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Finance Project
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AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION TO SIKKIM MANIPAL
UNIVERSITY, DIRECTORATE OF DISTANCE EDUCATION,
INDIA
SUBMITTED BY
NAME : ASHIM SAHA
ROLL NUMBER : 520838870
COURSE / SEMESTER : MBA/ 4TH SEM.
LC NAME & CODE : STAR TECHNOLOGIES (01786)
“RETAIL ASSET MANAGEMENT OF AXIS
BANK LTD”
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
ACKNOWLEDGEMENT
As a requirement for the MBA course, I feel greatly honoured
for having done my training with AXIS BANK LTD, RAC.
I am really grateful to my guides Mr. Sudipto Paul
Retail Asset Centre Head, Mr. Arijit Sadhu, Deputy Manager
Recovery and Risk Management Head, Mr. Sevoke Road
Branch for guiding and providing me with necessary help
throughout the project. Without their critical and timely
suggestion this project would never have been possible.
I would also like to thank other staffs of the bank for their kind
help and co-operation.
I would like to thank my most affectionate and Beloved Friends
and Brother without whose blessings and encouragement this
project work would not have completed.
Place: Siliguri _______________
Date: ASHIM SAHA
(Regd.Number: 520838870)
CONTENTS Page No.
Chapter~1
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
I. A BRIEF INTRODUCTION ABOUT COMPANY~~~~~~~~~~~~~~~~ 6
II. OBJECTIVE OF THE STUDY~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~ ~ 7
III SUMMERY OF THE PROJECT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~8
IV RESEARCH DESIGN / METHODOLOGY~~~~~~~~~~~~~~~~~~~~~9
V REVIEW OF LITERATURE~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~13
Chapter~2
I LOAN AVENUES: AN OVERVIEW~~~~~~~~~~~~~~~~~~~~~~~~~15II List of Table and Illustration~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~5
III ABBREVIATIONS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~31
Chapter~3
PRODUCT AND POLICY
I) MORTGAGE- HL LAP LRD NRI RML~~~~~~~~~~~~~ 33II) AUTO LOAN~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 48III) PERSONAL LOAN~~~~~~~~~~~~~~~~~~~~~~~~~~ 61IV) LOAN AGAINST MUTUAL FUNDS~~~~~~~~~~~~~~~67V) LOAN AGAINST SHARES~~~~~~~~~~~~~~~~~~~~~68
Chapter~4
LOAN PROCESS
I. CROSS SELL PROCESS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~74
II. LOAN PRE-SANCTION PROCESS~~~~~~~~~~~~~~~~~~~~~~~76
III. OPPS PROCESS FLOW~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~78
IV. Dos & Don’ts in AOPS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~80
Chapter~5
I. CONTACT CENTRE~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~81
II. SCOPE OF ACTIVITY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~82
III. CENTERLISED MONOTORING~~~~~~~~~~~~~~~~~~~~~~~~~85
Chapter~6
I. COLLECTION POLICY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~86
II. ANNUAL FINANCIAL RESULTS~~~~~~~~~~~~~~~~~~~~~~~~90
Chapter~7
I FINDINGS AND SUGGESTIONS~~~~~~~~~~~~~~~~~~~~~~~~93
II LIMITATIONS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~94
III QUESTIONNARIES ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~95
IV CONCLUSION~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~98
IV REFERENCES~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~99
V GLOSSARY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~100-103
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
LIST OF TABLE AND ILLUSTRATIONS
TABLE-1 Product and interest rate (page—23)
TABLE -2: Distribution of Govt. Employees and self employed by demography
(page—23)
TABLE -3: Loan Amortization mode(page—24)
TABLE -4: Different Age group of respondent(page—26)
TABLE -5: Profession of respondent regarding personal loan (page-26)
TABLE -6: Profession of respondent regarding home loan(page—27)
TABLE -7: Annual income-Salaried page—28)
TABLE-8: Annual income-Self employed (page—28)
TABLE-9: Delay payment of loan EMI(page—29)
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
A BRIEF ABOUT COMPANY
Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank was promoted jointly
by the Administrator of the specified undertaking of the Unit
Trust of India (UTI - I), Life Insurance Corporation of India (LIC)
and General Insurance Corporation of India (GIC) and other
four PSU insurance companies, i.e. National Insurance
Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance
Company Ltd.
The Bank today is capitalized to the extent of Rs. 405.17 crores
with the public holding (other than promoters and GDRs) at
53.09%.
The Bank's Registered Office is at Ahmedabad and its Central
Office is located at Mumbai. The Bank has a very wide network
of more than 1000 branches and Extension Counters (as on
31st March 2010). The Bank has a network of over 4055 ATMs
(as on 31st March 2010) providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM
networks in the country.
The Bank has strengths in both retail and corporate banking
and is committed to adopting the best industry practices
internationally in order to achieve excellence.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
OBJECTIVE OF THE STUDY
• Service Guarantee
• Login to Sanction
• Sanction to Disbursement
• Post Disbursement Queries
• Customer Sourcing to Sanction
•Need to move to system based processing
• Enables faster decisions
• Capture maximum data of the customer online
• Helps keep track of TAT
• Key Focus Areas
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SUMMARY OF THE PROJECT
This research intends to investigate the relationships of service
quality with customer satisfaction , customer loyalty and
solvency of Axis Bank. It is a correlation study which measures
the correlation between customer satisfaction __customer
loyalty and customer profitability_customer solvancy.The
sample for this study is 100 Axis Bank RAC (Retail Asset
Center)customer, on which I interact with 70 personal loan
user customer, whom I visited in the Axis Bank.Then I
distributed my own prepared questionnaires. During this study
I found that interest rate on personal loans are mush higher for
this the bank does not have anything to sell off and reclaim
the loan in case a borrower defaults. Hence defaults tends to
be more common in case of Personal loan. In a Home loan , if
the borrower defaults, the bank can sell the house and claim its
portion of the funds. In case of a Car loan, Car can be
recovered and sold.I also found some customer have 3 or 4
overdue till now. After collecting these data I will analyzed by
using the statistical tools such as regression analysis and
correlation analysis. I will also be find out EMI(equitable
monthly installment),loan Amortisation model, and Solvency
index.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
RESEARCH DESIGN / METHODOLOGY
This study follows the Quasi Experimental method that
characterizes the servey(field) procedure.This is because the
poinions of individual Axis Bank customers are sought, and
utilized as basis for analusis ans conclution. The work utilizes
the questionnaire as the vital reserch instrument. The
questionnaire contains questions that cover the major research
thrusts of the study.Some questions are open-ended while
others are multiple –choice. The Likert procedure qas utilized
where applicable for relevant questions.
SAMPLE DESIGN
A part of the population is known as sample. The process of
drawingf a sample from a large population is called the
sampling.The sample design is formulated in siliguri. The
idea is to targtet prospective customers, therfore considerable
stress has been given on aurveying the people residing and
working arround the bank, so that the prospective sustomers
of the branch can be identified(along with the servey) and
tapped.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SAMPLE SIZE
The sample size of the emperical investigation is 100.
SAMPLING TECHNIQUE
There are several method of sampling.
The methods are follow-----
1. Observation method
2. Questionaries method
3. Statistical tools
i. Frequency distribution
ii. mean
iii. median
iv. mode
iv. standard deviation
v. percentage
vi. correlation analysis.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
4.Loan amortisation Schedule
5.Calcutalating EMI(equitable monthly installment)
6.Solvency Index
SOURCES OF DATA
Sources of data can be of two types they
are…………..
1.Primary data
2.Secondary data
PRIMARY DATA
Primary data is collected directly from respondents
using data collection methos like servey intervview,
questionaries, measurements, direct observation.The
collection of primary data for business research is
important to assist management in decision-making.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SECONDARY DATA
Secondary data is the data that already exist which has
been collected by some other person or
organization.Sources of secondary data including
websites,Journals,books.
Sampling Plan:
The study is based on primary data. Till date I am
collecting sampling data through open and close ended
questionnaire with five point rating scale: 5= Strongly
Agree, 4= Agree, 3=Neutral, 2=Disagree, 1=Strongly
Disagree.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
REVIEW OF LITERATURE
Axis Bank is the third-largest private sector bank in India in
terms of asset size, with a balance sheet of INR 1.21 tn. It has
a network of 729 branches and extension countersacross the
country.The bank earns substantial fee income from
transaction and merchant banking activities.The key promoter
UTI-I (special undertaking) holds 27.5%, LIC holds 10.4%, and
the rest is
widely held by FIIs and public. Change in management may
affect the pace of growth and profitability.
Execution risk of its retail and international businesses is the
key risk of Axis Bank. The risk management function acts
as the gatekeeper, drawing the line on acceptable levels of
risk - risk appetite - by setting cut-offs. This is wearing a
marginal hat: the cutoff is the margin. For standard retail
products it may conveniently be set in terms of PD, although
more completely it would be an expected loss calculation. To
caricature this risk manager, he doesn’t mind how profitable the
applicants are, as long as they are just above the cut-off.The
business will be looking at the overall profitability of the
product/campaign/portfolio whatever. The business manager is
more likely to phrase his risk appetite targets in terms of
average PD. To caricature the business manager, he doesn’t
mind if a number of poor decisions are made around the
margins as long as the venture as a whole makes a good
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
return.Business situation in the credit market concerns
financial agreements where the creditor evaluate the potential
of fulfilled liabilities. The evaluation process concerns the
business and financial conditions with the objective to
estimate the credit risk or the credit worthiness of the applicant
in order to make a seccessful businesss decisions.Internal
information such as historical business records and other
business considerations such as approval rate and bad rate
should be included if avail able in order to perform a
comprehensive evaluation .The credit applicant could be
consumer or company related such as mortgage loan ,home
loan, personal loan, car loan.
So is the setting of risk appetite about trying to decline
applicants below a certain marginal PD, or is it about trying to
achieve a certain average PD for the accepts?
Complicating the discussion is the role played by
volume. Higher cut-offs naturally mean lower volumes of
successful applicants and this frustrates the assumptions on
the business case.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
LOAN AVENUES: AN OVERVIEW
LOAN POLICY : Bank are business institutions with the undoubted objective of earning profits. In the regard, the loan portfolio is the one that holds all the aces. Banks wish to sustain their earnings, by considerint the extent of importance attached to loan portfolio. As a result banks charting out a loan policy is all the more challenging in view of the need to work out a trade- off between banks priorities like profitability, liquidity, volume of business and risk levels against the requirements ato adhere to regulations.
LOAN PRICING : The objectives of loan pricing
1.Maintain Fixed vs. Floating rate pricing.
2.Maintain market influence on loan pricing.
3.Balance risk – reward profile and ensure market rate.
Axis Bank needs to arrive at the appropriate loan price depending on the operational environment of both the bank and the customer. This involves performing the customer profitability analysis.
CUSTOMER PROFITABILITY ANALYSIS: Banks usually have
a rich repository of customer information which, if utilized
appropriately, can be very predictive of future customer
behavior. Using advanced statistical analysis, tools may be
developed that will allow multiple variables to be used for
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
decision making. Specifically, to address the shortcomings of
the matrix approach, banks should make individual risk
adjustments at the customer account level within their customer
profitability models.
The logic for making such an adjustment is no different than that which has been driving improvements in customer profitability measurement in recent years. Just as banks have diligently measured other elements of the profitability equation at the customer account level (e.g., cost of funds, account fees, transaction costs, etc.), they should now focus on attributing risk at the individual level. Below are the steps required to develop a risk-adjusted customer profitability model.
1. Identify significant predictive variables. In addition to credit bureau and behavior scores, banks have a wealth of customer data that can be used to increase the accuracy with which they estimate the likelihood that their customers will default on their credit obligations. Advanced multivariate regression techniques can easily identify the most significant variables from the vast number of predictor variables available on the customer databases. The dependent variable is credit default and potential independent variables come from the bank’s entire repository of customer data, including account information (balance, time on books, other products held), behavioral data (payment history, credit utilization), and available demographic and psychographic data. Regression analysis will identify those variables that have the power to explain the probability of credit default. Most banks will be surprised to discover the predictive power of the data residing in their own customer information files.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
2. Build probability of charge-off model (scorecard). After identifying the variables most predictive of customer default, the next step is to build a probability of charge-off model -- or scorecard. The scorecard uses the predictive variables, along with historical customer charge-off data, to arrive at a probability of charge-off for every customer. Specifically, the model is developed using statistical software tools to query the customer information file with data for the past 12 or 24 months. The query returns the average incidence of default for every combination of the predictive variables. Visually, the model would appear as a multidimensional object with each cell representing the probability of charge-off for customers possessing particular characteristics represented by the predictive variables. For example, a customer with a home equity line of credit, who has been on the books for 14 months, who frequently draws the line to its limit, and who also has a checking account at the bank, may have a 1.17 percent probability of charge-off over the next 12- or 24-month period.
3. Incorporate risk adjustment. After developing the scorecard, the charge-off probabilities should be incorporated into the customer profitability calculation by applying a probability of charge-off to each customer account. The mechanics of this step are generally the same for most profitability metrics, including customer contribution, net income after capital charge (NIACC), or lifetime value. Essentially, the risk adjustment is carried out by substituting an account level loan loss provision and an account level capital charge for the their product level counterparts in the existing profitability calculation.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
For customer Jane Doe, account level loan loss provision is equal to Jane’s probability of charge-off multiplied by the outstanding balance on her loan (or the dollar limit on a revolving credit product) minus the expected recovery for secured products. For example, if Jane has a probability of charge-off equal to 3.39 percent, an outstanding loan balance of $7,555, and an expected recovery rate of 80 percent, her account level loan loss provision is equal to $51.22 ( [$7,555 x 3.39%] x [1-80%] ), or $4.27 on a monthly basis. This amount replaces the product-driven loan loss provision in most profitability models.
To derive the account level capital charge, each customer must be assigned a risk factor, which is also derived from the probability of charge-off model. The risk factor is calculated by dividing the customer’s account level loan loss provision by the total outstanding balances (less expected recovery) for that product. The resulting risk factor represents the percentage of total risk for that product represented by each customer. Next, account level capital charge is derived by multiplying the risk factor by the total capital allocated to that product.
It is important to note that although this process may seem like a substantial undertaking, it is likely that other departments within the bank are probably already performing some of these steps for other functions. For example, during the loan approval process, most banks use scorecards akin to the probability of charge-off model described above. Similarly, the bank often analyzes the existing customer base for risk management purposes. Therefore, adding a customer level risk adjustment to the existing customer profitability model may simply involve leveraging existing techniques in other parts of the bank.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
It is also important to note that there are several critical prerequisites for successfully implementing a risk adjusted profitability model. These include:
Mastering the basics. Guarantee that the fundamentals of profitability analysis, such as activity-based costing, funds transfer pricing, and risk-adjusted capital allocation, are correct. Warehousing the data. Design a customer database with accurate data that is regularly updated and validated. Acting on the information. Ensure the availability of technology that will communicate the customer knowledge from the Risk Adjusted Profitability Model to the front-line customer service representatives so that it is used at the time of customer contact.
COMPETITIVE ADVANTAGE:
Successful retail banks are devoting as much time and effort to customer retention as they are to new customer acquisition. Retaining profitable customers and devising successful strategies to increase the value of unprofitable customers will be the single largest source of competitive advantage in the coming years. Achieving this competitive advantage requires that banks have the ability to accurately identify their high value customers. Traditionally, customer profitability analysis has not adequately incorporated credit risk at the individual level. By developing risk-adjusted customer profitability metrics that take full advantage of new technology and the wealth of customer data available in most institutions, banks will ensure that their retention efforts are truly targeted at the most profitable customers.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
LOAN ACCOUNT: With the help of a well laid down loan policy, a tight appraisal mechanism and a suitable pricing model, it may appear that a bank has taken a prudent lending decision. Neverthelessm since the cash inflows from the loan installments are mostly related to the future cash inflows of the borrower, there will be an element of uncertainty related to the returns of the bank.
LOAN REPAYMENT SCHEDULE :All issues related to the repayment of the loan will clearly stated in the loan agreement. Apart from the interest rate the loan agreement will also comment on the repayment schedule. The repayment schedule will be drawn by considering the cash flows of the borrower which inturndepend on the Debt Service Converag Ration(DSCR)
CREDIT RISK: A counter –party failure in performing the repayment obligation on due date gives rise to low quality assets which in turn lead to credit risk. Like the interest rate risk and the liquidity risk, credit risk is also an inherent feature of any firm that is into the business of lending funds either to individuals or tocorporates.Effective management of credit risk involves the following key principles: 1.Evaluation 2.Pricing 3.MonitoringThe effective credit risk management necessitates that various risks arising out of deficiency in lending policy, incorrect product structuring, inadequate loan asreeinin and documentation, ineffective post-sanction ,monitoring/ follow-up and weak collection/ recovery mechanism are addressed adequately and in time. And like traditional lending , the bankers while taking lending decisions of loans should strictly adhere to the five ‘Cs’ of credit i.e character, capacity,credit,
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
convenants and collateral.As a risk –mitigating measure, the RBI has recently advised banks:
1.To keep the exposure of unsecured loans/guarantees within safe limits.
2.To increase provisioning of unsecured NPV under sub-standard category from10% to20%.
3.To increase risk weight on home loan from50 to75% and personal and consumer loan from100% to125%.PROBLEM LOANS: Frequent delay nd defaults in payment that is reflected in the loan account will be awarning signal for the bank. If the bank does not act promptly for such delays, there may be degaults leading further degeneration in the quality of the loan and thus create problem loans.Identifying problem loans: Identification of problem loans most importantly require timely access to information and the ability to analyze them. When the bank has the requisite systemsin place to provide the loan officers with the necessary information, it not only enables them to trace the early warnin signals of loans but also enables them to take swift measures to prevent the deterioration of the loan quality. This highlights the need for systematic data collection in credit management. Details on the folling can provide crucial insights into the post sanction ,monitoring appraisal system employed by the bank and will enable the bank to identify early warning signals for a problem loan:
1.Submission of financial statements-Balance sheet, Profit and Loss and Cash Flow Statement.
2.Submission of quarterly/half-yearly statements.
3.Submission of periodic stock statements.
4.Frequency of as hoc limits to meet the cash commitments.
5.Reflection of purchase and sales into the account.
6.Avarage delay in payment of installemts.
7.Clients projections and performance.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
RETAIL LOAN AND INTEREST RATE RISK:In Siliguri retail loan can be classify three way- 1.Home Loan 2.Personal Loan 3.Car Loan
Interest rate risk is another area to address. In the past two-three years, banks have built up housing loan portfolio, which carry7.5% to9.5% interest.But now it carry 14.75 to 11.25% on fixed rate basis.Housing loan are large tanures say 15 to20 years.Axis Bank offers 20.5% to 13.5% interest rate in case of Personal loan and 11.5% in case of Car loan.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Table no 1
Product(tenure) Interest rate
Home Loan Fixed Rate (20 Years) 11.25% - 14.75%
Personal Loan (5 Years) 13.5% - 20.5%
Home Loan Floating Rate (20 Years)
9.75% - 12.5%
Car loan(4 years) 11.5%
CREDITORS’ PROFILEThe personal as well as profile factors influence to leand in formulating their leanding pattern. An high profile person perceiving an lend differs from an low profile one. Similarly, the factors such as age, marital status or family size wield their own influence on the perceptual process. A young unmarried person for instance, prefers to take loan in more tenure more capital, whereas an aged person with a family responsibility prefers more or less tenure and less capital and steady income- generating avenues.
Table No. 2
Distribution of Govt. employees and self employed by demographic Factor
Investor Particulars
No. of Respondents
Total (100) (%)
SexMale 94 94
Female 6 6
Academic Qualification
CA,MBA 22 22Graduate or post
Graduate 48 48DOCTOR 30 30
Age
25-35 42 4236-45 38 3846-55 12 1256-65 0 0
Marital StatusMarried 77 77
Unmarried 23 23Annual income below Rs.100000 11 11
Rs.100000-Rs.200000
75 75
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Above Rs.200000 14 14
Annual savingsLess than Rs.25000 40 40Rs.25001-Rs.50000 43 43
Above Rs.50000 17 17
EMPIRICAL ANALYSISEMI=R/12=44,455 Where, R=15000000/ (PVIFA 18.50%,4)
AXIS BANK LTDLOAN AMOTIZATION MODEL
TENURE 48 PF 2%(.25WAIVED)ROI 18.5% FOUR CLOSUR 4%ON O/S CHARGE PRI.AMT(2% WAIVED BY COMPETENT AUTHORITY)EMI 44455LOAN AMOUNT 15,00,000
LOAN A/C
Month PrincipalO/sPrincipal Repaid Interest EMI
15000000 1500000 21330 23125 44,4551 1500000 21330 22796 44,4552 1478670 21330 22462 44,4553 1457010 21330 22123 44,4554 1435017 22332 21779 44,4555 1412685 22676 21429 44,4556 1390009 23026 21074 44,4557 1366983 23381 20714 44,4558 1343601 23742 20348 44,4559 1319860 24108 19976 44,455
10 1295752 24479 19599 44,45511 1271273 24859 19216 44,455
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
12 1246417 25240 18826 44,45513 1221177 25629 18431 44,45514 1195548 26024 18030 44,45515 1169524 26425 17623 44,45516 1143099 26833 17209 44,45517 1116266 27246 16789 44,45518 1089020 27666 16363 44,45519 1061354 28093 15929 44,45520 1033261 28526 15929 44,45521 1004735 28966 15490 44,45522 975769 29412 15043 44,45523 946357 29866 14590 44,45524 916491 30326 14129 44,45525 886165 30794 13662 44,45526 855371 31268 13187 44,45527 824103 31750 12705 44,45528 792352 32240 12215 44,45529 760113 32737 11718 44,45530 727376 33242 11214 44,45531 694134 33754 10701 44,45532 660380 34275 10181 44,45533 626105 34803 9652 44,45534 591302 35339 9116 44,45535 555963 35884 8571 44,45536 520079 36437 88018 44,45537 483641 36999 7456 44,45538 446642 37570 6886 44,45539 409072 38149 6307 44,45540 370923 38737 5718 44,45541 332186 39334 5121 44,45542 292852 39941 4515 44,45543 252912 40556 3899 44,45544 212355 41182 3274 44,45545 171174 41816 2639 44,45546 129357 42461 1994 44,45547 86896 43116 1340 44,45548 43780 43780 675 44,455
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
ANALYSIS OF THE STUDY Interpretation of data using graphs
Respondents’ Age: About 46% of the customer were under the age group 31 and 45 closely followed by the age group under 30 with 43%. Though the people among the age 31-45 invest more, the volume of their taking loan is relatively lower compared to that of the fewer than 30 age group (Following table).
Age Group of RespondentAge No. of People Percent (%)Under 30 39 4331-45 41 4646-60 7 860 and above 3 3Total 90 100
Profession of the Respondents : In my Interim report I am able to found the difference between the customer profiles depends on Customer occupation . This comparative study prepares only the help of Questionnaire method. In my Questionnaire process I have found various type of profession of the respondent. Example: Doctor, Engineer, Government Service, Business, Stock Broker, Banking etc. And their respondent regarding loan is given bellow by Pie Chart.
Profession of Respondents regarding Personal loanDoctor Engineer Accountant Business Govt.
ServiceStockBroker
Software Banking
5% 10% 6% 4% 55% 1% 2% 3%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
PROFETIONAL RESPONDENT REGARDING Home loanDoctor Engineer Accountant Business Govt.
ServiceStockBroker
Software Banking
5% 20% 12% 16% 9% 5% 5% 15%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Annual income(Salaried): Annual income decides the value of the customer made by their salary.
Annual Income of the RespondentAnnual income
(Lakh)No. of people Percent
<1 3 31-3 31 343-5 37 41
5-10 14 1610+ 5 6Total 90 100
Annual income(SELF EMPLOYED): Annual income decides the value of customer depending upon their income tax return file.
Annual Income of the RespondentIncome tax file
return (Lakh)No. of people Percent
<1 37 411-3 31 343-5 15 16
5-10 4 410+ 2 2Total 90 100
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
DELAY PAYMENT OF LOAN EMI
SCHEME DESCRIPTION PROFILE
INTEREST RATE
LOAN TENURE
LAST PAYMENT DATE BUCKET
PERSONAL POWER BUSINESSMAN 21.5 48 30.11.2007 90-180PERSONAL POWER BUSINESSMAN 21.5 36 21.11.2007 90-180PERSONAL POWER SALARIED 23.5 48 22.11.2007 30-60
PERSONAL POWER
SERVICE GOVERNMENT SECTOR 20.5 36 23.11.2007 60-90
CAR LOAN
SERVICE PRIVATE SECTOR 14.5 48 24.11.2007
CAR LOAN BUSINESSMAN 11.75 48 25.11.2007 90-180CAR LOAN BUSINESSMAN 12.6 48 21.11.2007 0-30CAR LOAN BUSINESSMAN 11.75 48 24.11.2007 0-30CAR LOAN BUSINESSMAN 11.75 48 25.11.2007 0-30
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
ABBREVIATIONS
AAA Anytime, Anywhere, Anyhow
ALM Asset Liability Management
ATM Automated Teller Machine
BIS Bank of International Settlements
CCIL Clearing Corporation of India Ltd.
CIBIL Credit Information Bureau of India Ltd.
CRM Customer Relations Management
Demat Dematerialize
DSAs Direct Selling Agents
ECS Electronic Clearing System
EFT Electronic Funds Transfer
EMI Equated Monthly Instalment Scheme
FS Financial services
GDP Gross Domestic Product
FDI Foreign Direct Investment
HNIs High Networth Individuals
IDRBT Institute for Development and Research in
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Banking Technology
IT Information Technology
KYC Know Your Customer
MIS Management Information System
MNC Multi-national Corpporation
NPA Non-Performing Asset
NSDL National Securities Depository Limited
OBC Other Backward Classes
PLR Prime Lending Rate
PSUs Public Sector Undertakings
PSB Public sector banks
RBI Reserve Bank of India
SMEs Small and Medium Enterprises
SCIs Specialised credit institutions
UK United Kingdom
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Process-Flow The following guidelines should be followed for all Mortgage Loans:
1. All the cases to be mandatorily processed through LOS.2. Credit Manager should only decision the files in LOS.3. If a case goes on hold because of any queries, the
queries should get cleared within 8 Days. In case the same doesn’t get cleared within 8 days the file should be declined and returned back.
4. For all declined cases the decline letter should be kept open for 7 days for review by sales managers / RAC heads. In case the same doesn’t get reviewed the reject letter should be directly couriered to the customer.
5. Sanction letter be couriered to the customer.6. The reasons for files on hold should be captured in
Notepad in LOS.7. Proper reject reason should be captured while declining a
case. In LOS we have the following reject reasons, one can select any one of the following:
• Age Norms not met• CPV negative• Contractibility norms not met – Outside the funding
area• Criterion not met• De-dupe negative• Derogatory history• Document norms not met• Employment / business stability norms not met• Gift – Sales reject needs to be entered• High risk profile / NSP• Income norms not met• LTV norms not met• Negative area• Negative Dealer – Negative builders / Property• Others / qualitative reasons• Programme norms not met• Residence stability norms not met• Tenure norms not met• Wrong information / negative reference
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Product Paper on Power Home
Purpose
Purchase of a plot of land and Construction of a house thereon
Construction of a house on plot of land already owned Purchase of a new house / flat Purchase of old house / flat. The residual age of the
property as confirmed by our empanelled valuators at the maturity of the loan should not be less than 10 years (Home Acquisition Plan)
Extend /Renovate/Repair of a house or flat already owned by self (Improvement/ Extension Plan)
Take-over of existing Housing Loan Pre-allotment Booking finance Loan takeover with additional refinance
However, the property should be located within 50-km radius of the nearest RAC/Branch.
The features of the home loan product are enclosed below.Eligibility
A) Salaried Individuals 1. Any individual with a minimum net monthly salary of Rs.10, 000/- p.m.2. In case of salaried persons clubbing of income of Husband and wife is
permitted, minimum aggregate net monthly salary of Rs.15, 000/- p.m. and both the applicants to be co-applicants to the loan. All property owners to be made co-applicants to the loan.
3. The applicant in all the cases should be above 24 years of age at the time of loan commencement and up to the age of 60 Years or superannuation, whichever is earlier at the time of loan maturity.
B) Professionals:1. In the case of professionals, minimum net annual income of Rs.1.50
lakhs.2. In case of professional (i.e. Doctors, Engineers, Dentists, Architects,
CAs, Cost Accountants, Company Secretary, Management Consultants
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
only) Clubbing of income of Husband and wife is permitted, minimum aggregate net monthly salary of Rs.15000/- p.m. and the loan would be granted to only one person. All property owners to be made co-applicants to the loan.
3. The applicant should be above 24 years of age at the time of loan commencement and up to 65 years or less at the time of loan maturity.
C) Self Employed Individuals 1. In case of self employed individuals, minimum net annual income of
Rs.1.50 lakhs. 2. Clubbing of income of Husband and wife is permitted, minimum
aggregate net monthly salary of Rs.15000/- p.m. and the loan would be granted to only one person. All property owners to be made co-applicants to the loan.
3. The applicant in all the cases should be above 24 years of age at the time of loan commencement and up to 65 years or less at the time of loan maturity.
Clubbing of Income is allowed between spouse and parents and also for the cases where one of the applicants is salaried and other applicant is self employed, subject to maximum clubbing of income of three applicants.
In case the co-applicant / guarantor is a non financial member, the minimum age be 18 years at the time of commencement of loan and up to the age of 75 years at the time of loan maturity.
Income / ownership grid as per matrix given in Annexure 1.
Work experience
A) Salaried Individuals:
Particulars Option ‘A’ Option ‘B’Current Job Min 1 year < 1 yearOverall experience
2 years total experience
3 years total experience
B) Professionals & Self Employed Individuals:
Business continuity of last three years in the same field
Loan amount
Minimum – Rs.1 lakh & Maximum - Rs.50 lacs
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Installment to Income Ratios (IIR) and Fixed Obligation to Income Ratios (FOIR) norms
Loan eligibility will be calculated basis IIR & FOIR and the loan eligibility basis the lower of IIR norm or FOIR norm will apply.
Salaried Individuals, Professionals & Self employed Individuals
Net Monthly Income (NMI)
Max IIR
Max FOIR on net income
Less than Rs.20,000 /-
50% 70%
Rs. 20,000/- to Rs.1,00,000/-
55% 70%
Above Rs.1,00,000/- 60% 75%
Rate of Interest (as applicable on date)
Sr. No.
Type Loan amount (Rs.) Effective ROI
1 Floating
Up to 30 Lacs 8.75 %Above 30 Lacs & up to
100 Lacs9.25 %
2 Fixed Irrespective of the loan amount
14.00 %
Mortgage Reference Rate (MRR) is 12.25%. All rates are subject to change from time to time.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Processing Charges/ Admission Fee - Penalty & Refund
Processing fee equivalent to 1% of the loan amount (applied for) will be collected prior to disbursal.The process of collection & refund of fees is appended below:
1. Minimum cheque of Rs.5,000/- or 1% of the loan amount to be collected upfront in all Home Loan cases but the cheques should be banked after sanction.
2. Balance processing fess of 1% of Home loan needs to be collected from the customer before disbursement. The processing fees should be collected from the customer and not be deducted from the disbursal amount.
3. The process of refund of processing fees is appended below:
Sr. No.
Scenario PF amt to be retained by the
Bank
PF amt to be refunded to
the Applicant1. Application rejected Nil Processing fees
collected, if any.
2. Application sanctioned for a
lower amount then the loan applied and
applicant is not interested in the lower amount.
Rs.2,000/- Balance processing fees
collected.
3. Application disbursed for a lower amount then the amount
sanctioned.
1% of the Sanction limit
Balance processing fees
collected.
4. Case sanctioned subject to legal &
technical clearance and thereon rejected
basis legal & technical report.
Rs.5,000/- Balance processing fees
collected.
5. Case sanctioned but not availed.
Full amount collected
Nil
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Refunds need to be done within a period of 90 days from the date of sanction / disbursal (as the case may be) of the loan. If the refund is not done, for any reason, in the stipulated period then the same needs to be done with the prior approval of Zonal Retail Asset Head.
4. No out of pocket expenses (e.g. Legal charges, Stamp duty, etc.) will be charged to the customer. These are to be adjusted out of the processing fees. However EM charges may be collected.
Penalty for part prepayment and foreclosure Nil
Booking Heads
GL Description GL HeadLoans – Power Home – Gen INR 69006
Product Scheme CodePower Home floating PH_LNPHG_floatingPower Home Fixed PH_LNPHG_fixed
Credit Score & CIBIL Score
The range of CIBIL score is 300-900. The cut-off score would be 760 for all the retail asset products.
The minimum Credit Score rating is 60 for Credit Score Rating sheet.
Other Conditions
Bank reserves the right to reject any application without assigning reasons thereof.
The applicant will undertake to inform the Bank as and when there is a change in address / employment.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
The terms & conditions mentioned above and elsewhere under the scheme are subject to modification from time to time solely at Bank's discretion.
Operational risk losses to be reported to Central Office for onward reporting to Operational Risk Department.
Documentation :
Documents required to be submitted along with application form:
Purpose Salaried OthersProof of Identity Voter's ID Card / Driving
License / PAN card / Photo Credit Card / Employees ID card / Defence, Police, Government, Departmental ID card / Passport & latest Photograph
Voter's ID Card / Driving License / PAN card / Photo Credit Card / Passport & latest Photograph
Proof of Income Latest salary slip/certificate showing all deductions or Form 16 along with current dated salary certificate.
IT Returns for the last 2 years and Computation of income for the last 2 years certified by a C.A.
Proof of Residence
Bank account statement / Latest Electricity Bill / Latest Mobile / Telephone Bill / Latest Credit Card statement / Latest LIC policy / Insurance Premium Receipt / Employers letter certifying the current mailing address / Latest NSC / Existing House Lease
Bank account statement / Latest Electricity Bill / Latest Mobile / Telephone Bill / Latest Credit Card statement / Latest LIC policy / Insurance Premium Receipt / Latest NSC
Bank Statement / Pass Book where salary / income is credited
Last 6 months Last 6 months
Guarantor Form Optional Optional
Disbursement documentation :
ApplicationTerm Loan AgreementCompletion of mortgage formalities (Equitable / Registered)Agreement with builder / seller duly registeredTitle Clearance Certificate / Valuation Report
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Blueprint of Plot / Land / House approved by the competent authorityNo Objection Certificate from Builder/ Society to mortgage the flatLetter of Authority from employee / Undertaking by employer where check-off facility is availablePledge Form for collateral securities
Delegation
Branches headed by SVPs/Other BranchesThe loans will be sanctioned and disbursed at the branch level and the individual sanctions would be reported to Zonal Office at monthly intervals in a pre-designed format for review by the Zonal Office. However, the branches are advised to obtain a pre-disbursal review invariably in those cases where there are deviations from the scheme but where the value of connections or other relevant factors make the proposal worthwhile for consideration.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Annexure A:
POWER HOMES (SALARIED)
CREDIT SCORING SHEET
Name: Shri / Smt. _________________________________
A/c No._________________
Sr.No.
Parameters Total Marks
Ex. G AA
A Criteria
1. Personal InformationAge
10 10 8 6 2EX > 24 Yrs. And < 35 Yrs.G > 35 Yrs. and < 50 Yrs.AA > 50 Yrs. And < 55 Yrs.A >55 Yrs.
2. EducationalQualifications
10 10 6 4 4 EX – Post Graduate /ProfessionalG – GraduateAA/A – Under Graduate
3.No. of Dependents
10 10 8 4 0 EX – Upto 4G – 5 AA –6A – More than 6
4. Income Information
Net Present Income from all sources
20 20 13 8 5EX =>Rs.300000G =>Rs.200000 < Rs.300000AA =>Rs.90000 < Rs.200000A => Rs.50000 , < Rs.90000
5. Monthly Instalment of Loan / Net
15 15 11 8 5 EX < 20%G < 35%AA < 45%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Sr.No.
Parameters Total Marks
Ex. G AA
A Criteria
MonthlyIncome(from all sources)
A > 45% but < 55%
6. Networth InformationHas Phone
2 2 0 0 0 EX – YesG/AA/A – No
7. Owning of vehicle
3 3 2 1 0 EX – 4 Wheeler fully owned/ Company providedG – Hypothecated 4 WheelerAA- Two WheelerA – Does not own a vehicle
8. Net Assets
(Total Assets – Liab.)
15 15 10 6 4 EX -Market Value >Rs.500000G- Market Value > Rs.300000AA-Market Value>Rs.200000A- Market Value > Rs.100000
9. Organisation InformationOrganisation (*)
3 3 2 1 0
EX –Government / Public Sector Undertaking/ MNCG – Public Limited CompanyAA –Private Limited Company
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Sr.No.
Parameters Total Marks
Ex. G AA
A Criteria
10. Designation (*) 2 2 1 0 0 EX – Executive / Senior ManagerG – OfficerAA/A–Others
11. Length of Service in present job
5 5 3 2 1 EX > 3 YearsG > 2 YearsAA > 1 YearA < 1Year
12. Credit Card Informationi) Type of Credit Card
3 3 2 0 0
EX - Gold / DinersG - Silver / Blue / Classic / Executive / Sterling Silver / others, AA/A - No Card
ii) Member Since
2 2 1 0 0EX > 2 YearsG 1 – 2 yearsAA < 1 YearA No Card
Total Marks 100
CREDIT SCORING RATING
Point Nos. 1 2 3 4 5 6 7 8 9 10 11 Total Marks
Max Scores
10 10
10 20 15
2 3 15
5 5 (3+2)
100
Marks Scored
Cut off Score = 60
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
POWER HOMES – SELF EMPLOYED
CREDIT SCORING SHEET
Name: Shri / Smt. _________________________________
A/c No._________________
Sr.No.
Parameters Total Mark
Ex. G AA
A Criteria
1. Personal InformationAge 10 10 8 6 2
EX - 30 years to 45 years.
G - 24 years to 30 years (others) 46
years to 50 years(professional)
AA - 51 years to 60 years.A - more than 60 years
2. EducationalQualifications
10 10 6 4 4 EX – Post Graduate/ Professional(Full time Degree course e.g. MBBS,BDS, Architect, Engineers, Chartered Accountants,Company Secretary, Cost Accountants, MBAs.)G – GraduateAA/A – Under Graduate
3.No. of Dependents
10 10 8 4 0 EX – Upto 4G – 5 AA --6A – More than 6
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Sr.No.
Parameters Total Mark
Ex. G AA
A Criteria
4. Net Present Income from all sources
20 20 15 8 5 EX => Rs. 300000G => Rs. 200000 <Rs.300000AA=>Rs.100000 < Rs.200000A > Rs. 75000 < Rs.100000
5. Monthly Instalment of Loan / Net Monthly Income(from all sources)
15 15 11 8 5 EX < 25%G < 40%AA < 50%A >50% but < 60%
6. Networth InformationHas Phone 2 2 0 0 0
EX – YesG/AA/A – No
7. Owning of vehicle
3 3 2 1 0 EX –4 Wheeler fully owned/ Company providedG – Hypothecated 4 WheelerAA- Two WheelerA – Does not own a vehicle
8. Net assets(For others)
(Total Assets – Liab.)
15 15 11 6 4 EX Market Value >Rs.500000G Market Value > Rs.300000AA Market Value> Rs.200000A Market Value > Rs.100000
9. Organisation Information Organisation 5 5 4 2 1
EX – Self-employed professional / Director of Pvt. Ltd
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Sr.No.
Parameters Total Mark
Ex. G AA
A Criteria
and Designation
Co. (with 50 or more staff)
G – Director of Pvt. Ltd. Co. with less than 50 staff / Partner in a partnership firm with 25 or more employeesAA – Partner in a partnership firm with >10 and < 25 employees / Proprietor of a firm with more than 25 employeesA – Proprietor of a firm with < 25 employees / Partner in a partnership firm with <10 employees.
10. Length of involvement in current business
5 5 3 2 1 EX > 3 YearsG > 2 YearsAA > 1 YearA < 1Year
11. Credit Card Informationi) Type of Credit Card
3 3 2 0 0 EX - Gold / DinersG - Silver / Blue / Classic / Executive / Sterling Silver / othersAA/A - No Card
ii) Member Since
2 2 1 0 0EX > 2 YearsG 1 – 2 yearsAA < 1 YearA No Card
Total Marks 100
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
CREDIT SCORING RATING
Point Nos. 1 2 3 4 5 6 7 8 9 10 11 Total Marks
Max Scores
10 10
10 20 15
2 3 15
5 5 (3+2)
100
Marks Scored
Cut off Score = 60%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
AUTO LOAN
PURPOSE
The product would be applicable for purchase of new cars only.
Vehicles under this scheme are to be used for personal use only.
SCHEMES
We would be offering the following schemes under the auto loans product:
1. Vanilla Product2. Salary Account Product3. Priority Account Product4. No Income Proof Product5. Repayment Track Record Product6. Credit Card Product7. Gross Receipts Product8. Defence Personnel Product9. Special Product for Working Women
SECURITY
Hypothecation of the vehicle and lien to be marked in favour of UTI Bank Ltd. in the Registration Certificate, Final Invoice and Insurance Policy.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SOURCING
This product will be sourced through RAC, SRAC, branches, dealerships, corporate tie-ups, existing salary and priority account relationships and DSAs.
ELIGIBLE SEGMENTS
The following applicants can apply for the loan:
1. Salaried Individuals2. Self-employed individuals3. Proprietorships4. Partnerships5. HUFs (with prior clearance of CO)6. Trusts
All applicants must be either Resident Indians or Non-Resident Indians
For NRI cases, a blood related (father/mother/wife/children) Resident Indian as co-applicant is required. Cheques can be taken from either the Resident co-applicant’s account or the NRI’s Resident account.
For all HUF cases, the Karta of the HUF must be taken in as co-applicant in his individual capacity
Directors (other than working Director employed in professional capacity) cannot apply as Salaried employee unless the Balance Sheet of the company is submitted along with the personal ITR of the applicant. They would be considered under the self-employed category.
In case of Trusts, the following documents must be collected in addition:
1. Certified True Copy of the Trust Deed2. Copy of the resolution passed by the Board of
Trustees/Directors authorizing borrowal3. Certified true copy of the Registration Certificate
from Charity Commissioner / Societies Registration Act
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
ELIGIBLE CARS
Cars have been categorized as follows for LTV and eligibility purposes.
Category A
Category B Category C Category D
Maruti 800Zen Baleno VitaraOmni Swift Esteem Sonata Alto Versa Tucson Wagon R Accent Mercedes C-Class Santro Verna Mercedes E-Class Getz Elantra Mercedes CLS-Class Indica Bolero Mercedes S-Class Palio Scorpio Mercedes SL-Class Cedia Mercedes SLK-Class Lancer Montero Octavia Pajero Sumo Combi Safari Laura Indigo Superb Corolla Camry Innova Land Cruiser Prado Chevrolet Aveo Fusion Chevrolet OptraEndeavour Tavera Accord Ikon Civic Fiesta Honda CRV Honda City
SRVMarina
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
ELIGIBILITY CRITERIA & DOCUMENTATION
Purpose Salaried Self-Employed Individuals/Proprietary
concerns
Partnership Firms/ Trusts
Age Minimum 21 years, Maximum upto 58 years or 60 years
(age of superannuation) at
the time of loan maturity
Minimum 21 years, Maximum 65 years at
the time of loan maturity
Loan executing partner/ trustee (as
applicable) to confirm to these
norms: Minimum 21 years, Maximum 65 years at the time of
loan maturityLoan amount Minimum Rs.
100000/-Minimum Rs. 100000/- Minimum Rs.
100000/-
Tenure Minimum 1 year and maximum 7
years
Minimum 1 year and maximum 7 years
Minimum 1 year and maximum 7 years
Income Norms***
Minimum Rs. 100000/- gross
annual income for Category A/B cars and Rs. 200000/- for Category C/D
cars (Gross annual income is the
gross salary as reflected in the Form-16 before any deduction)
Minimum Rs. 60000/- for Category A/B cars
and Minimum Rs. 100000/- for Category
C/D cars (Gross Income: Net Profit after tax + Depreciation)
Minimum Rs. 60000/- for
Category A/B cars and Minimum Rs.
100000/- for Category C/D cars (Gross Income: Net
Profit after tax + Depreciation)
Work-experience
Minimum 2 years of total
employment
Minimum 3 years in business
Minimum 3 years in business
Turnover NA NA Minimum turnover of Rs. 4.5 lacs
Telephone Landline at Residence/
Landline at Residence/ Postpaid mobile
Landline at Residence/
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Postpaid mobile connection
connection Postpaid mobile connection of loan executing partner/
trustee (as applicable)
Proof of Identity
Passport / Voter’s Card / Driving License with Photograph/ PAN card
Passport / Voter’s Card / Driving License with Photograph/ PAN card
Copy of Partnership Deed/ Memorandum & Articles of Association/Certified True Copy of Trust Deed (as applicable) & the following documents required for the loan executing partner/trustee: Passport / Voter’s Card / Driving License with Photograph/ PAN card
Proof of Income
Latest salary slip showing all deductions AND Latest Form 16 / Income Tax Return (Form 16 FYE March should be available June onwards)
Latest Income Tax Return and Computation of income
Audited Balance Sheet, Profit & Loss Account for last 2 years along with the latest 2 Income Tax Returns
Address Proof (of the residing city)
Ration Card/Latest Electricity Bill/Latest Telephone Bill/Passport/Latest Credit Card Bill/ Driving License
Ration Card/Latest Electricity Bill/Latest Telephone Bill/Passport/Latest Credit Card Bill/ Driving License
Telephone Bill/Electricity Bill/ Shop & Establishment Act Certificate/SSI Registered Certificate/ Sales Tax Certificate
Signature Verification
Passport copy/ Driving License with Photograph/ Banker’s
Passport copy/ Driving License with Photograph/ Banker’s Verification
Banker’s Verification
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
VerificationAdditional Documentation
NA Declaration from Proprietor
Authority letter signed by all partners/Board Resolution for Trusts
*** For Self-employed Individuals/Proprietorships :1. Income from other sources in the form of bank interests
and dividends of companies listed on the stock exchange can be added to Business Income ONLY if there is no business loss. However, if this income exceeds 20% of the total income requirement for the product, then income proof in the form of bank credits or bank fixed deposit photo copies or the Demat account statement needs to be given.
2. Income from rent can be added to the business income if there is no business loss. However, if this income exceeds 20% of the total income requirement for the product, then income proof in the form of rental credits in bank along with the rent agreement needs to be given. If rent credits are not appearing in the bank account, then the rent agreement along with 3 months bank statements will also be a valid substitute.
3. Agricultural income up to 20% of the total income requirements for the product can be added to the business income provided there is no business loss.
For Partnership Firms: Net loss making firms or firms having debit capital balances not to be considered. Salary of partners, interest paid to partners and full depreciation can be added to the net profit.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Loan To Value (LTV)
LTV would be computed on ON-ROAD price (inclusive of insurance and registration)
Funding on imported cars is permissible with CO approval
The following LTV grid would be applicable:
CompanyModel & it’s Variants
% LTV upto 36 months
% LTV upto 60 months
% LTV upto 84 months
Maruti Maruti 800 85% 80% 75% Omni 80% 75% 70% Zen 85% 80% 75% Alto 85% 80% 75% Wagon R 85% 80% 75% Versa 75% 65% 60% Esteem 80% 75% 70% Baleno 80% 70% 65% Vitara 75% 70% 65% Swift 85% 80% 75%Hyundai Santro 85% 80% 75% Getz 85% 80% 75% Accent 80% 75% 70% Verna 80% 75% 65% Elantra 75% 70% NA Sonata 80% 75% 65% Tucson 70% 65% NAMahindra Bolero 75% 65% NA Scorpio 80% 70% 65%Mercedes Mercedes 75% 70% 60%Mitsubishi Cedia 80% 70% NA Lancer 80% 70% NA Montero 65% NA NA Pajero 80% 70% 60%Skoda Combi 65% NA NA Octavia 80% 75% 70% Laura 75% 70% 65%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Superb 75% 70% NATata Sumo 80% 65% NA Safari 75% 65% 60% Indica 85% 80% 75% Indigo 80% 75% 70% Marina 75% 70% 65%Toyota Corolla 80% 75% 70% Camry 80% 75% 65% Innova 85% 75% 70% Land Cruiser Prado 75% 70% 60%GM Chevrolet Aveo 80% 75% 65% Chevrolet Optra 80% 75% 65% SRV 80% 75% 65% Tavera 80% 75% 70%Fiat Palio 80% 65% 60% Petra 75% 65% NAFord Ikon 80% 75% 65% Fiesta 80% 75% 65% Fusion 75% 70% NA Endeavour 75% 70% 60%Honda City 85% 75% 70% Accord 75% 70% 65% Civic 80% 75% 70% CRV 75% 70% 65%Others 65% NA NA
RATE OF INTEREST
Applicable ROI will be as follows:
Tenor upto 60 months
Tenor greater than 60 months up to 84 months
Without Payout 10.50% 10.50%With Payout (subject to a maximum payout of 5.5% flat) 11.75% 12.25%
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Rates are subject to change. Any revision in rates of interests would be communicated from the Central Office from time to time.
It is at the discretion of the RAC Head/SRAC Head/Branch Head to sell auto loans at rates higher than the one indicated above. No approval from the Zone / Central Office required for the same.
PRODUCT-WISE FEATURES
1. VANILLA PRODUCTAll category cars can be fundedLTV as per grid would applyAll documents as defined under documentation would
have to be collectedLast 3 months bank statements to be collected and to
be verified for negative traits like cheque bounces, minimum balance charges, penal interests etc.
Deviations would be permissible as per deviation grid6 months bank statements to be collected from cash
salary cases. No deviations permitted for cash salary.
Eligibility Criteria : For Salaried:1. 3 times Gross Salary p.a. OR (30 times of average
net salary of 3 months for cases where Form – 16 is not available)
2. EMI must not exceed 50% of net salary
For Self-employed: 6 times Gross Income p.a.
The RAC Head must ensure that deviation of non-availability of Form-16 must not be taken for more than 5% of the total portfolio.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Salary Account Product:
All category cars can be funded under this productAll customers having their Salary A/c with UTI Bank
since the past 3 months will qualify under this scheme
All documents as defined under documentation would have to be collected (other than income documents)
Deviations would be permissible as per deviation grid
Eligibility: 1. 30 times Average Net Salary Credited during last 3
months2. EMI must not exceed 50% of net salary
Benefits:100% Waiver of Processing Fees
Waiver of Salary Slips & Bank Statements
Priority Account Product:
All UTI Bank Priority customers, having an account for a minimum period of 12 months AND a minimum AQB of Rs. 100000/- for last 2 completed quarters will qualify under this scheme
Borrower will be eligible as per the LTV grid. Credit Manager to use his discretion.
All category cars can be funded under this productAll documents as defined under documentation would
have to be collectedDeviations would be permissible as per deviation grid
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Benefits:
100% Waiver of Processing Fees Waiver of Income documents & bank statements
No Income Proof Product:
Only Category A, B, C cars can be funded under this product
The product can be offered to all eligible applicants – Salaried, Self-employed, Partnership Firms, Trusts and HUFs
LTV would be as follows:
CAT
For Tenure <
36 months
For Tenure > 36 months, <= 60
monthsCategory A 75% 70%Category B 75% 70%Category C 60% 55%Category D NA NA
All documents other than income documents to be
collected as per documentation list. Last 1 Year bank statements to be collected,
Repayment to be through the same accountResidence must be owned by the applicant or by the
spouse/parent/children of the applicant. Ownership proof in the form of Ration Card/Latest Electricity Bill/Passport/Driving License/Property tax bill/Maintenance Bill/letter of allotment to be collected.
Deviations would be permissible as per deviation grid
Eligibility:
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
The average bank balance should be atleast 1.5 times the EMI. Loan amount to that extent can be granted
Repayment Track Record Product
Only Category A, B, C cars can be funded under this product
In addition to the documents mentioned under documentation, the sanction letter of the original loan (repayment track of which is considered) along with the repayment schedule needs to be collected.
This loan should have been for a minimum loan amount of Rs. 100000/- for Category A/B cars and Rs. 300000/- for Category C cars.
Conditions: The loan can be a live one or a closed one. Atleast
50% of the loan Should have been serviced if the loan account is a live one or should have been closed prior to 15 months from the date of application. If the loan has been closed prior to last 6 months, the
bank statements need to be checked for regularity of cash inflows to assess the current repayment capacity of the borrower. The credit manager to use his discretion while assessing the same.
There should not have been more than 2 cheque bounces per completed 12 months. It should never have been 30 days past due and should be current if live.
Repayment must be from one of the following: UTI Bank, ICICI Bank, HDFC, ABN Amro Bank, SCB, GE Countrywide, Citi, Kotak, Amex, HSBC, SBI and in the name of the applicant.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Repayment track record would also be acceptable in any of the following cases:
Track record availabe in the name of the proprietorary concern where the borrower is the proprietor
Track record available in the name of a partnership firm where the borrower is a 50% partner in the firm
Last 1 Year bank statements to be taken in all cases. Repayment track should be verified from either the loan account statement of the bank statements. If the track is verified from the bank statements, the same needs to be collected for atleast 50% of the original loan tenor completed.
LTV as per grid.Deviations would be permissible as per deviation grid
Eligibility: The new loan EMI can be upto a maximum of 1.5 times the previous loan EMI. For UTI Bank repayment cases, the new loan EMI can be upto 2 times the previous EMI.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
PERSONAL LOAN
1.1.1 Eligibility Criteria Any Individual having a cumulative experience of 2 years or more with a minimum net income of Rs 7000 p.m. should be eligible for the loan, irrespective of confirmation in his present job. An employee with 1 year experience in cat A or cat B company receiving net salary of Rs.11000/- p.m. is also eligible to avail the personal loan. Minimum experience of one year (1 year) or more for Salary Power customers with check off facility. The applicant should be above 21 years of age and less than the age of superannuation at the termination of the loan.
1.1.2 Additional Eligibility Criteria for cash salary
Any individual receiving cash salary will also be eligible for a Personal Loan. The following are the features:
1. Loan amount will be restricted to Rs.2 lacs 2. Applicant must have a minimum net income of Rs.10,000/-
p.m. 3. Banking habits: Atleast 6 transactions should be reflected in
the last 6 months’ bank statements and no cheque bounces/ minimum balance charges to be allowed
4. Pricing would be 200 basis points higher than the respective category rate
5. These loans will be tracked under the label code ‘PLCASH’. The same is to be captured on Disbursement Memo.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
1.1.3 Loan Amount The following matrix / loan limits are applicable for Salaried Individual Normal segment: Minimum Loan amount: Rs 50,000 Maximum Loan amount: Rs 10.00 lacs For Salary Power customers, minimum loan amount: Rs 25,000 (at the discretion of RAC Heads) (Repayment limit listed in the table below) Repayment Limit (Salaried Individual Normal) CAT A / B / C / D customers
Repayment Period(Salaried Individual
Normal)
Max. Loan Amount (Salaried Normal)
Maximum Limit Rs. 10,00,000/-
=>12 months but < 24 months
5 times Net Monthly Income for CAT A
4 times Net Monthly Income for CAT B
4 times Net Monthly Income for CAT C
4 times Net Monthly Income for CAT D
=>24 months but < 36 months
10 times Net Monthly Income for CAT A
8 times Net Monthly Income for CAT B
8 times Net Monthly Income for CAT C
8 times Net Monthly Income for CAT D
=>36 months but < 48 months
13 times Net Monthly Income for CAT A
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Repayment Period(Salaried Individual
Normal)
Max. Loan Amount (Salaried Normal)
Maximum Limit Rs. 10,00,000/-10 times Net Monthly Income for
CAT B10 times Net Monthly Income for
CAT C10 times Net Monthly Income for
CAT D
=>48 months upto 60 months
15 times Net Monthly Income for CAT A
12 times Net Monthly Income for CAT B
N.A. for CAT C / D NOTE: Personal Discussion with the borrower mandatory for all loan amounts > Rs 5.0 Lacs.
1.1.4 Security / Collateral A. Salaried (having salary power account with the Bank with check-
off facility) having net monthly income of Rs. 7000 to Rs.10,000, need not provide collateral security.
B. Salaried (not having salary power account with the Bank) having net monthly income of Rs. 7000 to Rs.10,000 need to provide 50% collateral security (units of UTI, NSCs, KVPs, Demat shares, Bank deposits, Surrender value of Life Insurance policy and such other investments that are acceptable to the Bank ) or a 3rd party guarantee of a person of satisfactory means*
C. Salaried having net monthly income of Rs. 10,000 or more need not provide collateral security.
* Guarantor: Father / Mother / Spouse / Third Party (any one of these) can be a financial guarantor by declaration. Signature verification and photograph required from the guarantor. Guarantor need to have monthly salary / income > Rs 10,000. For SRACs, monthly salary / income of Guarantor to be > Rs 8,000
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
1.1.5 Banking Relationships 1. For salaried normal in the last six (6) months maximum of 2
cheque bounces allowed (for CAT C & D). 2. For CAT A & B employees, maximum of 1 cheque bounce
allowed in last 3 months.
1.1.6 Rate Of Interest ** Rate of Interest for Salaried Individuals Normal:-
S. No. CATEGORYRATE OF INTEREST
1 CAT A 13.00 % p.a.
2 CAT B 15.00 % p.a.
3 CAT C 18.50 % p.a.
4 CAT D 20.50 % p.a.
A consolidated list of 7144 companies categorised as CAT A/B/C/D is enclosed as Annexure I for information. The list has been finalised after compiling similar data of all the market palyers (including MNC Banks) and discussing the same with RAC Heads / Sales Managers. The matrix defining the logic for un listed companies is also mentioned in the same annexure.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
This rate of interest is the floor rate to be offered to the borrowers. It is at the discretion of the RAC Head / Branch Head to sell Personal Power at rates higher than the one indicated above. No approval from the Zone / Central Office required for the same.
1.1.7 Pre-payment Penalty A pre-payment penalty of 4% of capital outstanding will be imposed, in case of pre payment of the loan. At RAC Head’s discretion, 50% waiver in pre-payment penalty can be granted.
1.1.8 Repayment
Salaried Individual Normal12 to 60 months (for CAT A & B) in Equated Monthly Installments (EMI) from the date of disbursement by way of post-dated cheques in cases where check-off facility is not available. Otherwise, the monthly installment will be received from the employer under check-off facility.
1.1.9 Residence & Phone Criteria
Residence Criteria 1. For Salaried individuals normal, Present residence should not be less than 6 months
(mandatory). On declaration backed by FI. If present residence is less than six (6) months, then it should
be company provided or own house or transfer case. Anything other than the listed cases, guarantor (local) mandatory. For Bachelor / Spinster salaried individual staying alone, permanent residence proof mandatory. If not provided, loan to be rejected. Also in this case, native place Field Investigation (FI) IS mandatory either by RAC / SRAC present in that location and if not, then tele – verification to be done.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Permanent residence proof mandatory for all loan cases > Rs 3.0 Lacs. Phone Criteria 1. For Salaried, a phone (landline) / mobile / WLL mandatory.
Documentary proof required for the phone.
1.1.10 Service Charges / Processing Fees 2% of loan amount applied for. Net off from the loan amount availed. Waiver / reduction in processing fees allowed at RAC Heads discretion.
1.1.11 Documentary Proofs Purpose Salaried NormalProof of Identity Passport / Voter's Card / Driving
Licence / PAN card & PhotographProof of Income Latest salary slip showing all deductions
or Form 16 alongwith current dated salary certificate
Proof of Residence Ration Card/ Passport /Latest Electricity Bill/ Latest Telephone Bill/ Latest Credit Card Bill
Bank Statement / Pass Book where salary / income is credited
Last 6 months3 months Bank Statement for CAT A & B employees.
Proof of Telephone Latest bill of landline / mobile / WLL stating name of borrower or address of borrower
Guarantor Form Yes (Optional)
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
LOAN AGAINST MUTUAL FUNDS
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Customer approaches the Bank for Loan Against Mutual
Funds
Bank Official briefs him about LMF Product.1) Product Policy2) Interest rate3) Approved schemes4) Eligible Loan amount
Please refer to the updated list available at Retail Asset URL [email protected]/Retail Asset URL (http://20.1.135.107/RETAILASSETS-
If the requested MF scheme is in approved list then Bank Official to feed the scheme details in the ‘What If –DP’ If not in approved list, then
reject the sameIf customer is not interested, thank the customer for taking interest in Axis
APPLICATION AND SANCTION STAGE
If customer agrees, Bank Official collects application form and sanction document.1) Loan is sanctioned as per the product guideline2) Collect accepted sanction letter along with loan documents from customer. (for other documents to be collected, please refer to product policy) 3) Take pledge request letter duly signed by the customer.4) All other documents as per Loan Against Mutual Funds Policy and/or any other docs required for new a/c opening
ACCOUNT OPENING AND PLEDGE CREATION STAGE
If cust id exists, account opening information to be filled up in the pre defined template by RAC / Branch and send the request info by email to [email protected]. If no cust id exists, RAC requests the Branch to create the cust id and then forward the account opening request to RAMG.
RAMG completes the account opening procedure and informs RAC .
Pledge request letter is forwarded to RAMG. RAMG send this to respective fund house. On receipt of confirmation from the fund house Drawing power is uploaded
Activity at RAMG1) Drawing Power uploading in DPintranet system2) Drawing Power uploading from Dpintranet to
Branch Task : 1) To issue cheque book to customer.2) To maintain account related documentation3) Servicing of the account.
Regular activity at CO:1) Monitoring of portfolio for delinquency & informing the same to respective branches.
ity at Branches / RAC:Informing the customer for delinquency or unutilized credit limit. Follow up with the customer for funding / additional pledging for regularization / issuing intimation for account
ACCOUNT ACTIVATION, SERVICING AND
Process Flow for Loan against share
A Customer approaches for LAS
DSA informs him about LAS {product policy}(Interest rate, Approved scrips etc)
Asks the Customer whether he wants loan against a Single Scrip (Scheme Code – IND02) or a group of Scrips (Scheme Code – IND01){ Appv List of Shares } (Please refer updated list only)
If Single Scrip,then to check whether the same is approved in Single Scrip
Category (IND02)
If Multiple Scrips,then to check whether all or atleast 2 of them are
approved in Multiple Scrip Category (IND01)
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
If not approved then reject the same
If not approved then reject the same
If Approved then proceed further`
Details of scrips given to Relationship Manager to get an idea on approx. Drawing Power.
If customer not interested, thank the customer for taking interest in Axis
Bank.
- 69 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
If Ok with customer, DSA gets the customer to fill up-Loan Application form for LAS and submits required documents.{Emp-frm1},{Emp-frm2}
Agreement form duly stamped & signed. {Empower Agmt}, {Pers Guarantee},{Irrevocable Undertaking},{Power of Attorney},{Serv Chrgs Decl},{Letter of Continuing Security},{Letter of Waiver},{Demand Promissory Note},{DPN Delv Letter},{Legal note Stamping/Signatory}.
Take pledge Creation forms (3 copies – 1 copy for DP ops, 1 for customer & 1 for branch records) duly signed by the customer & by the branch official incase of demat a/c with Axis Bank, if demat a/c with other DP then the customer has to submit the pledge forms to his DP and submit the acknowledged copy of the same to RAC for further processing.
Precautions for filling up of Pledge Forms:To mention correctly ISIN No., Code of Scrips,Scrip Name ,Quantity,
ODMAT A/c No. and DP ID (if DP A/c is with other depositoryAll other documents as per Empower Policy and/or any other docs required for new a/c opening (eg. Form for debit card etc).
Take Customer’s signature on sanction letter.
- 70 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
If the client does not have our DP a/c then inform the customer to fill up the pledge creation forms of his DP and send the same to his DP a/c and collect the acknowledged copy of those forms and submit
the same to RAC for process.
All the documents submitted to RAC for further process.
After completion of documentation, the request for account opening and pledge creation to be forwarded
to RAMG and DP ops respectively by RAC
- 71 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
• The cheque book is issued by the Branch where the OD account is opened.
• Drawing Power upload is on a daily basis.• Incase of delinquency greater than the prescribed norms
centralized share sale is executed.
DSA to inform the customer for delinquency or unutilized credit limit.
- 72 -
Process Flow for Cross Sell
Step 1: Lead Generation and Entry into Telesmart
There would be two modes of Lead Generation.
CET (Customer – Employee Type) Customer approaches Axis Bank Branch or other offices such as Regions, Zones or
Central Office. Leads are entered into Telesmart directly by the staff or by the Asset Desk Officer (ADO)
stationed at the branch.
CST (Customer – System Type) Customer applies through Axis Bank Alternate Channels. Leads are automatically entered into Telesmart through a back –end process at CO.
Step 2: Telesmart Customer ID generation
Once the lead is entered into Telesmart, Telesmart Lead ID and Telesmart Customer ID would be generated.
Step 3: Assigning Lead to CSC
The leads would automatically get assigned to the CSC at the respective RAC. The CSC would be able to view the details entered at the front end along with the corresponding Telesmart Customer ID.
Step 4: Re-assigning lead to CS SM
The CSC would then assign the lead to the Cross Sell Sales Manager at the RAC.
Step 5: Customer Contact
The Cross Sell Sales Manager would contact the customer and keep the CSC updated over the status of the lead.
Step 6: Updation of Lead status in system
The CSC would need to update the status of the lead in Telesmart. Thus, the ADO would be able to view the status of the leads and inform the lead generating branch staff.
Step 7: Conversion of Leads
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 74 -
The leads that successfully get converted would need to be entered in FinnOne by the RAC Operations Staff.
Step 8: Entry into FinnOne.
The Leads entered into Telesmart are visible in FinnOne on the next day. While entering the Cross Sell business into FinnOne, the Telesmart ID would be entered in the Lead field. Also, the Branch Name would be entered in the Source Code field. The RAC Operations Staff makes these entries in FinnOne.
Step 9: Lead closure in Telesmart.
Once the business is logged into FinnOne, the corresponding leads in Telesmart would be closed by the CSC by recording the A/c. no. generated through FinnOne and the amount disbursed.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
1. Lead Generation and Entry
into Telesmart
2. Telesmart Customer ID
generated
3. Lead Assigned to
CSC
4. CSC to re-assign lead to
CS SM
5. Customer Contact
6. Updation of Lead status in
Telesmart
8. Entry into FinOne.
Telesmart ID also entered
9. Lead closed in Telesmart
with A/c. No. and Amt
7. Lead converted
- 75 -
PRE-SANCTION PROCESS
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 76 -
\
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
DSA / DST
CPA
CreditManager
/ RAC Head
Identifies a potentialcustomer & the product
which can be sold to the customer (Day -1)
Gets the loan applicationform completely filled
from the customer(Day -1)
Collects the loan application form
along with relevantpapers & prepares a file
The file is submitted to
sales coordinator along
with PF cheque who
Isthe file comple
te?
Gets the file completed
from the customer N
File is submitted backto DSA/ DSE w/o
login.
Y
CPA checks the file
against the same
Isthe file comple
te?
File is submittedback to the sales coordinator (Day
0)
N
Y
CPA checks the name of the DSE / DST who has logged
in the file with the list ofexisting DSE / DST’s (Day
0)
Negative
Match is found
?
N
YCPA log-in’s the file & enters the same
in the sanction tracker
Starts doing the data entry in LOS
(Day 0)
CPA does the dedupe check, CIBIL check & PAN card verification
(Day 0)
Match is found
?
Shows the file to Credit, who decides whether the file is to be processed further or declined,
basis the matches (Day 1)
Further processi
ng?
Y
FI is triggered & fileIs forwarded to
RCU
N
Y NCAM is prepared and
file is rejected in LOS (Day 1) A
B
- 77 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
SANCTION PROCESS
DSA / DST
CPA
CreditManager
/ RAC Head
B
RCU stamps the file asScreened, sampledor RCU Hold (Day 1)
CPA does the eligibilitycalculation by preparing
a eligibility sheet (Day 1)
Receives the RCU report & FI report andincorporates the same
in file along with his observations (Day 2)
Checks the file along witheligibility calculation &
CPA’s observations (Day 3)
PD required?
Conducts a PD
at the applicants
Y
Satisfied
with the proposa
l?
NY
N
Queries
Prepares acombined
list of queries
& updatesthe same in tracker
Complete?
Y
CAM is prepared and
file is rejected in
Sanction / Decline letter is prepared in triplicate.
Two copies are dispatched
to the customer & one copy
is attached in the file.Sanction tracker is
Cheque
cleared
?
N
IsLegal &
technicalReqd.?
Shoots the Legal & Technical to the
empanelled agencies
& collects the report
OPPS PROCESS FLOW
- 78 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 79 -
Dos & Don’ts in AOPS
• AOF in black ink & capital letters only
• No cutting/over writing
• Signatures in black ink only
• No multiple inks to be used
• Photograph mandatory - to be affixed/pasted, not stapled
• All photocopies of documents on A4 only
• Separate A4 sheets for separate documents
• Check the application form with the documents, any
discrepancies would be rejected
• Check boxes to be filled
with tick mark correctly
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 80 -
Contact Centre
•Outsourced contact centre
–To handle calls & emails
–Prospective customers
–Clearly defined role & scope
–Escalation to the concerned authority
•SMS communication to customers
–Carried out in-house
–Instances
•Application form login
•Loan sanction
•Disbursement
•EMI deduction
•Cheque bounce
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 81 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
EmailsInboun
d calls
Outboundcalls
Customer
Scope of activities
EmailsInboun
d calls
Outboundcalls
Customer
- Welcome calls to customers
- Calls to customers regarding applications on hold
- Calls to RACs to follow up on the held application forms
- 82 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Scope of activities
EmailsInboun
d calls
Outboundcalls
Customer
- Calls from customers regarding status of application
- Calls from the customers regarding claiming of service guarantee amount
- Other queries from customers
- 83 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT)
Scope of activities
EmailsInboun
d calls
Outboundcalls
Customer
- Welcome emails to customers
- Mails to customers regarding applications on hold
Centralized Monitoring
- 84 -
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 85 -
COLLECTIONS POLICY
OBJECTIVES
The objective of the collection effort will be to encourage Borrowers to
bring payments to date and to stress the need to make future
payments on time.
COLLECTION DOCUMENTATION
All Collection activities must be documented for all 30 dpd + cases.
The Collection agency and the collectors should record only FACTS
and not opinions, assumptions or derogatory comments on the
borrower.
COLLECTION PROCESS GUIDELINES
The Bank collection procedure will support the following guidelines:-
1. Initial collection practices should be based on the presumption that
the borrower intends to repay. All communications in writing, by
telephone or by personal visit should be based on this presumption
unless the Collector determines that the borrower is deliberately
evading repayment.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 86
2. In all cases, the collection agency / collector should determine the
cause of the delinquency and document it. Borrowers must be dealt
with as individuals who have different attitudes toward obligations.
Collectors should recognize that economic, social or personal
problems may account for slow payment.
3. If the borrower does not indicate a willingness to pay, the Collector
should explain the seriousness of continuing the delinquency and
escalate the Collection effort. The
Collector must not use personal abuse or other unethical tactics as
these may antagonize the borrower or may lead to lawsuits, thereby
frustrating the Collection
effort apart from reputational damage.
4. Legal remedies available to the Bank can be stated as part of the
collection effort.
Legal action should not be cited unless it will be used against the
customer. In case legal proceedings have to be resorted to, the
Branch/Zone/RAC Head should obtain
the approval of the Head Retail Assets or the designated officer at the
Central Office. Alternatively the Senior Vice President Legal
Department can also be contacted by
keeping the Head Retail Assets in the loop.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 87
COLLECTIONS POLICY
RETAIL RISK MANAGEMENT
6. External agencies represent the bank and any unethical actions
on their part may expose the bank to adverse publicity and/or
lawsuits.
7. Hence, all external agencies employed in the collection effort
should be evaluated based on market reputation, infrastructure
availability and experience. The collection agencies will be
appointed with the recommendation of the Branch/Zone/RAC
Head / AVP Retail Assets, Retail Banking and approved by the
Senior Vice President – Retail Banking, Head-Retail Assets or
designated officers at the Central Office.
6. In case of delinquencies that arise due to borrower's dissatisfaction
with the goods or services rendered (due to material defects or
conflict over terms), Collectors should
note that as per the Bank's loan documentation, the Bank is not to be
involved in any dispute relating to quality, condition or delivery date of
the asset procured. The
Collection agency / Collector should investigate the situation and
determine the legal involvement of the Bank. If the Bank is involved,
he should refer to the Branch/Zone/RAC Head, AVP Retail Assets,
who will take requisite legal approvals from the Legal Department at
Central Office. If the Bank is not involved, Collection
efforts are to be resumed.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 88
7. Delinquency charges are to be assessed as per the Power Loan
schedule of Charges
(Format attached as per Annexure “A”) and collected at the time of
delinquent payment receipt.
In case of borrowers who have residual unpaid delinquency charges,
the delinquency charges may be collected at the maturity of the loan.
8. Borrower complaints concerning the Bank's Collection practices
must be promptly investigated. The Bank / Collection agency must
review and respond to the
complaint keeping legal requirements and impact on the Borrower's willingness to pay in
mind.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 89
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 90
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 91
FINDINGS AND SUGGESTIONS
As retail segment is the most profitable and less risky- banks has to go
for it. As Indian economy is booming the retail banking sector has a
great advantage – from the point of view of both profitability and
credibility. But the competition also is increasing. So, banks should focus
towards certain factors
They should adopt the latest technology to avoid the cases of comparative disadvantages.
They should offer wide range of products to cater the needs of various segments.
They should adopt the corporate governance framework for better transparency and reliability.
They should be customer oriented. They should put extra effort to retain the customers.
To reduce defalt Axis Bank should keep exposure of unsecured loans/guarantees within safe limits.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 93 -
LIMITATION
GEOGRAPHICAL LIMITATIONThe research will carried out with the Axis Bank customer who are lives on Siliguri and is not applicable to otherparts.
TEMPORAL LIMITATIAONThe data and analysis pertain to the information available during that period of study only.
PROCEDURAL LIMITATIONThe short time span of the project restricts from in depth study in some areas. Data collected from sources are not adequate in some cases.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 94 -
QUESTIONNAIRE
PERSONAL DETAILS
1. Name of the person:
_______________________________________
2. Address: _________________________
1. Age (in years): ________
2. Gender: Male Female
3. Marital Status: Married Unmarried
4. Occupation: salaried professional self employed others.
5. Average monthly income (in INR): 1,000-10,000 10,000-
20,000 20,000-40,000 40,000-50,000 above 50,000.
6.Average gross income in Incom-tax file: 2,00,000-4,00,000
4,00,000-above.
BANKING HABIT
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 95 -
1.Name of your prime bank…………………………………………………
2.How many times you have taken loan from Axis Bank?
zero 1 2
3.How secure you feel with your financial information available and
managed over internet?
Very secure Some what secure not secure some what insecure
Very insecure
6. Do you consider the Axis Banks’ products are the better
financial product?
Yes, N0
7. Do you consider the brand when you choose any retail
banking product?
Yes, N0
8.Have you cleared all the due EMI overdue?
yes No
9.How many overdue you are not clear till now?
1 2 3 4
SERVICE OFFERED BY BANK
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 96 -
1.Which of the following factors are you consider when you
choose any loan from Axis Bank?
Need, Quick processing customer profitability customer
satisfaction past record of the bank,
2.Which of the following services are provided by the bank from where
youchoose that Axis Bank product?
Better service after sales Core service Associated/Supporting service
Service flexibility in payment.
3.What type of service you are using from Axis Bank(RAC)?
Personal loan Home loan car loan Mortgage loan
4.Do you feel that the service what they provide is up to the mark?
Yes, N0
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 97 -
CONCLUSION
The implementation of customer profitability has yielded a
number of benifits to the bank. One of the important benefits to
the bank. One of the important benefits was customer has
provided the bank an opportunity to understand its customers well
and accordingly cater to their needs with individualized offerings.
The response time of the bank has redu ced. The effectiveness
and performance of thebank as well as the level of service of the
bank have also improved.The implematation of customer
profitability helped the bank tocome closer to its customers. To
analyze customer profitability we can understand customer
satisfaction, retention,loyalty.To improve customer satisfaction
and increase customer expectations Axis Bank has customized
their product. Delays /defaultsin payments affect the cash flow
forecastsmade by the bank and further result in changed risk
profile,as the bank will now have to face an enhanced interest
reate risk and liquidity risk as well as credit risk. For theis reason
it is neecssary ……..
1. To keep the exposure of unsecured loans within safe limit.
2.To increase provisioning of unsecured NPA under sub-standard
category from 10% to20%.
3.To increase risk weighy on home loanfrom 50 to 75% and
Personal loan from 100% to 125%.
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 98 -
REFERENCES
Magazines & Newspapers:
Business world.
Business line and The Economic Times.
Website Address:
www.google.com
www.indiainfoline.comn
www.economics.about.com
www.wikipedia.com
www.siligurionline.com
www.siligurimc.org
GLOSSARY
Arbitraging
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 99 -
The purchase of securities on one market for immediate resale on
another market in order to profit from a price discrepancy.
Credit risk
Credit risk is risk due to uncertainty in a counterparty's (also called an
obligor's or credit's) ability to meet its obligations. Because there are
many types of counterparties—from individuals to sovereign
governments—and many different types of obligations—from auto loans
to derivatives transactions—credit risk takes many forms. Institutions
manage it in different ways.
Deregulation
Deregulation is the process by which governments remove, reduce, or
simplify restrictions on business and individuals with the intent of
encouraging the efficient operation of markets. The stated rationale for
deregulation is often that fewer and simpler regulations will lead to a
raised level of competitiveness, therefore higher productivity, more
efficiency and lower prices overall. Deregulation is different from
liberalization because a liberalized market, while often having less and
simpler regulations, can also have regulations in order to increase
efficiency and protect consumer's rights
Insourcing
PROJECT REPORT AXIS BANK LTD (RETAIL ASSET MANAGEMENT) - 100 -
Insourcing is a business practice in which work that would otherwise
have been contracted out is performed in house. Insourcing is a
business decision that is often made to maintain control of certain critical
production or competencies.
KYC norms
A KYC profile is an aggregation of information on a customer. This
information is used to get to know the customer better and to understand
and above all to be able to assess its business operations and activities.
Information on its financial condition should help the financial institution
to check the plausibility of the statements made.
Leverage
Leverage (or gearing) is using given resources in such a way that the
potential positive or negative outcome is magnified. It generally refers to
using borrowed funds, or debt, so as to attempt to increase the returns to
equity.
Market risk
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Market risk is the risk that the value of an investment will decrease due
to moves in market factors. The four standard market risk factors are:
Equity risk, Interest rate risk, Currency risk, Commodity risk.
Liquidity
Quality that makes an asset easily convertible into cash with relatively
little loss of value in the conversion process. Sometimes used more
broadly to encompass credit in hand and promises of credit to meet
needs for cash.
Non-Performing Asset (NPA)
A NPA is a credit facility in respect of which the interest has remained
past due for two quarters or more
Outsourcing
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The process of outsourcing formalizes the description of the non-core
operation into a contractual relationship between the client and the
supplier. Under the new contractual agreement the supplier acquires the
means of production which may include people, processes, technology,
intellectual property and assets.
Productivity
In economics, productivity is the amount of output created (in terms of goods produced or
services rendered) per unit input used.
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