Bank products have evolved beyond traditional loans and deposits to include a wide variety of wholesale, retail, fee-based, and foreign products. Commercial credit includes both funded credit like cash credits and demand loans that involve funds flowing from the bank to borrowers, as well as non-funded credit like guarantees. Retail banking offers consumers credit products like credit cards, retail loans, and housing loans, as well as deposit products like savings and current accounts.

1. BANK PRODUCTS

2. Bank Products
 Banking products have evolved from the traditional loans
& deposits to a large variety of offerings.
 Bank products range
 from wholesale or corporate products to retail products
 from fund based to fee-based
 from domestic to foreign

4. Commercial/ Wholesale Credit

5. Commercial Credit
 The credit granted by a bank can be funded or non funded
credit.
 Funded credit involves a flow of funds from the bank to the
borrower ex: cash credit, demand loans, overdraft, bill
purchased and discounted
 While non funded credit doesn’t not Ex: guarantees and
letter of credit
 Cash credit is provided with limit no maturity and can be
drawn at will by the borrower but demand loan has granted
with maturity & lump sum amount is paid & repayable in
lump sum at maturity or installment

6. Cash Credit & Working Capital Demand
Loans
Working Capital Finance
 Working Capital facilities are provided to finance the day-to-day
business requirements. Funding requirements are
structured to finance procurement of raw materials/stores
and payment towards manufacturing costs and other
overheads.
The Bank offers a combination of operative cash credit and
working capital demand loan to meet the domestic working
capital requirements of our clients.
Short Term Finance
 The Bank offers short-term loans for a period ranging from 3
months to 12 months to sound corporate for meeting their
specific short-term working capital requirements. The funds
are provided with interest rates either linked to our
BPLR(Benchmark Prime Lending Rate-14.5%) or at a base

7. Bill Purchase & Discounting
• Discounting bill :Letter of credit is an instrument issued in the
favor of the seller by the buyer bank assuring that payment will be
made after certain timer frame depending upon the terms and
conditions agreed, ranging from 30-120 days
• Now when the seller receives the letter of credit through bank,
seller prepares the documents and presents the same to the bank.
The most important element in the same is the bill of exchange
which is used to negotiate a letter of credit. Seller discounts that
bill of exchange with the bank and gets money.
• Now it is seller's bank responsibility to send documents and bill of
exchange to buyer's bank for onward forwarding to the buyer for
the acceptance and the buyer finally, accepts bill of exchange
drawn by the seller on buyer's bank because he has opened that
LC. Buyers bank than get that signed bill of exchange from the
buyer as guarantee and release payment to the sellers bank and

8. Bill Purchase & Discounting
• Bill Discounting is a process in which you can get instant cash on
the purchases or credit sales made by you. If you have made
purchase with your suppliers you can pay them instantly by getting
discounted your purchase bill, for which you need to show the
documents which authenticates the transaction done by you like
trade invoices challans, truck receipts/railway receipts, bill of lading
etc. Similarly if you have made any credit sales you can get instant
money by getting discounted your sales bill.
• BILLS PURCHASED, in trade finance, allows a seller to obtain
financing and receive immediate funds in exchange for a sales
document not drawn under a letter of credit. The bank will send the
sales documents to the buyers bank on behalf of the seller.
“In case of the bill purchase, the bill is purchased and that in case of
bill discounting the bank is only financing against the said bill”

9. Overdraft
• This facility is basically for Current Account holder in a bank
can be sanctioned an overdraft facility.
• An overdraft occurs when money is withdrawn from
a bank account and the available balance goes below zero. In
this situation the account is said to be "overdrawn". If there
is a prior agreement with the account provider for an
overdraft, and the amount overdrawn is within the authorized
overdraft limit, then interest is normally charged at the
agreed rate. If the negative balance exceeds the agreed
terms, then additional fees may be charged and higher
interest rates may apply.

10. Term Loans
 A loan from a bank for a specific amount that has a specified
repayment schedule and a floating interest rate. Term loans
almost always mature between one and 10.
 For example many banks have term-loan programs that can
offer small businesses the cash they need to operate from
month to month. Often a small business will use the cash
from a term loan to purchase fixed assets such as
equipment used in its production process.
 Base Rate is 10-10.5%
 Lending Rate: Base Rate+ spread(2% approx depend upon
customer credit worthiness)

11. Benchmark Prime Lending Rates (New): Public
Sector Banks
S
r
.
N
o
Name of the Bank As on BPLR
1 Allahabad Bank
1/7 /
2008
14.50
2 Andhra Bank
31/8 /
2009
12.25
3 Bank of Baroda
1/7 /
2009
12.25
4 Bank of India
1/7 /
2009
11.75
5 Bank of Maharashtra
31/3 /
2008
13.00
6 Canara Bank
1/7 /
2006
11.5
7 Central Bank of India
1/4 /
2009
12.50
8 Corporation Bank
1/8 /
2008
13.50
9 Dena Bank
1/7 /
2009
12.00
1
0
IDBI Bank Limited
1/7 /
2009
12.00
1
1
Indian Bank
8/8 /
2008
16.00
1
2
Indian Overseas Bank
15/9 /
2003
11
1
3
Oriental Bank of Commerce
14/6 /
2006
11.5
1
4
Punjab & Sind Bank
1/1 /
2004
12
1
5
Punjab National Bank
22/12 /
2008
16.75
1
6
State Bank of India
15/5 /
2006
11.5
1
7
Syndicate Bank
6/7 /
2009
12.25
1
8
UCO Bank
6/7 /
2009
12.25
1
9
Union Bank of India
12/6 /
2009
15.25
2
0
United Bank of India
1/7 /
2009
12.00
2
1/5 /
Benchmark Prime Lending Rates (New): Private Banks of
India
S
r
.
N
o
Name of the Bank As on BPLR
1 AXIS Bank Ltd. 1/5 / 2006 10
2 City Union Bank Ltd. 1/5 / 2006 11.25
3 Development Credit Bank Ltd. 31/5 / 2009 12.00
4 ICICI Bank Limited 1/4 / 2009 12.00
5 IndusInd Bank Limited 6/11 / 2008 15.00
6 ING Vysya Bank Ltd. 1/8 / 2008 14.50
7 Karnataka Bank Ltd. 31/3 / 2008 14.50
8 Tamilnad Mercantile Bank Ltd. 1/7 / 2008 15.00
9The Dhanalakshmi Bank Limited. 13/9 / 2009 14.00
1
0
The Federal Bank Ltd. 5/6 / 2009 15.75
1
1
The HDFC Bank Ltd. 15/5 / 2007 15.50
1
2
The Jammu & Kashmir Bank Ltd. 31/3 / 2008 12.00
1
3
The Karur Vysya Bank Ltd. 31/3 / 2008 11.50
1
4
The Lakshmi Vilas Bank Ltd. 31/3 / 2008 11.00
1
5
The Nainital Bank Ltd. 13/8 / 2008 15.50
1
6
The Ratnakar Bank Ltd. 31/3 / 2008 12.75
1
7
The South Indian Bank Ltd. 9/7 / 2008 15.00
Benchmark Prime Lending Rates (New):
Foreign Banks
S
r
.
N
o
Name of the Bank As on BPLR
1 AB Bank Limited
1/5 /
2006
11
2
Abu Dhabi Commercial
Bank Ltd.
5/8 /
2008
14.00
3 Bank of America N.A.
4/8 /
2008
14.25
4
Bank of Bahrain & Kuwait
BSC
1/7 /
2009
12.75
5 Barclays Bank Plc
31/3 /
2008
11.00
6 BNP PARIBAS
1/1 /
2004
12.5
7 Citibank N.A.
1/5 /
2006
12.5
8
Credit Agricole Corporate
And Investment Bank
1/1 /
2009
15.50
9 Deutsche Bank AG
20/7 /
2009
15.75
1
0
Krung Thai Bank Public
Company
31/8 /
2009
12.75
1
1
Mashreqbank psc
1/1 /
2004
11
1
2
Oman International Bank S
A O
1/5 /
2006
12
1
3
Societe Generale
31/3 /
2008
13.50
1
4
The Royal Bank of
Scotland N V
1/7 /
2008
13.75
1
5
UBS AG
1/8 /
2008
16.00

12. Retail Credit

13. Retail Credit
 Credit given to a customer by a retailer for the payment of
purchases. Retail credit can be granted either through outside credit
cards such as Visa, MasterCard, and American Express or through
retailer-generated credit cards. In-house credit cards encourage
store loyalty.
 Retail credit facilities lend funds to consumers wishing to
purchase high ticket items but are short on capital. Thus, retail
credit facilities may enable a greater number of consumers access
to a retailer's goods. Retail credit facilities give the option of
consuming now or consuming in the future. Higher interest rates
may be acceptable to some consumers, depending on the
consumers' unique consumption utilities. The risk of default is a
factor that determines the interest rate that retail credit facilities
charge.

14. Credit Cards & Housing
Finance
Banks with a net worth of 100 crore can undertake credit card
business
 A credit card is a payment card issued to users as a system
of payment. It allows the cardholder to pay for goods and services
based on the holder's promise to pay for them. The issuer of the
card creates a revolving account and grants a line of credit to
the consumer from which the user can borrow money for payment
to a merchant or as a cash advance to the user.
 “The purpose of a housing finance (10% )system is to provide the
funds which home-buyers need to purchase their homes and also
for repairs to existing properties. Loan upto 15 lakh for
construction, loan upto 1 lakh in rural & semi urban areas, 2lakh in
urban for repair

15. Deposits

16. Current Accounts
 Current bank account is opened by businessmen who have
a number of regular transactions with the bank, both
deposits and withdrawals. It is also known as Demand
Deposit. No interest is given on current account balance
 Current account can be opened in co-operative bank
and commercial bank. Incurrent account, amount can be
deposited and withdrawn at any time without giving any
notice. It is also suitable for making payments to creditors by
using cheques. Cheques received from customers can be
deposited in this account for collection.

17. Saving Account
 Savings accounts are accounts maintained by
retail financial institutions that pay interest (saving deposit
rate: 4% approx). The withdrawal from a saving account are
limited in number and amount.
 These accounts let customers set aside a portion of their
liquid assets while earning a monetary return. For the bank,
money in a savings account may not be callable
immediately and the interest on a saving account balance is
calculated on the minimum balance in the account between
10th and last day of month again as per RBI guidelines

18. Deposits
 Term Deposit(8-9.25%): A deposit held at a financial
institution that has a fixed term. These are generally short-term
with maturities ranging anywhere from a month to a
few years. Minimum maturity 7days. When a term deposit is
purchased, the lender (the customer) understands that the
money can only be withdrawn after the term has ended or
by giving a predetermined number of days notice.
 Certificate of Deposits: A savings certificate entitling the
bearer to receive interest. A CD bears a maturity date, a
specified fixed interest rate and can be issued in any
denomination. CDs are generally issued by commercial
banks and are insured by the FDIC(Federal Deposit
Insurance Corporation). The term of a CD generally ranges
from one month to five years. Minimum amount of CD is
1lakh & in multiple of 1lakh thereafter

19. Non Resident Deposits
 Types of accounts which can be maintained by an
NRI / PIO in India:
 Non-Resident Ordinary Rupee Account (NRO Account)
 Non-Resident (External) Rupee Account (NRE Account)
 Foreign Currency Non Resident (Bank) Account – FCNR
(B) Account. It covers term deposits in pound sterling,
US dollar, Canadian Dollar, Euros. Maturity of FCNR is 5
years and interest is paid within the ceiling rate of
LIBOR or SWAP rates of respective currency

FCNR_Deposit_Rates_August_2012.xls

20. Fee Based Products

21. Letter of Credit
 A letter of credit is a document that a financial institution or similar party
issues to a seller of goods or services which provides that the issuer will
pay the seller for goods or services the seller delivers to a third-party
buyer. The issuer then seeks reimbursement from the buyer or from the
buyer's bank. The document serves essentially as a guarantee to
the seller that it will be paid by the issuer of the letter of credit
regardless of whether the buyer ultimately fails to pay. In this way,
the risk that the buyer will fail to pay is transferred from the seller to the
letter of credit's issuer.

22. Bank Guarantees
 A guarantee from a lending institution ensuring that the liabilities
of a debtor will be met. In other words, if the debtor fails to settle
a debt, the bank will cover it.
 A bank guarantee enables the customer (debtor) to acquire
goods, buy equipment, or draw down loans, and thereby expand
business activity. This facility is basically for existing customer
using credit facilities with bank & supported by cash margins
 While issuing financial guarantee, bank ensure that the customer
is in a position to reimburse the bank, in case bank is required to
make the payment under the guarantee.

24. Thanks