It describes the process of granting loans by SBH and adherence to various laws

1. STANDARD INDUSTRIAL
PROCESS FOLLOWED BY STATE
BANK OF HYDERABAD FOR
PROVIDNG LOAN
Made by :-
Aditi Rote
E-3
PRN - 15020441019
KNOWLEDGE MANAGEMENT

2. About the Company
 Established on 8th August, 1941
 A nationalized bank in India, with headquarters at
Hyderabad, Telangana
 One of the five associate banks of State Bank of
India and is one of the scheduled banks in India.
 CEO: Shri Santanu Mukherjee

4. PROCESS FOR PROVIDING LOANS
1. Locate the borrower
- The first step carried out by banks to search for the people in need of
loans
2. Determining the loan requirement
- It includes ascertaining loan requirements of the borrower
- Check of the financial background as well as other loans undertaken by
the borrower.
3. KYC
- It stands for Know Your Customer

5. PROCESS FOR PROVIDING LOANS
- The Reserve Bank of India introduced KYC guidelines for all the banks in
2002.
- A process of verifying the identity of its clients
4. Evaluation of loan applications
It includes evaluating
- Earnings
-Financial Condition
-Credit History
- Collateral
- various financial instruments like salary slip, income statement etc.

6. 5. CIBIL REPORT (Credit Information Bureau (India) Limited
- India’s first Credit Information Company (CIC) founded in August 2000
- Submission of CIBIL scores by all the borrowers in order to evaluate
and approve loan application
- The score should be above 700
6. Encumbrance Certificate
- It certifies that there are no dues on property both Mortgage and
Legal & the title of the property is clear and marketable.
PROCESS FOR PROVIDING LOANS

7. - An advocate checks complete property documents in order to keep the
property as mortgage.
- It is confined within the Section 58(a) of the Transfer of Properties
Act, 1882 and The Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (the "SARFAESI Act“)
7. Valuation of Property
- It is done to ensure that the loan given should not be more than the value
of the property
- The assessment is done under Wealth Tax Act, 1957
PROCESS FOR PROVIDING LOANS

8. 8. Updating on Software
- All the data is then updated on the internal software of the bank
9. Calculation of Marks
- The software thus generate marks for all the data.
- According to this marks the banks decide whether to give loans or
not.
10. Disbursal of Loan
- Loan is thus granted on the basis of agreed terms of disbursal.
PROCESS FOR PROVIDING LOANS

9. LAWS RELATED TO LOANS
 Reserve Bank of India Act, 1934
- All banks in India need to adhere to RBI guidelines.
- It lays down guidelines regarding loans and advances as well as
emergency loans
- Maintenance of Cash Reserves.
 Banking Regulation Act, 1949
- It governs the making of loans by Indian banks
 Negotiable Instrument Act, 1881
- It defines and amends. the law relating to .Promissory Notes,. Bills of
Exchange. and Cheques.

10. LAWS RELATED TO LOANS
 SARFAESI ACT,2002
- An effective tool for NPA (Non-performing Assets ) recovery
- Under this act, the bank can seize the securities of the borrower upon
default in payment of loans
 Transfer of Property Act, 1882
- It comprises of Mortgage of Immovable Properties or Assets
- It is mainly undertaken to secure the payment of loan
 Limitation Act, 1963
- Under this act, the borrower is given extra time or period to repay the
amount to the bank

11. LAWS RELATED TO LOANS
 Credit Information Companies Regulation Act, 2005
- It is mandatory for every credit institution to become a member of credit
information bureau
- They are repositories of information
 Basel Committee for Bank Supervision
- Prescribes particular set of norms for the requirement of capital for all the
banks across the countries
- One of the norms- CAR( Capital Adequacy Ratio)

12. Alterations in the process
 Introduction of online portal for the borrowers to apply
for loans
 Transparency in providing information to the customers
regarding the process of granting loans
 Conducting campaigns, customer meets, road shows to
attract and locate the borrowers.

13. Alterations in the process
 Easy documentation and fast processing with the
help of various software
 Attractive interests are provided to customers
without any hidden costs or other charges.
 Introduction of various branches in order to
reduce the time consumption as well as increasing
the efficiency of the process for providing loans.