Professional Documents
Culture Documents
RBS Final
RBS Final
Introduction...............................................................................................................................................3
Departments of RBS................................................................................................................................4
Marketing Department of RBS:............................................................................................................4
Credit Risk Management department of RBS:.....................................................................................5
Credit Administration Department RBS:..............................................................................................5
Secured loans..........................................................................................................................................8
Conventional Mortgages:....................................................................................................................8
CHARGES:................................................................................................................................................8
N’ cash facility (Business Finance):........................................................................................................10
WHEELS.................................................................................................................................................11
Charges:.............................................................................................................................................11
Cash near Cash......................................................................................................................................12
Loan against Shares...............................................................................................................................12
Personal Loans.......................................................................................................................................13
Credit Cards Facility...............................................................................................................................14
CREDIT POLICY:
GENERAL DEFINITION:...........................................................................................................................16
OBJECTIVES:...........................................................................................................................................16
SBP’S REQUIREMENT:............................................................................................................................16
Credit Standards Followed By RBS:........................................................................................................17
CENTRALIZED AUTHORITY:....................................................................................................................18
FUNDED AND NONFUNDED FACILITIES.................................................................................................18
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VALUE PROPOSITION
Royal Preferred Banking offers its clients an unmatched blend of personalized banking and
wealth maximization opportunities.
PRODUCTS
Alongside a comprehensive range of premium banking products and services, RBS offers
fully integrated financial planning and investment advisory capabilities.
PRIVILEGES
From luxurious lounges to personalized attention, Royal Preferred Banking delivers its clients
exclusive services.
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1
Unaudited half year income statement 2009
Source: www.rbs.com.pk
2
Unaudited half year income statement 2009
Source: www.rbs.com.pk
3
Source:financeasia.com
RBS has a centralized banking system. Facilitating a loan is a continuous process here which linked up
THREE major departments namely;
MARKETING
CREDIT RISK MANGEMENT
CAD
ALL the departments work together to make the system more efficient and to satisfy the customers
properly.
From initial analysis of the customer and his needs to the preparation of the proposal, marketing
department performed all duties to assist the Credit Risk Management Department.
The team of marketing department of RBs provide all documents and a track to reach the customer after
it the credit risk management department of RBS performed the further duties to check the credit
worthiness of the customer.
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MARKUP:
Slabs Benchmark KIBOR Spread Total
Up to 4,999,999 1 year KIBOR+4.25% 12.93% 4.25% 17.18%
Between 5,000.000 & 9,999,999 1 year KIBOR+3.75% 12.93% 3.75% 16.68%
Between 10,000,000 & 19,999,999 1 year KIBOR+3.5% 12.93% 3.50% 16.43%
More than 20,000,000 1 year KIBOR+3.25% 12.93% 3.25% 16.18%
CHARGES:
With Running Finance customer can fulfill his working capital/cash flow needs.
Charges
Charges:
RBS cherishes the relationship with its customers; they will be accommodated with assistance from
Relationship Managers who will facilitate them through the procedure until they find exactly what they
want.
Markup of Wheels
Slabs Benchmark KIBOR Spread Total
Less than 600 K 1 year KIBOR+4.50% 12.93% 4.50% 17.43%
More than 600 K 1 year KIBOR+4.00% 12.93% 4.00% 16.93%
Existing AAB Customers 0.5% discount on above
Charges:
Partial Prepayment :
Acquire funds against your existing deposits or near cash instruments without liquidating
them.
Earn income from your pledged deposit or near cash instrument without it being
disturbed.
Charges
Balance Confirmation Certificates Rs. 300/- per certificate
Loan against Shares (LAS) facility enables customers to take a loan against the shares invested in
companies listed on the KSE-100 index and release the initial investment at its current market value.
Their slogan is
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“Get more than just dividends - get the competitive edge with Loan against
Shares .”
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Charges:
2) Forced Facility Liquidation Fees Rs. 5,000/- Plus applicable brokerage charges
BTF is the most convenient, flexible, economical and easy-to-use loan facility designed to suit
customer needs and gives them the power to control their finances. It offers a variety of features
that provide the spending convenience a customer actually craves for.
Markup of BTF
Slabs Benchmark
Salaried & SEP 26.0%
Self Employed Business Segment 29.9%
Schedule of Charges
Mark up Rate may vary for Mark up Rate Up to 35% per annum
different customer segments
Personal Loans
Whether a customer want s to reorganise their finances, pay for a major purchase – such as a car or
home improvements – or simply give themselves more financial flexibility, RBS offer a range of
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Mark up Rate may vary for different Mark up Rate 35% per annum
customer segments/loan tenure
Platinum Credit Card: It provides luxurious facilities to the customers and they can enjoy a
selection of the finest privileges complementing their superior preferences and lifestyle.
Air blue Credit Card: We can take credit to spend on Fuel Groceries, Restaurants, utilities,
entertainment, and anywhere else. It’s a master card of RBS.
Gold Credit Card: Our Gold Credit Card charges a fixed rate on transferred balances, until they
are repaid. It could help to shrink your balance. This offer is available exclusively to existing RBS
current account customers and only available online.
Slabs Benchmark
Airblue Credit card 39.0%
Gold Credit Card 39.0%
Platinum Credit Card 18.0%
Annual Fees
Joining Fees*
Gold - NIL
Platinum - NIL
54 29.28%
60 28.88%
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GENERAL DEFINITION:
Credit Policy is the clear, written guidelines that set the following basic things:
OBJECTIVES:
SBP regulations and economic conditions are kept in mind while designing the techniques and
objectives for credit management strategy. Following are some of the objectives of SPCB’s credit
policy:
o Enable the bank to develop long-term business plans.
o Equip the bank to face the ever changing competitive scenario more effectively and act proactively
rather than reactively.
o To be a source of confidence to the lending officers and enable them to operate more effectively
within the framework of approved delegated authority.
o Provide a framework of reference and standards and to enable the bank to provide uniform
treatment to the borrowing customers.
o Properly serve the credit needs of current customers by satisfying them and establish long-term
relationship with them.
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o
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instructions are same for every bank but banks could make certain
changes in the level of deposits, advancement ratio and their loan
portfolio. Total amount of loan advancement is totally dependent on SPCB’s credibility situation.
4
Source:businessdictionary.com
DIVERSIFICATION:
RBS being a clever financial institution doesn’t invest in just one sector. It follows the basic rule
i.e.
SAFETY:
RBS follow the SAFETY-FIRST principle i.e. Money given as loan must be used properly.
The credit risk management department handles this
principle.
The following five elements(C’s) help a banker in arriving RBS focuses on 3c’s:
at the conclusion regarding safety. CHARACTER,
CAPITAL.CAPACITY
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significance.
Capacity: Mixture of academics and experience in the relative field and ability to
repay. And How well do we understand and know the relevant customer.
Capital: it means how much you are willing to invest your money.SBP restricts the
misuse of bank’s money.
Conditions: Bank should analyze the economic, business and socioeconomic
conditions to secure the loan.
DESIRABILITY: RBS focuses that money should be used for agreed purposes.
CREDIT RISK AND RETURN: The Credit risk management focuses risks associated with
the loans and their repayments.RBS focuses on short term loans to avoid defaults.
CENTRALIZED AUTHORITY:
The decision making power regarding credit policy and any loan approvals is centralized in RBS. They are
moving toward the hub concept. This has a negative impact on potential or prospective customers
because any person wanting to acquire a small loan in a few days time has to wait a lot and as a result a
number of applicants cannot be satisfied. RBS credit policy hinders such activity because having no
power and setup to verify credentials etc, the process at the head office takes minimum 15days. But this
step is also going to show the confidential output by bank.
RBS extends loan to almost all the sectors except for certain unapproved segments. However, RBS
focuses on consumer, commercial, corporate, agriculture, construction, engineering, automobiles and
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fertilizers sector. No loans are available for textile sector this time because of the bad conditions of this
sector. RBS is moved the directions of its credit policy toward the recovery of its loans.
UNAPPROVED SEGMENTS
Unapproved segments are the segments to which bank does not extend loan due to some reasons.
These include lawyers, journalists, farmers, money changers, politicians.
PATTERN OF INSTALLMENTS
RBS prefers quarterly payments as part of their selling terms set with the customers in advancement of
the loan. However, such terms may vary from customer to customer and situation to situation.
CREDIT CARD
Client can withdraw cash up to 75% of the available shared credit limit (if he is holding more than one
RBS Credit Card). For example, if your shared credit limit is PKR 300,000 and your cash withdrawal limit
is 75%, you can withdraw up to PKR 225,000.
NPL Ratio
RBS NPL ratio is comparatively good if we consider the financial crisis and current position of the bank.
Reason behind this is that they don’t accrue their revenues .Instead they are recorded when actually
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Their policy also changed according to risks and opportunities in the market like payment incentives
54(flat rate, computed rate) and low risk credit policies (advance payment & LC). So according to this
policy, now a day RBS is working with flat rate
Minimum Income of Salaried, SEB, SEP, NTI & Branch Banking Segment are:
Where;
SEB stands for Self-Employed Businessman The customer having between 1-6
SEP stands for Self-Employed Professional. months credit history reflecting in e-
NTI stands for New to the industry. CIB will be considered as NTI's.
A includes bankers and clients with a good pay back history. They are given credit up to 4times
of their salary.
B includes all the employees related to the textile sector. They are given credit up to 3times of
their salary.
C includes the government employees. They are given credit up to 2times of their salary.
Unapproved are given credit up to2 times of their salary.
Demand finance: 1 to 5 years maximum time period for this loan because it fulfilled the specific need of
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Term finance: 5 to 10 years maximum time period but in this loan the installment is involved.
LC FACILITY
RBS focused on hypothecate based facility.
SAFTY MARGIN:
For funded based facilities: 10 to 25 percent is the average safety margin rate. It varies
customer to customer. It’s also varies by securities and liquidity position of the customers.0%
safety margin can also be for those customers who are most reliable customers.
For non- funded based facilities: on average the 15% to 35% safety margin is taken.
If government has to stop the imports of anything to support the local production, SBP ordered to
increase this safety margin. For critical items like perishable items this safety margin can be 100%.
SPREAD:
RBS is stated to be charging around 2%-4% spread to its customers with negotiations or bargains with
customers even though they might not always be providing ancillary business to RBS. This depends on
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RBS invests extensively in mortgages and as fewer mortgage investments are present, RBS has the
opportunity to charge high mark ups. The high charges cover the costs incurred on those who have
defaulted.
PAYMENT INCENTIVES:
RBS deals with flat rate because flat rate does not consider TIME VALUE CONSTRAINT. Being customer
friendly it helps the customer to forecast his budget .this is rate is not affected by economic conditions.
Sole Proprietor:
Call report
Id card.
Address and other business related information.
BBFS (Borrower Basic Fact Sheet).
E-CIB report.(Electronic Credit Information Bureau Report)
Credit Worthiness Report
Bankers Report
Partnership:
Call report
Id card.
Address and other business related information.
BBFS (Borrower Basic Fact Sheet).
E-CIB report.(Electronic Credit Information Bureau Report)
Partnership deed.
Credit Worthiness Report
Bankers Report
Company:
Call report
Basic Information Report
Company’s e-CIB report.
Id cards of Directors.
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Financial Statements.
Director’s search and Assets Charges search report.
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Security Based:
Based on different securities, bank requires the following documents:
Property:
Title document:
o Sale deed
o Lease deed
o Transfer letter
Memorandum of deposit of title deed.
Personal guarantee by third party.
Letter of Lien on property.
Approved map of the location where the property is located.
General Power of Attorney (GPA).
PT-1 form is required for old cities, which had been settled by “Settlement Commission” during
partition.
Mortgage Deed (except DHA).
“Faard” and Letter of Lien are required from registrar in case of agriculture land.
A strong forum of all the stakeholders should be made, where the state representatives,
industrialists, bankers and the concerned people can gather together and give valuable
suggestions for the betterment of the whole financial system e.g.; Federal Reserve of U.S.A.
SECP should be more helpful to the banks; it should work more efficiently in providing the
details of Ranking charges and Pari-Pasu charges.
Keeping the current economic scenario of the country, RBS must also focus on agriculture
sector because Pakistan is an agricultural country and providing loans to this sector will lead
towards prosperity.
RBS should give a customer friendly credit facilities at most in each of its branches so that the
customer feels more convenient.
RBS should held meetings and seminars for their customers to give them suggestions and
advices to improve their credit worthiness. Moreover to guide the customers about their loan
products and procedures.
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Due to worldwide recession RBS has faced huge losses in current times; RBS in Pakistan is not
advancing long-term loans to corporate sector or other sectors as well due to the bad social and
economic conditions in the country. When RBS re-branded the name of ABN-AMRO formally
last year, total branches of RBS in Pakistan were 85 but now the number has reduced to 73.
Similarly the net value of assets of RBS in Pakistan has also been reduced to 23 billion PKR from
73 billion PKR. Moreover, more than 90% share of RBS Pakistan has been purchased by MCB
and this take over will be completed in the upcoming year. In the current business environment
with reduced sales and threats of recession RBS is under great pressure to manage their cash
flows productively; in this regard RBS has kept somehow a lenient credit policy (in consumer
financing i.e. short-term) as compared to other banks so that it may be able to retain its
customers in future for upcoming year.
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