summer internship project report on union bank of india
BES’s INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH<br />(Approved by AICTE & Affiliated to University of Mumbai)<br />Summer Internship Report<br />On <br />5th floor, 66/80,<br />mumbai samachar marg,<br />Fort, mumbai.400023<br />Contact No: +912222642701<br />BY<br />Abhishek Krishnakumar Rane.<br />Roll No.39<br />MMS 2010-12<br />May 2011<br />A<br />PROJECT REPORT<br />ON<br />IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF<br />MASTER OF MANAGEMENT STUDIES<br />CONDUCTED BY<br />UNIVERSITY OF MUMBAI<br />THROUGH<br />BES’S INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH<br />UNDER THE GUIDANCE OF<br />Porf. Mr. Kanpurwala.<br />SUBMITTED BY<br />Abhishek Krishnakumar Rane.<br />MMS<br />Roll No.39<br />DECLARATION<br /> <br />I hereby declare that the Summer Internship Report submitted for the MMS Degree, BES’s Institute of Management Studies and Research (Affiliated to University of Mumbai) is my original work and conducted in Union Bank of India (IFB).<br />Place: Mumbai <br />Date: 21st July, 2011. <br />Signature of the Student<br />ACKNOWLEDGEMENTS<br />I wish to express my gratitude to Mr. P .M .PATEL & Mr. ASHEESH PANDEY from the Union Bank of India for providing me valuable information.<br />I am grateful to BES’s Institute of Management Studies and Research for giving me an opportunity to pursue MMS. I wish to thank Professor Vikram D. Shikhare, Director, BES’s Institute of Management Studies and Research who has been a perpetual source of inspiration and offered valuable suggestions to improve my practical Knowledge.<br />I am indebted to my Coordinator Mr. Kanpurwala Professor, BES’s Institute of Management Studies and Research, for abundant guidance, support, and encouragement throughout my internship Study. <br />I would like to express my thanks to various people from the Union Bank of India for their support and direction. <br />Place: Mumbai<br />Date:21st July, 2011<br />Signature of the student<br />Abhishek Krishnakumar Rane.<br />Sr. No.ContentsPage No.1Executive summary12Introduction banking industries 22.1 Global scenario of banking industry52.2 Indian scenario of banking industries 62.3 Position of all banking industry in India93Union bank of India103.1 About the bank3.2 Our Vision3.3 Mission3.4 History 113.5 Products & Services4About the Branch:- IFB (Industrial Finance Branch)124.1 Form of Management135Union bank of India CSR activities 146Financial Position of union bank of India166.1 Key performance indicators6.2 Business Performance6.3 Financial Performance7Current Strategies of Company178External Environment of the Company188.1 Swat analysis of union bank of India8.2 Internal Environment of the Company8.3 Number of Departments: In Industrial finance branch199Marketing209.1 Recovery of Credit229.2 Grievance Redressal249.3 List and profile of Local Competitor for industrial finance branch10Finance2510.1 Financial performance of union bank of India10.2 Listing in share market10.3 Table of share price for six months of Union Bank of India2610.4 CRISIL Rating for Union Bank of India10.5 CHEQUE COLLECTION POLICY2810.6 profit and loss statement 3210.7 Balance sheet3310.8 Tax provision and other provision3410.9 Key ratio of Union Bank of India11Operation and Production3511.1 Steps in term loan assessment3611.2 MARKET FEASIBILITY3711.3 ORGANIZATIONAL/MANAGERIAL FEASIBILITY3811.4 TECHNICAL FEASIBILITY11.5 FINANCIAL FEASIBILITY3911.6 Credit report & Credit Rating4012Personal and HR department4212.1 Recruitment 12.2 Training and development12.3 Performance appraisal forms of Union Bank of India (IFB)4413MIS or IT Department4513.1 Workflow for Information system in Union Bank of India (IFB)13.2 Application of Software & Hardware4614Other aspect of bank4714.1 awards / certificates received by bank4814.2 Legal Compliances of Company15Problems or Issues in Union Bank of India IFB5516Solutions of problem and issues5617Recommendations5718Learning5919Bibliography60<br />1. EXECUTIVE SUMMARY<br />I work in IFB (Industrial finance branch) on the POWER PROJECT the aspect of the power project finance and work done on “OPPORTUNITIES IN POWER SECTOR AND ITS CREDIT VIABILITY” in this we learn the how the finance institution are provide finance for this sector. The Union Bank of India is providing the finance in three main sectors like PORT, POWER, and ROAD projects.<br />Availability of power is one of the important ingredients for industrial growth. It is an important infrastructure facility without which no industrial activity can be thought of in modern times. Increasing automation of Indian industries has created huge demand of power in India. This huge demand has resulted into demand supply gap in India in recent times. The main purpose of the project is to understand the whole concept of Project financing, and its methods and needs of project financing. The objective of this report is to get a comprehensive and apparent knowledge of the power sector, and to study the changes in power sector over a period of time there by analyzing various aspects of the power sector.<br />This study examines the power project finance in India. The power sector has increased significantly during the last decade and has met the needs of the people in India. This study evaluated project structure, risk allocation, and other issues. This study benefits from a substantially greater base of activity to systematically evaluate power project finance sources, project and financial structures, and other factors for the entire market.<br />The objectives of this study were to evaluate trends in power project finance and to examine the risk-sharing arrangements between private investors and host governments that enable private power projects to obtain non-recourse finance.<br />A key objective was to assess financing structures, sources of funds, and regulatory trends for a subset of the power market involving limited. Recourse finance of power projects that sell power to utility off-takers but that are not majority-owned by the off-takers.<br />This study also includes how the credit disbursement takes place at the UBI and the process involved in it. The various analyses about the financial statements and the profitability and the DSCR.<br />2. Introduction<br />Banking industries<br />Bank may be defined as a financial institution which is engaged in the business of keeping money for savings and checking accounts or for exchange or for issuing loans and credit etc. A set of services intended for private customers and characterized by a higher quality than the services offered to retail customers.<br />Based on the notion of tailor-made services, it aims to offer advice on investment, inheritance plans and provide active support for general transactions and the resolution of asset-related problems.<br />The essential function of a bank is to provide services related to the storing of deposits and the extending of credit. Basic function may include Credit collection, Issuer of banking notes, Depositor of money and lending loans.Now a day’s banking is not in its traditional way , with the advancement of technology its focusing on more comfort of customer providing services such as:<br />• Online banking• investment banking• electronic banking• internet banking• pc banking /mobile banking• e-banking<br />The importance of banking sector is immense in the progress and prosperity of any State or country.<br />The economic progress and prosperity comes from the well-rounded development and an impeccable banking management. Banks in general, governmental and private, have eased our financial transactions, security, and facilitated the funding for establishing a business or industry.<br />Business banking industry is the industry in business banking dealing with the different banking transactions which take place while conducting a business. Business banking can also be referred to as commercial banking. Business banking industry deals with all the functions ranging from transferring funds, business loans, online business transactions etc. <br />The success of a business largely depends on selecting the correct bank for carrying out all the transactions efficiently.<br />Banks falling under the category of business banking industry offer different charges and rates for the different business banking services. One needs to check and compare the charges offered by the different banks.<br />One needs to understand that opening an account under the business banking industry is vital as one is expected to maintain a long relationship with the bank offering business banking services. Many prefer to bank with the same bank where one has the personal bank account. If an individual has maintained a good track record during the tenure of personal banking , it can work to ones advantage for availing the different business banking services offered by the business banking industry.<br />The bank is required to have a business banking team<br />Services offered by the business banking service team<br />Cost of the services offered by the bank offering business banking services under business banking industry.<br />Whether the bank offering business banking services imposes fee for every single transaction or a lump sum for a particular category of transaction. There are some banks which impose fees for performing monetary transactions on behalf of the business banking account holder. One needs to clarify the same.<br />The business banking industry also requires that the bank offering business banking services should have a local branch situated in the city of the business banking account holder. Once a bank is selected an individual is required to open an account. The type of account one should go for is determined by the number of transactions taking place every day.<br />Under the business banking industry the following types of business banking accounts may be required by an entrepreneur. Current account: This can be used for carrying out everyday transactions including payments, taking deposits.<br />Instant access deposit account :This type of bank account is not needed for daily transactions.<br />Term deposit account:In this type of account, the money is not required for the daily transaction. Not only that the money is not likely to be required for quite some time.<br />Foreign currency account: A foreign currency account is required when an entrepreneur wishes to trade in a foreign country.<br />Loan account:When an entrepreneur is intending to take a loan for business purpose.<br />Merchant account: With the help of a merchant account, one is able to carry out transactions involving credit cards and debit cards.<br />There are some banks which impose fees and charges for every transaction made. There are yet others whose fee system may be different.<br />Changing banks according to ones convenience:In the event when one is not happy with the services of the existing bank providing the business banking services, one may at ones change banks for better services.<br />Transactionwithforeign currency: If an individual needs to constantly deal with foreign currency as part of one’s business requirements, one should check as to how the bank offering business banking facilities with regard to the following matters:<br />Offers guidance with regard to dealing with ones business products in the light of foreign countries as well as foreign currency. How one should restructure ones strategy with the changing currency rates and the risks involved in the same. The utilities in carrying out transaction with foreign currency.<br />Providing credit cards and debit cards for ones business: The bank providing business banking facilities should also provide debit cards or credit cards which are universally accepted.<br />Business banking industry requires that the bank should provide debit cards or credit cards to individuals offering the maximum or optimum advantages as per the requirements of the business banking holder. <br />Accepting payments by means of credit cards as well as debit cards: One should furnish all the details of one’s business to the bank offering business banking services. One can avail of a card transaction system by fulfilling the formalities with the bank. The risks involved in accepting payments by plastic cards should be reckoned.<br />Paymentsonline: If a business firm decides to accept payments through the Internet, appropriate arrangements in accordance to the banking norms are to be set up for carrying out transaction on line.<br />Online transactions are more susceptible to fraud and one needs to be extra careful if at all an online payment acceptance method is opted for.<br />2.1 Global scenario of banking industry<br />The world of commercial banking is undergoing a deep transformation as a result of marketable instruments competing with loans and demand deposits. Because of this strong competition, commercial banks are struggling to make acceptable margins from their traditional business entering into investment banking. <br />Increasing competition has forced banks to search for more income at the expense of more risk. Banks that lent heavily to Asia in search of better returns than those available in Western markets are now being blamed for bad credit decisions. The Asian crisis has renewed interest on credit risk management casting doubts on the effectiveness of current credit regulations. <br />Technological changes have also heightened competition by making it easier to imitate bank services. The traditional advantage of physical proximity to clients given by extended networks of branches has vanished. Banks have to compete with money market mutual funds for deposit business, commercial papers, and medium-term notes for bank loans. As margins are squeezed, commercial banks in the United States and Europe have been forced to cut costs and branches while diversifying into pensions, insurance, asset management, and investment banking. In the United States, many banks call themselves financial service companies even in their reported financial statements. <br />Diversification, however, has not always proved to be an effective strategy, and many banks have had to revert to a concentrated business. These examples illustrate how commercial banks are reinventing themselves, not just once but many times. All these changes are creating an identity crisis for old-fashioned bankers, leading to the key question, “What is a bank today?” The question is difficult, but evidence suggests that the concept of banking is being modified and the traditional barriers among financial service sub industries (retail banking, private banking, investment banking, asset management, insurance, etc.) are vanishing. <br />Illustrating what an entity does or serves for often is a useful way to define it. The identity crisis of banks—especially commercial banks stems from the deep and rapid changes in their traditional body of activities (particularly retail and corporate banking). On the other hand, investment banking, private banking, and banc assurance are the most profitable and fastest growing segments of the financial service industry. <br />As banks undertake new activities, they also incur new risks. Since boundaries among sub industries are weakening, if not vanishing, banks like all other financial service companies must redefine themselves in terms of the products they offer and the customers they serve. <br />The way banks pursue this redefinition is through a strategic repositioning in the financial service industry. All these factors represent a new challenge for commercial banks, provided this definition still has a unique meaning. Increased competition, diversification, new products, and new geographic markets mean that both the spectrum of risks and the risk profile for banks are dramatically changing. Not only have the risk parameters broadened, they have also changed: banks now face unfamiliar types of risk. In addition to the traditional credit risk, financial risk1 has risen and is now playing a crucial role. Banks thus need integrated risk management techniques that can measure and manage market risk in a timely and effective manner.<br />2.2 Indian scenario of banking industries <br />Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. <br />This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India.<br />Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for the company's debt) It was not the first though. <br />That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla.<br />When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. <br />The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century.<br />Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking centre.<br />The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India.<br />Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities.<br />The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. <br />Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments."<br />The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.<br />The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. <br />Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".<br />During the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. <br />The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table:<br />YearsNumber of banksthat failedAuthorised capital(Rs. Lakhs)Paid-up Capital(Rs. Lakhs)191312274351914427101091915115651916132314191797625191872091<br />2.3 Position of all banking industry in India<br />Sr. No Nationalized bankDeposits AdvancesInterest IncomeNet NPA as % Net advances1Allahabad Bank849725880273650.722Andhra Bank593904413953750.183Bank of Baroda192397143986150920.314Bank of India189708142909164370.445Bank of Maharashtra522553429142920.796Canara Bank186893138219171191.097Central Bank of India13127285483104551.248Corporation Bank739844851260670.949Dena Bank430512887834480.2410Indian Bank725825146568300.8111Indian Overseas Bank1001167488596411.3312Oriental Bank of Commerce983696850088560.6513Punjab and Sind Bank387662461532470.3214Punjab National Bank2097601541703193260.1715Syndicate Bank1158858153295800.7716UCO Bank1002226880581211.1817Union Bank of India13870396534118890.3419United Bank of India545363539443121.4820Vijaya Bank545353546852380.83<br />3. Union bank of India<br />3.1 About the bank: <br />Union Bank of India is firmly committed to consolidating and maintaining its identity as a leading, innovative commercial Bank, with a proactive approach to the changing needs of the society. This has resulted in a wide gamut of products and services, made available to its valuable clientele in catering to the smallest of their needs. Today, with its efficient, value-added services, sustained growth, consistent profitability and development of new technologies, Union Bank has ensured complete customer delight, living up to its image of, “GOOD PEOPLE TO BANK WITH”. Anticipative banking- the ability to gauge the customer's needs well ahead of real-time - forms the vital ingredient in value-based services to effectively reduce the gap between expectations and deliverables. The key to the success of any organization lie with its people. No wonder, Union Bank's unique family of about 26,000 qualified / skilled employees is and ever will be dedicated and delighted to serve the discerning customer with professionalism and wholeheartedness. Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of India. The Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 % of Share Capital is presently held by Institutions, Individuals and Others. Over the years, the Bank has earned the reputation of being a techno-savvy and is a front runner among public sector banks in modern-day banking trends. It is one of the pioneer public sector banks, which launched Core Banking Solution in 2002. Under this solution umbrella, All Branches of the Bank have been 1135 networked ATMs, with online Tele-banking facility made available to all its Core Banking Customers - individual as well as corporate. In addition to this, the versatile Internet Banking provides extensive information pertaining to accounts and facets of banking. Regular banking services apart, the customer can also avail of a variety of other value-added services like Cash Management Service, Insurance, Mutual Funds and Demat. The Bank will ever strive in its endeavour to provide services to its customer and enhance its businesses thereby fulfilling its vision of becoming<br />“THE BANK OF FIRST CHOICE IN OUR CHOSEN AREA BY BUILDING BENEFICIAL AND LASTING RELATIONSHIP WITH CUSTOMERS THROUGH A PROCESS OF CONTINUOUS IMPROVEMENT”.<br />3.2 Our Vision<br />To become the Bank of first choice in our areas by building beneficial and lasting relationship with customers through the process of Continuous improvement.<br />3.3 Mission<br />Our corporate mission to gain market recognition in chosen areas by building effective strategies .A logical extension of the Vision Statement is the Mission of the Bank, which is to gain market recognition in the chosen areas .To build a sizeable market share in each of the chosen areas of business through effective strategies in terms of pricing, product packaging and promoting the product in the market .To facilitate a process of restructuring of branches to support a greater efficiency in the retail banking field .To sustain the mission objective through harnessing technology driven banking and delivery channels .To promote confidence and commitment among the staff members, to address the expectations of the customers efficiently and handle technology banking with ease.<br />3.4 History <br />Union Bank of India was inaugurated by the Father of the Nation, Mahatma Gandhi, on November 11, 1919. Started as a limited company in Mumbai, it was one of the few Financial Commercial banks in India. Until 1947, UBI had only 4 branches - 3 in Mumbai and 1 in Saurashtra, all concentrated in key trade centers. Catering to all the sectors of the society, be it agriculture, industry, trade and commerce, services or infrastructure, the bank has also played a major role in rendering services to the financial needs of every section. Apart from this, the bank also extended financial support to educational, housing and trade sector. Union Bank of India undertook the task of establishment of village knowledge centers and self-employment training centers. It was in 1975, that the Union Bank of India was nationalized. It was, then, that it merged with the Belgaum Bank, a private sector bank. Another merger was on cards in 1985, this time with the Miraj State Bank. Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of India. The Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 % of Share Capital is presently held by institutions, individuals and others. <br />3.5 Products & Services<br /><ul><li>Deposits
Central Excise and Service Tax Collection Services
Special Savings Schemes for Senior Citizens</li></ul>4 . About the Branch:- IFB (Industrial Finance Branch)<br />There are 9 branches of Industrial Finance Branch (IFB) in Union Bank of India, out of which two branches are located in Mumbai, one at the head office at Nariman Point and the other at M. S. Marg (MSM). IFB (MSM) was started in September, 2009. It is a wholesale business unit which deals with only corporate clients.<br />The branch is headed by the Deputy General Manager (DGM) Mr. P. M. Patel. IFB MSM deals with corporate having loan requirement of Rs. 35 crores and above. Loans below Rs. 35 crores are provided by the Loans and Advances department.<br />IFB MSM provides all types of Credit facilities like Fund-Based Credit and Non-Fund Based Credit. Fund-based credit includes Cash Credit, Term Loan and Working Capital Loan. Non-fund-based credit includes Letter of Credit, Letter of Guarantee and Buyers Credit. Currently IFB provides Term Loans and Working Capital Loans for the following projects:<br /><ul><li>Infrastructure (Roads, Power, Ports, Telecom)
Traders (Import-Export)</li></ul>Cash credit is a short-term cash loan to a company. Term loan is a long-term loan provided for starting a new project or for the modification, replacement or expansion of the existing unit. Working Capital Loan is a short-term loan which the company uses for running the day-to-day operations. Letter of Credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Letter of Guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not fulfil the stipulated obligations under the contract. This can be used to essentially insure a buyer or seller from loss or damage due to non-performance by the other party in a contract. Buyer's credit is the credit availed by an Importer (Buyer) from overseas Lenders i.e. Banks and Financial Institutions for payment of his Imports on due date.<br />The branch also has an independent Foreign Exchange branch which manages the non-fund based facilities. The branch deals in acquiring the customers, getting limit sanctioned, documentation and monitoring process.<br />Head Office<br />Union Bank Bhavan,<br />239, Vidhan Bhavan Marg,<br />Nariman Point,<br />Mumbai - 400 021.<br />Central Office<br />Union Bank Bhavan,<br />239, Vidhan Bhavan Marg,<br />Nariman Point,<br />Mumbai - 400 021.<br />Investor Services Division<br />Union Bank Bhavan,<br />239, Vidhan Bhavan Marg,<br />Nariman Point,<br />Mumbai - 400 021.<br />Registrar & Share Transfer Agent<br />Datamatics Financial Services Ltd.<br />Plot No.B-5, Part B, MIDC,<br />Crosslane, Marol, Andheri (East),<br />Mumbai - 400 093.<br />4.1 Form of Management<br />Board of Directors<br />SHRI M. V. NAIRChairman &Managing DirectorSHRI S. C.KALIAExecutive DirectorSHRI S. S. MUNDRAExecutive DirectorSHRI K.V. EAPENGovernment ofIndia NomineeSMT. MEENA HEMCHANDRAGovernment ofIndia NomineeShri B.M.SHARMABoard of the BankSHRI N. SHANKARGovernment nominated DirectorDR. GULFAM MUJIBINominated by Government of India as a part-time non-official DirectorPROF. M.S. SRIRAMBODSHRI ARUN NANDABODSHRI S. RAVIBODSHRI BAIDYA NATHBHATTACHARJEEBOD<br />5. Union bank of India CSR activities <br /> 5.1 Karmayog 2008 CSR Rating: 3/5<br />Rural Development and Self Employment Training Institute (RUDSETI) <br />Established two RUDSETIs in our Lead Districts of Ernakulam and Varanasi and a Rural Development Foundation at Alibaug, Maharashtra, with the objective of raining youth in rural and semi-urban areas to take up self-employment ventures, to conduct various vocational and human resource development training programmes, to provide consultancy services etc. <br />Formation of Farmers' Clubs<br />Encouraging formation of Farmers Clubs in villages catered by our rural branches.<br /> <br />5.2 Introduction of Village Knowledge Centres <br />For the overall development of agricultural sector, Bank has introduced the innovative concept of "Village Knowledge Centres" for benefit of the farming community. These centres act as core centres for rural development activities and impart knowledge to the farmers about new developments in methods of cultivation/ technologies, proper use of fertilizers, pesticides etc. for better yield and higher income. Weather report and agro-climatic conditions, latest information on price of inputs and agriculture produce are also made available to the farmers. At these centres, farmers, landless labourers and other artisans are encouraged for formation of Self Help Groups, Farmers clubs etc.<br />5.3 100% Banking Habit Villages<br />Initiated the exercise of bringing maximum villages in each Region as 100% Banking Habit Villages" to provide banking services to each and every household. <br />5.4 Bhumiheen Green Card<br />Introduced the scheme of "Bhumiheen Green Card" to provide easy credit facilities to tenant farmers, oral lessees, sharecroppers, landless labourers and their Joint Liability Groups/SHGs etc. This scheme will benefit those farmers who are unable to give any tangible security. <br />5.5 Joint Liability Groups<br />To inculcate the habit of group based financing, to tenant farmers, share croppers, oral lessees, farmers with small land holding without proper title of Agriculture land, our Bank has introduced the mechanism of Joint Liability Groups (JLGs). <br />5.6 "No Frills" Account<br />"No Frills" Account scheme has been introduced to bring the down trodden and poverty ridden masses which have been socially and financially excluded so far from the main stream. <br />5.7 "Union Mitr"<br />As part of our initiatives and corporate social responsibility to create financial awareness we have launched "Union Mitr" to provide financial education services and debt counselling to all strata of the society especially the rural population, free of cost. Initially "Union Mitr" has been established at 51 Village Knowledge Centres in rural areas and will subsequently be rolled over to other areas of the country. <br />5.8 Current year Corporate Social Responsibility<br />Union Bank of India is actively engaged in community and social development and pursues this goal under the aegis of specially set up ‘Union Bank Social Foundation’. Various activities are carried out by this Foundation through a widespread presence of 202 Village knowledge Centres (VKCs), 103 Union Adarsh Gram, 8 Financial Literacy and Credit Counselling Centres (FLCC), 13 R-SETIs (Rural Self-employment and Training Institutes) across the country. This includes 1 VKC and 7 FLCC enduring the year.<br />Each VKC assists in overall development of the village by coordinating with various developmental agencies/Government departments and is semi ate nowledge to farmers about latest developments in methods of cultivation, technologies, proper use of fertilizers, pesticides etc. <br />Under Union Adarsh GramYojana, Bank undertakes a holistic development of the village by converting it into a model village. Similarly, R-SETI and FLCC extend financial literacy, counseling and training to the needy people so that they become part of the mainstreams. During the year 2010-11, Union Bank of India extended a donation of ` 175.65 lakh to various entities for the purpose of education, health and medical emergency, relief, basic amenities etc. Union Bank of India is examining.<br />The possibility of providing the solar-powered lanterns to the households in the103 Union Adarsh Gram. The objective is to provide illumination to the electricity eprived villages that will facilitate livelihood by increasing the productive hours for rural entrepreneurs, help spread education, improve health, bio-conservation and moreover, a ray of hope for everyone.<br />Union Bank of India is committed to its role as a responsible corporate citizen by adopting ethical business practices and contributes to economic development beyond its statutory obligation. The Bank fully realizes its social responsibility to improve the quality of life of the local community and society at large. The Bank has now moved a step ahead in this direction. In order to pay a focused attention, the Board of the Bank has decided to set apart 1% of its annual public profits to undertake Corporate Social Responsibility Activities through its trust named “Union Bank Social Foundation”.<br />The trust would provide for infrastructure facilities in rural areas and committed to undertaking one major project in each of the 13 lead districts across the country, namely, Ernakulam and Idukki in Kerala, Varanasi, Ghazipur, Jaunpur, Azamgarh,Chandauli, Bhadohi and Mau in U.P., Rewa and Sidhi in M.P. and Samasthipur and Khagaria in Bihar.<br />The Bank has established Village Knowledge Centres (VKCs) in nearly 200 villages across the country, which provides knowledge dissemination and extension services to the rural community helping them in improving their productivity. These VKCs are non-profit entities, fully funded by the bank.<br />The Bank has also established two Rural Development and Self-employment activities in Perambavur (Kerala) and Varanasi (U.P) funded jointly by the Bank, NABARD and respective State Governments.<br />6. Financial Position of union bank of India<br />As per annual report of 2009, 2010 & 2011<br />(In Thousands)<br />200920102011Net profit1,72,72,0232,07,57,5272,08,35,729Income13,37,19,30115,27,74,19218,49,13,987<br />6.1 Key performance indicators<br />FY2010FY2011AnnualChangeTotal Business29128935548322.04%Net Interest Income4192621648.28%Operating Profit3659430517.66%Provisions1584222340.34%Net Profit207520820.34%Net Interest Margin2.71%3.33%62 bpsCapital Adequacy Ratio12.51%12.95%44 bpsGross Profit per employee (lakh)13.1815.52 17.75%Dividend (` per share)5.5 8.0 45.45%Book Value per Share173.38 213.17 22.95%<br />6.2 Business Performance<br />a. Total Business of Union Bank of India increased by 22.04% from ` 2,91,289 crore as on March 31, 2010 to 3,55,483 crore as on March 31, 2011.<br />b. This comprised Deposit growth of 19.07% from 1,70,040 crore to ` 2,02,461 crore and Advances growth of 26.20% from ` 1,21,249 crore to 1,53,022 crore.<br />c. Bank has one branch outside India at Hong Kong. The business of Hong Kong branch increased by 94.53%, though on a lower base. Deposits increased from ` 370 crore to ` 570 crore and advances increased from ` 2,977 crore to ` 5,941crore.<br />6.3 Financial Performance<br />a. Net Interest Income recorded a growth rate of 48.28% from ` 4,192 crore for the year 2009-10 to ` 6,216 crore for the year 2010-11.<br />b. Total Income of the Bank increased by 21.04% from` 15,277 crore to ` 18,491 crore. Interest income was the major contributor, within which interest on advances recorded a growth of 24.08% from ` 9,696 crore to ` 12,031 crore. Interest income on investments increased by 14.93% from ` 3,482 crore to ` 4,002 crore. Yield on advances stood at 9.86%for the year 2010-11 from 9.94% in the previous year. Yield on investments, however, increased to 6.55%for the year 2010-11 from 6.32% in the previous year, reflecting higher coupon on government securities. Total yield on funds also recorded an improvement of 29 basis points (bps) from 8.04% to 8.33%.<br />c. Non-interest income increased by 3.24% from` 1,975 crore to ` 2,039 crore. The major drag was 19.02% fall in income from profit on sale of investments due to volatile and uncertain market conditions prevailing during the year. Excluding this item, non-interest income growth would be 12.34%.<br />7. Current Strategies of Company<br />A logical extension of the Vision Statement is the Mission of the Bank, which is to gain market recognition in the chosen areas.<br />To build a sizeable market shares in each of the chosen areas of business through effective strategies in terms of pricing, product packaging and promoting the product in the market.<br />To facilitate a process of restructuring of branches to support a greater efficiency in the retail banking field.<br />To sustain the mission objective through harnessing technology driven banking and delivery channels.<br />To promote confidence and commitment among the staff members, to address the expectations of the customers efficiently and handle technology banking with ease.<br />Union Bank OF India continued with the healthy performance track record during the year 010-11 while pursuing its broad Vision & Mission objective of becoming the Bank of first choice in chosen areas. These objectives have short-term as well as long-term goalposts. In the short-run, customer acquisition, business expansion and a profitable growth are the key outcomes while in the long-run Bank pursues a sustainable improvement in the process efficiency, product enrichment and people productivity. Our journey towards accomplishing the Vision involves creating values for our customers, our employees and you, our shareholders.<br />During the fiscal year 2010-11, the business environment was not so benign; however, Union Bank of India reported healthy results. Bank also launched two initiatives during the year, for achieving customer service excellence and building a strong human capital chain in the organization. These two initiatives, along with a number of enablers created in the recent years would help Union Bank of India become one of the most preferred banks amongst the existing customer pool and the two emerging customer classes, namely the Next Generation customers and new Bankable class. Union Bank OF India is laying a strong foundation for a sustainable growth in the future that would enhance the market share and shareholders’ value.<br />8. External Environment of the Company:<br />8.1 Swat analysis of union bank of India<br />Strengths<br />• Has been able to maintain healthy asset quality. In Q1 FY09, Gross NPAs were 2.08% and Net NPAs were 0.15% with healthy coverage ratio of 93.05%. UBI will continue to operate with Gross NPAs of 2.00% with delinquency ratio below 1.00%.<br />• Very good cost to income ratio of 38% in FY08 as the bank has managed to bring down and contain its costs significantly. Has one of the best operating efficiencies in the banking sector space.<br />• Superior ROE (24.67% inFY08) and excellent ROAA (1.22%) reflect high profitability of the bank.<br />• UBI has an excellent technological platform with 100% core banking solution rollout and increased use of electronic mode in transactions (12% of the total transactions). This helps the bank reduce risk, improve efficiency and reduce costs significantly.<br />Weaknesses<br />• Higher interest rates are putting pressure on NIM, as the bank is facing difficulty in passing on increasing cost of funds to its customers.<br />• The bank has large exposure in AFS category in its investment portfolio. In Q1, FY09, AFS consisted of 32.59% of the total investment portfolio. Out of this, 55% (Rs.63 bn) is in bond portfolio. Hardening of yields will require the bank to make provisions for mark-to market (MTM) losses on its bond portfolio.<br />• CD ratio has reached 73.1% in FY08. It means the bank has to rely on bulk deposits to finance advances growth.<br />Opportunities<br />• UBI still has a scope for improving its CASA, which is currently at 34.76%. The bank has planned to achieve a CASA target of 40% by 2012.<br />• Increasing share of fee-based income in operating income represents very good opportunity for the bank. The bank is expecting its fee-based income to grow in excess of a CAGR of 30%.<br />• Opening of 400 new branches and expansion in the international market by increasing its presence in 10 countries with stress on Australia, Canada, Abu Dhabi and United Kingdom<br />Threats<br />• Rising interest rates coupled with slowdown in the economy could result in higher<br />Delinquencies.<br />• Increasing money supply and inflationary pressures may prompt RBI to continue monetary tightening at least in the short-term.<br />8.2 Internal Environment of the Company:<br />Culture, Trade Union Issues not provided by company <br />8.3 Number of Departments: In Industrial finance branch<br /><ul><li>Loan disbursement department
Analysis group</li></ul>9. Marketing<br />BCG Matrix on industrial finance branch<br />Business growth rate<br />StarsSBIICICIHDFCQuestion markBank of Maharashtra Bank of barodaCash cows Union Bank of IndiaBank of IndiaDogsDena BankIndian Bank<br />Relative position (Market share)<br />Advertising <br />TV commercial ads<br />Recruitments ads etc.<br />Branding <br />Change is truly the only constant. Banks, in particular, have been following that rule in recent times. Bank of Baroda got itself a new logo and brand ambassador a few years ago. In recent times, UTI Bank was renamed Axis Bank. Canara Bank, too, has revamped itself. Adding to the ever increasing list is Union Bank of India. The bank, which was founded in 1919 and inaugurated by the father of the nation, MK Gandhi, has undergone a change twice in nearly 90 years of functioning. This time round, Union Bank of India, along with its creative agency, Mudra, and Boston Consulting Group, chalked out an agenda to create this change. Addressing the press in Mumbai, MV Nair, chairman, Union Bank of India, says, "We learned we needed to change now because we realised that the entire population is younger."The other factor that prompted the rebranding exercise was technology, which is part of life now. Union Bank of India wanted to highlight that it too had the technology to reach out to its consumers. Moreover, a few more foreign banks will soon be entering India and the bank decided it needed to prepare itself. As part of the change, Union Bank of India will leverage technology to centralise various processes and empower its staff in customer relationships. The bank is also creating business verticals in the banking sector, such as corporate banking, retail banking, etc., explained TY Prabhu, executive director, Union Bank of India. Mudra and its new design and strategy cell, Water, conducted the research study. "Research was conducted in various markets with the core consumer groups of Union Bank of India," says Ashish Mishra, chief strategist, Water, speaking to afaqs! The rebranding exercise also includes a changed logo. This was preceded by a teaser in the form of an outdoor. The hoarding showed a bird turning a new page to show the new logo. Though the logo is not completely visible, the previous page shows a section of the old logo. The logo, which now features two interlocking U’s in red and blue, stands for the consumer and the bank. Nair says, "The two U's stand for union and the integrity, security and strength, which Union Bank of India stands for." The colour blue represents commitment, while red is symbolic of the passion that exists at Union Bank of India.Union Bank of India will continue with its earlier tagline, ‘Good People to Bank With’. The creative proposition that the bank will carry forward is, ‘Your Dreams are not Yours Alone’. This is in a bid to indicate that the bank is ready to help fulfil everyone’s dreams.With the new logo and branding, Union Bank of India promises to the customer value for money service, a variety of channels through which the customer can choose to carry out banking activities, a timeline with all services offered, and absolutely no opaqueness with respect to the services and products offered. The communication that will follow the teaser will largely involve print and outdoor and also include a 10 second TV commercial. The TVC will be aired in about 10 days.The budget allocated for the branding exercise and advertising is close to Rs 75 crore, as compared to last year’s Rs 32 crore.<br />9.1 Recovery of Credit<br />CODE FOR COLLECTION OF DUES AND REPOSSESSION OF SECURITY I. Preamble: This Code for Collection of Dues And Repossession of Security (CDRS Code), is a non-statutory code issued on voluntary basis. II. Applicability: This code will apply to Union Bank Of India from 19th January 2004. III. Contents: • Introduction • Dues Collection Policy Statement • Security Repossession Policy Statement • General Guidelines • Grievance Redressal 1. Introduction: Union Bank Of India is committed to: • Following fair practices especially with regard to collection of dues and repossession of security • Fostering customer confidence and long-term relationship. 2. Dues Collection Policy Statement: • Dignity and Respect to Customers is Union Bank of India's Debt Collection Policy and the Bank do not follow policies that are unduly coercive in collection of dues. • Union Bank of India's dues collection policy is built on courtesy, fair treatment and persuasion. 3. Security Repossession Policy Statement: • Union Bank of India's Security Repossession Policy aims at recovery of dues in the event of default and is not aimed at whimsical deprivation of the property. • The Policy recognizes fairness and transparency in repossession, valuation and realization of security. 4. Guidelines: 4.1. All the members of the staff or any other person authorised to represent Union Bank of India in dues collection or/and security repossession would follow the guidelines set out below: General: Before taking action for collection of dues and repossession of security, Bank would give notice to the Borrower asking him to repay the dues and the Borrower will be generally given minimum 15 days time to repay dues. Guidelines for Collection of dues: • Customer would be contacted ordinarily at the place of his choice and in the absence of any specified place, at the place of his residence in the case of retail customers and in the place of business or residence as the case may be in the case of other customers. • Identity and authority to represent would be made known to the customer at the first instance. • Customer privacy would be respected. • Interaction with the customer would be inacceptable business language. • Customer calling time would be between 0700 and 1900 hours unless the special circumstances of the borrower's business or occupation demand otherwise. • Customer requests to avoid call at a particular time or at a particular place would be honoured as far as possible. • Time and number of calls and contents of conversion would be documented. • Customer would be provided with all the information regarding dues at the time of notice of recall of loan and as and when demanded by the Customer. • All assistance would be given to resolve disputes or differences in a mutually acceptable and in an ordinary manner, if any as regards dues. • During visits to customers' place for dues collection, decency and decorum would be maintained. • Inappropriate occasions such as bereavement in the family or such other calamitous occasions would be avoided for making calls/visits to collect dues. • Demeanor that would suggest criminal intimidation or threat of violence would be scrupulously avoided. Guidelines for Repossession of Securities: • Due process of Law would be followed for repossession of securities • Bank would give one week's notice before taking possession of/seizing securities • In case Bank engages services of a Recovery/Seizure Agent for repossession of securities then a notice of such appointment will be given to the Borrower. • Identity of Recovery/Seizure Agent so appointed will be disclosed to you • Such Recovery/Seizure Agents will have a covenant with the Bank to be bound by this Code. • Any violation of Code by Recovery/Agent will be viewed seriously and the Bank will take prompt action in preventing the violation. • Bank would an approved valuer value the securities and ascertain fair market value before resorting to sale. • Ordinarily Bank would not sell the securities below the fair market value unless the circumstances warrant. In the event of sale of securities being done at a price below the fair market value then Borrower would be given one opportunity to arrange for bidders at or above the fair market value. • Sale of securities will be conducted only after expiry of 30 days from the date of notice of sale. • In case the borrower comes forward and reaches a settlement and repays the dues of the Bank, then repossessed securities will be returned within 10 days from the date of satisfaction of dues. 9.2 Grievance Redressal: Internal procedures a. Staff and the representives engaged for collection of dues and repossession of securities will give assistance in the case customer/borrower wishes to lodge a complaint. b. Within two weeks of receiving any complaint, we will send a written acknowledgement. c. After examining the matter, we will send our final or other response within eight weeks. 9.3 List and profile of Local Competitor for industrial finance branchSr. No Nationalized bankDeposits AdvancesInterest IncomeNet NPA as % Net advances1Allahabad Bank849725880273650.722Andhra Bank593904413953750.183Bank of Baroda192397143986150920.314Bank of India189708142909164370.445Bank of Maharashtra522553429142920.796Canara Bank186893138219171191.097Central Bank of India13127285483104551.248Corporation Bank739844851260670.949Dena Bank430512887834480.2410Indian Bank725825146568300.8111Indian Overseas Bank1001167488596411.3312Oriental Bank of Commerce983696850088560.6513Punjab and Sind Bank387662461532470.3214Punjab National Bank2097601541703193260.1715Syndicate Bank1158858153295800.7716UCO Bank1002226880581211.1817Union Bank of India13870396534118890.3419United Bank of India545363539443121.4820Vijaya Bank545353546852380.83 10. Finance 10.1 Financial performance of union bank of IndiaNet Interest Income recorded a growth rate of 48.28% from ` 4,192 crore for the year 2009-10 to ` 6,216 crore for the year 2010-11.Total Income of the Bank increased by 21.04% from ` 15,277 crore to ` 18,491 crore. Interest income was the major contributor, within which interest on advances recorded a growth of 24.08% from ` 9,696 crore to ` 12,031 crore. Interest income on investments increased by 14.93% from ` 3,482 crore to ` 4,002 crore. Yield on advances stood at 9.86% for the year 2010-11 from 9.94% in the previous year. Yield on investments, however, increased to 6.55% for the year 2010-11 from 6.32% in the previous year, reflecting higher coupon on government securities. Total yield on funds also recorded an improvement of 29 basis points (bps) from 8.04% to 8.33%.Non-interest income increased by 3.24% from ` 1,975 crore to ` 2,039 crore. The major drag was 19.02% fall in income from profit on sale of investments due to volatile and uncertain market conditions prevailing during the year. Excluding this item, non-interest income growth would be 12.34%.FY-10 FY-11 Growth%Inland Commision 352 365 3.69Treasury Income 573 464 -19.02Income from ForexTransaction323 429 32.82Recovery in Written - off Accounts183 212 15.85Miscellaneous 544 569 4.60Total 1975 2039 3.24 (In crore)10.2 Listing in share marketThe Bank is a Scheduled Commercial Bank with its Head Office at Mumbai. The Bank has its presence in all parts of the country with a network connected in All Branches.The Bank’s shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange and its stock scrip code is as follows:- The Stock Exchange, Mumbai (BSE)532477The National Stock Exchange, (NSE)UNIONBANK-EQ10.3 Table of share price for six months of Union Bank of India 10.4 CRISIL Rating for Union Bank of IndiaCRISIL ‘AAA’ for UNION BANK OF INDIA’s Rs.5 Billion Upper Tier II Bonds IssueRs.5.0 Billion Upper Tier II Bonds IssueAAA/Stable (Assigned)Tier I Perpetual Bond Issue Aggregating Rs.10.4 BillionAAA/Stable (Reaffirmed)Upper Tier II Bond Issue Aggregating Rs.22.0 BillionAAA/Stable (Reaffirmed)Lower Tier II Bond Issue Aggregating Rs.32.7 BillionAAA/Stable (Reaffirmed)Rs.150 Billion Certificates of Deposit ProgrammeP1+ Reaffirmed)CRISIL has assigned its ‘AAA/Stable’ rating to Union Bank of India’s (Union Bank’s) Upper Tier II bonds, and has reaffirmed its outstanding ratings on the bank’s other aforementioned debt instruments at‘AAA/Stable/P1+’. The ratings continue to reflect the support that Union Bank is expected to continue to receive from its majority owner, the Government of India (GoI). The ratings also factor in Union Bank’s healthy market position, comfortable resource profile, and adequate earnings profile. These rating strengths are partially offset by the bank’s average capitalisation and moderate asset quality.Union Bank is among India’s top 10 banks by asset size. As on March 31, 2010, the bank had deposits and advances of Rs.1700 billion and Rs.1213 billion respectively. As on March 31, 2010, the share of low-cost current and savings accounts (CASAs) in the bank’s deposits was around 32 per cent (30 per cent as on March 31, 2009). The bank’s borrowing cost improved to 5.5 per cent in 2009-10 (refers to financial year, April 1 to March 31) from 6.4 per cent in 2008-09, and compares favourably with the industry average. CRISIL believes that Union Bank will maintain its comfortable resource profile over the medium term on the back of its adequate deposit mix and wide branch network.Union Bank’s core profitability is adequate - net profitability margin (NPM) was 1.34 per cent - in 2009-10 (1.6 per cent in 2008-09). The decline in NPM was primarily because of the decline in the bank’s interest spreads, largely driven by the decrease in its yield on earning assets, more than offsetting the decrease in its borrowings costs. However, return on assets was stable at 1.25 per for 2009-10, against 1.27 per cent in the previous year, supported by improvement in fee-based income and treasury gains. CRISIL believes that Union Bank’s ability to increase its core fee income and manage its advances profile, thereby maintaining a balance between yields and credit quality, will have a key bearing on the bank’s earnings.The quality of Union Bank’s assets is moderate. As on March 31, 2010, gross non-performing assets (NPAs) accounted for 2.2 per cent of its total assets, an increase from 1.96 per cent as on March 31, 2009, driven largely from slippages to NPAs from restructured standard assets in 2009-10. Also, the bank’s capitalisation is average, with a Tier I capital adequacy ratio (CAR) of 7.9 per cent of risk-weighted assets, and an overall CAR of 12.5 per cent, as on March 31, 2010, as per Basel II norms. While the size of the bank’s Tier I capital is healthy, at Rs.97 billion as on March 31, 2010, the bank has limited flexibility to raise fresh equity capital, given that GoI’s current shareholding in the bank is 55.4 per cent (regulatory minimum is 51 per cent). Union Bank’s adequate profitability, resulting in comfortable cash accruals to net worth ratio, and its stated posture that it will maintain its overall CAR in excess of 12 per cent, support the current ratings on the bank’s Tier I Perpetual and Upper Tier II bonds.Outlook:StableCRISIL believes that Union Bank will continue to benefit from the support it receives from GoI. The bank’s healthy business position and the support it receives from GoI are expected to significantly reduce the challenges the bank faces in improving its asset quality. The bank is likely to maintain its CAR at levels that will support the current rating. The outlook could be revised to ‘Negative’ in case of a steep deterioration in Union Bank’s asset quality or capitalisation; also, deterioration in capitalisation could lead to a downward revision in the rating outlook or rating on the hybrid instruments. 10.5 CHEQUE COLLECTION POLICY POLICY ON COLLECTION OF CHEQUES/INSTRUMENTSArrangements for Collection:Local ChequesAll cheques and other Negotiable Instruments payable locally would be presented through the clearing system prevailing at the centre. Cheques deposited at branch counters and in collection boxes within the branch premises before the specified cut-off time will be presented for clearing on the same day. Cheques deposited after the cut-off time and in collection boxes outside the branch premises including off-site ATMs will be presented in the next clearing cycle. To avoid fraudulent transactions by intercepting the cheque, customers should ensure that the cheques deposited in collection boxes are specially crossed to Union Bank of India. Instructions to this effect are displayed on the Cheque.In case of cheques deposited in all loans and advances accounts including term loan value date credit will be given on Day-1 or Day-2 as the case may be (that is the day on which settlement account of the Bank with RBI/SBI is credited depending on clearing cycle at the place) for limited purpose of calculation of products for application of interest in all loan and advances accounts including term loan.Outstation Chequesa) Cheques drawn on other banks at outstation centres will normally be collected through bank’s branches at those centres. Where the bank does not have a branch of its own, the instrument would be directly sent for collection to the drawee bank or collected through a correspondent bank. The bank would also use the National Clearing services offered by the Reserve Bank of India at centres where such collection services exist.b) Speed ClearingCollection of outstation cheques, till now, required movement of cheques from the presentation centre (city where the cheque is presented) to Drawee Centre (city where the cheque is payable) which increases the realization time for cheques. Speed clearing aims to reduce the time taken for realization of out station cheques. Outstation cheque collection through collection basis takes around one to two weeks time depending on the drawee centre. Under Speed Clearing, it would be realized on T+1 basis viz., within 48 hours. Speed Clearing refers to collection of outstation cheques through the local clearing. It facilitates collection of cheques drawn on outstation core banking enabled branches of banks, if they have a net worked branch locally.Cheques payable in Foreign CountriesThe Bank handles the transactions relating to foreign cheques for collection of their customers. Such cheques may be for personal purposes or trade related purposes.Foreign cheques will be sent for collection to the respective centers where it is payable through our correspondent banks for collection. The realization depends upon the local clearing rules, which vary from country to country and centre to centre. Immediate Credit of Local / Outstation Cheques / Instruments:Branches / extension counters of the bank will provide immediate credit for outstation cheques / instruments up to the aggregate value of Rs.15,000/- tendered for collection by individual account holders subject to satisfactory conduct of such accounts for a period not less than 6 months. In case of prepaid instruments like DDs, Interest/ Dividend Warrants drawn on our bank/branches and cheques issued by government undertakings the maximum limit will be Rs.25,000/-.The facility of immediate credit will be offered on Savings Bank / Current / Cash Credit Accounts of the customers. For extending this facility there will not be any separate stipulation of minimum balance in the account.Higher limits will be given for immediate credit of cheques in the form of bundled products upto Rs.25,000/- in all satisfactorily operated Multi Gain Savings Accounts (MGSA) as the customers maintain minimum balance of Rs.25,000/- in these accounts.Purchase of local/outstation chequesBank may, at its sole discretion, purchase local/outstation cheque tendered for collection at the specific request of the customer or as per prior arrangement. Besides satisfactory conduct of account, the standing of the drawer of the cheque will also be a factor considered while purchasing the cheque and this will be subject to levy of service charges.Time Frame for Collection of Local / Outstation Cheques / Instruments:Collection of Local Cheques/InstrumentsFor local cheques presented in clearing credit will be afforded as on the date of settlement of funds in clearing and the account holder will be allowed to withdraw funds as per return clearing norms in vogue. Cut-off time upto which the cheques received will be sent for clearing the same day, time when customer’s account gets credited and when customer can utilize the funds will be displayed in the branches. Similarly cut-off time prescribed for each cheque collection box will be indicated on the box. Cut-off time for receipt of cheques for payment to government accounts like Income Tax etc. will be displayed in the branches transaction government business.Cheques/instruments sent in Speed Clearing will be realized on “T + 1 day” basis.ii) Cheques drawn on foreign countries: Foreign cheques are sent for collection to the respective centers where they are payable through our correspondent banks for collection. The realization depends upon the local clearing rules, which vary from country to country and centre to centre. Normally USD cheques are returned within 15 days of presentation, except those cheques, which are fraudulent. Cheques which are fraudulent on the face can be returned within one year and other any time. Bank will, however give proceeds of realization within 20 days in case of USD cheques drawn in USA, subject to the right to debit in case of fraudulent cheques. All other foreign currency cheques are paid within two working days from the date of receipt of statement of Nostro Account showing the credit.The above time norms are applicable irrespective of whether cheques/instruments are drawn on the bank’s own branches or branches of other banks.Cheques / Instruments lost in transit / in clearing process or at paying bank’s branch:In the event a cheque or an instrument accepted for collection is lost in transit or in the clearing process or at the paying bank’s branch, the bank shall immediately on coming to know of the loss, bring the same to the notice of the accountholder so that the accountholder can inform the drawer to record stop payment and also take care that cheques, if any, issued by him / her are not dishonoured due to non-credit of the amount of the lost cheques / instruments. The bank would provide all assistance to the customer to obtain a duplicate instrument from the drawer of the cheque.In line with the Bank’s Compensation Policy the accountholder will be compensated in respect of instruments lost in transit in the following way:Expenses incurred for obtaining duplicate instrument will be paid @2% of the amount of instrument subject to maximum of Rs.500/-In addition, bank will pay interest on the amount of the cheque for a maximum period of 30 days at the rate applicable for relevant period of fixed deposit prevailing at the time of payment of interest to provide for likely further delay in obtaining duplicate cheque/instrument and collection thereof.In case of cheque/instrument lost after it is discounted bank would not charge interest for the period beyond the normal collection period.Charging of interest on cheques returned unpaid where Instant Credit was given:If a cheque sent for collection for which immediate credit was provided by the bank is returned unpaid, the value of the cheque will be immediately debited to the account. The customer will not be charged any interest from the date immediate credit was given to the date of return of the instrument unless the bank had remained out of funds on account of withdrawal of funds. Interest where applicable would be charged on the notional overdrawn balances in the account had credit not been given initially. If the proceeds of the cheque were credited to the Savings Bank Account and were not withdrawn, the amount so credited will not qualify for payment of interest when the cheque is returned unpaid. If proceeds were credited to an overdraft/loan account, interest shall be recovered at the rate of 2% above the interest rate applicable to the overdraft/loan from the date of credit to the date of reversal of the entry if the cheque/ instrument was returned unpaid.10.6 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011( 000' Omitted )Year Ended 31.3.2011Year Ended 31.3.2010Year Ended 31.3.2009I. IncomeInterest earned1,64,52,61,501,33,02,67,911,18,89,37,87Other income20,38,78,3719,74,74,0114,82,55,14Total1,84,91,39,871,52,77,41,921,33,71,93,01II. ExpenditureInterest expended1,02,36,41,7191,10,26,7480,75,81,31Operating expenses39,49,99,7125,07,84,7522,14,11,46Provisions and contingencies22,23,03,7315,84,38,5613,55,44,96Total1,64,09,45,151,32,02,50,051,16,45,37,73III. Net profit for the year20,81,94,7220,74,91,8717,26,55,28Add : Profit brought forward1,63,2783,4064,95Total20,83,57,9920,75,75,2717,27,20,23IV. AppropriationsTransfer to statutory reserve6,25,00,006,25,00,005,18,00,00Transfer to capital reserve61,20,071,00,09,052,17,08,28Transfer to revenue and other reserves6,22,00,005,72,00,002,59,00,00Proposed dividend4,19,46,592,77,81,492,52,55,89Dividend tax68,59,5047,21,4642,92,24Transfer to foreign currency translation reserve0080,42Transfer to special reserve [sec36(i)(viii)]2,82,00,004,52,00,004,36,00,00Provision for int. on PNCPS5,15,9200Balance in Profit and Loss Account15,911,63,2783,40Total20,83,57,9920,75,75,2717,27,20,23Earnings per share (basic and diluted)39.7141.0834.1810.7 BALANCE SHEET AS ON 31ST MARCH, 2011(000’ Omitted)As on 31.3.2011 As on 31.3.2010As on 31.3.2009Capital and LiabilitiesCapital 6,35,33,24 5,05,11,795,05,11,79Reserves and Surplus 1,21,29,19,02 99,18,66,2982,35,23,66Deposits 20,24,61,28,53 17,00,39,74,1413,87,02,83,25Borrowings 1,33,15,96,97 92,15,30,6487,74,89,53Other Liabilities and Provisions74,42,66,94 54,83,01,4447,57,42,92Total 23,59,84,44,70 19,51,61,84,3016,09,75,51,15AssetsCash and Balances with Reserve Bank Of India1,76,10,45,32 1,24,68,24,4389,92,04,83Balances with Banks and money at call and short notice 24,87,99,06 33,08,44,9669,92,88,12Investments 5,83,99,13,72 5,44,03,52,714,29,96,96,37Advances 15,09,86,08,32 11,93,15,29,869,65,34,23,21Fixed Assets 22,92,78,42 23,05,43,8223,35,15,97Other Assets 42,07,99,86 33,60,88,5231,24,22,65Total 23,59,84,44,70 19,51,61,84,3016,09,75,51,15Contingent Liabilities15,94,27,81,97 7,23,38,05,148,11,47,09,92Bills for Collection 52,58,37,22 45,65,80,3132,31,72,0710.8 Tax provision and other provision (Break up of ‘Provision & Contingencies’ shown under the head in Profit & Loss)(in crore)2010-11 2009-10Provision made towards Income Tax (IT)/Deferred tax liability (DTL) 873.45 758.00Provision / (Reversal) for Depreciation on Investment 26.65 (117.34)Provision towards NPA 1187.69 698.92Provision towards Standard Assets 148.54 20.95Other Provision and Contingencies:- Shifting Loss- Restructured Advances- Others82.941.63-95.8646.7695.2181.89TOTAL 2223.04 1584.3910.9 Key ratio of Union Bank of India31.03.200931.03.201031.03.2011Gross (Operating) Profit2.282.212.18Net Profit1.271.251.05Return on Net Worth24.7923.6918.63Return on Average Assets1.271.251.05Dividend payout Ratioto Net Profit (includingCorporate Dividend Tax)17.1115.6623.44Credit - Deposit Ratio73.2273.7178.11Capital Adequacy Ratio8.187.918.69<br />11. Operation and Production<br />Loan disbursement and work flow chart of industrial finance branch of Union Bank of India<br />Carrying out due diligence<br />Preparing credit report<br />Determining Interest rate<br />Preparation of Proposals<br /> <br />Submission of Proposals to designated authority If approved If not approved<br />Project Rejected <br /> <br />Communication of sanction terms and condition<br /> If no queries raised If queries raised<br />Sanction of proposals on various terms & conditionSolve the queries <br /> <br />Acknowledgement of sanction terms and condition <br />Application to comply with sanction terms & condition & execution of loan documents<br />Disbursement<br />11.1 Steps in term loan assessment<br /><ul><li>Term Sheet
Follow ups/ monitoring of the account</li></ul>Term Sheet<br />Following a favourable feasibility check, credit rating the next step is preparing term sheet. A Term Sheet is brief document that provides details on aspects like:<br /><ul><li>Account Details
Financial highlights for immediate previous two audited years and projection for proceeding year
Means of finance</li></ul>1. Nature of Facility<br />2. Purpose<br />3. Tenure of Term Loan<br />4. Interest rate Reset<br />5. Margin<br />6. Interest Rate, Commission<br />Door to Door Tenor i.e. the period within which the entire amount is to be disbursed.<br />a)Repayment Terms<br />b) Prime Security<br />c) Collateral Security<br />d) Upfront fees i.e. the charges levied by the bank for processing the documents.<br />Conducting feasibility study<br />The success of a feasibility study is based on the careful identification and assessment of all of the important issues for business success. A detailed Project Report is submitted by an entrepreneur, prepared by a approved agency or a consultancy organization. Such report provides in-depth details of the project requesting finance. It includes the technical aspects, Managerial Aspect, the Market Condition and Projected performance of the company. It is necessary for the appraising officer to cross check the information provided in the report for determining the worthiness of the project.<br />Project Details:<br /><ul><li>Definition of the project and alternative scenarios and models.
List the type and quality of product(s) or service(s) to be marketed.
Outline the general business model (ie. how the business will make money).
Include the technical processes, size, location, kind of inputs
Specify the time horizon from the time the project is initiated until it is up and running at capacity.
Relationship to the surrounding geographical area.
Identifies economic and social impact on local communities.
Identifies environmental impact on the surrounding area.</li></ul>11.2 MARKET FEASIBILITY<br /><ul><li>Industry description.
Describes the size and scope of the industry, market and/or market segment(s).
Estimates the future direction of the industry, market and/or market segment(s).
Describes the nature of the industry, market and/or market segment(s) (stable or going through rapid change and restructuring).
Identifies the life-cycle of the industry, market and/or market segment(s) (emerging, mature)
Identifies the potential buyers of the product/service and the associated marketing costs.
Investigates the product/service distribution system and the costs involved.</li></ul>11.3 ORGANIZATIONAL/MANAGERIAL FEASIBILITY<br /><ul><li>Business structure.
Outline alternative business model(s) (how the business will make money).
Identify the proposed legal structure of the business.
Identify any potential joint venture partners, alliances or other important stakeholders.
Identify availability of skilled and experienced business managers.
Identify availability of consultants and service providers with the skills needed to realize the project, including legal, accounting, industry experts, etc.
Outline the governance, lines of authority and decision making structure.</li></ul>Managerial Personnel<br /><ul><li>Managerial Personnel play a key role in directing the working of the company. It is
Important for an organization to have a pool of efficient personnel who bear the capacity to bail the company out from crisis situation and work towards optimum utilization of organizational resources. Such capacity of the personnel can be determined by having complete details on following key aspects:
Market reputation on the promoter / management of the company
Hands on experience of the management personnel in the industry / Business
Is any group company in default / Any Directors on RBI’s negative list / Borrower’s track-record in honoring financial commitment
Length of relationship with the bank</li></ul>11.4 TECHNICAL FEASIBILITY<br /><ul><li>Technology plays an important role in maintaining a competitive position in this highly competitive market conditions. Investing in the proper technology is the key to success it irrespective of size of business thus for achieving its projected performance, it is important for it to have sound technological background. Such technical competence of the project can be determined by having detailed study done on following key aspects:
Estimates the profit margin and expected net profit.
Estimates the sales or usage needed to break-even.
Estimates the returns under various production, price and sales levels. This may involve identifying "best case", "typical", and "worst case" scenarios or more sophisticated analysis like a Monte Carlo simulation.
Assesses the reliability of the underlying assumptions of the financial analysis (prices, production, efficiencies, market access, market penetration, etc.)
Creates a benchmark against industry averages and/or competitors (cost, margin, profits, ROI, etc.).
Identifies limitations or constraints of the economic analysis.
Determines project expected cash flow during the start-up period.
Identifies project an expected income statement, balance sheet, etc. when reaching full operation.
After the feasibility study has been completed and presented, a carefully study and analysis the conclusions and underlying assumptions. And deciding which course of action to pursue:-
Choosing the most viable business model, for investment
Identifying additional scenarios for further study.
Deciding that a viable business opportunity is not available and moving to end the business assessment process.</li></ul>11.6 Credit report & Credit Rating<br />The credit report is an important determinant of an individual's financial credibility. They are used by lenders to judge a person's creditworthiness. They also help the person concerned to narrow down on the financial problem areas. Credit report is a document, which comprises detailed information about the credit payment history of an applicant. It is mostly used by the lenders to determine the credit worthiness of an applicant. The business credit reports provide information on the background of a company. This assists one to take crucial business related decisions.<br />People can also assess the amount of business risk associated with a company and then decide whether they would be comfortable in providing them with credit facilities. The degree of interest that would be shown by investors in their company can also be gauged from the business credit reports as they can get an idea of the conception of their customers regarding themselves. Since these records are updated at regular intervals of time they enable people to identify the risk levels associated with a business as well as its future. These reports also allow businesses to get detailed information about the financial status of business partners and suppliers.<br />What Is A Corporate Credit Rating?<br />Ratings can be assigned to short-term and long-term debt obligations as well as securities, loans, preferred stock and insurance companies. Long-term credit ratings tend to be more indicative of a country's investment surroundings and/or a company's ability to honor its debt responsibilities. . The ratings therefore assess an entity's ability to pay debts. There are various organization who perform credit rating for various business organization.<br />Union Bank of India follows a finely defined Credit Rating Model for assessing the creditworthiness of the applicant. The credit rating model asses various aspects of the projects and assigns scores against them thereby determining the risk level involved with the project.<br />It is divided in Five Sections:<br />1. Rating of the Borrower<br />Financial Risk<br />Management Risk<br />2. Market Condition/ Demand Situation<br />3. Rating of the Facility<br />4. Business Consideration<br />5. Cash Flow related parameters<br />12. Personal and HR department <br />12.1 Recruitment <br />Written examination<br />Personal interview<br />12.2 Training and development<br />Union bank has one of the best training systems in India. The training experience here goes back to over four decades. Presently the training structure consists of the Staff College at Bangalore, and seven centers in various parts of the country. The training is designed, delivered and assessed, based on systems suggested and put in place by our overseas consultants M/s. Vinstar Limited (AGL Group) of New Zealand. These systems have been tested and refined by practical application. The training system of Union Bank has been awarded the prestigious Golden Peacock National Training Award instituted by the Institute of Directors, New Delhi for the best training system in the Country.In our pursuit of achieving higher standards we have further upgraded our systems and sized up to 'international norms'. After a rigorous audit, in February 2001, the College is awarded ISO 9001 certification (for Design and Development of Customised Training Programs) by Det Norske Veritas, of the Netherlands. We are the only Bank to obtain ISO certification for the training system. FROM PHILOSOPHY TO REALITY We have devised an outcome-oriented training process. Each and every module is designed so that learning takes place through interaction. It is also ensured that this learning is translated into action at the work place. Our training programs actually deliver value to the Organization. Post course surveys conducted by us have confirmed this Yes, we have translated yet another cliché into reality. We invite Organizations to give the enriching experience to the employees, to create learning and growing organizations. THE COLLEGE - AMBIENCE FOR LEARNING Union Bank Staff College stretching over 36 acres of sylvan setting, on the out skirts of Bangalore city, has been the cynosure of appreciation as an apt option, for the best ambience for learning. Here physical, mental, spiritual and social upgradation of self for an individual and building of teams of performers of outstanding Organizations take place in the most natural way. We have got excellent, air-conditioned learning centers [we call them "channels" of learning], computer-backed presentation packages, interactive learning processes, salubrious living conditions in hostel rooms with provisions for intellectual and physical games, group exercises and teambuilding fun in verdurous mango-groves, where mimicking monkeys and shy sheep are, perhaps, the only onlookers! Yoga, somnolent reverie after a relaxed splash in the swimming pool, or a stroll down the jogging tracks and exercise stations or a stretch of paddling or rowing on the boat around the natural pond are true tonics for invigoration. If the weather does not encourage outdoor relaxation (unusual in the 'Garden City' of Bangalore!) a workout in the luxury of the Gymnasium, a game of snooker, a solitary tryst with computer games or online learning facilities - are other options.THE 'FACILITATORS' Our 'facilitators' to learning - "Faculty" or "Trainers" in the common parlance- are experienced bank officers with many years of exposure in the entire gamut of banking. All the facilitators have been through an intensive orientation program on adult learning processes drawn up by Vinstar of New Zealand. They are also exposed periodically to updating of skills and awareness in leading institutions in the country. Some have also been nurtured with professional training abroad at premiere institutions like Columbia Business School, New York and the Manchester Business School, England. THE PROGRAMS Currently the College is running training programs in the following disciplines: 1.International Banking 2.Credit 3.Information Technology 4.General Banking 5.Marketing and 6. Management and human resource development. Union Bank is also organizing executive education programs in association with Icfian Business School - an arm of the Institute of Chartered Financial Analysts of India, Hyderabad. In this stream following programs are offered:1.Finance for Non-Finance executives 2.Treasury and forex management 3.Software- project management 4.The Service edge - improving service quality <br />12.3 Performance appraisal forms of Union Bank of India (IFB)<br />13. MIS or IT Department<br />13.1 Workflow for Information system in Union Bank of India (IFB)<br />13.2 Application of Software & Hardware<br />14. Other Aspects of Bank<br />14.1 Awards/ certifications received by the Bank<br />YearAward and Recognition2006National Award for the second best performance in financing small scale units by Ministryof Small Scale Industries, Government of India2007Golden Jubilee Award for the best bank in north east zone for excellence in the field ofkhadi and village industries from the Ministry of MSME, Government of India2007-2008Best Bancassurance partner byTata AIG2008National Award for the best bank for excellence in field of Khadi and village industries foreast and north east zones from the Ministry of MSME, Government of India2008-2009Pinnacle Partner of the year by Tata AIG2008-2009Highest contributor to lives insured by Tata AIG2009National Award under Prime Minister Employment Guarantee Programme in north eastzone from the Ministry of MSME, Government of India<br />14.2 Legal Compliances of Company<br />CODE OF BANK’S COMMITMENT TO CUSTOMERS<br />a. Providing minimum banking facilities of receipt and payment of cash/ cheques at the bank’s counter<br />b. Meeting the commitments and standards in this Code, for the products and services we offer, and in the procedures and practices we follow<br />c. Making sure our products and services meet relevant laws and regulations in letter and spirit<br />d. Ensuring that our dealings with you rest on ethical principles of integrity and transparency<br />e. Operating secure and reliable banking and payment systems.<br />To Help You To Understand How Our Financial Products And Services Work By:<br />a. Giving you information about them in any one or more of the following languages – Hindi, English or the appropriate local language<br />b. Ensuring that our advertising and promotional literature is clear and not misleading<br />c. Ensuring that you are given clear information about our products and services, the terms and conditions and the interest rates/service charges, which apply to them<br />d. Giving you information on what are the benefits to you, how you can avail of the benefits, what are their financial implications and whom you can contact for addressing your queries and how.<br />To Help You Use Your Account Or Service By:<br />a. Providing you regular appropriate updates<br />b. Keeping you informed about changes in the interest rates, charges or terms and conditions<br />c. Displaying in our branches, for your information<br />i. Services we provide<br />ii. Minimum balance requirement for Savings Bank accounts and No Frills accounts and charges for non-maintenance thereof<br />iii. Name of the official at the branch whom you may approach if you have a grievance<br />iv. Name and address of the Zonal/ Regional Manager whom you can approach if your grievance is not redressed at the branch<br />v. Name and contact details of the Banking Ombudsman under whose jurisdiction the branch falls<br />vi. Information available in booklet form.<br />d. Displaying on our website our policies on<br />i. Cheque collection<br />ii. Grievance Redressal<br />iii. Compensation<br />iv. Collection of Dues and Security Repossession.<br />To Deal Quickly and Sympathetically With Things That Go<br />Wrong By:<br />a. Correcting mistakes promptly and cancelling any bank charges that we apply due to our mistake<br />b. Handling your complaints promptly<br />c. Telling you how to take your complaint forward if you are still not satisfied (see Para No. 7)<br />d. Providing suitable alternative avenues to alleviate problems arising out of technological failures.<br />To Treat All Your Personal Information As Private And Confidential<br />We will treat all your personal information as private and confidential<br />Subject to matters.<br />To Publicise The Code We Will:<br />a. Provide you with a copy of the Code, on request, over the counter or by electronic communication or mail<br />b. provide you ( new customer) with a copy of the Code when you open your account<br />c. make available this Code at every branch and on our website<br />d. ensure that our staff are trained to provide relevant information about the Code and to put the Code into practice.<br />To Adopt and Practice A Non - Discrimination Policy<br />We will not discriminate on the basis of age, race, gender, marital status,<br />Religion or disability.<br />14.3 GRIEVANCE REDRESSAL POLICY1. IntroductionBank has set a vision to emerge as number one Bank in terms of customer experience. Towards this end, Bank will remain alert and sensitive to customer complaints and uses it as a tool for removing deficiencies in service at all levels. The policy also takes into account the increasing touch points where standard of customer service gets impacted significantly. Hence all the delivery channels viz., ATMs, Phone Banking, Mobile Banking, Internet Banking will be given due importance in redressing shortcomings based on customer feedbacks. Likewise, channels like call center and online complaints will be given added focus both in receiving as well as redressing customer grievances. The adoption of Banking Codes and Standards Board of India places greater responsibility on the Bank to meet higher standard of customer expectation. Bank will use customer education, customer awareness and transparency as tools for reducing grievances and enhancing customer satisfaction.Grievance Redressal Policy will also enable compliance to Government / Reserve Bank of India guidelines / regulations and adherence to code set by Banking Codes and Standard Board of India. The provisions of this policy will be maintained in compliance and fulfilment to these requirements to the grievance Redressal process.The policy document aims at understanding root cause of complaints, based thereon review of delivery standards will be carried out. Deterrent and disciplinary measures will also be effectively enforced. Over all the review mechanism should help in identifying shortcomings in products / processes and services related issues. The bank’s policy on grievance redressal is governed by the following principles:Customers be treated fairly at all timesComplaints raised by customers are dealt with courtesy and on timeCustomers are fully informed of avenues to escalate their complaints/grievances within the organization and their rights to alternative remedy, if they are not fully satisfied with the response of the bank to their complaints.Bank will treat all complaints efficiently and fairly and will be seen as opportunities for improvement.The bank employees must work in good faith keeping in mind Bank’s policy and without prejudice to interest of the customer.In order to make bank’s redressal mechanism more meaningful and effective, a structured system is laid down to meet this end. The system ensures that the redressal sought is handled in just and fair manner and is enabled through a set of framework of rules and regulations. The policy document will be made available at all branches. The concerned employees will be educated about the complaint handling process. The customer complaint arises due to:The attitudinal aspects in dealing with customersInadequacy of the functions / arrangements made available to the customers or gaps in standards of services expected and actual services rendered.Non-dispensation of cash at ATMsNon-functioning / mal-functioning of e-banking productNon-sanction / delay in sanction of loan / credit facilitiesLack of information and understanding of bank’s products, services and service chargesThe customer will have the full right to register his complaint if he is not satisfied with the services provided by the bank. He can give his complaint in writing, orally or over telephone. The customer can also lodge a complaint through Bank’s own call centre. If customer’s complaint is not resolved within given time or if he is not satisfied with the solution provided by the bank, he will have the right to approach Banking Ombudsman or such other grievances redressal forums for redressal of grievances.2. Internal Machinery to handle Customer complaints/ grievancesThree tier grievance redressal systemThe Bank will have public grievances machinery functioning at three levels i.e. Branch, Regional and Central Office level. All complaints received at every level will be immediately acknowledged and dealt appropriately.The bank has also enabled an Online Grievance Redressal Mechanism whereby grievances can be lodged online and will be attended as per the time schedule with an inbuilt escalation process by which the complaint get escalated to higher offices in case of non fulfilment within time. The facility has been provided to customer to register the complaint online for speedy redressal.Call Centre is yet another avenue to record complaints and deficiencies in service. Calls to Call Centre will be processed through a well laid down fulfilment work flow within a committed time and escalation provision.Nodal Officer and other designated officials to handle complaints and GrievancesBank will appoint a Nodal Officer in the rank of General Manager who will be responsible for implementation of customer service and complaint handling for the entire bank. At field level Regional Heads will be designated to handle complaints/grievances in respect of branches falling under their control. Nodal Officer shallEnsure adherence to the laid down Grievances Redressal Policy and process, monitoring its implementation and initiating corrective action wherever needed so as to improve the quality of customer service on