Retail Loans

“Retail Loans”
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
Post Graduate Diploma in Management
2016-2018
ROLL NO. – PG-17
SUBMITTED TO:
DR. V. N. BEDEKAR INSTITUTE OF MANAGEMENT STUDIES, THANE

DECLARATION BY THE CANDIDATE
This is to certify project report entitled “Retail Loans “which is submitted by me in partial
fulfillment of the requirement for the award of Post Graduate Diploma in Management, Dr. V.N.
Bedekar Institute of Management Studies, comprises of my original work and due
acknowledgment has been made in the text to all other material used.
Wherever references have been made to intellectual properties of any individual /
Institution / Government / Private / Public Bodies / Universities, research paper, text books,
reference books, research monographs, archives of newspapers, corporate, individuals,
business / Government and any other source of intellectual properties viz., speeches,
quotations, conference proceedings, extracts from the website, working paper, seminal work et
al, they have been clearly indicated, duly acknowledged and included in the Bibliography.
____________________________________
Date & Signature of Candidate

CERTIFICATE BY THE GUIDE
This is to certify that project report entitled “Retail Loans” which is submitted by
Apoorva.G.Modak in partial fulfillment of the requirement for the award of Post Graduate
Diploma in Management, Dr. V.N. Bedekar Institute of Management Studies, is a record of the
candidate's own work carried out by him under my guidance. The matter embodied in this
report is original and due acknowledgment has been made in the text to all other material used.
Guide's Name:
Guide's Signature:
Date:

Index
Particulars Page number
Introduction to Banking 01-02
Introduction of Bank of India 03-04
Retail Loan Overview 05-07
BOI Star Home Loan Scheme 08-12
BOI Star personal Loan Scheme 13-17
BOI Star Vehicle Loan scheme 18-22
BOI Star Education Loan scheme 23-27
Calculation of WACC from Statements &
Additional Learning from Bank of India
28-29
Finding Out Deposit Mix of Bank Of India V/s
Other Banks
30-31
Questionnaire undertaken 32-34
Recommendations & Conclusion 35-36
Bibliography & Appendices 37-38

Acknowledgement
I respect and thank DR Guruprasad Murthy for providing me an opportunity to do the project
work in Bank of India and giving me all support and guidance which made me complete the
project duly. I am extremely thankful to Sir for providing such a nice support and guidance, as
well as some insights for carrying out the project work. The insights given by sir were of great
effort and teaching of sir which would also help me in corporate carrier.
Thank you
Apoorva Modak
I

Objective of the Study
Studying about Retail banking and more in-depth knowledge about Retail Loans offered by the
Bank of India. Understanding loan procedure and learning about different loan schemes offered
by the Bank of India and Comparing the Loan product of Bank of India with other private and
public sector bank. Having brief idea of different loan proposals and calculating the bank earning
amount after sanctioning of the Loan and establishing some findings from particular Loan
proposal. Making small brochure of each loan specified in the project for simple understanding.
As well as some additional learning from Bank of India. To understand how Loan proposal is
made in banking software.
II

Literature Review
Bank of India narrows losses; CEO says focus on recovering bad loans :
Bank of India has posted Q4 net loss of The bank’s losses narrowed to Rs 1,046 crore in the
March quarter from Rs 3,587 crore, which was in previous fiscal year as commented by CEO
dinabhandhu mohapatra , Result of the reduction of Q4 loss was major focusing on recovery of
the bad loans as well as having more disbursed loan in public to have good source of earning for
the bank. Interest rates remained constant there was slight drop in processing charges to attract
more customers. As well as giving Different sops to the customer in terms of the repayment and
credit period allotted. This decision has force Bank of India to have “Earnings” day which has
directed the banks to have more business in terms of Disbursement and Settlement claims major
focus is on retail banking sector loans and advances. This decision comes right after posting Q4
Net loss which is said to be an parameter for reducing current deficit for current financial year.
Report on Trend and Progress of Banking in India 2015-16 issued by RBI :
Retail loan portfolios registered double-digit growth. The housing loan component which
constitutes more than 54 per cent of the total retail loan portfolio of banks increased by 16.4 per
cent. This has led bank of India to focus on Housing sector for which many schemes are in the
pipe for Final launch of the products , while Loan sector Personal loans has witnessed negative
growth. In comparison, the auto loan segment made a smart recovery after registering negative
growth during the previous year. Main reason behind the Steady decrease in the Personal loan
Process is complex Loan process which Every government bank follows . E.g. As I had live case
in my hand sanction personal loan requires 5-6 Business days which is very high compared to
lending of private banks. Though there are some setbacks by giving interest sops if the bank can
introduce E-Approval it can help to reduce the lag time in the business. Taking Case of Bank of
India Software which bank use CAPS requires long procedure format in which certain field can
be omitted and reducing the disbursement Process. Bank of India has given Signals of Reduction
in interest rate to keep the competition in the business : Statement was commented by the
Banking Experts as other banks have given alarming sings of Reduction of the interest rate which
III

was Done by SBI, ICICI and HDFC bank. The bank has reduced its marginal cost of funds based
lending rate (MCLR) by 10 basis points to 8.40 per cent, from 8.50 per cent, effective May 7.This
has resulted the Bank to stay in hunt for new Loans application as well as maintain the industry
Competition in the market. This decision has Forced bank to look upon NPA as well finding the
proper solution for recovering large debt and reducing Q4 loss as per Statement made by CEO of
Bank of India.
Loan Sanctioning Authority with the branches & Process of Loan Disbursement Affecting
the Retail Business of Bank Of India :
According to bank of India circular Loan sanctioning authority with Zonal offices has lead to
increase in sanctioning time of the Credit as commented by Loan availing industries which is top
organization availing all the loan schemes at BOI Branch . The point raised by loan availing
industries is partially correct as Zonal offices have to carry inspection reports through legal
valuers and as well as if Loan fails proper mortgage taken against loan though he might be high
valued customer for the business, valuers have to Value the property for correct Disbursement of
Loans creating efficient Mortgage against sanctioned loan.
The Indian Economy witnessed a decline in credit to the industrial sector from 12.8 % in
2014 to 2.7% in 2016 According to report in Financial Express :
This is mainly because, corporate loans are directly affected by industrial slowdown and policy
level structural issues, the retail credit has not been severely hit. Further, lending to retail has
some comparative advantage vis-à-vis corporate lending. These are higher yield of retail loan as
compared to corporate loans distribution of risk among large number of retail customers. Limited
value at risk in view of lower size of the retail loan as compared with corporate loan, leading to
lower quantum of NPAs and stressed assets in general. As per a research study by Reicheld and
Sasser in the Harvard Business Review, a mere 5% increase in customer retention can increase
profitability by 35% in the banking business, 50% in insurance and brokerage, and 125% in
consumer credit-card market. Thus, banks need to put more emphasis on retaining their customers
in order to increase profitability. As retention of customer is key to success in retail, banks need to
adopt some exclusive strategies
IV

Research methodology
Research undertaken in Bank of India is Analytical research study, involving Study of
live cases as well as Study of Past cases.
Understanding Loan procedure from start to end through making Charts and
Taking Live example (case) which is been conducted in the branch.
1. Use of Primary data i.e. Reading circulars of loan proposals of Bank Of India and
making proper Broacher format of the particular Loan. Taking Past Cases of Loans from
CAPS software of the bank. Accessing Legal papers associated with the Bank clients.
Having short insights on banking core operations studying and streamlining various
process given by the bank. Getting some bank insights from routine audit check done by
the bank in bank premises.
2. Use of Secondary Data : for comparison of Bank of India Loans parameters with other
Bank which are offering Loans studying their parameters. Use of Bank Websites for
obtaining Interest rate loan procedure. If any Loan is failed understanding root cause by
having purpose site visit for which loan is applied e.g. Housing loan case of one applicant
with rising city constructions. Having practical look out.
3. Having Actual view of Loan Inspection process by asking Questions pertaining to
the Loan sanctioning by actual site visit of loan applicant.
4. Making loan proposal for having exact idea of what documentation is required for
loan procedure. Establishing Client Contact for making loan procedures.
5. Studying bank articles for obtaining recovery procedures as bank outsources valuation
and recovery work to private institutions.
V

Banking
Banking Is the Business Operated by the Banks I.e. Accepting Deposits from the Customer and
Investing the Same money for different Purposes to earn profit. The business of Banking is
regulated by Reserve Bank of India Act 1934 And Banking Regulation act 1949. Banks are
Classified Under three sectors Commercial bank, Co-operative Banks, Development Banks. In
addition Bank Provide many Functions Such as:
1. Accepting Deposits like Saving Deposit , Current Deposit , Fixed Deposit , Recurring Deposit
2. Granting Loan and Advances Like Short term and Long term loan , Cash Credit, Bill
discounting.
3. Utility Functions like Locker service, underwriting, Social Welfare Programmes.
4. Agency Functions like Transfer of Funds, Portfolio Management, Collection of Cheques etc.
What is Product?
According to Philip Kotler “product is anything that can be offered to someone to satisfy their
need or want.
According to William Stanton “Product is complex of tangible and intangible attributes
including packaging, clour, time, price, prestige and Service that satisfy needs and want of the
Society.
What is Service?
According to Philip Kotler “service is an action or activity which can be offered by a party to
the party which is basically intangible and cannot affect any ownership. Service may be related
to tangible or intangible products.
According to Business dictionary “service means Enterprise providing work which is done
under expert supervision by an individual a team for benefit of its customers.
Page 1

Quality of service: (value Creation):
Any product or service should meet quality norms and create value for customers as well as the
business.
Thus, In competitive market ‘A product or service has quality if consumers’ enjoyment of it
exceeds their perceived value of the money they paid for and enjoyment is greater than what they
would have derived if they had bought Competitors ‘goods and services’
What Are Products and Services Offered by Bank:-
A. Different Products can be broadly Classified as follows:
1. Retail Banking (Bond Valuation, Remittance Services, and Loans etc).
2. Trade Finance (Bill discounting , Promissory notes, Issuing Letter of Credit).
3. Treasury Operations (Buying and Selling of Currency, Purchasing selling Bonds,
Underwriting of Shares).
4. Debit Cards and Credit Cards.
B. Different Services Can be Classifies as follows:
1. Internet banking Services & Mobile Banking Services
2. Portfolio Services
3. Investment Services
4. Online Trading platform for Investors
Page 2

Bank of India
Bank of India is a Commercial bank which has its headquarters Located in Mumbai Originally
founded in the year 1906. It was owned by the Government under Bank nationalization 1969.
Bank of India has 4963 Branches and 54 Zonal offices in India. It is the member of SWIFT
organization (Society for Worldwide Inter Bank Financial Telecommunications) which provides
Cost effective financial Processing and Communication Services. It began its services With
having one branch in Mumbai with paid up Capital of RS 50 lakh .
Some of the Popular Services which Bank of India Offers are:
1. Gold Coin service: Which is Associated with Selling of Pure Gold.
2. Sovereign Gold Bond (SGB): They are the Government Securities denominated in forms
of Gold. They are Substitutes for having Physical Gold.
3. Public Provident Fund Services: Which gives interest of 8.7% Compounded Annually.
4. Debenture Trustee Business: It is Individual or Entity that act has the holder of
Debenture Stock for the benefit of the other party which is regulated by SEBI.
5. Application Supported by blocked amount (ASBA): It is the process developed by SEBI
was IPO applicant account is not debited until the approved quantity of shares are allotted
to him.
6. Deposit Schemes: Various well known Deposit schemes for different Purposes having
different Services for different accounts e.g. BOI star Yuva Account, BOI Saving plus
scheme , Star suraksha Saving Plus account .
Page 3

Retail Banking of BOI
According to Reserve Bank of India Retail Banking Means
“It refers to dealing of commercial banks with individual customers, both on liabilities and asset
side of the balance sheet. Fixed, current/saving account services on liability side and mortgages
and loans on the asset side of the balance sheet are the more important services offered by the
retail banks in addition ancillary services such as credit card or depository services”.
1. Savings 1. Home Loan 1. Current Account
2. Salary Accounts 2.Perosnal Loan 2. Saving Bank Accounts
3. Current 3.Loan against Property
4. Term 4.Housing Loan
5. Tax saving 5.Education Loan
6. Vehicle Loan
7. Pension Loan
8. Star top Up Loan
Page 4
Retail banking of Bank of India
Deposits Loans and Advances CASA Term Insurance Online Share Trading Mortgages

Bank of India
Application Process for the Retail Loans in Bank of India
Page 5
Customer Requests for
Loan
Loan Application Is
entered in CAPS
Bank Performs Credit
Analysis
Credit
Decision
Credit Report
YES
No Inform
Customer
Loan Plan and
Documents are
Prepared Using
Credit Report
Customer
Signs Loan
Agreement
Bank
Verifies the
Submitted
Documents
Bank
Prepare
Accounting
Entries
Bank Funds
the Loan to
the
Customer
Loan System of
the bank is
updated
Loan is served to
the Customer

Bank of India
Some Important Findings in the Loan Process :
1. Proposal is appraised on the basis of Gross Net salary of the Consumer Depending on the various loan
schemes which consumer wants to avail.
2. Bank of India uses CAPS system which is automated system for entering Loan Application as well as
calculation of Installments as per Duration Specified in the proposal.
3. Credit Analysis is performed using CIBIL, Equinox and Equifax Software which specifies the credit score
through which loan can be granted to the applicant. Credit score ranges from 300 to 900, anything above
750 credit score is considered good for granting loan.
4. Guarantor Profile is processed in system , his credit score is also checked using CIBIL software whether
Guarantor score is good or any issues are there .
5. After getting good CIBIL score Site visit and Surveillance is done to get some facts about the applicants
relating to his tenure of the stay, working history and many other Factors.
6. Loan application is prepared on basis of credit Worthiness of applicant after having background check of
the applicant and same application need to be Notarized or Franked on legal papers acting as proof of
application.
CIBIL Score Calculation:(some parameters Considered)
Track record of the Past Payments 1. Track record of past payments
2. Consistently making payments to obtain
high score
3. Delayed payments leading to low score
Previous settlement or write-offs or Defaults 1. Delayed and Default payment affecting the
credit score of the Individual.
2. Multiple Write off leading to low credit
score
3. Write offs documented on previous debt
low scores
Loan as proportion of the Income 1. Low loan balance is Indicator of healthy
credit usage.
2. High loan balances Reduces score
Secured loan V/s Unsecured Loan and Credit Cards 1. High credit card balance Results in low
Score rating
2. Reliance on unsecured loans i.e. credit card
is considered negatively
Loan Enquires 1. Many loan enquires in multiple bank
indicates credit hungriness of the applicant
resulting to obtain low credit score
Page 6

Bank of India
Things Positively affecting the Credit Score:
1. On Time EMI payments of the loan taken .
2. Regular payment of unsecured loans (credit Card Bills).
3. Avoiding Over-leveraging.
4. Maintaining strong Financial records.
5. Proper utilization of earlier Credit facility granted.
Things Negatively affecting the Credit Score:
1. Too many credit Enquires through different banks.
2. Cheque bounce or dishonor.
3. Default in payment of Installments.
4. Defaulting as Guarantor
5. High Utilization of the approved Credit or Overshooting the Limit.
Different Credit Score Slabs:
FROM 750 to 900 Excellent Score Bank can
sanction the loan.
FROM 700 to 750 Very good score bank can still
sanction the loan.
FROM 600 to 700 Fair score bank may approve
part of sanctioned loan E.g.
Loan needed 1 lakh but
Approved will be 75-80
Thousand
FROM 300 to 600 Poor score bank will think
twice before Sanctioning loan
an possible outcome will be
rejection of the Loan .
Page 7

BOI Star Home Loan
Purpose of the Loan:
1. To purchase / Construct house or Flat on ownership basis.
2. To renovate/ Extend/ repair existing House or Flat.
3. To purchase the plot of land (* Loan will be granted for Purchasing plot + Construction of house
on the same plot also called as Composite Loan).
4. To acquire Household articles after purchase of new Flat.
Eligible Components for the Housing Loan:
1. Cost of the plot of land acquired.
2. Cost construction for that particular house/ Flat
3. Cost of flat or House in case purchase between parties.
List of Documents required to be submitted with application:
1. For Salaried people : Salary Certificate according to income tax filed, Monthly salary slips of the
working Company, Copies of Income Tax return.
2. For Businessmen: Copies of Financial Statement, Income Tax returns of Last 3 years, Advance
tax Challans of current year.
Quantum of Loan :
1. Construction/ Purchase of House or Flat : At Metro 500 Lacs, At Rural Areas 300 Lacs.
2. For Purchase of plot : Sanctioning Limit till 100 Lacs.
3.For Addition/renovation/Extension/repair: Sanctioning Limit till 50 Lacs.
4.Furnishing of house/ Flat: Sanctioning Limit 10 lacs.
Calculation of Quantum of Loan:
1. Salaried Employees: 72 times of Gross Monthly Salary or 6 times of Gross Annual Income based
as per IT Returns.
2. For Self Employed/ Professionals:6 Times of their Gross annual income based on IT returns.
3. For HUF/Proprietorship/Partnership: 6 Times of Cash Accrual (PAT + Depreciation) as Per
Audited Financial Statements
*In case of HUF and Proprietorship or partnership Debt Service Coverage Ratio (DSCR) should be 1:5.
Page 8

Brochure for Home Loan of Bank of India
Eligibility Salaried employees, Professionals, Self-employed persons.
Requests are also considered from NRIs, PIOs, HUF, and Prop.
Firm, Partnership firms and corporate
Margin : Amount : For
Loan up
to Rs.20
Lacs
For
Loan
upto
Rs.75
Lacs:
For
Loan
above
Rs.75
Lacs:
For 1st House 15% 20% 25%
For 2nd or Subsequent Home
Loan/House/Flat
20% 20% 25%
Interest Charges : For Limits Upto 75
Lacs
8.50% + 0.20 % for other
8.50% +0.15% for women
For Limits above 75
lacs
8.50% + 0.20 % for other
8.50% +0.15% for women
Purpose :  1.To purchase/construct house/flat
 2.To renovate/extend/repair existing house/flat.
 3.To purchase a plot of land for construction of house
 4.Takeover of home loan from other banks/FIs- subject to conditions
Repayment ( Can be
Customized )
Highly flexible: Maximum 30 years Including 36 Months (max) in monthly
installments on the project approved by Banks. Normally to be repaid
before Retirement age I.e. 70 Years of the Age .
Special Features : 1. Free personal accident cover for the borrower
2. Life Insurance Cover for the borrower
3. Loan for Furnishing House at rate of interest applicable for housing
loan under the scheme
4. Loan for installation of Solar panels at Housing loan rate of interest
Page 9

Bank of India
Calculation of Home Loan sanctioning Limit Through one Example
A. Gross Annual Salary = Rs 12,48,850 i.e.6 times of Gross salary which is Rs 74,93,100.
B. Cost of Project : Rs 90,00,000 – 25% margin as per prescribe terms of Bank which comes to
RS 67,50,000.
C. Gross Cost of Flat RS 90,00,000 - Contribution by the Applicant (27.78%) Which comes to RS
25,00,000 on Gross cost and Eligible Amount is 90,00,000-25,00,000 = Rs 65,00,000.
*Amount whichever is Low From following 3 calculations i.e. (A, B, C) Will be Considered so as per
above 3 calculations sanction limit for the loan will be Rs 65,00,000.
Tenure of the Loan will be 30 Years (including moratorium period). Interest Rate charged by the bank
will be at the Rate of 8.75 % p.a on the loan amount.
Therefore Total EMI payable = EMI= [p x r x (1+r)^n]/[(1+r)^n-1]
Therefore EMI per month = Rs 51,136
Page 10

Bank of India
Key Findings from Star Home Loan Proposal
1. Interest charged on daily balance basis and debited at the end of every month rather charging
quarterly or half yearly or yearly. If borrower pays installment before the due date it may help in
reduction of interest on paying installments before date. Due to which Loan account get closed
before termination.
2. In 30 Years Periods Bank will Earn RS 1,19,08,789.
3. Upto 36 Months of Moratorium Period Granted by the bank to Applicant if Building is under
Construction.
4. Guarantor CIBIL score is also taken into consideration while sanctioning the loan amount of the
Applicant. Data of Guarantor also needs to be disclosed in CAPS software with his income
disclosure and Assets and Liabilities pertaining to him.
5. Facility of 100 % Loan amount irrespective stage of Construction.
Page 11

Bank of India
Comparison of Home Loan of Bank of India V/S Home loan of other banks.
Features of
Loan
SBI Home Loan
Scheme
Oriental bank
Housing
Scheme
DHFL Housing
Loan
PNB Bank
Housing
Scheme
Bank of India
Housing
Scheme
Interest
Charges
8.65 % to 8.70%
Floating MCLR
8.60 % Floating
MCLR
8.60% to 9.75%
Floating MCLR
8.50% to 8.70%
Floating MCLR
8.75%
Floating
MCLR
Processing
Fees for Loan
0.35 % of Loan
Amount Max Rs
10,000 + Service
Tax
Upto 0.50% of
Loan Amount
Max Rs 20,000
+ Service Tax
Rs 5,000 to Rs
20,000 One time
Amount to be
Paid
Upto 0.50% of
Loan Amount
Min Rs 5,750
0.25% of
Loan amount
Min Rs 1,000
and Max Rs
20,000 +
Service Tax
Tenure of
loan &
Amount
sanctioned
1-30 years & 15
Lac to 10 Crores
1-25 years &
30 Lac to 10
Crore
1-30 Years & 1
Lac to 5 Crore
1-30 Years & 5
Lac to 10 Crore
1-30 Years &
5 Lac to 10
Crore
Eligibility
Criteria
1. Age at least
18 years and
Less than 60
Years.
2. Salaried or
Self Employed
with regular
income.
1. Age at least
20 years and
Less than 60
Years.
2. Salaried or
Self Employed
with regular
income.
1. Age at least
20 years and
Less than 60
Years.
2. Continuity
and stability in
earned income
1. Age at least
23 years and
Less than 70
Years.
2. Applicant
must be citizen
of India or fully
documented
NRI with High
net turnover
income
1. Age at
least 18 years
and Less than
60 Years.
2. Salaried or
Self
Employed
with regular
income.
Benefits Of
Scheme
1. Pay only
Interest Upto 60
Months after
Which EMI
payment Will
begin.
2. No pre-
Closure or Part
payment Fee.
3. Can Avail
Service of SBI
Flexi pay
1. No pre- Part
payment Fee.
2. Salaried
Customers
with Pension
can have Loan
tenure Upto
70 Years.
3. Access to
various
banking
Schemes.
1. 1. No Guarantor
Required for the
Scheme.
2. 2. No pre-
Closure or Part
payment Fee.
3. 3. Top up Loan
available.
4. 1. No
Guarantor
Required for
the Scheme.
2. No pre-
Closure or Part
payment Fee.
3. Ghar Utsav
Scheme Special
Floating Rate
for 12 Months
1. No pre-
Closure or
Part payment
Fee.
2. Interest
Charged on
Daily
reducing
balance
basis.
3. Step up or
Step down
EMI.
Page 12

BOI Star Personal Loan Scheme
Purpose of the Loan:
1. To meet Marriage expenses of Self/son/daughter or nearby relative dependant of the Loan
applicant.
2. To meet Expenses related to tours/ excursions etc. undertaken or to be undertaken within India or
aboard.
3. Medical expenses incurred for self/ spouse/ daughter or nearby relation.
4. Clean and Unsecured Loan can also be Granted for Following purpose :
A. Education of Self/ Spouse/ near relatives.
B. Repairs/ renovation/ extension of existing house/flat.
C. Any other personal expenses of bonafide nature as approved by the bank.
Quantum of Advance:
Nature Of Advance Minimum Advance Maximum Advance
Unsecured/ Clean Rs 0.10 Lacs Rs 2 Lacs
Secured Rs 0.10 Lacs Rs 10 Lacs
Calculation of the Quantum:
Unsecured Loan/Clean Loan 1. 10 times of monthly Net take home salary
in case of salaried employees
2. 50% of gross annual income as per last I.T
returns for professionals/individual of high
net worth.
Secured Loans 1. 20 times of monthly gross salary in case of
salaried employees
2. 100% of Gross average annual income as
per last three income tax returns for
professionals and individuals of high net
worth
Page 13

Brochure for Housing Loan of Bank of India
Page 14
Eligibility Salaried Employees, Professionals and Individuals
with high net worth
Margin 1. Margin for Secured loan can be considered
in consonance with Requirement of
security, size of the limit, credit rating of the
customer etc can be considered.
2. No specific margin is to be levied upon
unsecured or clean Loans. However loan
amount should not exceed proposed
expenditure or requirement
Interest Rate 8.75 % MCLR + Processing Charges as per RBI
guidelines and bank Policies.
Purpose 1. Repayment of Existing housing loans from
other financial banks of financial institution
2. Purchase of consumer Durables and other
expensive items
Repayment 1. For Clean/ Unsecured Loan : Repayment in
36 Equated installments commencing one
month after disbursement
2. For secured advances : Maximum 60
Equated Installments commencing from one
month after disbursement
3. Repayment Age may not exceed retirement
age of the employer.
Appropriate Securities for Secured advances 1. Equitable/ legal mortgage of commercial
property / flat for not less than 150% of
Quantum of loan.
2. Pledge of Demat shares, units etc. of market
value not less than 200% of the amount of
the loan.
3. National saving certificates, LIC policies
etc., should be equal to the loan amount
sanctioned.

Bank of India
Calculation of Personal loan through one example
A. Net monthly income of individual : Rs 10,430
i.e. 10 times of monthly income: Rs 1,04,300
Therefore Eligible loan amount Under A = Rs 1,04,300
B. Cost of the Project : Rs 50,000
Less: margin that will be Rs 0
Therefore Eligible Loan amount under B= Rs 50,000
C. Gross Income = Rs 11,255 - Statutory deductions= Rs 825
Net monthly income = RS 10,430
Proposed Loan amount = Rs 50,000
% of net take home gross income = 77.09
D. Maximum Loan amount under the Scheme = Rs 5,00,000
Therefore Loan amount to be sanctioned = Rs 50,000 i.e. Least amount from above Four
assessments.
EMI will be calculated @ 14.20 % p.a in 35 Equated monthly installments
Therefore Per month EMI = RS 1,754
Page 15

Bank of India
Findings from personal loan Scheme
1. Proponent or borrower may be sanctioned one or more loan i.e. two accounts one for secured and
one for unsecured or clear Loans under the scheme. Depending upon compliance of terms of
scheme and merits of the case.
2. 2 % Processing charge of the loan amount, Minimum Rs 1000 and Maximum Rs 10,000
3. Third party guarantee can be taken, if considered necessary by sanctioning authority, depending on
the merits of the case.
4. KYC application must be obtained from Applicant as well as guarantor for availing the Loan
facility. As well as inspection by the banking officer is required for sanctioning of the loan.
5. Sanctioning Loan amount will be depended also on Inspection Report depending on state and
condition of the applicant
6. After 35 Installments bank will Receive Rs 57,750
7. PV = FV*{1(1+R)^ N }
Therefore 50,000= 1/ (1+0.14/35) ^35
So bank will Earn Rs 57,750 (approx)
Page 16

Bank of India
Comparison of personal Loan of Bank of India V/S personal loan of other banks.
Features of
Loan
HDFC Bank IDBI Bank Union Bank SBI Bank Bank of India
Interest
Charges
10.99% to 15.8 %
Floating Charge
12.20% Floating
Charge
14.40% Floating
Charge
12.90% to 14.90 %
Fixed Charge
13% to 14%
Floating Charge
Processing
Fees for Loan
Upto 2.5 % 1% + Service Tax 0.5% Min Rs 500 1% Charge Rs 1,000 to Rs
10,000 + Service
Tax
Tenure of loan
& Amount
sanctioned
1-5 years & RS 25
Lac maximum
Loan amount
1-5 Years & Rs
50,000 to 10 Lac
Loan amount
1-5 years Rs 5 Lac
maximum Loan
Amount
5 years of tenure &
RS 24,000 to Rs
15 Lac Loan
Amount
1-3 years & Rs
10,000 to Rs 5
Lac Loan
Amount
Eligibility
Criteria
1. Age At least 21
years & less than
60 Years.
2. Should have
minimum Income
of Rs 20,000 P.M.
1. Age At least 21
years & less than
60 Years.
2. Customer
should have
Regular income
and Salaried
Customer.
1.Age At least 21
years & less than
58 Years
2.Applicant
Should be
Customer of union
bank
3. Customer
should have
Regular income
and Salaried
Customer.
1. Age At least 21
years & less than
58 Years.
2. Income Should
not be less than Rs
7,500.
3. Total Years in
job and Profession
Min 2 Years
Required.
1. Age At least
21 years & less
than 60 Years.
2. Customer
should have
Regular income
and Salaried
Customer.
Benefits Of
Scheme
1. Conditional Pre
Closure after 1
year of Loan
tenure.
2. No Guarantor
Required for Loan.
3. E-Approval
Facility for those
who have Good
Income to show
1. No part payment
Fee charged by
Bank.
2. Has Pre-Closure
option & and No
Guarantor
required.
3. Top up Loan
Facility Available
1. Target market
lower middle Class
income looking for
Loan.
2.Acess to various
other Schemes
offered by the
Bank
1. Target market
lower middle Class
income looking for
Loan.
2. Acess to various
other Schemes
offered by the
Bank.
3. Facility of
Online application
for the Loan
1. Target market
lower middle
Class income
looking for
Loan.
2.Acess to
various other
Schemes offered
by the Bank
Page 17

BOI Star Vehicle Loan Scheme
Purpose:
1. For Purchase of two wheeler or four wheeler new vehicle or 2nd
hand vehicle (upto 3 years old).
2. For buying corporate vehicles in bulk quantity.
List of Documents required to be submitted with application:
1. Hypothecation of vehicle, charge to be registered with RTO. Insurance will be with bank as per
bank rules and regulations.
2. Collateral Security need to be maintained if the vehicle loan exceeds Rs 25 Lacs.
Quantum of Loan:
1. For Indian vehicle loan can be sanctioned upto Rs 50 Lacs.
2. For Imported vehicle from outside countries loan can be sanctioned upto Rs 100 Lacs.
3. For Companies and Entities Loan sanctioned Upto Rs 200 Lacs
4. For non-conventional vehicle which does not require registration of RTO loan can be Sanctioned
Upto for Two wheelers Rs 50,000 & for four Wheeler Rs 4 Lacs.
Calculation of Quantum of Loan:
1. Individuals or Pensioners: 24 times of gross monthly amendments or 2 times of Gross average
annual salary as per I.T. returns.
2. Others: 2 times of Average cash Accruals as per last three years audited Balance sheet & Profit
and Loss statement of the Firm or Company.
3. Farmers: Depending on the Repayable capacity as applicable on the Agricultural loans granted by
the banks.
Page 18

Brochure for vehicle Loan of Bank of India
Eligibility Salaried employees, Professionals, Self-
employed persons including Farmers.
Requests are also considered from NRIs,
PIOs, HUF, and Prop. Firm, Partnership
firms and corporate
Margin For Loan Upto
Rs 10 lacs:
No margin on
EX-showroom
price of the
Vehicle
For Loan
from 10
lacs to 25
lacs :
15% on
road price
including
insurance,
taxes &
Registration
charges
For Loan
Above Rs 25
lacs
25% on road
price
including
insurance,
taxes &
Registration
charges
Interest Rate 1 year MCLR that is + 0.85 % charge
Purpose 1. For purchase of new vehicle for self or
Corporate Entities.
2. For purchase of 2nd
hand Vehicle.
Repayment
Repayment ( age)
1. 1.For individuals having New vehicle:
2. A. four Wheelers: 7 years Maximum
B. Two Wheelers: 5 years Maximum
3. 2. For corporate & Firms : Maximum period
4. Of 5 years.
5. 3. For Second Hand vehicles Max period 3
6. Years.
Age Should not Exceed 65 years.
Appropriate Securities for Secured advances 1. Hypothecation of vehicle purchased out of
bank Finances.
2.Charges to be Registered with RTO
3. Third party Guarantee Required if Loan is
given to NRI Guarantor should be Resident
of India.
Page 19

Bank of India
Calculation of Vehicle loan through one example
Cost of vehicle = Rs 10,75,717
Loan amount Requested by party : Rs 7,50,000
A. Gross Annual Income = Rs 7,71,756
2 Times if Gross annual Income = Rs 15,43,512
Therefore Eligible amount Under A = Rs 15,43,512
B. Cost of vehicle = Rs 10,75,717
(-) Margin = Rs 0
Eligible amount under B = Rs 10,75,717
C. Gross Monthly income = Rs 51,076
(-) Deductions = Rs 869
Net Monthly income = Rs 50,206
Loan Amount Requested by party = Rs 7,50,000
D. Maximum permissible amount Under Section D = Rs 50 Lacs
Therefore total amount loan sanctioned will be Rs 7,50,000 which is Least amount from all four
Sections.
Installment for the above loan will be Rs 12,201 at the rate of 9.35 %
Page 20

Bank of India
Findings from Vehicle loan Scheme
1. Loan amount sanctioned with less paperwork easy approval terms as compared to the other Loans
which bank offers.
2. Covers both imported as well as car made in India, It gives higher Cap of Loan sanctioning to
corporate entities.
3. Bank will earn Rs 8,58,809
4. PV = FV*{1(1+R)^ N }
Therefore 7,50,000= 1/ (1+0.093/60) ^60
So bank will Earn Rs 8,24,312 (approx)
5. Sanctioning of Vehicle Loan is more easy as compared to house property and personal loan as you
get all information from applicant itself no need of client visit or inspection.
Page 21

Bank of India
Comparison of vehicle Loan of Bank of India V/S vehicle loan of other banks.
Page 22
Features of
Loan
HDFC Oriental Bank Union Bank L&T Finance Bank Of India
Interest
Charges
11.25% to 13.99%
Fixed Charge
9.10 % Floating
Charge
9 % Fixed Charge 16% to 17% Fixed
Charge
9.35% Fixed
Charge
Processing
Fees for Loan
Upto Rs 2,300
Onetime fee
Charged
Rs 500 to Rs 700
+ Service Charge
Nil 2% of the
principal
outstanding
Nil
Tenure of
loan &
Amount
sanctioned
1 year to 7 year
and Min Rs
75,000 Loan
Amount.
7 years Max
tenure and Max
Loan Amount Rs 1
Crore.
7 years Max
tenure and Max
Loan Amount Rs
125 Lacss Max
amount.
1 year to 5 year
tenure and Min
Loan amount Rs 1
Lacs.
7 years Max
tenure and Rs
50 Lacs to Rs 1
Crore Loan
Amount.
Eligibility
Criteria
1. Age at least 21
years and less than
65 years for
salaried and less
than 70 years for
self employed.
2. Must have Min
2 years of working
experience and 3
years if its
business entity.
1. Applicant
should be earning
at least Rs 20,000
Gross salary.
2. Salaried
employee should
have worked at
least 1 year in
current Job.
Experience from
previous
employment can
also be considered.
3.Business entities
should be
established more
than 2 years
1. Age at least 18
years and less than
70 years of the
age.
2.Salaried, self
employed or
business entity are
eligible
1. Age at least 25
years and less than
65 years.
2.Salaried, self
employed or
business entity are
eligible
1. Age at least
21 and less than
65 years of the
age.
2.Non resident
can also apply
but need
Resident
guarantor
against loan.
Benefits Of
Scheme
1. No pre-closure
fees after 18
months.
2. No guarantor
required for the
scheme.
3.Part payment
facility available
as well as Top up
loan available.
1. Maximum Loan
maturity age of 65
years for Salaried
Customers with
Pension facility.
2.No Pre-closure
Fee charged
3.E-Approval
facility
1. No Pre-closure
Fee charged.
2. Max age of 70
years but should
have good pension
amount.
1. No Guarantor
required under the
scheme.
2. Loan sanctioned
upto 95% of the
Vehicle value.
3. Door step loan
service available.
1. No Pre-
closure Fee
charged.
2. Max age of
65 years but
should have
good pension
amount.

BOI Star Education Loan Scheme
Purpose:
For pursuing Courses from registered university or private institute. Courses like Graduation courses,
professional Courses (CA, ICWA etc), Courses of IIM, ITM , Courses from Diploma colleges approved
by AICTE or UGC/government, Regular degree Courses.
List of Documents required to be submitted with application :
1. Institute Prospectus regarding Course Detail & Eligibility Procedure with authorized Fees Receipt
from institute authority.
2. Institute letter Regarding Loan Application and Confirmation of Admission Seat in the Institute.
3. If any entrance tests given, Copy of Score card should be submitted with the loan.
Quantum of Loan:
Quantum of Loan is divided in two which are as follows:
1. For Education Study in India Maximum Loan amount Rs 10 Lacs
2. For Student pursuing Education Abroad Maximum Loan Amount Rs 20 Lacs
Expenses Consider in the Star Education Loan Scheme:
1. Fees payable to School, College, Hostel.
2. Examination or laboratory fee Deposit.
3. Purchase of Education materials, books, Equipments etc.
4. Purchase of Laptop or other electrical accessory.
5. Life insurance premium of student
6. Any other expense required to complete course like study tours, project work.
The above expenses will be sanctioned under Loan scheme after producing brochure and demand letter
from the Institution.
Page 23

Brochure for Education Loan of Bank of India
Page 24
Eligibility 1. Student should be Indian national.
2. Student should have secure admission to
academic course in registered Institutes.
3. Good academic carrier and Should not have any
other education loan from any other institution.
4. Father and Mother should be Co-borrower for
the Loan.
Margin 1.Upto Rs 4 Lacs : No margin applied
2. Above Rs 4 Lacs: 5% of the margin
3. Studying Abroad : 15% of the margin
Interest Rate 1.For Limit upto Rs7.50 Lacs: 1 year
MCLR+1.70%.
2.For Limits above Rs 7.50 lacs: 1 Year MCLR
+2.50 %
Purpose For Pursuing Degree, Professional, Diploma etc
courses from registered institution.
Repayment 1. Moratorium period granted is Course period + 1
year repayment holiday.
2. Repayment Period upto Max 15 years from
commencement of repayment
Security 1. For Loan upto Rs 4 Lacs: Parents or Guardian
should be joint borrowers.
2. For Loan above Rs 4 Lacs to Rs7.50 Lacs:
Parents or guardian should be Joint borrowers.
3. For Loan above Rs 7.50 Lacs: Co-obligation of
parents or Guardian as well as collateral security of
suitable value.
Other Conditions: 1. Loan to be disbursed in stages as per
requirement, demand, directly to the Institution or
Vendors of books, instruments to the extent
possible.
2. Student, Parent to inform Branch immediately
on change of course, completion of studies,
termination of studies, any refund of fees by
college, institution successful placement, Joining
of job or change of job etc.
3. Student to produce mark list of previous term or
semester before availing next installment.

Bank of India
Calculation of Education loan through one example
A: Course Amount given as per Brochure and fee structure of Institute is Rs 2,64,793.
Margin for the above Loan will be NIL.
Therefore eligible Loan amount under (A) will be Rs 2,64,793
B: Loan amount Requested by the Borrower is Rs 2,64,793
C: Maximum Sanctioned Amount under the scheme = Rs 10 lakh
Therefore Calculation from Assessment (A), (B), (C) Least amount will be considered
Which will be Rs 2,64,793 at the rate of 12.70 % p.a which will be divided in 102 EMI
Therefore Total EMI payable EMI = Rs 4,214
Page 25

Bank of India
Findings from Education loan Scheme
1. One of the best features of the loan is Moratorium period which is one year after completion of the
course or six months after completion of the course if the applicant has got regular job.
2. Margin Requirements are considerably high if loan sanctioned is above Rs 4,00,000.
3. After 110 EMI bank will Earn amount of Rs 3,87,566
PV = FV*{1(1+R)^ N }
Therefore 264793= 1/ (1+0.12/102) ^102
So bank will Earn Rs 2,98,500 (approx)
4. Sanctioning of Education Loan is more easy as compared to house property and personal loan as you
get all information from applicant itself no need of client visit or inspection.
Page 26

Bank of India
Comparison of Education Loan of Bank of India V/S Education loan of other banks.
Features of
Loan
HDFC Bank PNB Bank Oriental Bank Union Bank Bank Of India
Interest
Charges
12.35 % fixed
Rate.
12.75% Fixed
Rate.
12.25 % Fixed
Charge
12.70 % Fixed
charge
Processing
Fees for Loan
1 % of the Loan
amount as
Processing Charge
0.50 % processing
Charges
2.50 % processing
Charges charged.
Nil Nil but for
foreign Studies
one time charge
Rs 1000 which
will be refunded
while
disbursment
Tenure of loan
& Amount
sanctioned
For Loan Upto Rs
7.50 Lacs 10 years
and For Loan
above 7.50 Lacs 15
years
For Loan Upto Rs
7.50 Lacs 10 years
and For Loan
above 7.50 Lacs
15 years
For Loan Upto Rs
7.50 Lacs 10 years
and For Loan
above 7.50 Lacs
15 years
For Loan Upto Rs
7.50 Lacs 10 years
and For Loan
above 7.50 Lacs
15 years
For Loan Upto
Rs 7.50 Lacs 10
years and For
Loan above 7.50
Lacs 15 years
Eligibility
Criteria
1. Must be Indian
Citizen.
2. Age must be
between age of 16
and less than 35.
1. Must be Indian
Citizen.
2. Should have
gained Admission
in recognized
University or
Institute.
3.Admissions
considered on
score card of
particular Entrance
exam
1. Must be Indian
Citizen.
2. Should have
gained Admission
in recognized
University or
Institute.
1. Must be Indian
Citizen.
2. Should have
gained Admission
in recognized
University or
Institute.
1. Must be
Indian Citizen.
2. Should have
gained
Admission in
recognized
University or
Institute.
3.Parents or
Guardian will
sign up as Co-
applicant.
Page 27

Finding out WACC from Balance sheet and P&L figures of Bank of India
Calculation of WACC From above Formulas:
Page 28
DPS
Dividendpaid/no of shares NIL
EPS
Earnings/no of shares 126.84crore/777514808
EPS= 16.31
MPS = DPS+r/ke(EPS-DPS)/ke
0+12.01/4.99(16.31-
0)/4.99%
MPS = 786.67
PE= MPS/EPS 786.67/16.31=48.23
Industry PE 20.02
Ke=1/PE 1/48.232*100
Ke= 2.07%
Kd= rate of return*(1-Taxrate)
9%*(1-30%)=6.30%
Kd= 6.30 %
Let’s Assume Tax rate = 30%
Equity 1055
Reserves 29709
Total 30764 2.07% 636
Debt 39405 6.30% 2482
70169 3118
Therefore WACC 3118/70169*100
WACC= 4.44%

Additional Learning’s from Bank of India
1. In-depth learning about KYC application and procedure learning about requirements of KYC as well
as storing it in Finacle software of Bank.
2. Account opening features using Bank Finacle software keys such as CUMM, ACLI, and CTDSID
for account opening and Account modification in the software.
3. Understanding Post verification procedure of the account customer ID generated and helping officer
for verification of the accounts.
4. Getting some insights of pension accounts documents required monthly pension process and
documents related to pension schemes in the bank.
5. Learning pre loan sanction procedure which is verification of the applicant address proof and other
details provided by the applicant by applicant place visit.
6. Getting information about various accounts opened with the bank by the customer i.e. no frills
account, saving scheme accounts and other schemes related to government procedure.
7. Understanding CAPS software of Bank of India for Loan applications i.e. what are all loan
requirements procedure, rates, and EMI calculation.
8. Understanding Customer desk with all Customer relationship work helping customers to sort out
their problems.
Page 29

Finding Out Deposit Mix of Bank Of India V/s Other Banks
For Bank Of India
CASA Ratio = (Demand Deposit + Saving Deposit / Total Deposit)*100
For 2017= (283319755+1438874024/5400320078)*100
= 31.89 %
For 2016= (235120739+1092074358/5130045218)*100
= 25.87 %
Credit Deposit Ratio= Total advances/ Total deposits *100
For 2017= (3664816671/5400320078 *100)
= 67.86%
For 2016= (3591889592/5130045218 *100)
= 70.01%
For Bank Of Baroda
For 2017= (425192695+1509764913/6016751729)*100
= 32.15 %
For 2016= (346290617+1167054095/5740378722)*100
= 26.36 %
For 2017= (3832592231/6016751729*100)
= 63.69%
For 2016= (3837701803/5740378722*100)
= 66.85%
Page 30

For Union Bank of India:
For 2017= (262362822+1040724264/3783915755)*100
= 34.44 %
For 2016= (297431460+811326170/3427200092)*100
= 32.35 %
For 2017= (2864665770/3783915755*100)
= 75.70%
For 2016= (2673540019/342720092*100)
= 78.03%
Page 31

Data Collection through interviewing Few customers
Page 32

RECOMMENDATION
1. To make people aware about the benefits of Retail loan the bank should advertise
through Print Media; Hoarding & Banners should be placed with the attractive
offers so that the customers are attracted.
2. To Reduce the Sanctioning period so that customers can avail more Loan services through
the bank giving more powers of direct sanction to Branch level Managers.
3. Giving end to end solution to the Customer of Bank of India e.g if person walks in to open
the account Ready kit can be given to the customers which will have ATM cum debit card
net banking facilities cheque book rather feeling different forms.
4. Customer grievance time should be reduced the complaint launched by the customers
should be given right time and right solution regarding the complaint.
5. Reducing Loan paperwork opting for more E-Approval through creating portal for the
consumers through which it can reduce Loan sanctioning time.
6. Advertising can be done of branding of Loan products bank is offering as well as
additional benefits and facilitates given by the bank.
Page 35

Conclusion
Thus Retail sector of the banks is very vast area especially if we consider Retail Loans its one of the
growing sectors of the Bank which powers the bank in their operations. Though there are many areas of
the Loan sectors which can be improved. There are lots of changes which will happen in retail sector but
it is important to every Bank to cope up with changes and maintain healthy competition with the other
bank in the Banking industry.
Retail sector helps you to learn lot of things such as CIBIL data or analyzing Quantum of Loans and
Advances on which Study can be established with the help of proper format. Thus Retail Banking sector
Remains one of the most Growing Business area in the Banking Sector.
Page 36

Bibliography
1. www.bankofindia.co.in
2. www.hdfcbank.com
3. www.pnbindia.in
4. www.unionbankonline.co.in
5. www.obcindia.co.in
6. www.onlinesbi.com
7. www.idbi.com
8. www.cibil.com
9. www.ivestopedia.com
Page 37

Appendices
1.Study of SOP of bank operation for Core banking work with the help of staff associated
for the work.
2.Master Loan circulars Of Bank of India For understanding different Loan which bank
offers as well as Circular for understanding Bank software for Loan application.
3.Reading RBI circulars of Loans and Advances department on updates of interest rate or
change of sanctioning powers allotted to the branch
4.Master Circular of CIBIL for understanding Different CIBIL scores.
Page 38

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