INTRODUCTION

INDIAN BANKING INDUSTRY

Banking falls under credit market and in India it is mainly governed by the Banking

Regulation Act, 1949 and RBI Act, 1934. The Reserve Bank of India and the Government of

India exercise control over banks from the opening of banks to their winding up by virtue of

the powers conferred under these statutes.

I. Legal frame work of regulation of banks:

The business of Banking:

1] Definition:
Banking is defined in section 5(b) of Banking Regulation Act, 1949 as the acceptance of

deposits from public for the purpose of lending or investment. Such deposits may be

repayable on demand or for a period of time as agreed by the banker and the customer.

2] Acceptance of deposits by Non-Banking entities:

There are also non-banking companies, firms and other unincorporated associations of

persons and individuals who accept deposit from the public. Acceptance of deposits by non-

banking financial companies is regulated by the Reserve Bank of India under the directions

issued by it under chapter 111B of the Reserve Bank of India Act. Other companies are

regulated by the central government under the companies (acceptance of deposits) rules,

issued under section 58A of the Companies Act.

3] License for banking:

In India, it is necessary to have a license from the Reserve Bank of India under section 22 of

the Banking Regulation Act for commencing or carrying on the business of Banking. Every
banking company has to use the word “Bank” as a part of its name and no company other a

banking company can use the words, “Bank”, “Banker”, “Banking” as a part of its name.

4] Permitted Business:
Although, traditionally the main business of the banks is, acceptance of deposits and lending,

the banks have now spread their wings far and wide into many allied and even unrelated

activities. Some of the important forms of business permissible are:

(i) borrowing, raising, or taking up of money

(ii) lending or advancing of money either upon security or without security

(iii) drawing, making, accepting, discounting, buying, selling, collecting and dealing in

bills of exchange, hundis, promissory notes, coupons, drafts, bills of lading,

railway receipts, warrants, debentures, certificates, scrips and other instruments

and securities whether transferable or negotiable or not

(iv) providing of safe deposit vaults

(v) collecting and transmitting of money and securities

And other businesses as permissible under section 6(1).

5] Prohibited Business:
Section 8 of the Banking Regulation Act prohibits Banking Company from engaging directly

or indirectly in trading activities and under taking trading risks.

Buying or selling or bartering of goods directly or indirectly is prohibited.

II. Constitution of Banks:

Banks in India fall under one of the following categories

(i) Body corporate constituted under special statutes:

(ii) Company registered under the Companies Act, 1956 or foreign companies.

(iii) Co-operative society registered under the Co-operative societies Act.

 Public Sector:
The public sector banks including nationalized banks, State Bank of India and its

associates and the Regional Rural Banks fall in the first category. The Banking

Companies Act, 1970 nationalized and vested them in newly created statutory bodies. The

regional rural banks are constituted under the Regional Rural Banks Act, 1976. These

banks are governed by the statute creating them as also some of the provisions of the

Banking Regulation Act and The Reserve Bank of India Act.

Banking companies:
A banking company, as defined in section 5(e) of the Banking Companies Act, is a

company which transacts the business of banking. Such company may be a company

constituted under section 3 of The Companies Act or a foreign company within the

meaning of section 591 of that act. All the private sector banks are Banking Companies.

These banks are governed by The Companies Act, 1956 in respect of their constitution

and by the Banking Regulation Act and the RBI Act with regard to their business of

banking.

Domestic Scenario
In recent years Indian Banking industry has seen significant changes. Internet, wireless

technology and global straight-through processing have created a paradigm shift in the

banking industry. The growing market is attracting more and more foreign banks to enter

Indian territories. Recently there are 40 foreign banks in India and by 2009 few more will be

added in the list. RBI is planning to move from large number of small banks to small number

of large banks. With the economic growth picking up pace and the investment cycle on the
way to recovery, the banking sector will have to transform its role as an intermediary between

the demand and supply of funds. In order to speed up the growth process in the economy, the

banks need to play a greater and diversified role in the economy in the coming years.

In India, the most significant achievement of the financial sector reforms is the improvement

in the financial health of commercial banks in terms of capital adequacy, profitability and

asset quality as well as greater attention to risk management. Later on, after adopting the

policy of deregulation, it opened the new opportunities for the banks to increase revenues by

diversifying into investment banking, insurance, credit cards, depository services, mortgage

financing, securitization, etc.

During the same time, banks faced a greater competition both domestic and foreign, as well

as competition from mutual funds, NBFC, etc. due to liberalization. Increasing competition

has reduced the profitability and forcing the bank to work efficiently on shrinking spreads. As

now banks benchmark themselves against global standards, they have increased the

disclosures and transparency in bank balance sheets, the banks also started focusing more on

corporate governance.

Major Reform Initiatives

Some of the major reform initiatives in the last decade that have changed the

Face of the Indian banking and financial sector are:

➢ • Interest rate deregulation. Interest rates on deposits and lending have been

deregulated with banks enjoying greater freedom to determine their rates.

➢ • Adoption of prudential norms in terms of capital adequacy, asset classification,

income recognition, provisioning, and exposure limits investment fluctuation reserve,

etc.

➢ • Reduction in pre-emptions – lowering of reserve requirements (SLR and CRR), thus

releasing more lendable resources which banks can deploy profitably.

➢ • Government equity in banks has been reduced and strong banks have been allowed

to access the capital market for raising additional capital.

➢ • Banks now enjoy greater operational freedom in terms of opening and swapping of

branches, and banks with a good track record of profitability have greater flexibility in

recruitment.

➢ • New private sector banks have been set up and foreign banks permitted to expand

their operations in India including through subsidiaries. Banks have also been allowed

to set up Offshore Banking Units in Special Economic Zones.

➢ • New areas have been opened up for bank financing: insurance, credit cards,

infrastructure financing, leasing, gold banking, besides of course investment banking,

asset management, factoring, etc.

➢ Several new institutions have been including the National Securities Depositories

Ltd., Central Depositories Services Ltd., Clearing Corporation of India Ltd., Credit

Information Bureau India Ltd.

➢ • Universal Banking has been introduced. With banks permitted to diversify into long-

term finance and DFIs into working capital, guidelines have been put in place for the

evolution of universal banks in an orderly fashion.

➢ • Technology infrastructure for the payments and settlement system in the country has

been strengthened with electronic funds transfer, Centralised Funds Management

System, Structured Financial Messaging Solution, Negotiated Dealing System and

move towards Real Time Gross Settlement.

➢ • Credit delivery mechanism has been reinforced to increase the flow of credit to

priority sectors through focus on micro credit and Self Help Groups. The definition of

priority sector has been widened to include food processing and cold storage, software

up to Rs 1 crore, housing above Rs 10 lakh, selected lending through NBFCs, etc.

➢ • RBI guidelines have been issued for putting in place risk management systems in

banks. Risk Management Committees in banks address credit risk, market risk and

operational risk. Banks have specialised committees to measure and monitor various

risks and have been upgrading their risk management skills and systems.

➢ • The limit for foreign direct investment in private banks has been increased from

49% to 74% and the 10% cap on voting rights has been removed. In addition, the limit

for foreign institutional investment in private banks is 49%.

 Challenges Ahead

(i) Improving profitability: The most direct result of the above changes is increasing

competition and narrowing of spreads and its impact on the profitability of banks. The

challenge for banks is how to manage with thinning margins while at the same time working

to improve productivity which remains low in relation to global standards. This is particularly

important because with dilution in banks’ equity, analysts and shareholders now closely track

their performance. Thus, with falling spreads, rising provision for NPAs and falling interest

rates, greater attention will need to be paid to reducing transaction costs. This will require

tremendous efforts in the area of technology and for banks to build capabilities to handle

much bigger Volumes.

(ii) Reinforcing technology: Technology has thus become a strategic and integral part of

banking, driving banks to acquire and implement world class systems that enable them to

provide products and services in large volumes at a competitive cost with better risk

management practices. The pressure to undertake extensive computerisation is very real as

banks that adopt the latest in technology have an edge over others. Customers have become

very demanding and banks have to deliver customised products through multiple channels,

allowing customers access to the bank round the clock.

(iii) Risk management: The deregulated environment brings in its wake risks along with

profitable opportunities, and technology plays a crucial role in managing these risks. In

addition to being exposed to credit risk, market risk and operational risk, the business of

banks would be susceptible to country risk, which will be heightened as controls on the
movement of capital are eased. In this context, banks are upgrading their credit assessment

and risk management skills and retraining staff, developing a cadre of specialists and

introducing technology driven management information systems.

(iv) Sharpening skills: The far-reaching changes in the banking and financial sector entail a

fundamental shift in the set of skills required in banking. To meet increased competition and

manage risks, the demand for specialised banking functions, using IT as a competitive tool is

set to go up. Special skills in retail banking, treasury, risk management, foreign exchange,

development banking, etc., will need to be carefully nurtured and built. Thus, the twin pillars

of the banking sector i.e. human resources and IT will have to be strengthened.

(v) Greater customer orientation: In today’s competitive environment, banks will have to

strive to attract and retain customers by introducing innovative products, enhancing the

quality of customer service and marketing a variety of products through diverse channels

targeted at specific customer groups.

(i) Corporate governance: Besides using their strengths and strategic initiatives for
creating shareholder value, banks have to be conscious of their responsibilities
towards corporate governance. Following financial liberalisation, as the ownership
of banks gets broad based the importance of institutional and individual
shareholders will increase. In such a scenario, banks will need to put in place a
code for corporate governance for benefiting all stakeholders of a corporate entity.

COMPANY PROFILE

Bank of India was founded on 7th September, 1906 by a group of eminent

businessmen from Mumbai. The Bank was under private ownership and control
till July 1969 when it was nationalised along with 13 other banks.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a
mighty institution with a strong national presence and sizable international
operations. In business volume, the Bank occupies a premier position among the
nationalised banks.
 The Bank has 3101 branches in India spread over all states/ union territories
including 141 specialised branches. These branches are controlled through 48
Zonal Offices . There are 29 branches/ offices (including three representative
offices) abroad.

The Bank came out with its maiden public issue in 1997 and follow on Qualified
Institutions Placement in February 2008. . Total number of shareholders as on
30/09/2009 is 2,15,790.

While firmly adhering to a policy of prudence and caution, the Bank has been in
the forefront of introducing various innovative services and systems. Business has
been conducted with the successful blend of traditional values and ethics and the
most modern infrastructure. The Bank has been the first among the nationalised
banks to establish a fully computerised branch and ATM facility at the Mahalaxmi
Branch at Mumbai way back in 1989. The Bank is also a Founder Member of
SWIFT in India. It pioneered the introduction of the Health Code System in 1982,
for evaluating/ rating its credit portfolio.

The Bank's association with the capital market goes back to 1921 when it entered
into an agreement with the Bombay Stock Exchange (BSE) to manage the BSE
Clearing House. It is an association that has blossomed into a joint venture with
BSE, called the BOI Shareholding Ltd. to extend depository services to the stock
broking community. Bank of India was the first Indian Bank to open a branch
outside the country, at London, in 1946, and also the first to open a branch in
Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of
29 branches (including five representative office) at key banking and financial
centres viz. London, Newyork, Paris, Tokyo, Hong-Kong and Singapore. The
international business accounts for around 17.82% of Bank's total business.

Code of conduct for directors

I. Need and objective of the Code

Clause 49 of the Listing Agreement entered into with the Stock Exchanges, requires, as part
of Corporate Governance, the listed entities to lay down a Code of Conduct for Directors on
the Board of an entity and it Senior Management

Accordingly the Bank has laid down this Code for its Directors on the Board

II. Bank's belief system

This Code of Conduct attempts to set forth the guiding principles on which the Bank shall
operate and conduct its daily business with its multitudinous stakeholders, government and
regulatory agencies, media, and anyone else with whom it is connected. It recognises that the
Bank is a trustee and custodian of public money and in order to fulfil its fiduciary obligations
and responsibilities, it has to maintain and continue to enjoy the trust and confidence of
public at large.
The Bank acknowledges the need to uphold the integrity of every transaction it enters into
and believes that honesty and integrity in its internal conduct would be judged by its external
behaviour. The Bank shall be committed in all its actions to the interest of the countries in
which it operates. The Bank is conscious of the reputation it carries amongst its customers
and public at large and shall endeavour to do all it can to sustain and improve upon the same
in its discharge of obligations. The Bank shall continue to initiate policies, which are
customer centric and which promote financial prudence.

III. Philosophy Of The Code

The Code envisages and expects -

The Bank expects all Directors to exercise good judgement, to ensure the interests, safety and
welfare of customers, employees, and other stakeholders and to maintain a cooperative,
efficient, positive, harmonious and productive work environment and business organization.
The Directors while discharging duties of their office must act honestly and with due
diligence. They are expected to act with that amount of utmost care and prudence, which an
ordinary person is expected to take in his/her own business. These standards need to be
applied while working in the premises of the Bank, at offsite locations where the business is
being conducted whether in India or abroad, at Bank-sponsored business and social events, or
at any other place where they act as representatives of the Bank.

A. adherence to the highest standards of honest and ethical conduct, including proper and
ethical procedures in dealing with actual or apparent conflicts of interest between personal
and professional relationships.
B. full, fair, accurate, timely and meaningful disclosures in the periodic reports required to be
filed by the Bank with government and regulatory agencies.
C. compliance with applicable laws, rules and regulations.
D. to address misuse or misapplication of the Bank's assets and resources.
E. the highest level of confidentiality and fair dealing within and outside the Bank.

B Conflict of Interest

• A "Conflict of Interest" occurs when personal interest of any member of the Board of
Directors interferes or appears to interfere in any way with the interests of the Bank.
Every member of the Board of Directors has a responsibility to the Bank, its
stakeholders and to each other. Although this duty does not prevent them from
engaging in personal transactions and investments, it does demand that they avoid
situations where a conflict of interest might occur or appear to occur. They are
expected to perform their duties in a way that they do not conflict with the Bank's
interest such as-
• Business Interests - If any member of the Board of Directors considers investing in
securities issued by the Bank's customer, supplier or competitor, they should ensure
that these investments do not compromise their responsibilities to the Bank. Many
factors including the size and nature of the investment; their ability to influence the
Bank's decisions; their access to confidential information of the Bank, or of the other
entity, and the nature of the relationship between the Bank and the customer, supplier
or competitor should be considered in determining whether a conflict exists.
 Additionally, they should disclose to the Bank any interest that they have which may
conflict with the business of the Bank.
• Related Parties - As a general rule, the Directors should avoid conducting Bank's
business with a relative or any other person or any firm, Company, Association in
which the relative or other person is associated in any significant role. Relatives shall
include:
• Spouse
• Father
• Mother (including step-mother)
• Son (including step-son)
• Son's wife
• Daughter (including step-daughter)
• Father's father
• Father's mother
• Mother's mother
• Mother's father
• Son's son
• Son's son's wife
• Son's daughter
• Son's Daughter's husband
• Daughter's husband
• Daughter's son
• Daughter's son's wife
• Daughter's daughter
• Daughter's daughter's husband
• Brother (including step-brother)
• Brother's wife
• Sister (including step-sister)
• Sister's husband
• If such a related party transaction is unavoidable, they must fully disclose the nature
of the related party transaction to the appropriate authority. Any dealings with a
related party must be conducted in such a way that no preferential treatment is given
to that party.
• In the case of any other transaction or situation giving rise to conflicts of interests, the
appropriate authority should after due deliberations decide on its impact.

C. Applicable Laws

The Directors of the Bank must comply with applicable laws, regulations, rules and
regulatory orders. They should report any inadvertent non-compliance, if detected
subsequently, to the concerned authorities
D. Disclosure Standards

The Bank shall make full, fair, accurate, timely and meaningful disclosures in the periodic
reports required to be filed with Government and Regulatory agencies. The members of Core
Management of the Bank shall initiate all actions deemed necessary for proper dissemination
of relevant information to the Board of Directors, Auditors and other Statutory Agencies, as
may be required by applicable laws, rules and regulations.

E. Use of Bank's Assets and Resources :

Each member of the Board of Directors has a duty to the Bank to advance its legitimate
interests while dealing with the Bank's assets and resources. Members of the Board of
Directors are prohibited from:
using corporate property, information or position for personal gain;
soliciting, demanding, accepting or agreeing to accept anything of value from any person
while dealing with the Bank's assets and resources; acting on behalf of the Bank in any
transaction in which they or any of their relative(s) have a significant direct or indirect
interest.

F. Confidentiality and Fair Dealings

1. Bank's Confidential Information

The Bank's confidential information is a valuable asset. It includes all trade related
information, trade secrets, confidential and privileged information, customer information,
employee related information, strategies, administration, research in connection with the
Bank and commercial, legal, scientific, technical data that are either provided to or made
available to each member of the Board of Directors by the Bank either in paper form or
electronic media to facilitate their work or that they are able to know or obtain access by
virtue of their position with the Bank. All confidential information must be used for Bank's
business purposes only.

This responsibility includes the safeguarding, securing and proper disposal of confidential
information in accordance with the Bank's policy on maintaining and managing records. This
obligation extends to confidential information of third parties, which the Bank has rightfully
received under non-disclosure agreements.

To further the Bank's business, confidential information may have to be disclosed to potential
business partners. Such disclosure should be made after considering its potential benefits and
risks. Care should be taken to divulge the most sensitive information, only after the said
potential business partner has signed a confidentiality agreement with the Bank.

Any publication or publicly made statement that might be perceived or construed as

attributable to the Bank, made outside the scope of any appropriate authority in the Bank,
should include a disclaimer that the publication or statement represents the views of the
specific author and not the bank.

2. Other Confidential Information -

The Bank has many kinds of business relationships with many companies and individuals.
Sometimes, they will volunteer confidential information about their products or business
plans to induce the Bank to enter into a business relationship. At other times, the Bank may
request that a third party provide confidential information to permit the Bank to evaluate a
potential business relationship with that party. Therefore, special care must be taken by the
Board of Directors to handle the confidential information of others responsibly. Such
confidential information should be handled in accordance with the agreements with such third
parties.

The Bank requires that every Director should be fully compliant with the laws, statutes, rules
and regulations that have the objective of preventing unlawful gains of any nature
whatsoever.

Directors shall not accept any offer, payment promise to pay, or authorization to pay any
money, gift, or anything of value from customers, suppliers, shareholders/ stakeholders, etc.
that is perceived as intended, directly or indirectly, to influence any business decision, any act
or failure to act, any commission of fraud, or opportunity for the commission of any fraud.

IV. Good corporate governance practices

Each member of the Board of Directors of the Bank should adhere to the following so as to
ensure compliance with good Corporate Governance practices.

" Dos

Attend Board meetings regularly and participate in the deliberations and discussions
effectively.

Study the Board papers thoroughly and enquire about follow-up reports on definite time
schedule.

Involve actively in the matter of formulation of general policies.

Be familiar with the broad objectives of the Bank and the policies laid down by the
Government and the various laws and legislations.

Ensure confidentiality of the Bank's agenda papers, notes and Minutes.

" Dont's

Do not interfere in the day to day functioning of the bank. (This stipulation does not apply to
the Chairman and Managing Director and Executive / Whole Time Director)

Do not reveal any information relating to any constituent of the Bank to anyone.
Do not display the logo / distinctive design of the Bank on their personal visiting cards / letter
heads. (This does not prevent the Chairman and Managing Director and Executive /Whole
Time Director from using DO Letterheads or visiting cards with BOI's logo thereon).

Do not sponsor any proposal relating to loans, investments, buildings or sites for Bank's
premises, enlistment or empanelment of contractors, architects, auditors, doctors, lawyers and
other professionals, etc.
Do not do anything, which will interfere with and / or be subversive of maintenance of
discipline, good conduct and integrity of the staff.

V. Waivers
Any waiver of any provision of this Code of Conduct for a member of the Bank's Board of
Directors must be approved in writing by the Board of Directors of the Bank.

The matters covered in this Code of Conduct are of the utmost importance to the Bank, its
stakeholders and its business partners, and are essential to the Bank's ability to conduct its
business in accordance with its value system.

Mission & Vision

Our Mission
"to provide superior, proactive banking services to niche markets globally, while providing
cost-effective, responsive services to others in our role as a development bank, and in so
doing, meet the requirements of our stakeholders".

Our Vision
"to become the bank of choice for corporates, medium businesses and upmarket retail
customers and to provide cost effective developmental banking for small business, mass
market and rural markets"

RESEARCH METHODOLOGY
The main purpose of the study was to investigate into the loan facilities as
provided by the Bank of India and to study the procedure being followed by them
for sanctioning, and disbursement of loans and also the procedure followed for
recovery of the loan amount. The present research is a combination of both
primary as well as secondary data. The research methodology includes the
following:-

Primary Source
Personal meetings with the Assistant Manager and junior officials were made and
information was collected.

Secondary Source
The facts have been collected from the record books,subjective books,official
records,magazines,manual of the bank etc. also the web site of the bank
i.e.www.bankofindia.com
 Data Analysis
The collected data was finally analyzed and presented in a proper sequential form
in this project report. The conclusions derived from the study are added at the last
and also recommendations are given.
Thus, the present research is a combination of both primary as well as secondry
data.

SUGGESTIONS AND RECOMMENDATIONS

1. Banks should face start ups temporarily faced with high cost and high risk. This

could be achieved by:

• favourable conditions, such as lower rates, grace periods, etc.;

• seed capital in the form of equity or subordinated loans;

• more flexible collateral requirements

1. Banks should make tailor made financial solutions. This could be achieved by:

• offering a total range of options, such as equity, leasing, mortgages, credit cards,

factoring, stepped loans, etc.;

• supporting SMEs in acquiring external sources of finance, such as grants, guarantees

and subsidies;

• developing advanced products based on asset securitisation, junior stock markets and

informal capital funds;

• Collaboration with local, national and transnational public funding institutions

willing to offer customised financial products for predefined SME market segments.

2. Banks should endeavor to assist SME representative bodies who seek to improve

the quality of the credit request made by SMEs. This could be achieved by:

• supporting actions taken by professional organisations and training institution to

improve the quality of entrepreneurs;

• · providing links from the bank’s SME home page to websites of other SME

supporting organisations;

• · giving priority treatment to well prepared SMEs advised by professionals, such as

qualified accountants, lawyers, business consultants, sectoral and SME organisations.

2. Banks should recognize they have a special role to play vis-à-vis specific SME

group who cannot obtain finance under conventional banking criteria. These

include micro borrowers, youngsters, ethnic minorities and environmental

projects. This could be achieved by:

 • allocating a small fixed percentage of annual profits to create a credit line or

seed capital fund with less stringent funding criteria than are applied in normal

commercial banking practices;

• · financial participation in initiatives taken by public and not-for-profit

organisations aimed at financing these SME target groups;

• giving advice and training to these initiatives.

CREDIT PROCEDURE

1)Star Autofin Scheme.

The Scheme provides loan for purchasing 2/4 wheeler vehicles (like car, scooter,
motorcycle etc.). Maximum amount of loan is Rs. 25 lacs, depending upon cost of vehicle &
income of proponent, at attractive rate of interest and easy repayment plan.

Product BOI Star Autofin Scheme

Eligibility Salaried employees, Professionals, Self-
employed, individuals with high net
worth, People engaged in
trade/commerce/ business, Directors of
Companies, Senior Citizens, Pensioners,
Farmers, Staff Members, Retired
employees (other than dismissed/
compulsorily retired) of our Bank.
Non-Resident Indians in India – advance
to be granted jointly with Resident
Indians (close relative)
(Age of the individual borrower not to
exceed 65 years at the time of availing
the advance)
Companies, Partnership Firms,
Proprietary concern and other types of
 Corporate entities.
HUFs not permitted.
Purpose Purchase of two/four wheeler vehicles.
For purchase of used/second hand 2 and
4 wheeler. (age of the vehicle not to
exceed 3 years)
For purchase of light personal vehicles
not requiring heavy duty driving license
viz. Jeeps, Vans. Etc.
For purchase of personal vehicles
powered by non-conventional energy,
such as electronic/battery operated small
vehicles for urban transport provided
they are registered with RTO. (Such
vehicles not registered with RTO can be
financed subject to specified curtailed
limits of advance preferably with
collateral security).
Type of Advance Demand Loan /Term Loan (for 2nd hand
vehicles only Demand Loan)
Quantum of Loan Maximum limits for finance :
1) Individuals (Resident in India) :
= For Indian make vehicles – Rs.25 lacs
=For imported vehicles – Rs.75 lacs.
2) For Companies and corporate entities
– Rs.100 lacs (Can be a fleet of vehicles)
3)Non-resident Indians – Rs.25 lacs.
4)For vehicles run on non-conventional
energy and not required to be registered
with RTO.
Two wheelers – Rs.50,000/- (Max.)
Four wheelers – Rs.4.00 lacs (Max.)
The limits are subject to : (a) 24 times
of gross monthly emoluments in case of
salaried employees/pension/ or two times
of gross average annual income as per
last 3 yeas I.T. Returns
(b) two times average annual cash
accrual (i.e. PAT + Dep.) as per firms/
companies last 3 years audited balance
sheet, P&L A/c.
© In respect of farmers depending on his
repayment capacity as is applicable in
Agriculture loans.
(d) Net take home pay should be atleast
40% of income (net of proposed EMI).
Rate of Interest FOR LOANS UPTO RS.10.00 LACS :
(on daily reducing New Vehicles : Repayment upto 3
balance) years : 2.25% below BPLR, Min. 9.75%
w.e.f. 01.04.09 p.a. at monthly rests. Repayment over 3
years : 1.75 % below BPLR, Min.
 10.25% p.a. Second hand vehicles :
1.25% below BPLR, Min.10.75% p.a. at
monthly rests. FOR LOANS ABOVE
RS.10.00 LACS : New Vehicles :
Repayment upto 36 months - 1.25%
below BPLR - Min. 10.75% p.a. at
monthly rests. Repayment over 3 years -
0.75% below BPLR -Min.11.25% p.a.
Second hand vehicles – 0.25% below
BPLR – 11.75% p.a.
Repayment A) For Individuals – for new vehicles
(New Vehicles) 4 wheelers – imported vehicles-Max. 7
years.
4 wheelers - Indian vehicles – 6 years.
2 wheelers – max. 5 years.
B) For Corporates/Firms,etc. – Max. 5
years.
C) For second hand vehicles – Max. 3
years.
Security i. Hypothecation of vehicle to be
purchased out of Bank finance.
ii. Charge to be registered with RTO.
iii. Third party guarantee required in the
following cases :
(a) Loans to NRIs – Guarantee of
Resident Indian is required.
(b) Vehicles not registered with RTO
and for loans to individuals for limits
exceeding Rs.25.00 lacs.
Margin Individuals (including NRIs) : (For new
vehicles)
Upto Rs.2.00 lacs - 5%
Rs.2.00 lacs to Rs.10.00 lacs - 10%
Above Rs.10 lacs to Rs.25 lacs - 15%
Above Rs.25.00 lacs - Min. 25%
For Corporate entities/firms, etc. :
Min. 25%
For second hand vehicles – Min. 30%
Processing/ a)Loans upto Rs.25,000/- - one time
Handling Charges Rs.1,000/-
b)Loans above Rs.25,000/- upto Rs.25
lacs – one time 1.10% of loan amount –
Min.Rs.1,500/- & Max. Rs.5,000/-
c)Loans above Rs.25 lacs – one time
0.25% of the loan amount Max.15,000/-

Service Tax as applicable.

Processing charges waived for Senior
Citizens, staff members & retired
employees of the Bank & Pensioners
drawing pension from the Bank.
 For Partnership firms/Corporates –
Processing charges will be double that of
applicable to individuals

For Rural areas –

Processing charges will be 50% that of
applicable to individuals in respect of
loans availed by borrowers from rural
areas from the Rural Branches.

Additional charges for deviations from

the scheme norms –One time 25% of the
applicable processing charges min.
Rs.500/- max. Rs.3000/-

2) Star Education Loan.

1.OBJECTIVE & PURPOSE:

The Star Educational Loan Scheme aims at providing financial support from the bank to
deserving/ meritorious students for pursuing higher education in India and abroad. The main
emphasis is that every meritorious student is provided with an opportunity to pursue
education with the financial support on affordable terms and conditions.

2. ELIGIBILITY CRITERIA:
a) STUDENT'S ELIGIBILITY:
• Should be an Indian National;
• Secured admission to professional/technical courses in India or Abroad through
Entrance Test/Merit based selection process.
• Good academic career.
• The student should not have outstanding education loan from any other Institution.
• Father/Mother should be co-borrower.
• Branch nearest to the permanent residence of student will consider the loan.
b) ELIGIBLE COURSE:
(i) Studies in India (Indicative list):
• Graduation courses : BA, B.Com., B.Sc., etc.
• Post Graduation courses : Masters & Phd.
• Professional courses : Engineering, Medical, Agriculture, Veterinary, Law, Dental,
Management, Computer, etc
 • Computer certificate courses of reputed institutes accredited to Department of
Electronics or institutes affiliated to university.
• Courses like ICWA, CA, CFA, etc.
• Courses conducted by IIM, IIT, IISc, XLRI, NIFT, NID and other Institutes set up by
Central/State Govt.
• Evening courses of approved institutes.
• Other courses leading to diploma/degree, etc. conducted by colleges/universities
approved by UGC/Govt./AICTE/AIBMS/ ICMR, etc.
• Courses offered by National Institutes and other reputed private institutions with prior
approval of Head Office.
• Courses offered in India by reputed foreign universities with prior approval of Head
Office.
Note : 1. Professional courses not approved by AICTE and conducted by Institutes not
recognised by State Universities is outside the purview of the eligibility under the scheme.
2. Special scheme for students admitted to IITs, at concessional rate of interest.

(ii) Studies abroad:

• Graduation : For job oriented professional/technical courses offered by reputed
universities.
• Post Graduation : MCA, MBA, MS, etc.
• Courses conducted by CIMA - London, CPA in USA, etc.
3. EXPENSES CONSIDERED FOR LOAN :
• Fee payable to college/school/hostel*
• Examination/Library/Laboratory fee.
• Purchase of books/equipments/instruments/uniforms.
• Caution deposit/building fund/refundable deposit supported by Institution
bills/receipts.
• Travel expenses/passage money for studies abroad.
• Purchase of computers - essential for completion of the course.
• Insurance cover for the student.
• Any other expense required to complete the course - like study tours, project work,
thesis, etc.
* As per brochure/ demand letter from the institution.

4. QUANTUM OF FINANCE :
Need based finance subject to repaying capacity of the parents/students with margin and the
following ceilings :
• Studies in India - Maximum Rs.10.00 lakh
• Studies abroad - Maximum Rs.20.00 lakh.

5. MARGIN :
Upto Rs.4 lakh : Nil
Above Rs.4 lakh - Studies in India : 5%
Studies Abroad : 15%
· Scholarship could be included in margin.
· Margin to be brought in on year to year basis as and when disbursements are made.
6. SECURITY:
Upto Rs. 4 lakh : No security
Above Rs.4 lakh & upto Rs.7.5 lakh : Collateral security in the form of a suitable third party
guarantee.
Above Rs.7.5 lakh : Collateral security of suitable value or at the discretion of the Bank
suitable third party guarantee alongwith the assignment of future income of the student for
payment of installments.
Note : The security can be in the form of land/building/Govt. Securities/Public Sector
Bonds/NSC/KVP/LIP/ Banks Term Deposit etc.,in the name of
Student/Parent/Guardian/Guarantor with suitable margin.

7. RATE OF INTEREST*: (w.e.f. 01.04.09)

• Upto Rs.4.00 lacs – 2.50% below BPLR., Min. 9.50% p.a.
• Above Rs.4.00 lacs upto Rs.7.50 lacs – 2.00% below BPLR, Min. 10.00% p.a.
• Above Rs.7.50 lacs - 1.25% below BPLR, Min. 10.75% p.a.
• Simple interest during the repayment holiday/moratorium period. Penal interest @2%
for loans above Rs.4 lakh for the overdue amount and overdue period.
• Int. Concession of 0.50%p.a. for woman beneficiaries for limits upto Rs.50,000/- and
1% for limits over Rs.50,000/-
• 1% int. concession if interest is serviced during moratorium period, where repayment
holiday is specified for interest/repayment under the scheme (concession available for
moratorium period)
No processing charges.

One time charges for any deviations from the scheme norms including approval of courses
outside the scheme -

Upto Rs.4.00 lacs - Rs. 500/-

Over Rs.4.00 lacs upto Rs.7.50 lacs - Rs.1000/-
Over Rs.7.50 lacs upto Rs.20.00 lacs - Rs.2000/-

In respect of loans availed by borrowers from rural areas from the Rural Branches – Charges
Nil

3) Star Home Loan.

Eligibility
Salaried employees, Professionals like Doctors, Lawyers, Engineers, Chartered Accountants,
Self-employed persons. Requests are also considered in special cases from Group of
individuals, NRIs, PIOs, HUF, Prop. Firm, Partnership firms and corporate.
Purpose
 • To purchase/construct house/flat
• To renovate/extend/repair existing house/flat.
• To purchase a plot of land for construction of house.
• To acquire household articles along with the house/flat-for furnishing the house/flat.
Quantum of Loan
For construction/purchase of a house/flat-Rs.300 lacs
 Repairs/renovation/extension/addition to house/flat - Rs.20 lacs
 Purchase of a plot - Rs.30 lacs
 Purchase/acquire household articles for furnishing the house/flat - Rs.1.00 lac. (15% of
Home Loan amount)
Minimum size of Housing Loan:-
At Metro and Urban Centres :-Rs. One Lakh
At Rural and Semi Urban Centres :-No minimum size of loan.
Processing charges
For loans upto Rs.30 lacs One time @ 0.55% of loan amount min. Rs. 3000/- and max.
Rs.10000/-
For Loan over Rs.30 Lacs upto Rs.50 lacs – One time flat Rs.15,000/-
For Loan over Rs.50 Lacs upto Rs.1.00 crore – One time flat Rs.20,000/-
Loans over Rs.1.00 crore – One time flat Rs.25,000/-
Loans over Rs.3.00 crores – One time flat Rs.50,000/-
For Partnership firms & Corporate Borrowers –
Processing charges will be double that of applicable to individuals
For Rural areas –Processing charges will be 50% that of applicable to individuals in respect
of loans availed by borrowers from rural areas from the Rural Branches.
Conversion Charges
Switch over from:
i. Fixed to floating ROI- @0.25% p.a. on o/s balance for the remaining maturity of loan
ii. Floating to Fixed ROI - @ 0.40% p.a. on o/s balance for the remaining maturity of loan.
For i & ii above : max. Charge: 2.10% of o/s balance
Charges for deviation from the scheme norms
For every item of Deviation from the scheme norms –
One time additional processing charges min .Rs.3000/-; max. for set of deviations
Rs.10,000/-
Margin
For Loan upto Rs.10 Lacs – 15%
For Loan over Rs.10 Lacs – 20%
Note :
Cost incurred by the proponent in the form of land already purchased/acquired by him/her
(from their own sources) can be accepted as part of above said margin at the request of
proponent. Liquid securities such as Banks TDR,NSC,KVP etc., can also considered as
Margin, ensuring higher quantum of loan.
Repayment(can be customised)
Highly flexible - maximum 20 yrs. including moratorium period of 18 months (max.) in
monthly installments.Repayment will start on completion of construction/purchase of
house/flat or 18 months after first disbursement, whichever is earlier.
Eligible Quantum of Loan/ EMI
Calculation of quantum of loan is related to Income/repayment capacity of
proponent/borrower.
48 times of gross monthly salary or 4 times of gross annual
Salaried Employees :
income based on I-T Returns.
Self-employed/
Professionals /Individuals
4 times of their Gross annual income based on I-T Returns
Engaged in Trade
/Commerce/Business
Chartered Accountants 5 times of Gross annual income based on I-T Returns.
Doctors 6 times of Gross annual Income based on I-T Returns
HUF/Proprietorship /Partnership 4 times of cash accruals (PAT+Depreciation) as per their
Firm/ Company Balance Sheet/P&L Account
Net take home pay/income (net of EMI of Proposed
In case of Individuals: loan) should not be less than 45% of the gross monthly
salary/income of applicant(s)
In case of HUF/Proprietorship/
DSCR should be minimum 1.5.
Partnership firm/Company :
Fees / Charges
• No administrative fees
• No commitment charge
Prepayment charges :
i) No charges, if pre-payment is made from own sources of the borrower ii) 0.65% p.a. on the
outstanding loan amount for remaining maturity of the loan, subject to max.2.25% of
outstanding loan amount in case of take over by other bank/FI.
Other Charges : Legal Expenses/Valuation Charges/Stamp Paper
Charges At actual –Loan Agreement copy charge : as applicable
Rate of Interest
w.e.f 06.11.08
Upto 5 >5-10 >10-15 >15-20
yrs yrs yrs yrs
Floating Rate -Linked to floating reference rate (% p.a. at
monthly rest) FOR LIMITS UPTO RS.30 LACS: 8.75 9.00 9.25 9.25
FOR LIMITS OER RS.30 LACS UPTO RS.50 LACS : 9.50 9.75 10.00 10.25
FOR LIMITS OVER RS.50 LACS :
10.25 10.50 10.75 11.00
Interest on daily reducing balances. Interest applicable to residents as well as non-residents

4) Star Mortgage Loan.

This scheme provides loan/overdraft facility against mortgage of property at low rate of
interest. The scheme is for people engaged in trade, commerce & business and also
professionals & self employed, Prop. Firm, partnership firm, companies, NRIs and
individuals with high net worth including salaried people, agriculturists and staff members.
The product provides an opportunity to customers to borrow against a fixed asset (mortgage
of property) at a short notice without much paper work/attendant hassles.
Product BOI Star Mortgage Loan Scheme
Purpose a. To meet the credit needs of trade, commercial
activity, other general business, Profession as also
for their bonafide requirements.
b. To meet marriage or medical or educational
expenses of family members including near
relatives.
c. To undertake repairs/renovation/extension to the
residence/commercial property.
d. Purchase of consumer durables.
e. To purchase/construct house/flat, purchase of
plot.
f. To purchase 2/4 wheeler vehicles.
g. For going on pilgramage/tours/excursions, etc.
h. Repayment of existing loans from other
Banks/FIs.
Target customers People engaged in trade, commerce and business,
(Eligibility) Professionals, Self-employed, Prop. Firms,
partnership firms, HUFs (excluding NBFC, Trade,
partnership firms where HUF is a partner),
companies, NRIs, individuals with high networth,
salaried people, agriculturists, staff members.
Type of advance Demand/Term Loan/Overdraft (reducible as per
repayment schedule).
Overdraft facility (not reducible as per repayment
schedule) can also be permitted to eligible
customers (other than salaried people).
Quantum of advance (Rs. in lacs)
Min. Max.
a. For agriculturists 0.50 2.00
b. For Others :
Individuals/Prop. Firm/ 1.00 50.00
Partnership firm/
Company :
Prop./Partnership 1.00 100.00
firm/company 1.00 100.00
Calculation of quantum The sanctioned limit is to be related to the value of
of advance security & repayment capacity of borrower, subject
to :
i. Salaried employees :
• 48 times of monthly net emoluments (take
home salary).
OR
• 4 times of net annual income with other
rental income from property etc. based on
Income-tax returns ( Average of Last 2/3
years).
ii. Self-employed/professionals/ individuals
engaged in trade/ commerce/ business- 4 times of
their net annual income based on income-tax
 returns ( Average of Last 2/3 years).
iii. Proprietorship/Partnership Firm/Company -
Four times of Cash-accruals (i.e. PAT+
Depreciation) as per their Audited Balance Sheet/
P & L Account ( Average of Last 2/3 years).
Note:
1. For individuals :
While fixing the limit , it is to be ensured that the
net take home pay (net of EMI [notional EMI in
case of non reducible OD] of proposed advance ) is
not less than 30% of gross income of the applicant.
For Prop. Firm/Partnership firm/Company: DSCR :
Min. 1.5
2. Limit prescribed would be subject to a
Maximum of 70% in case of salaried
employees(50% in other cases) of value of
property or eligibility level, whichever is lower.
Margin Salaried Employees 30% *
Others 50% *
*On value of property [Lower of Market Value
/Distress Sale value/Registration Value as on date
of valuation] assessed by Bank's approved valuer.
Rate of Interest For loans/overdrafts – 1% over BPLR, 13.00% p.a.
w.e.f. 21.07.2009 Interest concession for woman beneficiaries 0.25%
p.a.[All borrowers to be women]
Repayment In accounts where regular Overdraft facility is not
proposed. :-
Within a period of eight years by way of EMIs.
The repayment shall commence from the month
subsequent to the month in which final
disbursement is made or 6 months from the first
disbursement, Whichever is earlier. In case of
agriculturists : The repayment will be related to the
generation of farm income from crops and other
subsidiary activities.

5) Star Personal Loan.

Product
BOI Star Personal Loan Scheme
Eligibility
Salaried employees, Professionals and individuals with high networth, regular pensioners or
family pensioners drawing regular monthly pension through Branch, Staff members, retired
employees (other than dismissed/compulsorily retired) of our Bank.

Types of advance
Demand/Term Loan/Overdraft (reducible as per repayment schedule)
Overdraft limit (not reducible as per repayment schedule) maximum upto
Rs.1 lac to confirmed permanent employees of Central/State Govt./Reputed Corporates and
PSU's.
Purpose
Clean/Unsecured
loans
• Marriage expenses of self, son,
daughter or a dependent near relative.
• Medical Expenses incurred/to be incurred for self, spouse, children, dependent near
relative.
• For education of self/spouse/
children/ near dependent relatives.
• Any other personal expenses of bonafide nature as approved by the Bank
Secured loans
• Repayment of existing housing loans from other banks/Financial Institutions, etc.
• Education of self, spouse, children, near dependent relatives.
• Purchase of consumer
durables, computers, professional equipments etc
Max. Loan
Min. Size of loan
Rs.2.00 lacs
Minimum size of loan :-At Metro and Urban Centres : Rs.10,000/-
At Rural and Semi Urban centres: No minimum size of loan.
Rs.10.00 lacs

Minimum size of
loan :-At Metro and
Urban Centres : Rs.10,000/-
At Rural and Semi
Urban centres: No
minimum size of loan.
Eligible Amount
10 times of net monthly emoluments in case of salaried employees
OR
50% of gross annual income as per last Income Tax Return for Professionals/Individuals of
high networth
20 times of Gross
monthly emoluments in case of salaried
employees
OR
100% of gross average annual income as
per last three Income Tax Returns for
Professionals/
Individuals of high
networth
Rate of Interest
(On daily reducing balances)

w.e.f.01.04.09
0.25% above BPLR 12.25% p.a at monthly rests. Interest concession to women - 0.50% [All
borrowers to be women] For Senior Citizens – 10.75% Financing secured under tie-up
arrangement – 11.50%
At 0.50% below BPLR Min. 11.50% p.a. at monthly rests. Interest concession to women -
0.50% [All borrowers to be women]
Repayment
36 Equated monthly instalments w.e.f. one month after first disbursement. Exceptional cases
upto 60 months
Maximum 60 Equated monthly instalments w.e.f. one month after first disbursement from
loan account.
Security
Equitable/Legal Mortgage of commercial or residential properties.
Hypothecation charge on assets acquired.

Collateral security in the form of pledge of gold/gold ornaments, NSC/Indira Vikas Patra,
Bonds, Assignment of LIC policies, Relief Bonds etc.
Processing/Handling charges
One time @ 1.10% of loan amount Min. Rs.1000/- and Max. Rs.5000/-
Pensioners: One time @ 1.10.% of loan amount, min. Rs. 500/- and max. Rs. 1,100/-.
No processing charges for Senior Citizens (60 years & above)
Other Charges
Stamp charges for documents : At actuals.
Loan Agreement copy charges: As applicable

6) Star Pensioner Loan.

Eligibility:-
 Regular Pensions/Family pensioners drawing regular monthly pension through the
branch.
 Retired Employees(other than dismissed/compulsory retired) of our bank.
Type of Advance:-
Advance can be by way of Demand Loan/Term Loan/Overdraft.
Purpose:- Clean Loan.
For Marriage Expenses of son/daughter of near relatives dependent on the applicant.
For Education of self/spouse/children/near relatives.
Repairs/renovation/extension of existing house/flat(where Mortgage cannot be created of
same property and no finance against this property).
Any other personal expenses of bonafide nature as approved by the bank.
Secured Loan:-
For repayment of existing housing loan from other banks/FIs etc.
For purchase of consumer durables/computers/professional equipments.
Quantum of Advance:-
Unsecured Loans.
Regular Pensioner Family Pensioner
10 times of monthly pension 10 times of monthly pension
Max: Rs.1,00,000 Max: Rs. 50,000
Undertaking required regarding use of funds for the purpose declared.
Secured Loans.
Regular Pensioner Family pensioner
20 times of monthly pension 20 times of monthly pension
Max: Rs. 1,00,000 Max: Rs. 50,000
(if age is 65 & above,max: Rs.50,000)
Margin:-
Secured loans - Suitable margin
Unsecured loans - No specific margin norms.
Co-Borrower:-
In case of regular pensioners,nominee/legal heir entitled to family pension and in case of loan
to family pensioner,legal heir will be co-borrower.
Guarantee:-
 Third party guarantee including that of other pensioner drawing regular pemsion from
branch.
 Collateral security in lieu of personal guarantee for the amount of loan can be accepted.
Interest:-
(w.e.f. 1st april,2009) : Unsecured-At BPLR (12% p.a.)
Secured-0.50% below BPLR presently 11.50%p.a.
For senior citizens – 1.25% below BPLR (10.75%p.a.) for loans upto Rs.50,000.
For existing old loans , 0.50% below earlier applicable rate.
BANK OF INDIA
BALANCE SHEET AS AT 31ST MARCH, 2010
 BANK OF INDIA
BALANCE SHEET AS AT 31st MARCH, 2009
DATA ANAlYSIS
Percentage
 Advances in India* (bank of India-2010)

Percentage

Advances outside India *(bank of India-2010)

Percentage
 Advances in India*(bank of India-2009)

Percentage

Advances outside India*(Bank of India-2009)

Percentage
 Advances in India*(comparative of 2009-2010)

percentage

Advances outside India*(comparative of 2009-2010)

percentage
Advances in India*(comparative of BOI and HDFC)

percentage

Advances outside India*(comparative of BOI and HDFC)