Hierarchy of management that covers different levels of management
Study on Personal loan products major competitors
1. Study of following Personal Loan products vis-a-vis the scheme of
other major competitors:
Analysing reasons for slow/ negligible growth in personal loan
Scheme vlz.,
SBI Gold Loan Scheme. Rent Plus.
Festival Loan Scheme Xpress Credit
(Analysing reasons for slow/ negligible growth of our products and
strategies for improving our market share)
SUMMER TRAINING PROJECT
ON
Presented by
Deepali Srivastava
2014
2. Content of Project
• Introduction
• Objectives of study
• Results analysis and discussion
• Conclusion
• Suggestions
• Different Loans of Competitors
3. Introduction
• The banking sector is the most dominating sector of the
financial system in India. Significant progress has been made
with respect to the banking sector in new economic era (post
liberalization period).
• Deregulation has opened new opportunities for banks to
increase revenue.
• Liberalization has created the more competitive environment
in banking sector.
4. CONCERNS
• The macroeconomic situation continues to raise concerns.
Even as growth has slowed significantly, inflation remains
well beyond the comfort level of the Reserve Bank.
• The impact from domestic and international economic
developments posed challenges to the banking sector during
the year 2013-14.
• Higher capital requirements and the need for meaningful
financial inclusion are the primary challenges before banks.
• Under extreme shocks, some banks could face moderate
liquidity problems and their profitability could be affected.
5. Advances
• India has recorded syndicated loan volume of only $7.2 billion for
the first nine months of 2012, just one-third of the $21.2 billion
closed by the end of the third quarter last year.
• Volume has dropped significantly this year in the absence of large
offshore M&A deals, previously a big volume booster. And deal
flow has been muted amid a dramatic slowdown in economic
growth.
6. Trends in advances
• Over the past 12 months, total bank loans have risen by less than
four percent, while deposits have increased over eight percent.
• The overall loan-deposit ratio for the banking industry is getting
lower.
• Business loans are the fastest growing segment, with real estate and
consumer loans just barely expanding.
• SBI expects to achieve lower advances growth rate of 16% in 2013
advances as compare to 21% of previous year
7. Challenges for bank
• Financial inclusion
• Profitability
• Non-Performing Assets
• Credit risk
8. State Bank Of India - A Brief Introduction
creation of the State Bank of India Group (SBI Group) 1959.
State Bank of India (SBI) 1955.
Imperial Bank of India 1921.
Bank of Bengal in 1809.
SBI history started in the year 1806 with formation of the Bank
of Calcutta.
The State Bank of India is the largest bank in India.
9. Products Portfolio
• Personal Banking
• Agricultural & Rural Banking
• NRI Services
• International Banking
• Corporate Banking
• Services
• Govt. Business
• SME
10. OBJECTIVES OF THE STUDY
To find out the reasons behind the slow growth/
negligible growth in personal loan.
To know the view of people regarding institutional
loan and its procedures with particular emphasis on
SBI’s Personal loan.
11. RESEARCH METHODOLOGY
• Background of study-
• The growth in retail advances of the bank has become
stagnant. Also the asset quality is getting degraded day
by day; the study aims to identify the reasons which are
responsible for the slow growth in loan segment. The
study is based on analysis of Factors (of bank and
customers) and their linkages, within the research
framework of 8 weeks.
12. Source of data
• Primary data:
Data collected from the bank officials as well as from people
(customers as well as other) through semi structured
questionnaire.
• Secondary data:
Secondary data collected from the bank’s annual reports,
financial journals, economic issues, as well as RBI & SBI
websites
13. Research design:
Sampling method: Non Probability Sampling
Sampling technique: Convenient Sampling
Sample area: Lucknow region
Sample size: 100
Sampling unit: Customers and non customers of
Bank.
Analytical tools: Interpreting using charts, graphs
and tables etc.
15. Gold Loan
Your Gold - The key to generate fast cash.
• Let's make things easy! Sometimes, we all face situations when quick finance is required, be it for your
business, your child's education, a new home or an emergency.
• That's why we have financial offerings that have been designed to meet the quick and easy need for
liquidity. Our uncomplicated procedures ensure that you receive the loan in the shortest time possible. This
will help you get better rates per gram of gold compared to other institutions; part redemption allowed; part
payment allowed.
Major Competitors
The Muthoot Gold loan portfolio is the largest in India as well as all around the globe. It is humbling to
know that more than 80,000 people avail their trusted services on a daily basis.
• With Muthoot Finance Ltd. gold loan services, it takes no more than a few minutes for your gold to
generate cash. The simple procedure that they follow allows:
• Quick Loan disbursal
• Loan limit stretches from Rs. 1500 to Rs. 1 crore.
• Pre-payment option-without any penalty.
• Minimal documentation.
• In-house gold evaluation.
• Improves customer service in a shorter response time.
• Strong rooms for providing safe custody for gold ornaments.
18. Manappuram Gold Loan
1. How are Gold Loans different from other loans like Personal Loan or Credit Card?
Gold loan is sanctioned by accepting the gold ornaments of the customer as pledge. Personal loan is sanctioned on the basis
of source of income and repayment capacity of an applicant. It is true that Gold loans, like personal loans or credit card
borrowings, are often used for short term household requirements. However, in terms of the cost and ease of availing the
loan, and the convenience when repaying, gold loans are a better bargain. Personal loans and credit card borrowings are
unsecured loans and therefore may carry a higher rate of interest. Moreover, personal loans require considerable effort in
documentation formalities and they commit you to an inflexible EMI schedule for repayment. Gold loans, on the other hand,
are cheaper and can be availed of in minutes. You can also stretch the repayment to your convenience; the only requirement
is that you have to service the interest periodically. Credit card borrowings may be easier to avail than even gold loans but
the interest rates are prohibitive and it can lure people into a debt-trap.
2. Who is eligible to avail Manappuram Gold loans? What security has to be provided?
Anyone who owns gold ornaments can avail the loan. (Note: minors are not eligible.) To obtain the loan you need to submit
your gold jewellery (within a karat range of 18 to 24 k) at the branch. The loan amount that is sanctioned will be based on
the gold valuation which involves verification of its purity. The weight of stones etc. fixed on the ornaments will be
deducted for the purpose of valuation.
3. What are the documents required for taking loan against gold ornaments? Are there any end-use restrictions involved?
We need one document of identity proof (such as ration card, driving licence, PAN Card, Voter ID card, passport etc.) and
one document of residential proof. There are no end-use restrictions in gold loans.
4. What are the things that people should keep in mind while taking a gold loan?
The most important things from the customer’s perspective are transparency, security and choice of loan product to suit
individual requirements. Transparency would help the customer see for himself what he gets in return for what he pays.
There should be no hidden costs and no nasty surprises. Security is about how well the gold is physically secured, and also
about the internal systems and procedures at the company which ensure that there is no scope for any mala fide actions after
the jewellery has been pledged. The choice of loan products should cover the range from high LTV (loan to value) to low
LTV, with appropriate variations in interest rates. At Manappuram, you will find that all these aspects are well taken care of.
21. SBI Gold Loan
ABOUT
Bank's existing customers can avail the loan upto Rs.10 lacs by pledge of gold ornaments including gold coins sold by Banks. It requires inimum
paper work and has low interest rate.
ELIGIBILITY
Age: 21 years and above
Profession: Anybody with Steady source of income including: Bank s Employees, Pensioners
LOAN AMOUNT
MINIMUM
Rural/Semi Urban: Rs 5000/-
Urban/Metros: Rs 10,000/-
MAXIMUM : Rs. 10 lacs.
MARGIN: 30%
DOCUMENTATION
• D P Note and D P Note Take Delivery Letter
• Application for Gold Loans (as per specified format)
• Two copies of photograph of the borrower(s)
• Gold Ornaments Take Delivery Letter (as per specified format)
• Witness Letter in case of illiterate borrowers (as per specified format)
• Arrangement Letter (as per specified format)
REPAYMENT:
Repayment Period
• 30 months
• Calculate the EMI and advice the customer about the same depending on the tenure they want Repayment Mode Borrower will have the option
of making repayment in one or more lump sum / installments of his choice within the period of 30 months.
SECURITY
Security of gold ornaments.
PROCESSING FEES
(i) For BIS Hallmarked Jewellery/ Ornaments and specially minted Gold Coins sold by Banks:
• 0.51% of the Loan Amount
• (Min: Rs 256; Max: Rs 1022)
(ii) For Non Hallmarked Jewellery/ Ornaments:
(a) Up to Rs 25000: Rs 511 per application;
(b) Above Rs 25000:1.01% of the Loan amount or Rs 1022 whichever is higher.
22. SBI Smart Gold Loan
What is the Smart + Gold loan scheme?
With Smart + Gold Loan, you have the advantage of paying back in Equated Monthly installments; the EMI is
apportioned such that the larger amount goes toward repaying the principal; no applicable charges; part release
and repledge is allowed.
23. Express Credit Personal Loan
Introduction to Personal Loans
At some point in your life you may need to make a purchase which you cannot afford. Perhaps you would like to
travel abroad and visit friends, renovate your home or help pay for your child's wedding, but you do not have
sufficient savings.
A personal loan enables you to borrow money from a financial institution, and repay the amount borrowed over an
extended period of time. In exchange for the financial loan, you will be required to pay interest on the amount you
have borrowed. This means that the total amount you repay will exceed the amount you initially borrowed. Interest
charges vary depending on the amount borrowed, the length of the repayment period, the applicant's current financial
circumstances and their borrowing history.
ICICI Express Credit Personal Loan
ICICI Bank offers a selection of cards to perfectly complement your distinct lifestyle needs.
The Gemstone Collection :-
A card inspired by the unique qualities of a rare gemstone and powered by our most exclusive lifestyle privileges.
Airline :- Convert your everyday card purchases into free flights and upgrades.
Fuel:- Earn cash back and rewards on fuel purchases, along with entertainment and dining benefits.
Delhi Metro Card:- A Delhi Metro Smart Card and a Credit Card combined in one.
More Cards- A selection of convenient, flexible and secure credit cards.
24. Axis Bank Express Credit
Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of financial services
to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.
The Bank has a large footprint of 1947 domestic branches (including extension counters) and 11,245 ATMs spread
across the country as on 31st March 2013. The Bank also has overseas offices in Singapore, Hong Kong, Shanghai,
Colombo, Dubai and Abu Dhabi.
Axis Bank is one of the first new generation private sector banks to have begun operations in 1994. The Bank was
promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of
India),Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance
Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The shareholding of Unit Trust of India was subsequently transferred to SUUTI, an entity
established in 2003.
My Choice Credit Card:- This card allows you to personalize your card design and choose your benefits. You can
now customize features and benefits according to your spending and saving needs, so that you get the best out of
every transaction you make.And it’s not just the looks of the card that are customisable.
My Wings Credit Card:- This card is specially created for those who like to experience life to the fullest.With
benefits such as free tickets, cash back on domestic travel, hotel & holiday vouchers, etc.The explorer inside you
gives the privilege to travel beyond the flight of imagination
My Zone Credit Card :- This card offers you benefits that allow you to enjoy your entertainment experiences even
more.It provides exciting offers on movie tickets, dining, shopping, etc.
Signature Credit Card :- This card offers you to enjoy some of the best-in-class privileges in travel & living, dining
and lifestyle.Its a is EMV certified Chip embedded Card, which gives you the highest levels of security and reduces
the possibility of counterfeit or skimming as against a normal magnetic stripe credit card.
25. HDFC Bank Express Credit
The inception of Housing Development Finance Corporation Limited, later known as HDFC Bank came about in the
year 1994 when RBI decided to liberalize the Indian Banking Industry. A private sector bank, it set up its first registered
office in Mumbai and started operations as a Scheduled Commercial Bank in the year 1995. With its commendable and
flawless track record in the country as well as abroad, the bank has made its way steadily as a trusted and respected
market leader in the banking industry, with more than a million dwelling units in its outstanding loan portfolio. HDFC
bank boasts of a strong network of more than 3400 branches, and 11250 ATM centres in 2171 cities, wherein every
branch is inter-connected to another online on a real-time basis.
Customers also enjoy telephone banking privileges in more than 1350 cities with the bank. When it comes to
technology, the bank is miles ahead in all possible milestones, whether it's advanced communication systems or state-
of-art infrastructure required for it to be a world class bank. Every single HDFC Bank branch has online connectivity
and multi-branch access points are offered to retail customers to enable them to transfer and receive funds in a quick
and effortless manner.
Platinum Plus Credit Card:- Avail of up to 50 days interest free from the date of purchase
Visa Signature Credit Card:- You also get your first year fee reversed if you spend Rs. 15,000 in first 90 days of card set-up date and renewal fee
reversed if you spend Rs. 75,000 in a year prior to renewal date.
World Mastercard Credit Card :- Fuel surcharge waiver of 2.5% across all fuel stations for transaction value between Rs. 400 to Rs. 5000. If you
lose your Card, report it immediately to our 24-hour call centre.
Titanimum Edge Credit Card :- Get reward points for every Rs.150 you spend. Accumulate the Reward Points and redeem them as Cashback
against the outstanding amount on your Credit Card.
Superia Credit Card :- This card gives you tons of reasons to dine out. Enjoy 50% more reward points when you dine. Now every meal will be
more rewarding.
Regalia Credit Credit Card- Find the best prices and super deals on your flight tickets, hotel bookings and movie tickets with ease on our online
Travel & Entertainment Portal
Jetprivilege HDFC Bank World Credit Card:- This card offers you a complimentary Priority Pass membership that allows you preferential access to
more than 600 airport lounges around the world.
Diners Rewardz Credit Card:- One stop shop for your car rental, limousine referral and assistance.
Diners Black Credit Card:- Gain access to select Golf Clubs in India as a Green Fee player with Green Fees hosted for you as per the program.
Diners Premium Credit Card:- Enjoy Revolving Credit on your Credit Card at an interest rate of 3.25% per month
Jetprivilege HDFC Bank Titanium Credit Card:- Spend Rs. 1,50,000 on your JetPrivilege HDFC Bank Titanium Credit Card within 12 months
of the card setup date or within 12 months of card renewal date and get the renewal fee for the next year waived off*.
Jetprivilege HDFC Bank Platinum Credit Card:- The card will entitle the cardholders to enjoy a wide bouquet of lifestyle benefits
26. SBI EXPRESS CREDIT PERSONAL LOAN
Enjoy the SBI Advantage:
• Low interest rates. Further, we charge interest on a daily reducing balance!!
• Low processing charges;
• No hidden costs /administrative charges.
• No security required, minimal documentation...something that you had always wanted.
• No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan.
Features
Purpose
Bank provide personal loans to the employees of undernoted entities maintaining salary account with us at zero margin, and very competitive interest rates with fast and easy processing:
• Central and state Government
• Quasi-Government
• Central PSUs
• Profit making State PSUs
• Educational Institutions of National Repute
• Selected Corporates Income
• Minimum NMI: Rs.7500/-
• EMI/NMI Ratio should not exceed 50
Loan Amount
(i) Term Loan:Min: Rs.24,000/-
• Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.
(ii) Overdraft:
• Minimum: Rs.10.00 lacs,
• Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.
The OD will be subject to monthly reduction in DP so that DP becomes NIL in 60 months
Note: Maximum loan amount for School Teachers is capped at 12 months Gross Salary both
under Term Loan and Overdraft facility Repayment Period
• Min 6 month
• Maximum 60 months or residual service period whichever is less Provision for 2nd Loan
Second Loan can be taken after 1 year of disbursement of the 1st been satisfactorily conducted and is regular at the time of sanction of 2nd Loan. There cannot be more than 2 Xpress Credit
Loans standing in the name of a borrower. However this is subject to the overall EMI/NMI ratio of 50%
Margin : Nil
Security : Nil
Third Party Guarantee : Nil
Charges/Fees
Processing Fees
1.01% of the Loan Amount
Penal Interest
Penal interest will not be charged for loans up to Rs.25, 000.
For Loans above Rs.25000/-, if the irregularity exceeds EMI or installment amount, for a period of one month, then penal interest would be charged @2% p.a. (over and above the applicable
interest rate) on the overdue amountfor the period of default. If part installment or part EMI remains overdue then penal interest will not be levied.
Prepayment Charges : Nil
27. Festival Loan Personal Loan
It is the festive season!!! Is the unavailability of ready funds, dampening the celebrations?
Festival Loan and bring back the cheer and celebrate in style!!! Hurry, the gifts and the sweets are waiting.
It offers you the unique facility of Festival Loans to help you meet any kind of festival related expenses.
PNB Festival Loan
Punjab National Bank announces a series of new schemes with the onset of Festival Season for Retail Loans by way of offering full waiver of processing fee on
Housing, Car, Two-Wheeler and Personal Loans for purchase of Consumer Durables. Further, Rate of Interest on Car Loans slashed to 10.65% on Fixed basis,
ROI on Two-Wheeler loans slashed to 12.25% on Fixed Rate basis and Rate of Interest on Personal Loans for purchase of Consumer Durables slashed to 12.75%
on Fixed basis. These rates are lesser by 1% to 2.50% from the existing floating rates.
Bank has announced PNB Festival Season Bonanza Otter, 2013-14 for the period 08.10.2013 to 31 .01.2014 as under:
2.1 Introduction ot New Schemes under the Otter::Bank has introduced 4 new schemes for the period of offer as per the details given hereunder:
2.1.1 SCHEME FOR FINANCING PURCHASE OF CAR BY PUBLIC AT FIXED ROl*
1. ELIGIBILITY: 1.1 Individuals. Joint Borrowers are also eligible.
1.2 Business Concerns (Corporate! Non-Corporate)
2. RATE OF INTEREST: 10.65% (Fixed) across all repayment tenors.
3. MARGIN: Finance upto 100% of ex-showroom price of vehicle under
tie up arrangements.
4. UPFRONT FEE AND DOCUMENTATION
CHARGES: NIL
2.1.2 SCHEME FOR FINANCING TWO-WHEELERS TO PUBLIC — PNB SAARTHI AT FIXED RATE OF INTEREST*
1. Eligibility Borrowers whose salary is being disbursed through our branches!
who avail check-off facility.
2. Amt Rs 1.00 Lac (max)
3. Rate ot 12.25% (Fixed tor 5 years).
Interest:
4. Repayment Max. 5 years (Max. 60 EMI5).
5. Uptront tee and NIL.
2.1.4 PERSONAL LOAN SCHEME FOR PURCHASE OF CONSUMER DURABLES FOR FURNISHING OF THE FULLY CONSTRUCTED FLAT/HOUSE AT FIXED RATE OF
INTEREST OF 10.50% & REPAYMENT TENOR OF 5 YEARS*
1. Eligibility Individuals.
2. Extent ot Loan* Max. Rs.5.00 lacs
3. Purpose For purchase ot consumer durables tor furnishing of the fully constructed house/flat, where the prospective borrower is residing.
4. Repayment Max. 5 years (Max. 60 EMI5).
5. Security Equitable/Registered Mortgage ot the residential house
6. Rate ot Interest 10.50% (Fixed tor 5 years).
*Conditions apply.
2.2 Besides, the above Schemes, Full waiver of Upfront Fee and Documentation under Housing & personal Loans has been offered.
28. Festival Loan of ICICI Bank
ICICI Bank festival season home loan schemes/ offers.
Under festival Loan Scheme – on Home loans
Interest Rates as follows -
Loan upto Rs 30 lakh – 10.25%
Loans 30 lakh to 3 crore – 10.50%
Fixed Rate home loan interest rates are-
loans below Rs 30 lakh For 3 years – 10.50%
above Rs 30 lakh and up to Rs 3 crore – 10.75%
29. Festival Loan of SBI Bank
SBI offers you the unique facility of Festival Loans to help you meet any kind of festival related expenses.
Enjoy the SBI Advantage :
• Low interest rates, currently 15.50% p.a.(compare with the 18.00% - 30% p.a. charged by others for personal loans/credit card companies.)
• Low processing charges; 1.10% of loan amount(inclusive of service tax) per application.
• No hidden costs or administrative charges.
• No security required if check off is available.. which means minimal documentation. something that you had always wanted.
• No prepayment penalties.
• Repayment period of upto 12 months.
• Complete Transparency. The Scheme Purpose To meet any kind of festival related expenses.
Eligibility
You are eligible to avail a Festival Loan if you are:
• An Employee of Govt., PSUs, profit making public/private limited companies/ institutions etc with a minimum of 2 years service OR
• Self employed person with minimum 3 years standing/experience OR
• A person having regular source of income from verifiable channels like Pension and interest from TDRs/NSCs/Govt. Securities etc
• You have a net monthly income of Rs.3000/- and above.
• Your spouse's income can also be considered in calculating the loan amount provided he/she guarantees the loan or the loan is taken jointly.
Loan Amount
Your festival loan limit would be determined by your income and repayment capacity.
Minimum : Rs.5000/-
Maximum : 4 times your Net Monthly Income, subject to a ceiling of Rs.50,000/-.
Documents Required
• Passport Size Photograph
• Proof of official address for self employed individuals and professionals. This can include shop and establishment certificate/Lease deed/Telephone Bill.
• Latest Salary Slip and Form 16, in the case of salaried persons IT returns for the last two financial years, in the case of self employed individuals and
professionals Margin : NIL
Interest
Repayment
You can repay the loan over a period of 12 months through Equated Monthly Installments
(EMI). Should you wish to deploy your surplus funds towards prepayment of the loan, feel free to do so without any prepayment penalty.
Security
Personal guarantee of the spouse or any other person of adequate worth where check off
facility is not available.
Processing Fee
You need to pay only a nominal processing fee of 1.10% of the loan amount.
37. Reason for non institutional
b. flexibility of
amount
9%
c. personal
relations
13%
e. No other option
14%
d. timeliness
23%
a. easy
availability
41%
FIG 4.10
38. Types of institutional loan
home loan
27%
Car/vehicle loan
12%
Agriculture loan
23%
educational loan
16%
other
22%
FIG 4.11
39. Source of institutional credit
other
10% private banks
13%
Other public
sector banks
19%
SBI
58%
FIG 4.12
40. Reasons for choosing SBI loan
transparency
13%
Low cost
28%
offer from the
institute
20%
trustworthyness
34%
other
5%
FIG 4.13
41. Difficulties / Problems of institutional
loans
lack of
awareness
8%
other
10%
more time
consuming
21%
heavy paper
work
61%
FIG 4.14
42. Start up / continue taking up SBI
loan
yes
85%
no
15%
FIG 4.15
43. If no then what is the reason
no timeliness
13% inflexibility of
amount
13%
less cooperation
20%
heavy paper
work
54%
FIG 4.16
44. Reason for continuity/starting up
loan from SBI
low interest rate
27%
good service
14%
reliability
48%
other
11%
FIG 4.17
46. Conclusion from discussion with bank
• Although the growth in advances is at par with deposits but still the
overall loan deposit ratio is less.
• Rising NPA causing degradation in asset quality hence it is
adversely affecting the lending abilities of bank.
• The officers who process loan is made responsible if it defaults.
• Lack of staff is also causing the loss of customers as many
customers are left unaddressed of their problems.
47. Conclusion of customer analysis
• The customer processing time is huge in loan application
as an average it takes minimum 10 days to process a loan
from application to final sanctioning.
• People think that loan from institutions is a tiring
procedure and requires heavy paperwork and lot of time.
• Respondents of semi urban and rural areas were having
less awareness of various schemes and facilities provided
by the bank to promote the advances.
48. Recommendations
• Need of little flexibility in terms of amount under
consideration, time and documents requirements.
• The complaints of customers should address as quickly as
possible.
• The recovery of loan should be done professionally.
• The staff should be given more authority and power to verify
the loan procedure and to recover it, so they can feel free while
sanctioning the loan.
• Employee turnover should be reduced as it takes time to build
the relations again with new staff and customers
