Credit analysis for personal laon abn amro bank

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Credit analysis for personal laon abn amro bank

  1. 1. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ A PROJECT REPORT ON “CREDIT ANALYSIS OF PERSONAL LOAN” OF ABN AMRO BANK MAY-JULY. 2007IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR MANAGEMENT COURSE OF MASTER OF BUSINESS ADMINISTRATION ADMINISTRATION BY SIDDHARTH SHRIKANT RAUT UNDER THE GUIDANCE OF MRS SMITA SOVANI MADAM VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE-411048
  2. 2. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ To Whomsoever It May ConcernThis to certify that Mr. Siddharth Shrikant Raut is a student ofVishwakarma Institute Of Management , PUNE .He has successfully carriedout his summer project titled “ CREDIT ANALYSIS OF PERSONALLOAN” at ABN AMRO BANK , Pune from 20-05-2007 to 31-07-2007 ,in thepartial fulfillment of Masters in Business Administration Course ofUniversity of Pune (2006 – 2008 ) .He has worked under our guidance and directions. His work is found to begood and complete in all respects .during the period we found him hardworking, sincere and loyal.We wish him all the best for his Future.
  3. 3. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ ACKNOWLEDGEMENTTaking advantage of the occasion of submission of this project, I take an opportunity tothank to all who were directly or indirectly involved in this project and without thereguidance, co-operation and support this would not have been possible. I am highly obliged to Mr. Atul Sharma(Head – Unsecured Asset) forproviding spark in the dark and providing us the opportunity to work in CREDITANALYSIS of prestigious organization like ABN AMRO BANK I was fortunate to getevery sought of guidance which acted as a pole star for me. I would also like to thank Staff of ABN AMRO BANK who has been backboneof our project & for being “Friend, Philosopher & Guide” at every stage of the project.There valuable suggestions, encouragement & patience are only responsible for seeingthis project through to completion.I am proudly indebted to my project guide prof smita sovani mam for all her support andGuidance towards the completion of the project. . It was their vision, my hard work & blessings of my parents, which made mecapable to complete this project successfully.I would be failing in my duty if I do not acknowledge the gratitude to Dr Sharad joshi ,director, V I M for his keen interest and valuable suggestions that went all the waysuccessful completion of this work.Above all, I thank ‘God ‘for making this mortal venture possible. Thanking All, Siddharth Raut
  4. 4. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ TABLE OF CONTENTS CHAPTER 1 : INTRODUCTION P.NOEXECUTIVE SUMMARY....................................................................... 2OBJECTIVE OF THE PROJECT ……………………………………… 3 CHAPTER 2 : COMPANY PROFILEABN AMRO BANK……………………………………………………… 5CORPORATE VALUES & MISSION …………………………………... 6THREE BUSINESS UNITS ……………………………………………… 8 1. Consumer & commercial clients 2. Private clients & asset management 3. Wholesale clientsABN AMRO BANK IN INDIA ………………………………………….. 11ACHIEVEMENTS ………………………………………………………... 12PRODUCT AND SERVICES: OVERVIEW ……………………………… 13 CHAPTER 3 : PERSONAL LOANPERSONAL LOANS ……………………………………………………. 17LOAN WITH INCOME STATEMENTS ………………………………. 19SELF EMPLOYED PROFFESSIONALS ……………………………… 21SELF EMPLOYED BUSINESSMEN …………………………………... 22LOAN WITHOUT INCOME STATEMENTS ………………………… 23Credit cardsSurrogate loanRelationship rewards for existing ABN AMRO customersPersonal loan top up schemes
  5. 5. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CHAPTER 4 : CREDIT LINECONCEPT OF CREDIT …………………………………………… 30SALARIEDSURROGATEBALANCE TRANSFERRELATIONSHIP REWARDSCo – BorrowersGuarantorsINTREST RATES ………………………………………………………… 46PERSONAL LOAN APPROVAL STAGES ……………………………… 47GUIDELINENOTE ON NORMS ………………………………………… 49CONTACT POINT VERIFICATION POLICY ………………………….. 50LIST OF APPROVED COMPANIES …………………………………….. 52 CHAPTER 5:CASE STUDY …………………………………………………………….. 54 CHAPTER 6:CONCLUSION ……………………………………………………………. 59 CHAPTER 7:BIBLIOGRAPHY …………………………………………………………. 61
  6. 6. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CHAPTER 1INTRODUCTION
  7. 7. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ EXECUTIVE SUMMARYABN AMRO BANK is one of the fast growing foreign banks in India. It has got veryimportant presence in the consumer as well as corporate sectors. I have undertaken aProject titled “CREDIT ANALYSIS OF PERSONAL LOAN “The main objective of the project was to know the loan proposal system of ABN AMROBANK. The analysis of any proposal consists of two parts • Internal • ExternalInternal is extract of internal analysis , consisting of calculation of tenor as per norms,calculation of eligibility with reference to income shown by an applicant, then ifapproved, to calculate the equated monthly installments & actual disbursement.External analysis involves collection of documenry proofs regarding income profile,residence verification, repayment capacity and the end use.
  8. 8. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ OBJECTIVE OF THE PROJECTTo find out exactly what is Credit Analysis is?How it is to be done?To find out what is the criteria to be considered by the banks to give loan forvarious purposes.How the processing is done on the applicant’s loan request & how it is to beaccepter or rejected.To know and study various credit facilitities provided by the banks.How the eligibility for granting for granting the loan is calculated.
  9. 9. www.final-yearproject.com | www.troubleshoot4free.com/fyp/CHAPTER 2COMPANY PROFILE
  10. 10. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ ABN AMRO Bank On 29 March 1824 Kng Willem-I issued a royal decree creating theNederlandsche handel-Maatschappij (NHM) with the aim of reviving tradebetween the Netherlands and the Dutch East Indies. It started with theTrade Company Edwards, Henriquez and Co., establish in 1856 inCuracao whose main activity was trade and sea transportation. Severalyears later the company began with money exchange-activities and little bylittle became a bank of full value. In 1964, NHM merged with DeTwentsche Bank to form Algemene Bank Nederland (ABN), whileAmsterdamsche Bank and Rotterdamsche Bank joined to becomeAmsterdam-Rotterdam (AMRO) Bank. In 1991, these two banks mergedas ABN AMRO Bank. Today, ABN AMRO Ban has a powerful presence inworld markets, building on a tradition of stimulation international trade. ABN AMRO Bank ranks 10th in Europe and 22nd in the world basedon tier 1 capital, with over 3,500 branches in more than 70 countries, astaff of 110,000 full-time equivalents and total assets of EUR 597 billion(as per end March 2003). The Bank is listed on several exchanges,including the Amsterdam, London and New York Stock Exchanges. Leadership in chosen markets is critical to ABN AMRO Banks long-team success as well. We have three principle clients segments:Consumer and Commercial Clients, Wholesale Clients and Private Clientsand Asset Management. Within ABN AMRO Banks organizationalstructure, these are also core global Strategic Business Units. We strive tomaximize the value of each of these businesses and the synergiesbetween them.
  11. 11. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Corporate Values & Mission Our Corporate Values provide the foundation for the banks newlyintroduced business principles. The bank formulated these CorporateValues in 1997.Integrity: Above al, we are committed to integrity in all that we do, always,everywhere.Teamwork: Teamwork is the essence of our ability to succeed as a trustedpreferred supplier of financial solutions to our clients. Our overriding loyaltyis to the good of the whole organization, requiring us all to learn from eachother and to share our skills and resources across organizationalboundaries for our clients benefit.Respect: We respect every individual. We draw strength from equalopportunity and diversity, at the same time supporting personal growth anddevelopment. We value and we all benefit from the entrepreneurial spiritof each individual.
  12. 12. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Professionalism: To be of service to our clients we are committed to thehighest standards of professionalism, pursuing innovation deployingimagination, being open to new ideas and acting decisively andconsistently. We are determined to deliver outstanding quality so that ourrelationships with our clients will be long lasting and close.Mission: ABN AMRO Banks Mission is to create maximum economicvalue for our shareholders through a constant relationship focus on thefinancial services needs of our chosen client segments and a strictadherence to our financial targets.Excellence of service to our clients and leadership in our chosen marketsare the reasons behind our long-term success.We strictly follow a relationship approach, which keeps clientsrequirements clearly in focus and provides excellent service through theprofessionalism and motivation of our employees across the globe
  13. 13. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Three Business Units1. Consumer & Commercial Clients (C & CC) The business unit is to provide services to individuals and small tomedium-sized enterprises requiring day-to-day banking. ABN AMROserves approximately 15 million clients, mainly through their majorpresence in three home markets: the US Midwest, the Netherlands andBrazil. The Businesses Unit New Growth Markets is also expanding itsconsumer and commercial operations in selected countries such as India,Hungary and Thailand. For our personal customers we offer a range ofproducts to meet the financial needs of the individual. The financial services and solutions for small to medium sizedbusinesses includes a variety of commercial financing and lending servicessuch as business loans and lines of credit, cash management solutions,public services and small business opportunities, providing them with thefinancial tools necessary to manage their business.
  14. 14. www.final-yearproject.com | www.troubleshoot4free.com/fyp/2. Private Clients and Asset Management (PCAM) Private Clients and Asset Management Unit is for individuals andinstitutional investors. ABN AMRO is a leading player in private bankingboth in the Netherlands and in France, and has strong positions inLuxembourg, Miami and Switzerland. Private clients ranks among theworlds top 10, with EUR 94 billion in Assets under Administration (as perend March 2003). Asset Management has a local presence in 30countries and FUR 148 billion in Assets under Management (as per endMarch 2003). We offer highly personalized banking for our private clients,aiming to structure and enhance wealth with services ranging fromdiscretionary portfolio management to international estate planning andTrust. At Asset Management we offer strong capabilities in themanagement of equities, fixed income, money market, property andquantitative products.Solutions are suggested in the areas of • Banking • Investment advisory • Discretionary portfolio management • Investment funds • Trust • International estate planning
  15. 15. www.final-yearproject.com | www.troubleshoot4free.com/fyp/3. Wholesale Clients (WCS) ABN AMRO Banks traditional strength lies in its leadership inproviding a gamut of services to corporate and institutions, combing itscorporate and investment banking activities in one integrated business unit- Wholesale Clients. This is one of the largest Europe-based wholesalebanking businesses with around EUR 5 billion in annual revenue (as perend 2002), 10,000 clients, 20,000 staff and operations in over 45 countries.With a global network, specialists in all major industry sectors and a broadrange of products, ABN AMRO provides local and global expertise forcomplex cross-border deals. For our corporate and institutional clients weaim to be a leading provider of commercial and investment bankingproducts and services By combining our sector expertise with in –depth product knowledge in both corporate and investment banking, We deliver a broad range of benefits, including • Sector Expertise • Integrated Product Offering • Local Presence • Financial strength
  16. 16. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ ABN AMRO Bank in IndiaABN AMRO Bank started its operations in India in 1920. till the early1990s it was largely a bank catering to the diamond trade. It startedwholesale banking in 1995, the securities business and corporate financeservices soon after, and consumer banking in 1999. ABN AMRO Banktook over the consumer banking business of Bank of America in 1999 aspart of a purchase agreement covering acquisition of this line of businessin India, Taiwan and Singapore. The consumer banking business of Bankof America acquired by ABN AMRO Bank included consumer lending,deposit mobilization, auto finance and mortgage activities. The acquisitionwas in part of US$ 200 million deal signed between the two banks forpurchasing the consumer banking business by ABN AMRO Bank in thesethree countries. ABN AMRO Bank (India) has an 83 years long experience of theIndian business scenario. Traditionally known as a strong "diamond-financing bank", it has turned into a bank providing a comprehensive rangeof services with a difference. The bank took off in a big way in 1991, after the merger of ABN andAMRO worldwide. The Delhi branch was functional in the very same year.ABN AMRO Bank was launched in other cities throughout India between1994 and 1999. They were Chennai in 1994, Pune in 1997 and Baroda in1999, while the Hyderabad and Bangalore branches were opened in 2001.The year 2002 saw the opening of the Noida office. AA Securities (I) Pvt.Ltd. formed in September 1998.
  17. 17. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ AchievementsBest at cash management Award in September 2001 – The bankerCorporate Finance India ranked second in M&A in the investmentBanking arena in 2001 – The Economic Times.ABN AMRO Securities India Best foreign bond house No 1 arranger inprivate sector Euro money 2000.Top bank on “MANAGEMENT QUALITY “parameter business India‘Best banks survey 2000’.7th most admired commercial bank in the world fortune magazine 2000Top foreign bank in India The Economic Times – CMIE Survey 1999Second overall in banking industry financial express – BRIS Survey1999Judged India’s No 1 bank by business today magazine in December2002
  18. 18. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Products and Services : Overview Our local expertise is backed by the strength of ABN AMRO Banksvast international network. This enables us to offer the most innovativefinancial products and services across banking segments, to help achievecompanys strategic local, regional and international goals and fulfill clientspersonal investment needs. Core Business Products and Services Consumer Banking CREDIT CARD LOAN PRODUCTS • Loans against Securities • Car loans • Persona loans DEPOSIT PRODUCTS • Savings Accounts • Current Accounts • Fixed Deposits • Products & Services SERVICES INVESTMENT SERVICES • Mutual Funds
  19. 19. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ SERVICES • Debit Card • Net Banking • Express Cash • ATM Services • 24 Hour Bank by Phone • Bill Payment • Doorstep Banking • Depository Services • National Access • 365 Days Banking • Extended Banking Hours
  20. 20. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Wholesale Banking • Structured Products • Trade Services • Cash Management • Correspondent Banking • Precious Metals • Electronic Banking • Custodial & Security Services Structured Corporate Products • INR Interest ate Swaps • Currency cum InterestPrivate Banking • Portfolio Advisory Value Added Services
  21. 21. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CHAPTER 3PERSONAL LOAN
  22. 22. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ PERSONAL LOANPersonal loans help you to take care of your immediate requirementsWithout much of a hassle. The most attractive feature of the personal loanis that you do not have to give any kind of security to avail this loan. NoSecurity, Collateral or Guarantors are required to avail personal loans.Also, no questions regarding the end use of the loan are asked sincepersonal loans do not require any security or hypothecation of assets, therate of interest charged by them is higher compared to any other securedloans..
  23. 23. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ABN AMRO Personal Loans are completely flexible - you can take yourloan for purchase of assets and consumer durables, home improvements,tax saving investments, higher education, holidays and travel, emergencymedical needs, marriage in family … in short, for any declared legal usewithout pledging any security. You may also avail of our "Balance Transfer Program" to retire anyhigh cost loans that you may have taken, including your credit card duesby simply opting for an ABN AMRO Personal Loan. There are no hidden charges - our Personal Loans come to you withminimum formalities, at attractive interest rates and only a one time non-refundable processing fee. If you are an existing ABN AMRO customer,you could be eligible for special discounts on the interest rates andsimplified application formalities under our "Relationship RewardsProgram".
  24. 24. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Loan with Income Statements / Salaried Employees The loan offered to salaried employees is given according to thecompanies they are working with. ABN AMRO Bank has around 7500companies listed with them, and they offer loans to the employees workingin these companies only. The criteria for listed companies are according tothe company profile, past performance, profit earning ability etc. Thesecompanies are again been divided into 3 categories i.e. Category A, B & C,according to the above factors. ABN AMRO Bank gives loan to the officers and management cadresonly. They dont give loans to the employees below the officers grade i.e.to the supervisor, the workers etc. The applicant should be earning aGross annual salary of minimum Rs. 1, 00,000/- per annum. Theconditions are as follows.Conditions • Officer or management cadre • Working in the current employment for at least 1 year or overall 3 years work experience • Age between 23 to 60 years • Gross annual salary more than Rs. 1, 00,000/- per annum. This maximum amount that can be given to an applicant is subject tohis net monthly income. The amount calculated by the applicants NetAdjusted salary.
  25. 25. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Following is the table that is used to calculate the maximum loan amount. Tenure Max Loan Amount 1 year 5 times net adjusted salary 2 years 10 times net adjusted salary 3 years 12 times net adjusted salary 4 years 15 times net adjusted salary 5 years 18 times net adjusted salaryDocument Required: 1. Application form 2. Latest 2 months salary slip 3. Bank statement 4. Photograph (signed on back side) 5. Identity proof • PAN Card • Driving License • Passport • (if the above documents are not available then LIC premium receipt/SSC Certificate with Photo and sign verification is required) 6. Employment proof (Form 16 H or appointment letter)
  26. 26. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Self Employed ProfessionalsDoctors (BDS, MBBS, MD, MS only) The loan offered to the self-employed professionals is, at presentlimited to doctors (BDS, MBBS, MD, MS) only. The rate of interest for thiscategory is 16.5%. The conditions for this category area as follows.Conditions: • Net Annual Income should be Rs. 1,00,000/- per annum (at least Rs. 75,000/- from profession) • Overall 3 years in the business or profession • Age between 23 to 65 years. The maximum amount that the bank can give is subject to the Netadjusted salary of the applicant. The calculation for the same is done in thefollowing manner.NAS (P) = Net Income (ITR) - (EMI * 12) - (IT paid in a particular year)Degree Max Loan AmountMBBS & BDS 4 times net adjusted salaryMD & MS 5 times net adjusted salary
  27. 27. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Self Employed Businessmen The loan offered to the self-employed businessmen is limited to theProprietor, Director, Partner only. The rate of interest for this category is22.5% for the Director and Partners.Conditions • Net Annual Income should be Rs. 1,00,000/- per annum • Overall 3 years in the business • Age between 23 to 65 yearsThe multiplier used here is as follows.NAS (B) = Net Income (ITR) - (EMI * 12) - (25% CC) - (IT paid)Document Required: 1. Application form 2. Latest 2 years ITR with Balances sheet and P & L statement 3. Bank statement 4. Photograph (signed on back side) 5. Identity proof a. PAN Card b. Driving License c. Passport d. (if the above documents are not available then LIC premium receipt/SSC Certificate with Photo and sign verification is required) 6. Establishment proof 7. Telephone connection is a must in the office sand residence both.
  28. 28. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Loan without Income StatementsCredit Cards In this program the loan is offered against the credit card limit. ABNAMRO Bank gives loan to applicants having the credit cards of all MNCs,SBI, ICICI, HDFC except to the employees of Private Limited Companies.Conditions: • Rate of interest 21.5% if loan amount <=50000 otherwise 21%. • Tenure 1 to 3 years • Multiplier : 1.2 times credit limit for salaried 1 for other i.e. SEPs and SEBs. • Maximum loan limit Rs. 3,00,000/- (in case of charge card/ diners club limit is Rs. 1,00,000/-)Documents Required: • Application form • Latest 2 months billing for Credit Card (No late charges allowed) • Photocopies of both sides of credit card • Identity proof • PAN Card • Driving License • Passport
  29. 29. www.final-yearproject.com | www.troubleshoot4free.com/fyp/• (if above documents are not available then LIC premium receipt/SSC certificate with photo and sign verification is required)• Photograph (signed on both sides)• Employment / Establishment proof (Form 16H or appointment letter/shop license)• Card must be at least 1 year old
  30. 30. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Surrogate Loan (Track Record of Previous PL/Auto/Housing Loan) In this program the loan is offered on the track record of the previousPersonal Loan, Car loan and Housing loan. Track record on the loan takenfrom the following companies will make the applicant eligible for the loanoffered by ABN AMRO Bank. • State Bank of India (SBI • ICICI • HDFC • Kotak Mahindra • Amex • HSBC • Sundaram Fin. • Tata Fin. • IDBI • ING Vyshya • UTI • DCB • Centurain Bank of Punjab • GE Money/ Countrywide • Citi Fin.Conditions • Previous loan should be matured at least for 12 months for the salaried class and 18 months for businessmen. • Loan limit will be Rs. 25,000/- to Rs. 3,00,000/- • Interest will be 20% for car/housing loan
  31. 31. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ • Interest 1% less than previous personal loan (should not be less than 17.5%) • Tenure 1 to 5 years • Multiplier is 15 times of EMI for salaried • For Businessmen and others If loan seasoning is done between 12 - 18 months 12 times of EMI 18 months and above 15 times of EMIDocuments Required • Application form • Identity proof • PAN Card • Driving License • Passport • (if above documents are not available then LIC premium receipt/SSC certificate with photo and sign verification is required) • Photograph (signed on both sides) • Track record of last 12 months/ 15 months bank statement • Employment / Establishment proof (Form 16H or appointment letter/shop license)
  32. 32. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Relationship Rewards for Existing ABN AMRO CustomersCar Loan/ Personal Loan (With relation of at least 8 months) • Max loan limit - Rs. 25,000/- to 4,00,000/- • Interest 21% for self employed • All others at respective rack rates • Tenure 12 months to 60 months • Multiplier - Maturity of previous loan • 8 months - 12 months * EMI paid • 12 months - 18 months (EMI * No of installments)* 1.2 times • 18 months and above (EMI* No of installments)* 1.3 times subject to a Max of 30 installments Consideration upto 6 months from completion of previous loan
  33. 33. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Personal Loan Top Up Scheme Under this program, any applicant can go for the top up scheme. Here after thecompletion of six months, the applicant can get an additional loan amount to theEMI of the loan and the completed tenure of the loan.
  34. 34. www.final-yearproject.com | www.troubleshoot4free.com/fyp/CHAPTER 4CREDIT LINE
  35. 35. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CONCEPT OF “CREDIT” 1. It is the idea that if you build up a reputation for paying bills and debts on time you will be able to borrow money in the future. 2. Credit is important because it enables you to borrow money when you need it. In addition, the better your creditworthiness the more cheaply you will be able to borrow money whether for a car, education, home or some other large expenses. 3. On the other hand, if you are not a good credit risk, you may not be able to borrow when you need to, or you might be able to borrow but only at a high interest rate.SIGNIFICANCE OF CREDIT • Credit is used primarily in order to obtain loans. Loans can be excellent way to be fund large purchases and business initiative ,but managing debt can be complicated process • It can take just few months to get into financial trouble and years to get out. • Although debt is some time useful, there is diff between good debt and bad debt the two most important characteristics are how you borrow the money and what you do it .HOW FRUITFULLY YOU USE IT. • Even though debt is a part of life, the key to preventing it from becoming destructive is knowing its benefits and risks.
  36. 36. www.final-yearproject.com | www.troubleshoot4free.com/fyp/REASONS FOR CREDIT ANALYSIS Unfortunately credit fraud is increasingly serious problem having grown almost threefold in frequency in the last five years. Under the most common scham called “Identity Theft “the criminal opens a credit card or other account with another person name. The criminal then purchases goods and services and you get stuck with the bill. Credit card fraud & credit analysis are not related with each other. Sometimes the creditor / borrower may qote wrong information about his personal loan details. his capacity to pay off the loan ,the reasons for taking the loan. Therefore to overcome all this fraudulent activity credit analysis is to bedone, to check out the worthiness of the creditor to repay the loan and pay theintrest.“CREDIT ANALYSIS”DEFINATION: “The process of evaluating an applicants loan request or a corporations debt issue in order to determine the likelihood that the borrower will live up to his/in obligations.”
  37. 37. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ SALARIEDMin Age - 23Max Age (on loan maturity) - 60Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or Self-Owned resi or Gross Sal> 3.6LJob Stability - 1 yr at current job or 3 yrs total work experienceBasic Documents - (1) photo with sign on back side (2) ID proof (3)Job/Business Stability proof Self employed - BizMin Age - 25Max Age (on loan maturity) - 65Residence Stability - 2 yrs in Pune of 1 yr in current resi OR self ownedresiJob Stability - 3 yrs in same bizBasic Documents - (1) photo with sign on back side (2) ID proof (3) Job/Business Stability proof
  38. 38. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ RR CustomersMin Age - 21Max Age (on loan maturity) - 70Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or Self-Owned resi or Gross Sal> 3.6LJob Stability - 1 yr at current job or 3 yrs total work experienceBasic Documents - (1) photo with sign on back side (2) ID proof (3)Job/Business Stability proof Verified Income Program -Cat AMin Income - Gross 1 LacMax loan amt - 10 lacsMax Tenor - 5 yrsEmp Continuity Req -Maximum Loan eligibility-Multiplier - 1 yr - NAS x 5 2 yrs - NAS x 10 3 yrs - NAS x 12 4 yrs - NAS x 15 5 yrs - NAS x 18Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting3 Salary Credits.Additional Qualifying requirements -NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC
  39. 39. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Cat BMin Income - Gross 1 LacMax loan amt - 5 lacsMax Tenor - 4 yrsEmp Continuity Req -Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4.5 2 yrs - NAS x 9 3 yrs - NAS x 10 4 yrs - NAS x 13Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting3 Salary Credits.Additional Qualifying requirements -NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CCSalariedMin Income - Gross 1 LacMax loan amt - 3 lacsMax Tenor - 4 yrsEmp Continuity Req -Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4 2 yrs - NAS x 8 3 yrs - NAS x 9 4 yrs - NAS x 11Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting3 Salary Credits.Additional Qualifying requirements -NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC
  40. 40. www.final-yearproject.com | www.troubleshoot4free.com/fyp/SalariedMin Income - Gross 1 LacMax loan amt - 1.25 lacsMax Tenor - 3 yrsEmp Continuity Req -Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4 2 yrs - NAS x 8 3 yrs - NAS x 9Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting3 Salary Credits.Additional Qualifying requirements -NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC Software ProfessionalsMin Income - Net 1.5 LacsMax loan amt - 5 lacsMax Tenor -EMP Continuity Req -Maximum Loan eligibility-Multiplier - 1 yr - NAS x 3.5 2 yrs - NAS x 7.5 3 yrs - NAS x 9 4 yrs - NAS x 11.25 5 yrs - NAS x 13.5Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting3 Salary Credits (3) mustAdditional Qualifying requirements -- Must have 12 months old loan with approved financier ( lac AL/HL or75,000 PL) OR CC with min 40,000 limit.
  41. 41. www.final-yearproject.com | www.troubleshoot4free.com/fyp/NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC EMPLOYEES OF BPO , CALL CENTERMin Income - Net 2.4 lacsMax loan amt - Cat A - 5 lacs & Cat B - 3 lacsMax Tenor -EMP Continuity Req - Min 3 yrsMaximum Loan eligibility-Multiplier - 1 yr - NAS x 3.75 2 yrs - NAS x 7.5 3 yrs - NAS x 9 4 yrs - NAS x 11.25 5 yrs - NAS x 13.5Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting3 Salary Credits (3) mustAdditional Qualifying requirements -- Min age of 23 yrs and must not be staing in shared rentedaccommodation.NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC Surrogate ProgramLoan track record NRRMax loan - 7.5 lacsMin vintage - 8 monthsMax tenor - 5 yrsProgram requirement - Min 10 EMIs paid and Min loan taken Rs.50,000/-
  42. 42. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Max Loan eligibility -10-12 EMIs x EMI x No. of EMIs paid x 1.25>12-18 EMIs - EMI x No. of EMIs paid x 1.45 (subj to Max of 30 EMIs) >18-24 1.5Eligibility -Citibank, StanC, AmEx, HSBC, ICICI, HDFC, Sundaram Fin. Kotak Mah,Tata Fin, IDBI, ING Vysya, UTI, KOTAK, DCB, Centurian Bank of Punjab,GE Money/Countrywide**, Citi Fin**, Maruti Countrywide**Documentation - (1) Repayment track, (2) 3 months bank statements OR(1) Amortization schedule & 8 months banking. Surrogate Program Mobile PhoneMax loan - 1.25 lacsMin vintage - 3 monthsMax tenor - 3 yrsProgram requirement - Min Avg Billing of Rs. 1500/- for last 3 monthsMax Loan eligibility -* Rs. 1500 - Rs. 2500 - 75,000 > Rs. 2500 - 1, 25,000Eligibility -Aritel, Reliance, Idea, Hutch, BSNL, Tata Mobile & BPLDocumentation - Latest 3 months mobile bill statements showing minbilling of Rs. 1,500/-
  43. 43. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Surrogate Program Other Bank DepositMax loan - 3 lacsMin vintage - 6 monthsMax tenor - 3 yrsProgram requirement - Saving Bank A/c with 6 months relationshipMax Loan eligibility -* 6-12 months - ADB x 1* 12-18 months - ADB x 2*> 18 months - ADB x 3Eligibility -ICICI, HDFC, StanChart, Citibank, HSBC, AmEx, UTI, IDBI & SBIDocumentation - Latest 6 months bank statements from S/B a/c with lastdays avg balance >/= Rs. 25,000/- Balance Transfer ProgramCredit CardMax loan - 3 lacsMin vintage - 8 monthsMax tenor - 3 yrsProgram requirement -* Min Credit Limit - 25,000/-* Limit utilization on Card =/<80%* Card should have transaction in last 2 months.Max Loan eligibility -* 8-12 months - Cr limit x 2* 12 months - Cr limit x 3
  44. 44. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Eligibility -Sai Employees of Prop & Pship mush have min MOB>12 monthsDocumentation - (1) Latest 2 months Card Statement (2) front & backcopy of the Card. Balance Transfer Program PLMax loan - 4lacsMin vintage - 1 yrMax tenor - 4 yrsProgram requirement -Min 12 EMIs paid and Min loan taken 1 lacMax Loan eligibility -* 12 to 18 EMIs = 1.2 x Principal Outstanding* 18 EMIs = 1.3 x Principal OutstandingEligibility -Documentation - (1) Repayment track for the last 12 months (2) 3 monthsbank Statement OR (1) 12 months bank statements (2) amortizationschedule & (3) Resi. & DOB Proof.ROI - Personal Loan: 1% less than competition subject to min of 16%
  45. 45. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ RR Program C A/cMin vintage - 6 monthsMax loan - 6 lacsMax tenor - 5 yrsMUE -Program eligibility -6 months ADB 40,000/-Loan eligibility -* 6 to 12 months - ADB x 3* 12 to 18 months - ADB x 5* > 18 months - ADB x 6 RR Program SB A/cMin vintage - 6 monthsMax loan - 6 lacsMax tenor - 5 yrsMUE -Program eligibility -6 months ADB 20,000/-Loan eligibility -* 6 to 12 months - ADB x 3* 12 to 18 months - ADB x 5* > 18 months - ADB x 6
  46. 46. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ RR Program CardsMin vintage - 8 monthsMax loan - 4 lacsMax tenor - 4 yrsMUE - 8.5 IacsProgram eligibility -Min Credit Limit - 25,000/-Loan eligibility -* 8 -12 months - Cr limit x 2* > 12 months - Cr limit x 3 RR Program Auto LoanMin vintage - 8 monthsMax loan - 7.5 lacsMax tenor - 4 yrsMUE - 8.5 IscsProgram eligibility -8 EMIs paidLoan eligibility -* 8 -12 MOB - EMI x No. of EMIs paid x 1.5* > 12-18 MOB - EMI x No. of EMIs paid x 1.75* > 18 MOB - EMI x No. of EMIs paid x 2 (subj to a Max of 36 EMIs)
  47. 47. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ RR Program MortgageMin vintage - 8 monthsMax loan - 7.5 lacsMax tenor - 5 yrsMUE - 8.5 IscsProgram eligibility -Loan eligibility -EMI x No. of EMIs paid x 1.5* Subj to a Max of 18 EMIs & LTV of HI < 80%Top Up ProgramMin loan enhancement - Rs. 50,000/-Max loan - For Salaried, loan amount caps as per present employercategory (Cat A/B) AND for SE as per programMin vintage - 8 monthsMax tenor - New loan tenor either same as earlier loan of higher subject toprogram caps (depending on whether existing loan is RR/VI/SI etc).Program requirement -# Any applicant who has availed a loyalty/special loyalty auto loan from thebank in the last 3 months will not be eligible for a loan under the Top Upprogram.# If existing PL has already closed/run off, then the loan multipliers willapply ONLY if the last payment is not more than 12 months old. if lastpayment is 12-24 months old, the PL can be processed as Override-however multipliers will not apply.# Max 4 Top up loans allowed.
  48. 48. www.final-yearproject.com | www.troubleshoot4free.com/fyp/# The EMIs for the top up loan should be from the same account as that ofthe existing loan and the existing business/employer (entity only) andresidence addresses should be unchanged, failing which, a full verificationwill be done i.e., residence and/or business/employer.# The new loan may be approved for either the same tenor as the earliertenor or a higher tenor subject to the maximum tenor allowed for thespecific program.# The applicant category must be unchanged from the original applicationi.e. if the applicant was earlier salaried and now self employed he will notbe eligible under theLoan eligibility -If, 8 -12 EMIs paid then EMIs paid x 1.2 & If, > 12 months then EMIs paidx 1.3* > 12-18 MOB - EMI x No. of EMIs paid x 1.75* > 18 MOB - EMI x No. of EMIs paid x 2 (subj to a Max of 36 EMIs)
  49. 49. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Co-borrowers This program is only for the salaried applicants. In this program the spouse canbe the co-borrower for the loan amount. The income of the spouse can be added in the gross income for the multiplier,to find the maximum loan that can be given to the applicants. Here 60% of thespouse’s gross income can be added for eligibility.
  50. 50. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ GuarantorsAlthough ABN AMRO BANK does not require guarantors for personal loans, butthere are some exceptions where there is need for the guarantors. The followingare the conditions when there is need for guarantors. 1. If the person is staying alone 2. If the applied amount for loan is very high 3. For self employed business 4. For software professionals if the applied amount of loan is grater than Rs. 3, 00,000/-
  51. 51. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ INTREST STRUCTURE PERSONAL LOANS Salaried Individuals 16% - 23% Relationship Rewards 16% - 22% Programs Track Record/Special 18% - 26% Surrogate Programs Processing fee for Regular 2.25% Programs Processing Fee for Relationship Reward 2% Programs Processing Fee for loan Rs. 20 amount less than Rs. 100000Disclaimer - The rate of interest mentioned above are the standard and averagerates under standard income criteria for each class of borrowers and shall behigher/lower depending on the parameters which are met by the customers. Theywould also vary by tenor. These rates are currently applicable and can be changedany time from time to time, at the sole discretion of ABN AMRO Bank andwithout any prior or post notice to the customer and such changes shall be finaland binding on all customers of ABN AMRO Bank
  52. 52. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Personal Loan Approval Stages Marketing Executive File Checking Documents Coordinator Initiating Verification {Crystal Info Services (P) Ltd. Central Processing Agency Credit Department Approval / Decline Post Approval Documents Delhi Disbursement
  53. 53. www.final-yearproject.com | www.troubleshoot4free.com/fyp/After a file is logged in by the Marketing Executive, the Coordinator checksthe documents and also initiates the Verification. Verification is done by anexternal agency Crystal Info Services Pvt. Ltd." The Verification is done bya surprise visit to the applicant’s residence and office premises, subject toa maximum of 3 times. Once the verification is done by the agency thereport is submitted to the credit department. Meanwhile, the documents submitted by the applicant are beingforwarded to the Central Processing Agency (CPA), which checks thedetails of the documents for processing. This work is also given to anexternal agency Lovelock & Lewis Pvt. Ltd.. The two external agencies submits their report to the CreditDepartment, which actually decides for Approval/Decline of the case, forfurther processing. The details of the report are put into a programme thatcalculates the maximum sanctioned amount for the loan. Once the loan is approved, the Cheque is disbursed to the applicantand the documents are sent to Delhi Office.
  54. 54. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Guideline Notes on NormsEligibility Criteria: 1, Age - Needs to be ascertained from Date of Birth as given in the address proof or the ID proof or the SSC Certificate. 2. Loan Eligibility - Multiplier to Net Income 3. Number of years in present/previous job/ business - it is very important norm, which helps assess the stability of the applicants career and also the regularity of the incomes for repayments of the loan. 4. Salary - The minimum requirement of Salary of the applicant is set to Rs. 1, 00,000/- only. 5. Telephone - a landline telephone connection is compulsory for every Scheme except for the Salaried applicants, for which a mobile connection will do along with the latest mobile bill.
  55. 55. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ Contact Point Verification PolicyContact Point Verification Policy (CPV) is a very important part of theApproval process.Objectives: • To ensure that the information is accurate • To enable the credit officer to construct a profile of customer for credit evaluation • To select and eliminate fraudulent applicantPurpose: • To establish identity of the borrower, ascertain and reconfirm his residential and office address, length of stay and stability, and match them with the information given by the applicant in the application form. • Residence verification is an external input to evaluate the standard of living of the applicants household in terms of his visible quality of life indicators like T.V., Refrigerator, AC, Music System etc. • The office verification will reconfirm the name and address of his employer and his designation in the company. In case of self employed Professional/Businessman, the office CPV will provide data on number of years of business, employees in the company, size and location of the office etc.Contact Point Verification is an aid to, and not replacement or asubstitution to credit evaluation process. A positive CPV does notguarantee Credit Approval.
  56. 56. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Division of files according to Programs 35 30 25 No. of Files 20 Series1 Series2 15 Series3 10 5 0 Relationship Top Up Balance SEVI Self Salaried Surrogate Rew ards Scheme Transfer Employed Program Program Professional Programs
  57. 57. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ List of approved companiesABN AMRO BANK has 7500 companies listed with them for the personalloan scheme. We can give loan only to the employees who are working inthese companies. These companies are listed according to their pastperformance, track record, profit earned in the past years, number ofemployees working there etc. The new company that has to be listed should first give the details ofthe requirements. Once the company is listed, the employees can apply forpersonal loan.
  58. 58. www.final-yearproject.com | www.troubleshoot4free.com/fyp/CHAPTER 5CASE STUDY
  59. 59. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CASE STUDYName: Siddharth DixitDate of Birth: 25-07- 1975Gender: MaleMartial status: MarriedExisting Relationship: NOResidential Address: Pl no 22, Purnanand Soc, Sadashiv Peth, Pune: 411030Name of Buiseness Entity: Sanchi SilkBusiness Address: Laxmi Road, Pune 411012Proprietor Name: Siddharth DixitNo of years in Business: 12 yrsTelephone No: 24216545Mobile No: 9860542165Residence Type: SelfLive in the city of Residence for: since BirthLive in the current residence for: 10 yrsDetail of Spouse:Name: YoginiOccupation: House WifeNumber of Dependant: 2Surrogate Loan 1: HDFC BankType of Loan: Auto Loan
  60. 60. www.final-yearproject.com | www.troubleshoot4free.com/fyp/Monthly EMI: 22550No of EMI Paid: 15Current Loan Rate: 20%You want a loan of RS: 5, 00,000Banking Relationship DetailLogin Documents Provided: 1) Application Form 2) Pan Card 3) MSEB Bill Xerox 4) Telephone Bill Xerox Of Sanchi Silk 5) Renewal Shop Act 6) EMI reflected banking only, Bank A/c Statement, Current A/c from Janata sah Bank 7) Welcome Letter 8) Repayment Schedule 9) 2 References who knows the applicant their telephone no , Residential Address 10) PhotographCustomer attestation is compulsory on each document; Sign behind thePhotograph is must.
  61. 61. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ STEP 2 After the file logd in properly it went to Contact Point Verification for Telephone Verification Then it is initiated as Telicalling OkAdditional Document Required: ITR Copy of 2002, to see Income from Business & Profession the case is under self employed. For business continuity the 2002 copy demanded. After it went to credit Then Physical verification was initiated. VR done at Residence, Resi Owned, Prime Location, Met Wife. VR done at Office, Met the Staff, Prime Location prop conformed, set up activity seen. Then CIBIL Report Checked, CIBIL report is Credit Information Bureau India Limited Report. CIBIL: All information Contained in this credit report has been collated by Credit Information Bureau India Limited based on information provided by its various members .Consequently CIBIL disclaims any and all responsibility on the accuracy, completeness, and veracity of any and all such information provided. The information is current and up to date to such extent as provided by its members. Any information contained herein does not reflect the views of CIBIL or its directors or employees. The use of this report is governed by the terms and conditions of rules for CIBIL and its members.CIBIL report gives details about All MNCS Loans & Credit Cards History.
  62. 62. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ After found Target Loans reflect in CIBIL with Clear track. It will go to Eligibility, and then it will process for Disbursement. Disbursement Documents Required: A. Agreement B. New Application Form ( NO Correction, Overwriting) C. Applicants Photograph D. Post Dated Cheque 60 cheque E. If its ECS then 9 cheques required for security F. ECS done by the Bank only which submitted in primary Level. G. If the Cheque given by current a/c then Sole Proprietor Declaration is requireApplicant Loan Eligibility: 20, 00,000Applicant Sanction Loan: 5, 06,000Rack Intrest Rate: 19%Processing Fee: 2%Tenure: 60 MonthsProgram: Surrogate Self Employed Auto LoanEMI: RS.11, 133.00Advance EMI: 0
  63. 63. www.final-yearproject.com | www.troubleshoot4free.com/fyp/CHAPTER 6CONCLUSION
  64. 64. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CONCLUSIONABN AMRO BANK has successful lead on personal loan market .Moreover theyworking for customer satisfaction .Bank very much stuck to the policy , the policyis not flexible to everyone it mainly concentrate on Higher middle class group andMass public. Bank mainly deal with surrogate program it will go through theprocess very soon as compare to other.Basically CREDIT ANALYSIS is a programmed carried out by Banks toMinimized the Risk involved to lending money .Credit appraisal intention is toverify Financial soundness & his repayment capacity, to check MCNF (MasterCard Negative Feedback) and very important is CIBIL report.
  65. 65. www.final-yearproject.com | www.troubleshoot4free.com/fyp/ CHAPTER 7BIBLIOGRAPHY
  66. 66. www.final-yearproject.com | www.troubleshoot4free.com/fyp/BIBLIOGRAPHY SITE: WWW.ABNAMRO.CO.IN BOOKS: RISK MANAGEMENT INDIAN FINANCIAL SYSTEM: M Y Khan

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