A

TPP Report

On

‘Gold Loan at SBOP Bank’

For the training undergone at

‘State Bank Of Patiala

Pehowa Branch’

Under the Supervision of

RAKESH GARG

For the partial fulfillment of the award of degree of MBA

Subject : TPP (IMS-903)

Submitted to: Submitted by:

The Director Lovely Kumar Verma

MBA 9th Sem.

Roll. No. 20

Regn. No. 11-UD-3043

Submitted to

INSTITUTE OF MANAGEMENT STUDIES

KURUKSHETRA UNIVERSITY KURUKSHETRA

December 2015

1

DECLARATION

I LOVELY KUMAR VERMA, Roll No. 20, Class MBA - 9th Semester of

KURUKSHETRA UNIVERSITY KURUKSHETRA OF INSTITUTE OF

MANAGEMANT STUDIES, hereby declare that the summer TRAINING PROFILE

PRESENATATION entitled STATE BANK OF PATIALA Ltd. BRANCH

PEHOWA is an original work done by me and the information provided in the study is

authentic to the best of my knowledge and belief.

This study has not been submitted to any other institute or university for the award of any

degree or for any purpose.

(Lovely Kumar Verma)

Roll No. 20

Semester 9th

2

Acknowledgement

First of all I thank my department who provided me this opportunity. I want to

thanks to all those who guided me to move on the track. I am gratefully indebted to

the Director for providing me all the necessary help and requirement guidelines for

the completion of my report and also for the valuable time that he gave me from his

schedule.

(Lovely kumar verma)

Roll No. 20

Semester 9th

3

CONTENTS

Chapter

No.

Title of the chapter Page no.

1. Introduction

A. Banking in India

B. Meaning

C. Definition

D. Features

2. State Bank Of Patiala

A. Introduction

B. Organisational Structures

C. Product and Services

3. Analysis & Discussion

Gold Loan at SBOP

4. SWOT Analysis 47

4

5. Conclusion 48

6. Learning 50

7. References 51

5

Chapter 1

INTRODUCTION

A. Banking in India

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector

acts as the backbone of modern business. Development of any country mainly depends

upon the banking system. An organization, usually a corporation, chartered by a state

or federal government, which does most or all of the following:

Receive demand deposit and time deposits, honors instruments drawn on them,

and pays interest on them; notes, makes loans, and invests insecurities;

collects checks, drafts, and notes; certifies depositor's checks; and issues drafts

and cashier's checks.

The term bank is derived from the French word Banco which means a Bench or Money

exchange table. In olden days, European money lenders or money changers used to

display (show) coins of different countries in big heaps (quantity) on benches of tables

for the purpose of lending or exchanging. A bank is a financial institution which deals

with deposits and advances and other related services. It receives money from those who

want to save in the form of deposits and it lends money to those who need it.

(b) Meaning of bank

The term bank is derived from the French word Banco which means a Bench or Money

exchange table. In olden days, European money lenders or money changers used to

display (show) coins of different countries in big heaps (quantity) on benches or tables

for the purpose of lending or exchanging.

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(c) Definition of bank

Oxford Dictionary defines a bank as "an establishment for custody of money, which it

pays out on customer's order."

(d) Features of bank

1. Dealing in Money

Bank is a financial institution which deals with other people's money i.e. money given by

depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company

which is in the business of banking.

3. Acceptance of Deposit

A bank accepts money from the people in the form of deposits which are usually

repayable on demand or after the expiry of a fixed period. It gives safety to the deposits

of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances

A bank lends out money in the form of loans to those who require it for different

purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of

cheques and drafts; it also brings bank money in circulation. This money is in the form of

cheques, drafts, etc.

7

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility

services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as

regards the functions, services and activities of a bank.

9. Connecting Link

A bank acts as a connecting link between borrowers and lenders of money. Banks collect

money from those who have surplus money and give the same to those who are in need

of money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be

subsidiary to any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is

a bank and that it is dealing in money.

8

E. Types of banks

Type 1. Saving Banks

Saving banks are established to create saving habit among the people. These banks are

helpful for salaried people and low income groups. The deposits collected from

customers are invested in bonds, securities, etc. At present most of the commercial banks

carry the functions of savings banks. Postal department also performs the functions of

saving bank.

Type 2. Commercial Banks

Commercial banks are established with an objective to help businessmen. These banks

collect money from general public and give short-term loans to businessmen by way of

cash credits, overdrafts, etc. Commercial banks provide various services like collecting

cheques, bill of exchange, and remittance money from one place to another place.

In India, commercial banks are established under Companies Act, 1956. In 1969, 14

commercial banks were nationalized by Government of India. The policies regarding

deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.

Type 3. Industrial Banks / Development Banks

Industrial / Development banks collect cash by issuing shares & debentures and

providing long-term loans to industries. The main objective of these banks is to provide

long-term loans for expansion and modernization of industries.

In India such banks are established on a large scale after independence. They are

Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment

Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).

9

Type 4. Land Mortgage / Land Development Banks

Land Mortgage or Land Development banks are also known as Agricultural Banks

because these are formed to finance agricultural sector. They also help in land

development.

In India, Government has come forward to assist these banks. The Government has

guaranteed the debentures issued by such banks. There is a great risk involved in the

financing of agriculture and generally commercial banks do not take much interest in

financing agricultural sector.

Type 5. Indigenous Banks

Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general

public and grant loans to the needy persons out of their own funds as well as from

deposits. These indigenous banks are popular in villages and small towns. They perform

combined functions of trading and banking activities. Certain well-known Indian

communities like Marwari’s and Multan even today run specialized indigenous banks.

Type 6. Central / Federal / National Bank

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A,

Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the

other banks. They provide specialized functions i.e. issue of paper currency, working as

bankers of government, supervising and controlling foreign exchange. A central bank is a

non-profit making institution. It does not deal with the public but it deals with other

banks. The principal responsibility of Central Bank is thorough control on currency of a

country.

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Type 7. Co-operative Banks

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.

They generally give credit facilities to small farmers, salaried employees, small-scale

industries, etc. Co-operative Banks are available in rural as well as in urban areas. The

functions of these banks are just similar to commercial banks.

Type 8. Exchange Banks

Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks

working in India. These banks are mainly concerned with financing foreign trade.

Following are the various functions of Exchange Banks:-

Remitting money from one country to another country,

Discounting of foreign bills,

Buying and Selling Gold and Silver, and

Helping Import and Export Trade.

Type 9. Consumers Banks

Consumers bank is a new addition to the existing type of banks. Such banks are usually

found only in advanced countries like U.S.A. and Germany. The main objective of this

bank is to give loans to consumers for purchase of the durables like Motor car, television

set, washing machine, furniture, etc. The consumers have to repay the loans in easy

installments.

11

Chapter 2

INTRODUCTION

ON

STATE BANK OF PATIALA

12

13

A.Introduction

The rich heritage of State Bank of Patiala dates back to the year 1917, when it was

founded by Late His Highness Bhupinder Singh, Maharaja of erstwhile Patiala state,

with one branch by the name of 'Chowk Fort, Patiala' to begin with. The Bank, then

known as the 'Patiala State Bank' was state owned and setup for the explicit purpose

of fostering growth of agriculture, trade and industry. The constitution, scope and

operations of the Bank underwent a sea change with the formation of the Patiala and

east Punjab States Union (PEPSU) in 1948.The Bank was then reorganized and

brought under the control of Reserve Bank of India.

It was christened as the Bank of Patiala. Another milestone in history of the Bank was

its becoming a subsidiary of the State Bank of India on 1st April,1960 when it was

named as the State Bank of Patiala and since then it has grown significantly both in

size and volume of business. During these glorious years, the Bank has been playing

an important role in Banking sphere.

Our Bank has now added a golden chapter to its history by fully networking all its

brances on Core Banking Solutions on 08.08.2005 and become the first fully

networked Public Sector Bank in the country.

Logo and slogan

The logo of the State Bank of Patiala is a blue circle with a small cut in the

bottom that depicts perfection and the small man the common man - being the

center of the bank's business. The logo came from National Institute of

Design(NID), Ahmedabad and it was inspired by Kankaria Lake, Ahmedabad.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY

INDIAN", "THE NATION BANKS ON US"

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Branches And ATM Services

The State Bank of Patiala has more than 1000 branches, spread across the major cities of

India. The majority ofits branches are located in Punjab, Haryana, Himachal Pradesh,

Rajasthan, Jammu & Kashmir, Delhi, and Chandigarh. The Bank provides easy access to

money to its customers through its ATMs spread over 16 states of India.

It was the first bank in India to go on CORE 100%.

15

B.PRODUCTS AND SERVICES

DIFFERENT PRODUCTS OF SBOP:

DEPOSIT LOANS CARDS DIFFERENT CREDIT CARDS

Savings Account

Home Loans

Consumer Cards

SBOP International cards

Life Plus Senior Citizens Savings Account

Loan Against Property

Credit Card SBOP Gold cards

 Fixed Deposits

Personal Loans

 Travel Card SBOP Gold Master cards

Security

Deposits

Ca r Loan Debit Cards Your City Your Cards

Recurring Deposits

Loans against Securities

Commercial Cards

Tax-Saver Fixed Deposit

Two Wheeler

Corporate Cards

Partnership Cards

Salary Account

Pre- approved Loans

Prepaid Card

Advantage WomanSavings Account

Retail Asset Purchase Card SBOP Employee Cards

Rural Savings Account

  Farmer Finance

Distribution Cards

People's Savings Account

Business Installment        Loans

Business Card SBOP Advantage Cards

 

16

Introduction to Advance Product:

Now a day not all the people have the capacity to fulfill their requirement by their own

earning, that’s why they need help from others. For this so many government & private

sector bank provide them money to fulfill their requirement, that’s call the Advance

Product (loan product) of the bank. All the banks have so many different types of

advance product as per the requirement of the people or customers. In Bhubaneswar also

there are so many banks those provide loan to the people for different causes.

Types of Advance Product

Home Loan

Educational Loan

Car Loan

Personal Loan

Property Loan

Loan Against Shares\Debentures

Etc.

Now a day a large no. of people are taking loan form different banks. It helps people to

fulfill their need and it really easy to repayment the loan amount with a longer repayment

period.

17

SBOP Advance Product

SBOP Home Loans:

Purpose

Purchase/ Construction of House/ Flat

Purchase of a plot of land for construction of House

Extension/ repair/ renovation/ alteration of an existing House/ FlaT

Purchase of Furnishings and Consumer Durables as a part of the project cost.

Takeover of an existing loan from other Banks/ Housing Finance Companies.

Eligibility

Minimum age 18 years as on the date of sanction

Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which

the loan should be fully repaid.

Availability of sufficient, regular and continuous source of income for servicing the loan

repayment.

Loan Amount

40 to 60 times of NMI, depending on repayment capacity as % of NMI as under –

 Net Annual Income EMI/NMI Ratio 

 Upto Rs.2 lacs  40%

 Above Rs.2 lac to Rs. 5 lacs  50%

 Above Rs. 5 lacs  55%

To enhance loan eligibility you have option to add:

18

1. Income of your spouse/ your son/ daughter living with you, provided they have a

steady income and his/ her salary account is maintained with SBOP.

2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is

proposed to be rented out.

3. Depreciation, subject to some conditions.

4. Regular income from all sources

Margin (Special Festival Season Offer)

.Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr.,

20% for loans above Rs. 1 cr.

.Repairs/ Renovation of an existing House/ Flat: 15%

Interest Rates w.e.f 27.2.2015

Floating interest rates

(linked to State Bank Advance Rate - SBAR

(SBAR: 12.25% p.a.)

 Loan Tenor -

>Upto 5 years

Above 5 years

and upto 15 years

 Above 15 years and

upto 25 years

 Upto Rs.30

Lacs

 2.25% below

SBAR, 10.00% p.a.

 2.00% below

SBAR, 10.25% p.a.

 1.75% below

SBAR, 10.50% p.a.

 Above Rs.30

Lacs

 2.00% below

SBAR, 10.25% p.a.

 1.75% below

SBAR, 10.50% p.a.

1.50% below

SBAR, 10.75% p.a. 

Fixed interest rates

Tenure Rate of Interest

(p.a.)*Upto 10 years 12.75%

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* Fixed rate loans will be subject to: 'force maejure' clause and interest reset at the end

of every two years on the basis of fixed interest rates prevailing then.

CAR LOAN:

Purpose You can take finance for:

A new car, jeep or Multi Utility Vehicles (MUVs)

A used car / jeep (not more than 5 years old). (Any make or model).

Take over of existing loan from other Bank/Financial institution (Conditions apply)

Eligibility

To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age.

A Permanent employee of State / Central Government, Public Sector

Undertaking, Private company or a reputed establishment or

A Professionals or self-employed individual who is an income tax assessee or

A Person engaged in agriculture and allied activities.

Net Annual Income Rs. 100,000/- and above.

Salient Features 

Loan Amount

There is no upper limit for the amount of a car loan. A maximum loan amount of

2.5 times the net annual income can be sanctioned. If married, your spouse's

income could also be considered provided the spouse becomes a co-borrower

in the loan. The loan amount includes finance for one-time road tax, registration

and insurance!

No ceiling on the loan amount for new cars.

Loan amount for used car is subject to a maximum limit of Rs. 15 Lacs

1. Term Loan 

2. Overdraft –

a) For New vehicles only

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b) Minimum loan amount: Rs. 3 lacs.

Documents required

you would need to submit the following documents along with the completed application

form if you are an existing SBOP account holder:

Statement of Bank account of the borrower for last 12 months.

2 passport size photographs of borrower(s).

Signature identification from bankers of borrower(s).

A copy of passport /voters ID card/PAN card.

Proof of residence.

Latest salary-slip showing all deductions

I.T. Returns/Form 16: 2 years for salaried employees and 3 years for

professional/self-employed/businessmen duly accepted by the ITO wherever

applicable to be submitted.

Proof of official address for non-salaried individuals.

If you are not an account holder with SBOP you would also need to furnish documents

that establish your identity and give proof of residence.

Margin

New / Used vehicles: 15% of the on the road price.

Repayment

You enjoy the longest repayment period in the industry with us.

Repayment period:

For Salaried:                               Maximum of 84 month

For Self-employed & Professionals:  Maximum 60 months

Repayment period for used vehicles :Up to 84 months from the date of original purchase

of the vehicle (subject to maximum tenure as above).

21

Prepayment Penalty:

Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain

conditions

FLOATING RATES:

A. for Term Loans

EDUCATION LOAN:

A term loan granted to Indian Nationals for pursuing higher education in India or abroad

where admission has been secured.

Eligible Courses

All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

22

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees

for the entire course) 

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.

Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

Interest Rates

(with effect from 1st June 2008)

For loans up to Rs.4 lacs   - 11.75 % p.a. Floating

For loans above Rs. 4 lacs and upto Rs.7.50 lacs - 13.25 % Floating

For loans above Rs.7.50 lacs - 12.25% p.a. Floating

Processing Fees

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted

in the margin money

Repayment Tenure

23

Repayment will commence one year after completion of course or 6 months after

securing a job, whichever is earlier.

Place of Study Loan Amount Repayment in Period

Years

Studies in India Rs. 10.0 lacs 5-7 

Studies Abroad Rs. 20.0 lacs 5-7 

Security

Amount For loans upto Rs. 10.00 lacs for Studies in

India and upto Rs. 20.00 lacs for studies abroad

Upto Rs. 4 lacs No Security

Above Rs. 4 lacs to Rs. 7.50 lacs Collateral security in the form of suitable third party

Guarantee. The bank may, at its discretion, in

exceptional cases, weive third party guarantee if

satisfied with the net-worth/means of parent/s who

would be executing the documents as "joint

borrower"

Above Rs. 7.50 lacs. Tangible collateral security of suitable value, along

with the assignment of future income of the student

For payment of installments.

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All loans should be secured by parent(s)/guardian of the student borrower. In case

of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Margin

For loans up to Rs.4.0 lacs : No Margin

For loans above Rs.4.0 lacs:

Studies in India: 5%

Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

SBOP SARAL PERSONAL LOAN:

Purpose

The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for

domestic or foreign travel, medical treatment of self or a family member, meeting any

financial liability, such as marriage of son/daughter, defraying educational expenses

onwards, meeting margins for purchase of assets etc.).

Eligibility

You are eligible if you are a Salaried individual of good quality corporate, self employed

25

engineer, doctor, architect, chartered accountant, MBA with minimum 2 years

standing.    

Salient Features

Loan Amount

Your personal loan limit would be determined by your income and repayment capacity.

Minimum: Rs.24,000/- in metro and urban centres

Rs.10, 000/- in rural/semi-urban centres

Maximum: 12 times Net Monthly Income for salaried individuals and pensioners 

subject to a ceiling of Rs.10 lacs in all centres

Documents Required

Important documents to be furnished while opening a Personal Loan Account:

For existing bank customers

Passport size photograph

From salaried individuals

Latest salary slip and Form 16

Margin

We do not insist on any margin amount.

Interest Rates

3.25% above SBAR floating i.e. 15.50% p.a.

Repayment

The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish

to, without attracting any prepayment penalty.

Security

NIL

Processing Fee

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Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in the

industry. Processing fees have to be paid upfront. There are no hidden costs or other

administrative charges.

PROPERTY LOAN:

Purpose

This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If

amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified

along with an undertaking that loan will not be used for any speculative purpose whatever

including speculation on real estate and equity shares. 

Eligibility

You are eligible if you are:

A. An individual who is;

a. An Employee or

b. A Professional, self-employed or an income tax assesse or

c. Engaged in agricultural and allied activities.

B. Your Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual Income

(others) is in excess of Rs.1,50,000/-.

The income of the spouse may be added if he/she is a co-borrower or a guarantor.

C. Maximum age limit: 60 years.

Salient Features

Loan Amount

Minimum: Rs.25, 000/-

Maximum: Rs.1 crore. The amount is decided by the following calculation:

27

.24 times the net monthly income of salaried persons (Net of all deductions including

TDS) OR

.2 times the net annual income of others (income as per latest IT return less taxes

payable)

Margin

We will finance upto 75% of the market value of your property.

Interest

Term Loan 0.75% above SBAR. i.e.13.00% p.a. Floating

Repayment

Maximum of 60 equated monthly installments, upto 120 months for salaried individuals

with check-off facility. You could opt to divert any surplus funds towards prepayment of

the loan without attracting any penalty.

Security

As per banks extant instructions.

LOAN AGAINST SHARES \ DEBENTURES:

Eligibility

This facility is available to our existing individual customers enjoying a strong

relationship with SBOP. This loan could be availed either singly or as a joint account

with spouse in 'Either or Survivor'/ 'Former or Survivor' mode. It is offered as an

Overdraft or Demand Loan.

The facility is available at 50 select centers.

28

Salient Features:

Purpose

For meeting contingencies and needs of personal nature. Loan will be permitted for

subscribing to rights or new issue of shares / debentures against the security of existing

shares / debentures. Loan will not be sanctioned for (i) speculative purposes (ii) inter-

corporate investments or (iii) acquiring controlling interest in company / companies.

Loan Amount

You can avail of loans up to Rs 20.00 lacs against your shares/debentures.

Documents Required

You will be required to submit a declaration indicating:

Details of loans availed from other banks/ branches for acquiring shares/

debentures.

Details of loans availed from other banks/ branches against security of shares/

debentures 

Margin

You will need to provide a margin amount of 50% of the prevailing market prices of the

shares/ non-convertible debentures being offered as security. (The market prices refer to

the prices in the Stock Exchanges as reported in the Economic Times.)

Interest

At SBAR Floating i.e. 12.25% p.a.

Repayment Schedule

To be liquidated in maximum period of 30 months through a suitable reducing DP

programme.

In case of a default or if the outstanding is over Rs.20.00 lacs, the shares/debentures will

be transferred in the name of the Bank.

Security:

Pledge of the demat shares/debentures against which overdraft is granted.

29

C. ORGANISATIONAL STRUCTURE

30

31

BOARD OF DIRECTORS

Shri Pratip Chaudhuri,Chairman,State Bank of India,Corporate Centre,MUMBAI

Shri R.SridharanManaging Director& Group Executive(Associates & Subsidiaries)State Bank of IndiaCorporate CentreMumbai

Shri Ashok Nayar,Managing Director,State Bank of Patiala,Head Office, The Mall,PATIALA 147001

Shri B. Ramesh Babu,Dy. General Manager(Associates & Subsidiaries),State Bank of India,Corporate Centre,MUMBAI

Shri B.S. Gopalakrishna,General Manager(Associate Banks),State Bank of India,Corporate Centre,MUMBAI 400021

Shri Rakesh Chander Jasra,Non-Workmen Director,State Bank of Patiala, Zonal Office, NEW DELHI

Shri Ashwani Kumar Gupta,85, Green Park,Cool Road,JALANDHAR CITY

Shri Swarn Singh Boparai,67, Sector 9 A,CHANDIGARH

Dr. Abhijit Mukherjee,Director,Thapar University,PATIALA

Shri R.K. Sood,Under Secretary,Government of India,Ministry of Finance,Department of Financial Services,Jeevan Deep Building,Sansad Marg,NEW DELHI 110001

Shri Jagdish SharmaWorkmen Director,State Bank of Patiala,Shastri BhawanNEW DELHI

Shri Verjinder Kumar Gupta,261, Dalima Vihar,RAJPURA 140401

Dr. Amarendra Sahoo,Regional Director,Reserve Bank of India,LUCKNOW

32

33

Chapter 3

ANALYSIS & DISCUSSION

ON

GOLD LOAN

34

35

36

37

38

SBP - Liquid Gold Scheme

39

40

Procedure for Gold loan

.First the temporary receipt is given to the customer this receipt contains only the number

of items given by the customer.

.Then these ornaments are sent to the jeweler for verification.

.After verification the jeweler gives a receipt which contains the weight of the jewelry,

price per 10gms of gold, and the total value of the gold jewelry.

.Once this verification receipt is received bank’s manager decides the amount that can

given to the customer for loan.

Detailed procedure for gold loan:.Temporary receipt:

Three copies of this receipt are made.

First copy is given to the customer.

Second copy is placed inside the bag (in which jewelries are placed) and is send

to the jeweler.

Third copy is kept with the bank for further reference.

How gold is taken to the jeweler:

After the jewelry along with the temporary receipt is placed inside the bag, the

bag is sealed.

This sealed bag is then sent to the jewelers shop.

For security of this gold ornament one person from the bank and two security

guards goes to jeweler’s shop along with the bag containing gold ornaments.

41

Once the verification is over jeweler puts the verification report’s copy inside the

bag along with temporary receipt and ornaments.

After this the bag is again sealed by the jeweler and a tag is attached along with

the bag which includes name of the customer, and the bank’s branch name.

This bag is then again sent back to the bank.

After receiving of this valuation receipt all other formalities are done and the loan

is disbursed.

This loan amount disbursed is not given completely to the customer a small

amount is deducted from it as charges for the following thing:

Stamp paper (for every Rs.1 lakhs, stamp paper charge is Rs.100)

Commission (Rs.10)

Nominal membership fees (it is Rs.25)

Valuation fees (this is charged by the jeweler as his fees for valuing the gold).

After this loan is given to the customer.

42

Some important points to be remembered:

1 .Generally valuation price is kept less then that of the current market price of the gold.

Reason:

If the customer doesn’t repay the loan within the given period of time then auction of this

gold is done at the HEAD OFFICE of the bank. And the amount obtained will be used for

recovery of the loan and the extra amount is debited to account of the borrower.

But in case during the auction the gold does not get sold then the jeweler will have to

purchase the gold at the value valued by him.

2. Manager permits loan of amount 70%of the valuation made by the jeweler.

Reason:

This is done so that after the loan period the amount to be paid by the customer should

not go beyond the value of gold.

3. Auction is done generally in the month of September and March.

Procedure:

First notice is sent to the customer and 10-15 days time is given to the customer to

repay his/her loan.

If no response comes from customer’s side then an advertisement is published in

the newspaper regarding the auction.

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Reasons why people go for gold loan:

They can get loan immediately within 5-6 hours

No need for any guarantor.

Easy procedure.

No documents needed.(only in case of mangalsutra NOC has to signed by wife).

Full loan can be paid at a time only 1 month’s interest is compulsory.

Security of gold as it is now the responsibility of the bank to safeguard the gold.

Last resource.

Reason for taking the loan need not to be mentioned.

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CHAPTER 4

SWOT ANALYSIS

AND

CONCLUSION

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CONCLUSION

Most of the companies which are offering gold loan in India are still at growth stage and

hence there are ample of opportunities for all the companies which are offering gold

loan to tap customer. The perception of customer is yet to be changed because still they

don’t feel comfortable in taking gold loan because of traditional approach hence there is

a lot of education has to be provided to make people aware of gold loan. To achieve

sustainable growth in this sector India info line finance limited needs to endeavour with

maximum efforts the company can achieve several milestones in future while

maintaining the existing customer relationship.

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LEARNING FROM TRAINING

Account opening

Cash withdrawal

Cash deposit

Loans

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REFERENCES

Banking Awareness by Upendra Rai

www.harcobank.com

Annual report ob kccb.

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