CHAPTER I

Introduction

The banking industry handles finances in a country including cash and credit.
Banks are the institutional bodies that accept deposits and grant credit to the entities and
play a major role in maintaining the economic stature of a country. The Indian banking
system consists of 27 public sector banks, 21 private sector banks, 49 foreign banks, 56
regional rural banks, 1,562 urban cooperative banks and 94,384 rural cooperative banks, in
addition to cooperative credit institutions.

As of Financial Year, 2019 total credit extended by commercial banks surged to Rs

93,751.17 billion and deposits grew to Rs 120,818.92 billion. Indian banks are increasingly
focusing on adopting integrated approach to risk management. Banks have already
embraced the international banking supervision accord of Basel II, and majority of the
banks already meet the requirements of Basel III.

Reserve Bank of India (RBI) has decided to set up Public Credit Registry (PCR) an
extensive database of credit information which is accessible to all stakeholders. The
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed and
is expected to strengthen the banking sector. Deposits under Pradhan Mantri Jan Dhan
Yojana (PMJDY) increased to Rs 988.74 billion and 355.4 million accounts were opened
in India. In May 2018, the Government of India provided Rs 6 trillion loans to 120 million
beneficiaries under Mudra scheme.

1
 Rising incomes are expected to enhance the need for banking services in rural areas
and therefore drive the growth of the sector. As of September 2018, Department of
Financial Services (DFS), Ministry of Finance and National Informatics Centre (NIC)
launched Jan Dhan Darshak as a part of financial inclusion initiative. It is a mobile app to
help people locate financial services in India.

The digital payments revolution will trigger massive changes in the way credit is
disbursed in India. Debit cards have radically replaced credit cards as the preferred payment
mode in India, after demonetisation. Debit cards garnered a share of 87.14 per cent of the
total card spending.

The banking sector has been undergoing a complex change in the very recent past.
The fact that banks work under the most volatile conditions and the banking industry as
such in the booming phase makes it an interesting subject of study. Amongst these reforms
has its own contribution to the way modern banking.

BANKING STRUCTURE IN INDIA

RBI

Scheduled Unscheduled
Banks Banks

Commercial Co-operative
Banks Banks

Public Sector Private Sector Foreign Regional Rural

Banks(27) Banks (21) Banks(49) Banks(56)

2
 TOP RANKING BANKS IN INDIA

Top Performing Public Sector Banks

▪ State Bank of India. ▪ Canara Bank.

▪ Bank of Baroda. ▪ Bank of India.
▪ Punjab National Bank. ▪ Indian Bank
▪ Central Bank of India. ▪ Union Bank of India
▪ IDBI Bank. ▪ Indian Overseas Bank

Top Performing Private Sector Banks

▪ НDFС Bаnk ▪ Іnduѕіnd Bаnk

▪ ІСІСІ Ваnk ▪ Ѕtаndаrd Сhаrtеrеd Ваnk
▪ Ахіѕ Bаnk ▪ Fеdеrаl Bаnk
▪ Коtаk Маhіndrа Ваnk ▪ Јаmmuаnd Каѕhmіr Ваnk
▪ YЕЅ Bаnk ▪ Ѕоuth Іndіаn Ваnk

Top Performing Foreign Banks

▪ Citi Group ▪ ANZ Group

▪ HSBC Bank ▪ Bank of Nova Scotia
▪ Deutsche Bank ▪ Barclays plc.
▪ Standard Chartered Bank ▪ Abu Dhabi Commercial Bank
▪ DBS Bank ▪ Doha Bank

3
 CHAPTER II
Bank profile
“A good bank is not only the financial heart of the community, but also one
with an obligation of helping in every possible manner to improve the economic conditions
of the common people”

- Founder Late Ammembal Subbarao Pai

Canara Bank is one of the largest public sector banks owned by the Government
of India. It is headquartered in Bengaluru. It was established at Mangalore in 1906 by
Ammembal Subba Rao Pai. It is one of the oldest public sector banks in the country. The
Bank has gone through the various phases of its growth trajectory over hundred years of its
existence. Growth of Canara Bank was phenomenal, especially after nationalization in the
year 1969, attaining the status of a national level player in terms of geographical reach and
clientele segments. Eighties was characterized by business diversification for the Bank. In
June 2006, the Bank completed a century of operation in the Indian banking industry. The
eventful journey of the Bank has been characterized by several memorable milestones.
Today, Canara Bank occupies a premier position in the comity of Indian banks. With an
unbroken record of profits since its inception, Canara Bank has several firsts to its credit.

They are as follows.

• Launching of Inter-City ATM Network

• Obtaining ISO Certification for a Branch
• Articulation of ‘Good Banking’ – Bank’s Citizen Charter
• Commissioning of Exclusive Mahila Banking Branch
• Launching of Exclusive Subsidiary for IT Consultancy
• Issuing credit card for farmers
• Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a
major 'Financial Conglomerate' with as many as ten subsidiaries/sponsored
institutions/joint ventures in India and abroad. As at March 2019, the Bank has further
expanded its domestic presence, with 6310 branches spread across all geographical
segments. Keeping customer convenience at the forefront, the Bank provides a wide array

4
of alternative delivery channels that include 8851 ATMs, covering 4467 centres.Several IT
initiatives have been undertaken during the year, which include net banking, SMS/e-mail
alerts for all transactions done through ATM, net banking, POS, mobile banking, online
payments irrespective of amounts, online loan applications and tracking facility, generation
of automatic pass sheets through e-mail and automatic renewal of term deposits.

History of Canara Bank

Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Shri Ammembal
Subba Rao Pai, a philanthropist, this small seed blossomed into a limited company as
'Canara Bank Ltd.' in 1910 and became Canara Bank in 1969 after nationalization.

Founding Principles

1. To remove superstition and ignorance.

2. To spread education among all to sub-serve the first principle.
3. To inculcate the habit of thrift and savings.
4. To transform the financial institution not only as the financial heart of the
community but the social heart as well.
5. To assist the needy.
6. To work with sense of service and dedication.
7. To develop a concern for fellow human being and sensitivity to the surroundings
with a view to make changes/remove hardships and sufferings.

Vision
To emerge as a ‘Best Practices Bank’ by pursuing global benchmarks in
profitability, operational efficiency, asset quality, risk management and expanding the
global reach.

Mission
To provide quality banking services with enhanced customer orientation, higher
value creation for stakeholders and to continue as a responsive corporate social citizen by
effectively blending commercial pursuits with social banking.

5
Strengths

• Country-wide presence
• Overseas presence with profitable overseas operation
• Strong capital base
• High proportion of long Term liabilities
• A well diversified asset portfolio
• A large and diversified client base

About logo

The bank symbolically conveys the message - Together we can.

• two triangles linked together
• one triangle represents the customer
• the other triangle represents the bank
The new brand identity for Canara Bank is based on the idea of a bond and is a
representation of the close ties between the Bank and its many stakeholders - from
customers and employees to investors, institutions and society at large.

The colour palette and typography have been carefully chosen. The rich blue
represents stability, scale and depth. This contrasts with accents of bright yellow that
evoke optimism, warmth and energy. The Canara Bank logotype has been hand-crafted.
Its classic, serif letterforms communicate heritage and stature.

6
Mobile application

The Bank has recently launched a series of customer friendly mobile application as under:

• Canara Saathi – Canara Bank Credit Card Self Service Mobile App.
• Canara OTP – Mobile app for generating OTP for your Canara Bank Internet
Banking.
• BHIM Aadhaar Pay- App for accepting payments for the sale of goods/services.
• BHIM Canara Empower- Unified Payments Interface (UPI) for single platform in
accessing multiple bank accounts.
• Canara camServe- enables customer to Hotlist and Block/Unblock Cards.
• Canara GeoLocate- a mobile Application which enables a GPS based search for
locating Branch, ATMs and E Lounge of Canara Bank.
• Green PIN in ATMs, an online module to generate Debit Card PIN at the time of
fresh issuance of Card and also when the customer forgets the PIN.
• Canara Tech- support for structured resolution of queries related to tech-products.
• Canara Cart- an application basket containing all mobile based solutions. Customers
can manage all mobile apps of Canara Bank under this single application.
• Canmoney- an exclusive stock trading mobile

Awards and achievements during 2018-19

• Central Vigilance Commission has awarded Canara Bank with ‘Vigilance
Excellence Award-Outstanding’ under Category ‘Timely Completion of
Disciplinary Proceedings’ for the year 2018.

• Bank received first runner up award on theme Credit off-take in EASE Banking
Reform Awards 2019.
• Bank has bagged four awards from the Associated Chambers of Commerce and
Industry of India (ASSOCHAM) under Agriculture, Priority sector lending, Social
Banking and Technology.
• Bank has bagged eight Awards from Public Relations Council Of India (PRCI)
including 3 Gold under Television Commercials, Advertising Corporate Campaign
RADIO and Advertising Corporate Campaign Television
• NPCI Special Award in recognition of excellent performance in NFS ATM
Network, Rupay, CTS & UPI / IMPS.

7
 • Bank’s House magazine ‘Shreyas’ bagged Making of Developed India Award
sponsored by ET Now for best in house magazine for the year 2018.

Table 2.1 – Milestones of Canara Bank

The Bank’s aggregate business crossed 4 lakh crore mark.

2009-10 Net profit of the Bank crossed 3000 crore. The Bank’s branch network
crossed the 3000 mark.

The Bank’s aggregate business crossed 5 lakh crore mark. Net profit of the
Bank crossed 4000 crore. 100% coverage under Core Banking Solution.
2010-11 The Bank’s 4th foreign branch at Leicester and a Representative office at
Sharjah, UAE, opened. The Bank raised 1993 crore under QIP. Govt.
holding reduced to 67.72% post QIP.

Total number of branches reached 3600. The Bank’s 5th foreign branch at
2011-12
Manama, Bahrain opened.

2012-13 Highest Dividend of 130% paid for the year

1027 branches and 2786 ATMs opened during the year. Global business
crossed the 7 lakh crore milestone. Switchover to Basel III New Capital
2013-14
Adequacy Framework. Branch Network and Atms increased to 4755
branches and 6312 ATMs.

2014-15 Global Business of the Bank crossed 8 lakh crore.

2015-16 The Bank’s 8th foreign branch at DIFC (Dubai) opened.

Branch network crossed 6000 milestones.

2016-17 Total number branches rose to 6083.
Canara Bank (Tanzania) Ltd., a foreign subsidiary, opened.

2017-18 Global Business of the Bank crossed 9 lakh crore.

Global Business of the Bank crossed 10 lakh crore, Bank issued 2 core new
2018-19 equity shares to employees under Canara Bank Employee Share Purchase
scheme (CanBank-ESPS).

8
Organisation structure

HEAD CIRCLE REGIONAL

BRANCH
OFFICE OFFICE OFFICE

Table 2.2 – Key Executives of Canara Bank

NAME DESIGNATION

Shri. T.N. Manoharan Chairman

Managing Director & Chief Executive

Shri. R A Sankara Narayanan
Officer

Shri. M.V Rao Executive Director

Shri. Debashish Mukherjee Executive Director

Ms. A. Manimekhalai Executive Director

Sri R Kesavan Director representing Reserve Bank of India

Shri. SuchindraMisra Director representing Government of India

Shri. Krishnamurthy H Shareholder Director

Shri. Venkatachalam Ramakrishna Iyer Shareholder Director

9
 Management Structure

MANAGEMENT STRUCTURE

CHAIRMAN & MANAGING EXECUTIVE CHEIF GENERAL

DIRECTOR DIRECTOR MANAGER
SCALE 8 SCALE 8 SCALE 8

GENERAL
MANAGER
SCALE 7

DEPUTY GENERAL
MANAGER
SCALE 6

ASSISTANT
GENERAL MANAGER
SCALE 5

DIVISIONAL
MANAGER
SCALE 4

SENIOR
MANAGER
SCALE 3

MANAGER
SCALE 2

OFFICER
SCALE 1

CLERK
SCALE 0

10
 CHAPTER III

Departmentation

Retail banking

Retail banking, also known as consumer banking, is the provision of services by

one bank to the general public, rather than to companies, corporations or other banks,
which are often described as wholesale banking. Banking services which are regarded as
retail include provision of savings and transactional accounts, mortgages, personal
loans, debit cards, and credit cards. Retail banking is also distinguished from investment
banking or commercial banking.

The concept of Retail banking is not new to banks. It is only now that it is being
viewed as an attractive market segment, which offers opportunities for growth with profits.
The diversified portfolio characteristic of retail banking gives better comfort and spreads
the essence of retail banking lies in individual customers. Though the term Retail Banking
and retail lending are often used synonymously, yet the latter is just one side of Retail
Banking. In retail banking, all the banking needs of individual customers are taken care of
in an integrated manner.

Retail banking product & services of Canara bank

Followings are the main products of Canara Bank of India.

▪ Deposits ▪ Insurance
▪ Accounts ▪ ATM’s
▪ Credit Cards ▪ Services
▪ Debit Cards ▪ Lockers
▪ Mutual Funds ▪ Retail lending

11
Deposits

Canara Bank of India offers various deposit plans that you can choose from
depending on the term period, nature of deposit and its unique saving and withdrawal
features. Apart from competitive interest rates and convenient withdrawal options, our
deposit plans offer other features such as overdraft facility, outstation cheque collections,
safe deposit lockers, ATM's etc. It can be either saving, current or recurring deposits.

Savings accounts
Canara Bank offers its rich experience in catering to the daily financial needs of
Indians in the form of Canara Bank savings accounts. A savings account from Canara
Bank is designed keeping in mind the prospective customer to ensure maximum financial
inclusion of every section of the Indian society. The types of accounts offered to
customers of the bank are:

• Savings Bank Account - this is a simple savings account which can be opened by
anyone. The account caters to the banking needs of every individual through various
facilities which it offers.
• Canara Champ Deposit Scheme – a saving bank account specially designed for
children so that they may learn the basics of banking.
• Canara Basic Savings Bank Deposit Account – an account as per the regulations of
the RBI to provide banking facilities to the common man.
• Canara Small Savings Bank Deposit Account – this account is meant for low-
income group people.
• Canara NSIGSE Savings Bank Deposit Account – a special account developed for
the girl child belonging to the SC/ST category
• Canara Jeevandhara – a savings account for senior citizens
• Canara SB Power Plus – a savings account designed for the premium customers of
the bank who maintain a high balance in their accounts
• Canara Payroll Package Savings Bank Account – saving account designed for the
employees of corporate organizations.
• Canara Junior Savings Account – a savings account for minors which also provides
them with a debit card

12
 All the different variants of the savings account, besides providing banking facility,
also provide accountholders with interest on their balances maintained in the account @4%
per annum.
Fixed deposits and their rate of interest

Canara Bank also offers Fixed Deposit schemes to its customers so that they can
deposit their surplus cash into these accounts and enjoy attractive rates of return on their
investments. The accounts come in different versions which are:

• Kamdhenu Deposit – a deposit scheme which reinvests the income earned for
further income accrual
• Canara Bank Tax Saver Scheme – a deposit account which saves tax under the rules
of Section 80C as given in the Income Tax Act.
• Recurring Deposits – deposits which can be made every month to facilitate small
savings
• Ashraya Deposit Scheme – a fixed deposit scheme which is meant for senior
citizens giving them higher returns
• Canara Dhanvarsha – another type of recurring deposit scheme for monthly savings
which is flexible in nature
• Fixed Deposit – the traditional fixed deposit account which serves the purpose of
wealth accumulation through interest payments

The interest rate which is granted on these different types of fixed deposit account
depend on the tenure for which the customer holds the money in the account and the amount
of deposit made.
Table 3.1 – Rate of Interest on Fixed Deposits of less than Rs. 1 Crore

Canara Bank FD Interest Rates (in %) p.a.

FD Tenure
Regular Citizens Senior Citizens

7 days to 14 days * 5.75 6.25

15 days to 30 days 5.75 6.25

31 days to 45 days 5.75 6.25

46 days to 60 days 6.00 6.50

13
 61 days to 90 days 6.00 6.50

91 days to 120 days 6.00 6.50

121 days to 179 days 6.00 6.50

180 days to 269 days 6.00 6.50

270 days to less than 1 year 6.20 6.70

1 year only 6.75 7.25

Above 1 year to less than 2 years 6.70 7.20

2 years & above to less than 3 years 6.70 7.20

3 years & above to less than 5 years 6.60 7.10

5 years & above to less than 8 years 6.00 6.50

8 years & above to 10 years 6.00 6.50

444 Days (Canara Shikhar Deposit) 6.65 7.15

555 Days (Canara Shikhar Deposit) 6.70 7.20

Credit cards

Canara Bank offers a range of credit cards to its customers both in association with
Visa and Master Card. Each affiliate offers different categories of cards which are:

• VISA Credit Cards – there are two types of different cards which are affiliated with
VISA. These cards include:

• Classic
• Gold

• Master Card Credit Cards – under this variety, the bank has three types of cards
which are:
• Standard
• Gold
• World

14
 • Corporate Credit Card – Canara Bank also offers the facility of Corporate Credit
Card which are meant for corporate employees of organizations.

Debit cards
Canara Bank also offers Debit Cards to its accountholders which enable them to
make transactions without carrying physical cash. The cards under the Debit Card variety
include:

• Canara Bank Debit Card – this card comes in both variants of a VISA card, Rupay
card or a Master Card
• Canara Bank Platinum Debit Card – this is a premium card for customers who have
a high balance in their savings accounts maintained with the bank.
• Canara Bank Campus Card – this debit card is designed and offered to students who
are studying to meet their banking needs.

NRI banking

Non-Resident Individuals can also avail banking facilities from Canara Bank
through their NRI banking services. Services which are listed below are offered to NRIs:

• Expatriate, migrant and international student banking for Australia

• Online remittances of funds
• FLASH remit
• Remittance Scheme in Association with Western Union
• Foreign currency remittances (SWIFT)
• Instant remittance of money (INSTANT REMIT MONEY)

15
Internet banking
Canara Bank customers can also transact banking business from the comfort of their
homes or offices through Canara bank’s internet banking facility which allows online
banking. Activities such as managing one’s accounts, checking account balances,
transferring funds to other parties through NEFT or RTGS, investing in a fixed deposit
scheme, requesting for the generation of an account statement, payment of credit card or
other utility bills, checking respective eligibility for the purpose of loan application and
subsequently applying for loans, opening of a PPF account, paying taxes, etc. are some of
the facilities which are provided by Canara bank on their online portal. A customer
provided with a unique user id through which they can access their account and carry out
any transaction easily and quickly.

Services
Apart from the Loans, Deposits, Credit and Debit Cards, Canara Bank of India
offers other services to make financial dealings easy and convenient. Key Services include

• Demat Account • e-banking

• Online Demat Trading • Cash Management Services
• Insurance • Bill Payment Service
• Mutual Funds • Tax Payment Service
• Remittances • ECS (Electronic Clearing
• Collection Service Services

Lockers
Storing too much jewellery and valuables in the house at times becomes a security
issue and an impediment in case of natural calamities. Canara Bank of India offers you, a
safe, trustworthy space to store your valuables, jewellery, documents and other things
dear to you.
Retail lending

Retail lending is the very important part of retail banking. Retail lending is the
practice of loaning money to individuals rather than institutions. Retail lending is done by
banks, credit unions, and savings and loan associations. These institutions make loans for
automobile purchase, home purchases, medical care, home repair, vacations and other
consumer uses. Retail lending has taken a prominent role in the lending activities of banks,

16
as the availability of credit and the numbers of products offered for retail lending have
grown. The amount loaned through retail lending is usually smaller than those loaned
businesses. Retail lending may take the form of instalment loans, which must be paid off
little by little over the course of years, or non-instalment loans, which are paid off in one
lump sum.

In the context of higher yield and need for improving profitability, Banks are
popularizing various retail credit facilities suiting the requirements of clients. There is a
stiff competition among Banks to improve their retail credit base. To retain and to expand
such type of retail clients, Bank has introduced a basket of attractive lending schemes to
carter to the varied needs of the retail market. The various loan products offered by the
bank are as follows:

• Housing Loan • Teachers Loan

• Home Improvement Loan • Swarna Loan
• Canara Cash • Canara Rent
• Canara Vehicle • Canara Mortgage
• Canara Site Loan • Canara Jeevan
• Canara Budget • Canara Consumer Loan
• Canara Pension • Combo Loan Scheme

Retail Assets Hub

Retail Assets Hubs are a part of bank’s initiative to enhance its operations in the
retail lending segment. It is launched specially to enhance customer convenience, facilitate
quicker sanction of loan proposals and to extend the benefit of collective experience and
exposure the bank possesses in different segments.

RAH’s extent it’s control over almost all the branches in its district. Loan proposals
with high quantum or with special conditions are to be sanctioned only by RAH. The
primary pre-sanctioning activities are performed by the respective branches where the
applicant have their account. The loan application form along with the necessary documents
are then, forwarded to RAH for scrutinising. Based on the applicants credentials, keeping
in view the guidelines and regulations of the bank, the loan proposal may be sanctioned or
rejected. If it is sanctioned all the documentation process are performed by the respective
RAH. Also the documents submitted will be held only by the RAH and not by the branch.
17
 There are a total of 83 RAH’s in India spread over different cities. The Retail Asset
Hub Branch in Erode has control over 36 branches in and around the Erode district. It is
headed by the Divisional Manager Mr. Jayakumar.

Canara Loan Application Processing System (CLAPS)

• In term of extent RBI instructions, Bank has initiated Enterprises- Wide Integrated
Risk Management Architecture (WIRM) project. As part of the project, and
direction of the Ministry of Finance, implementation of CLAPS package with a
vision to address digitization of loan appraisal and sanctioning with supplemental
benefits of addressing the data gap elements required for moving over to Advanced
Approaches under Basel II and also to have a robust online tracking system was
initiated.
• The ALPS package was implemented only in RAH and was not covering the entire
loan origination in credit portfolio and was not also completely interfaced with
CBS. Hence implementation of CLAPS.
• The CLAPS solution is intended to capture all data and processes from the date of
receipt of loan application to disbursement including appraisal, financial analysis,
credit checks, dedupe checks, scoring, risk rating, documentation, sanctions, etc and
interface with online tracking and online submission of loan applications.
• Presently, online submission of loan application facility is available in the Bank
Website. The status of Online Tracking of loan applications submitted by the
borrower can be tracked through OLTS package which is in-house software
developed by the DIT Wing and same is maintained by it. CLAPS is also facilitated
with interface to various Credit Information Companies like CIBIL, Equifax,
Experian, Highmark.

KYC documents

KYC stands for Know Your Customer. The obtention of KYC documents is a
primary pre-sanction activity.IT is mandatory to collect the necessary KYC documents
from both the Applicant and co- Applicant and check its authenticity. KYC documents
include

18
 • Pan card
• Aadhar card
• Passport
• Driving Licence
• Voter’s ID

Obtention of necessary documents

The various necessary document required, has to be submitted to the branch with
respect to the type of the loan. The branch checks the documents for its authenticity. The
RAH is subjected to obtain legal opinion (i.e.) Legal Scrutiny Report from a renowned
lawyer to check the correctness of the original documents submitted. In addition, to check
the correctness of the value of estimate submitted for the purpose of the loan a Valuation
Report is obtained from an approved Civil Engineer.

Credit information reports (CIRs)

The obtention of CIRs is a pre sanctioning activity and not a substitute for verifying
default borrower data under RBI Defaulters list. It is mandatory to obtain Credit
Information Report of the customer for all loans. It can be obtained from multiple CICs
(CIBIL, CIRIF, ECIS, ECICI). At the time of considering the proposal, critical examination
of credit history, Number of enquires, delinquency, number of existing loans etc. should be
noted. For determining the risk grade of the borrower only CIBIL TransUnion Version 2
score is considered. The score of both Applicant and Co-Applicant are considered. The risk
grades based on CIBIL score is categorised as:

Table 3.2- Description of Credit Score

CIBIL CREDIT SCORE RISK GRADE RISK DESCRIPTION

900-750 CS :1 Low Risk
750-700 CS :2 Fair Risk
700-650 CS :3 Normal Risk
650-590 CS :4 Moderate Risk
Less than 590 CS :5 High Risk

19
 Loan process

APPLICATION • This process refers to entry of all customer's

data as per application from. This will form
DATA ENTRY the basis for Pre-Sanctioning activities

PRE • It deals with Pre-Sanctioning activities which

SANCTIONING are performed by the Bank as part of appraisal
of application and applicants.
CHECKS

SANCTIONING • It deals with loan sanctioning activities based

on appraisal of the customer's credentials, the
CREDIT DECISION loan is sanctioned or rejected.

• It deals with activities which are required to

PRE LIMIT be performed before limit loading could be
performed. It involves Compliance Call, Legal
LOADING CHECKS Documentation, Receipt of Fees, Covenant
Fulfillment, Documentation Fulfillment, etc.

• CLAPS will hand off the necessary data to

LIMIT LOADING CBS for the purpose of Limit Loading in the
CBS.

20
 RETAIL LOANS OF CANARA BANK OF INDIA
1. Housing loan

Purpose
• Purchase of a ready built house / flat.
• Construction of house / flat.
• Purchase of site and construction of house thereon. However, loan for purchase of
only site shall not be considered under Housing Loans. In case of composite
Housing loans, utilisation of loan amount for purchase of plot is restricted to 60%
of eligible / sanctioned loan amount.
• For undertaking repairs, renovation, expansion, upgradation and creation of
additional amenities with a monetary ceiling of Rs. 15.00 Lacs in case of repairs
& renovations only.
• For acquiring second house/flat where the borrower is already having a House/flat
with or without loan.
• For taking over of the HL liability from:
a) All Public Sector Banks/Private Sector Banks
b) NBFCs/HFCs rated externally as A & above) only in the case of Salaried class
of borrowers with proper due diligence and after ensuring that the assessment by
the NBFCs is acceptable and conforms to Bank’s policy guidelines.

21
Eligibility
• Salaried individuals confirmed in the service with a minimum service of 3 years.
• Individuals engaged in business / professionals and self-employed persons. Such
applicants should have been in the business/profession for a minimum period of 3
years.
• The entry age of the borrower/s shall be less than 60 years at the time of availing
the loan and the ostensible liability in the normal course should get cleared before
the borrower/s attain the age of 70 years.
• Persons above the age of 60 years are also eligible subject to certain stipulations.

Quantum
• 4 times gross annual Salary as per ITR/ITAO of the concluded financial year in
the case of Salaried Class.
• 4 times of average gross annual income of all the four years in the case of
individuals engaged in business or self-employed persons subject to production of
documentary evidence regarding the gross annual income.
• Selectively loan up to 5 years' gross salary/ income also permitted
• Rs.15.00 lacs for repairs / renovations.

Table 3.3- Margin for Housing loan

Old House / Flat

Amount of Housing Loans New House / Flat
Up to 10 > 10 years
years old old
Upto Rs. 30.00 Lacs 10% 20% 25%
Above Rs. 30.00 Lacs
20% 20% 25%
&upto Rs.75.00 Lacs
Above Rs. 75.00 Lacs 25% 25% 25%
The margin is stipulated on the total project cost. In the case of Repairs &
Renovations, expansion of existing unit, upgradation and creation of additional amenities,
a uniform margin of 25% on project cost is applicable.

Net take home

Minimum percentage of Net Income/NTH 25% (after EMI) with a minimum

amount of Rs.10000/-.

22
Security
Mortgage of House / Flat

Repayment

In convenient equated monthly instalments up to 30 years or borrower attaining

age of70 years whichever is earlier (subject to conditions).

Repayment holiday

• In the case of purchase of ready built house/flat: The repayment shall commence
within TWO MONTHS from the date of first disbursement.
• In the case of purchase of Site & Construction of House thereof and OR only
construction of House in the existing Site: ‘The repayment shall commence within
2 months after completion of House OR 24 months from the date of first
disbursement whichever is earlier’.
• In the case of purchase of flat under construction: ‘The repayment shall start within
2 MONTHS of completion of construction or 36 Months from the date of first
disbursement, whichever is earlier.
Processing charges
Nominal processing fee of 0.50% is charged with the minimum of Rs.1500/- and
maximum of Rs.10,000/-

Prepayment
Prepayment can be done at the choice of the borrower. In case of takeover of
liability by other banks / HFIs, no prepayment penalties is charged in respect of Housing
Loans carrying floating rate of interest.

Documents / formalities
• Stipulated Loan Application with 2 passport size photos of applicant / guarantor
• Sale Deed
• Agreement for Sale
• Copy of the approved plan for the proposed construction / extension / addition
• Detailed cost estimate / valuation report from Bank's Panel Chartered Engineer /
Architect

23
 • Allotment letter of Co-operative Housing Society / Apartment Owners'
Association / Housing Board / NOC from the Society / Association / Builders /
Housing Board
• Legal Scrutiny Report, EC for the past 13 years, Property Tax paid receipt, Khata
and permission for mortgage, wherever necessary
• Salary Certificate and Form No.16 (in case of salaried persons)
• IT Returns filed for the past three assessment years (in case of non-salaried
persons)
• A brief note on the nature of business, year of establishment, type of organization,
etc., (in case of self-employed)
• Balance Sheet and P&L Account for the past three years (in case of self-
employed)

2. HOME IMPROVEMENT LOAN

Purpose

For purchase of household furniture items, refrigerator, fans, air conditioner/s, to

put up wardrobes or any other household item/s.

Eligibility
• Owners of House / flat who are salaried individuals / individuals engaged in
business / professionals / self-employed. NRIs are also eligible.

24
 • Salaried individuals should have a minimum monthly net take home salary of 25%
of their gross salary or Rs. 2000/- after meeting the loan instalments for the
proposed loan.
• Professionals and other non-salaried persons should have a minimum annual
income of Rs. 50000/- to be evidenced by Income Tax assessment order / return.

Loan quantum
• When availed along with Housing Loan from Canara Bank, amount up to one year's
gross salary / income over and above the normal eligible amount for housing
finance.
• In other cases, one year's gross income / salary will be reckoned to determine the
loan quantum under this Scheme.
• Subject to above, normally, the maximum loan quantum shall be Rs.2 lacs. Higher
quantum considered selectively.

Margin

If availed as a part of the housing finance from Bank, then, the margin stipulated
is same as margin stipulated for Housing Loan. In other cases, the margin is 20%.

Security
• Hypothecation of assets created out of this loan.
• Mortgage of house / flat
• Suitable co-obligation / personal guarantee. Waiver considered selectively.

Repayment
The repayment can be done in convenient equated monthly instalments up to 60 months.

Processing charges
The processing charges payable is 0.5% of the loan amount subject to a minimum
of Rs. 1500/- and maximum of Rs. 10000/- (subject to change from time to time)
Disbursements
Amount will be normally disbursed only after acquiring ready built house / flat or
completion of construction of house / flat or completion of repairs / renovations, etc., where

25
the loan is availed along with housing finance. In case this loan is sanctioned independent
of a housing loan then, the loan can also be disbursed against proforma invoice, etc.
Documents / formalities
• Stipulated Loan application with 2 passport size photographs
• Latest Salary Certificate and Form No.16
• ITAO / IT Returns (for professionals and non-salaried persons)
• Proforma Invoices, cost estimates

3. CANARA SITE LOAN

Purpose
• A Loan Scheme to individuals for purchase of Housing sites from State
Development/Town Planning Development authorities, Central and State
Governments local authorities either exclusively or in partnership with private
sector entities, or from any other body constituted by the Government for
distribution of sites provided such layouts are duly approved by the concerned
statutory authority.
• Take over accounts from other banks permitted subject to fulfilment of original loan
sanctioned for above purpose.
• Housing loan can be availed whenever required for construction of house of the
sites purchased.

Eligibility
• Customer of the Bank with satisfactory dealings. New customers properly
introduced & creditworthy.

26
 • Age of applicant should be less than 60 years.
• NRIs also eligible.

Quantum

Four years gross Annual salary/income OR 75% of the cost of the site/guideline
value (whichever is less).

Margin

25% on the project cost is to be brought as margin by the borrower.

Repayment period
10 Years or maximum period permitted by the allotment agency for construction of
house or up to 65 years of the borrower at the time of closure of loan whichever is earlier.

Security
Mortgage of the residential site proposed to be purchased. Suitable Co-
obligation/personal guarantee of adequate net worth will be insisted.

Processing charges
0.5% of the Loan Amount is charged for the expenses incurred for processing the
loan proposal with the minimum of Rs. 1500/- and maximum of Rs. 10000/-

Documents / formalities
• Application with 2 passport size photographs
• Layout/site plan issued by the development authorities.
• Latest 6 months Salary Certificate/Form No.16 for salaried class and latest
• ITAO for Businessmen/professionals.
• Legal Scrutiny Report form Bank’s panel Advocate<
• Allotment letter other any other evidencing purchase/allotment of sites issued by
the development authorities.
• An undertaking should be obtained from the borrower for construction of the
house within the stipulated time (as stipulated by the development authorities
while allotting or giving possession of sites

27
 4. CANARA VEHICLE

Purpose
The main object of this vehicle loan is to assist the borrower in buying a new or
used four-wheeler.
Eligibility
• All individual borrowers / professionals / reputed firms / companies are eligible.
However, HUF is not eligible.
• Salaried individuals should have a minimum gross salary of Rs.3.00 lacs p.a.
Minimum NTH after proposed instalment should not be less than 25% or
Rs.12,000/- whichever is higher.
• Other than salaried individuals should have a minimum Gross Annual Income of
Rs. 3.00 lakhs p.a. as per latest ITR/ITAO subject to 3 years Gross Average Annual
Income of not less than Rs. 2.50 lakhs. Minimum NTH after proposed instalment
should not be less than 25% or Rs.12,000/- whichever is higher.

Table 3.3- Margin for Vehicles

Amount of Vehicle Loans MARGIN %

Upto Rs. 10.00 Lacs 10%

Above Rs. 10.00 Lacs &upto Rs.25.00 Lacs 15%

Above Rs. 25.00 Lacs 20%

28
 For new vehicles, loan may be granted up to 90%/85%/80% of the total value
inclusive of invoice value, life tax, registration charges, insurance premium and other
accessories.

For used cars (not older than 5 years) at the same low interest rates. Loan amount
is 75% of the agreed price or 75% of the value of the car, as assessed by an automobile
engineer or Rs.15.00 Lakh whichever is lower.

Repayment

The repayment can be done in convenient equated monthly instalments up to 84

months (60 months in case of second hand vehicles).

Processing charges

0.25% of the Loan Amount is charged for the expenses incurred for processing the
loan proposal with the minimum of Rs. 1000/- and maximum of Rs. 5000/-.

5. CANARA BUDGET

Purpose
To meet genuine personal/domestic needs other than speculative purpose.

Eligibility
• Confirmed employees of reputed PSUs and Joint Stock Companies
• Confirmed Central / State Government officials

29
 • Lecturers / Asst. Professors / Professors of Colleges / Research Institutions and
Universities.
• IT/BT Companies.
• Employees salary account has to be maintained with our branch
• Minimum Net Take Home Salary should not be less than 25% or Rs.10,000/- per
month whichever is higher after meeting the proposed loan instalments.

Quantum
• Salaried: - Six months' gross salary or Rs.3.00 lakh whichever is less.
• Higher quantum also considered selectively.

Repayment
The repayment can be done in convenient equated monthly instalments ( EMI ) up
to 60months
Security
Salaried: Normally, Co-obligation is required equal to loan amount.
Processing charges
0.5% of the Loan Amount is charged for the expenses incurred for processing the
loan proposal with the minimum of Rs. 1000/- and maximum of Rs. 5000/-.

Documents / formalities
• Stipulated Loan Application with 2 copies of passport size photographs
• Latest Salary Certificate and Form No.16 / ITR/ITAO for last 3 years.
• Co-obligation
• Pronote / Pronote Covering Letter

30
 6. SWARNA LOAN (GOLD LOAN)

Purpose
To meet medical expenses and other unforeseen commitments / contingencies and
investment / domestic purposes.
Repayment
• The entire loan is to be repaid within 12 months from the date of sanction as bullet
payment along with interest.
• Interest will be accrued to the account at monthly rates compounded but will
become due for payment along with principal only at maturity.

Eligibility
Credit-worthy SB Account holders with satisfactory dealings
Quantum
Minimum Rs. 10,000/- Maximum Rs.10,00,000/
Documents & formalities to be submitted
• Application for Swarna Loan
• Certificate by the Jewel Appraiser (Bank will arrange)
• Salary Certificate and Form No.16 / income proof

Security: finance against

• Specially minted gold coins sold by any bank
• Gold ornaments

Processing charges 1% of the loan amount, with a minimum of Rs. 1,000/- subject to a
maximum of Rs. 5,000/- per loan

31
 7. CANARA MORTGAGE

Purpose
To the individuals for non-business purpose only, for meeting any unforeseen
expenses, urgent personal and medical needs etc
Eligibility
• Individual customers having satisfactory dealings with our bank
• New customers well introduced and credit worthy with satisfactory banker's /
market reports on them.
• NRI customers, with their resident close relatives as co-borrowers, can avail the
loan.

Quantum
Up to 50% on the value of the property offered as security as per the valuation
report of the bank's panel-valuer with a maximum Rs. 10.00 Crores, whichever is less.

Repayment
The repayment can be done in convenient instalments up to 84 months by way of
EMI
Repayment capacity
NTH (Net Take Home) requirement is minimum 20% or 20,000/p.m. whichever
is higher after meeting EMIs of proposed loan.

32
Security and guarantee
Equitable Mortgage of property acceptable to the Bank having clear marketable
title. Personal Guarantee from person / s of adequate net worth acceptable to the Bank.
Waiver considered selectively.
Processing and documentation charges
1% of loan amount with a minimum of Rs.5000/- and maximum of Rs. 50,000/-.
Documentation charge will be Rs.100/- Per Lac or minimum of Rs.1000/- and Maximum
Rs. 25000/-
Documents / formalities
• Stipulated Loan Application with passport size photographs - 2 copies each
• Copy of lease deed
• Income proof of the applicant and guarantor Income Tax Assessment Order / IT
Returns
• Title deeds of the property / EC, latest tax paid receipt / Legal Scrutiny Report
• Approved plan of building
• Certificate of balance if finance is availed against property from any other source
• Annual Financial Statements for the past 2 years (in case of persons other than
salaried individuals

8. CANARA PENSION-GENERAL PUBLIC

Purpose
The main object of this loan is to meet the cost of medical expenses and other
personal needs of the Pensioners

33
Eligibility
The following types of pensioners who are drawing their pension through canara
branches are eligible for financial assistance under the scheme:

• All Central Government Pensioners (viz., Central, Civil, Railways,

Defence, Armed Forces, Defence Civilians and Freedom Fighters etc.)
• All State Government Pensioners.
• Pensioners of all Government Department Undertakings.
• Pensioners of all Public Sector Undertakings/Corporate Pensioners.
• Family Pensioners of all the above categories.
• 15 month’s Pension amount or Rs.5,00,000/- whichever is less, subject to Net
Take Home of 40% of gross Pension after deducting the proposed EMI.

Repayment
The repayment can be done in convenient equated monthly instalments (EMI ) up
to 72monthsif pensioner is below 65 years, 60 EMIs if pensioner is above 65 years.
Security
• In case of Loan to Pensioners: Co-obligation of the spouse (wherever there is a
provision for family pension) or any other person/pensioner good for the amount, if
necessary, may be stipulated by the sanctioning authority.

• In case of Loan to Family Pensioners: Third party guarantee/co-obligation good for

the amount should be obtained invariably.

Processing charges
Processing charges are waived in respect of the loans under this scheme
Documents / formalities
• Stipulated Loan Application with 2 copies of passport size photographs
• Co-obligation (unless waived)
• Delivery letter to DPN

34
 9. TEACHERS LOAN

Purpose
To meet any genuine personal/domestic needs and not for speculative purposes.

Eligibility
• All confirmed teaching / non-teaching staff working in a school / college - drawing
salary through our branches, with an undertaking letter from salary disbursing
authority at District/Block level not to shift the salary account without NOC from
the branch.
• Net take home after meeting the proposed EMI should be minimum 30% of the
gross salary Or Rs. 10,000/- whichever is higher

Quantum
10 months' gross salary or Rs. 3,00,000/- whichever is less.

Processing charges
1 % of the loan amount is levied for the expenses incurred for processing the loan
proposals with a minimum of Rs.50/-.
Repayment
The repayment can be done in convenient equated monthly instalments (EMI ) up
to 48 months
Documents/formalities to be completed
• stipulated Loan Application with 2 passport size photographs

35
 • Latest Salary Certificate and Form No.16
• Co-obligation where applicable
• Pronote/Pronote Covering Letter

10. EDUCATION LOAN

One of the main agendas of the Government of India is to make sure that no one is
deprived of a proper education due to financial constraints. Indian Banks' Association
(IBA) has framed an all-inclusive model educational loan scheme, which every bank has
adopted.

Purpose

The loan principally goes towards the course fees for the stream chosen by the
applicant. It is applicable irrespective of where the applicant chooses to study - in India or
overseas.

Expenses considered for education loan

Course fee, hostel fee, costs of required books and instruments, examination fee and
study trips are considered.

Amount of education loan

• For education in India: Up to INR. 10 lakhs.

• For education overseas: Up to INR. 20 lakhs.

36
Interest rates

• If the loan taken is less than INR 4 lakhs, no interest will be levied.
• For loan more than that, 5 percent interest will be levied if you are studying in India
and 15 percent if you are going abroad.

Repayment

• Starts a year after the course is completed or six months after landing a job,
whichever is earlier.
• Loan with interest can be repaid in EMIs i.e. you can take 10 years to repay loan
amount up to INR. 7.5 lakhs and 15 years if the amount is more than that.

Security

• Loan is provided conjointly to the applicant and his/ her guardian.

• There is an agreement that future earnings of the student will contribute to loan
repayment.
• No collateral is required if the loan amount is less than INR. 4 lakhs.
• For loan sum between INR. 4 lakh and INR 7.5 lakh, guarantee from a bank-
approved third party may be required. To avoid this, the borrower can offer security
of palpable assets (covering the loan amount) in its stead.
• If the loan amount is more than INR. 7.5 lakhs, the security worth the same is
required as collateral.

Margin

• Up to INR. 4 lakhs – Nil

• Above INR. 4 lakhs:
- For studying in India – 5%

- For studying overseas - 15%

Eligible courses

• India: Bachelors (Graduation) and Masters (Post-graduation) that include

professional as well as technical courses with work potential conducted by colleges
or universities validated by UGC, Government, Department of Electronics, AICTE,
IMC, and autonomous institutes like IIT, IIM, Madras Christian College etc.

37
 • Abroad: Any Bachelor's or Master's Degree that is employment-oriented from an
approved institute.

Documentation required

• Mark sheet of the most recent qualifying public exam for school or college in India.
• Proof of admission to the course (Fee receipts, Transfer Certificate, etc.).
• Schedule of expenses for the course (Fee receipts obtained from the institute).
• Two recent passport size photos of the borrower, co-obligant and guarantor.
• Duplicate copy of any national ID card like passport, Voter’s ID, Driving License etc.
• Recent salary slips if you are a salaried person and income proofs like reference from
clients, IT papers etc. if you are self-employed, freelancers, professionals, entrepreneurs
or agriculturist.

Student eligibility criteria

• The student must be an Indian National & must have passed the required course with
essential grades.
• The applicant must have received admission in a course in any recognized institute,
approved by the State or Central Government.

38
 RATES OF INTEREST FOR RETAIL LENDING SCHEMES
Rates of Interest of all Retail Lending Schemes are linked to one-year MCLR of the bank

ONE YEAR MCLR OF THE BANK – 8.70% w.e.f. 07.05.2019

Housing loans

For Housing Loans under Commercial Real Estate (3rd & subsequent dwelling Unit), the
applicable rate shall be the above rate + 0.50%

Women
Other Borrowers
Borrowers
Scheme Name
Rate Of Present Rate Of Present
Loan
Interes Interes Interes Interes
Quantum
t t Rates t t Rates

CIC – RISK GRADE - LOW RISK Category

Irrespectiv
e of LOAN One One
Limit to year 8.60% year 8.60%
i. HOUSING LOAN, Salaried MCLR MCLR
ii. HOUSING LOAN Class
TO AGRICULTURISTS,
iii. HOUSING LOAN OTHER CATEGORIES
TO NRIs,
iv. YUVA AWAS RIN ( One
One
CANYAR), Up to Rs. 30 year
year
v. HOUSING LOAN Lakhs 8.65% MCLR+
MCLR+
TO SENIOR 0.10% 8.70%
0.05%
CITIZENS*,
vi. PRADHANMANTR 8.75% One
One
I AWAS YOJNA Above Rs 30 year 8.80%
year
(PMAY)* Lakhs &Upto MCLR+
MCLR+
vii. HOUSING CUM Rs. 75 Lakhs 0.20%
0.15%
SOLAR LOAN

One One
Above Rs.75 year year
8.80% 8.85%
Lakhs MCLR+ MCLR
0.20% +0.25%

39
 CIC – RISK GRADE - LOW RISK Category

Irrespective of One year

One year
LOAN Limit to MCLR + 9.10% 9.10%
MCLR+ 0.50%
Salaried Class 0.50%

OTHER CATEGORIES
HOUSING
LOAN CRE One year
Up to Rs. 30 One year
(3rd and MCLR+ 9.15% 9.20%
Lakhs MCLR+0.60%
subsequent 0.55%
dwelling unit)
Above Rs 30 One year
One year
Lakhs &Upto Rs. MCLR+ 9.25% 9.30%
MLLR +0.70%
75 Lakhs 0.65%

One year
Above Rs.75 One year
MCLR+ 9.30% 9.35%
Lakhs MCLR+ 0.75%
0.70%

HOME IMPROVEMENT LOAN One Year MCLR + 2.45% 11.05%

CANARA Term Loan One Year MCLR + 0.50% 9.10%

HOME LOAN
PLUS Over Draft One Year MCLR + 1.00% 9.60%

Education loans

Loan Quantum Rate of

Interest

VIdhyaTuran Loan Scheme 8.90%

Up to Rs. 4 Lakhs * 10.70%

> Rs. 4 Lacs to Rs. 7.50 Lakhs * 10.70%

>Rs. 7.50 lakhs * 10.50%

IBA´s Model Loan scheme for Vocational Education & Training * 10.20%

* The concession of 0.50% on the above applicable ROI extended to girl students.

40
Mortgage loans

Rate Of
Scheme Name Description
Interest
CANARA SITE 9.70%
CANARA MORTGAGE 11.70%

For Navaratna PSUs, AAA rated Companies,

Fortune 500 Companies, MNCs, Banks, Insurance 10.70%
CANARA Companies
RENT
For General Companies 11.00%
For Property Leased out to Canara Bank 10.50%
CANARA JEEVAN 10.20%

Canara vehicle loan

RATE OF INTEREST
SCHEME NAME DESCRIPTION
LINKED TO CIC SCORE
Canara vehicle loan WOMEN 9.00% TO 9.55%

Car loan OTHER 9.05% TO 9.65%

Canara vehicle loan WOMEN 11.70% TO 12.10%

Two-wheeler OTHER 11.75% TO 12.15%

Other retail lending schemes

Scheme Name Description Rate Of

Interest

CANARA CONSUMER LOAN 13.15%

SWARNA LOAN 12.00%

CANARA BUDGET With Salary tie-up 13.00%

Without Salary tie-up 14.00%

For BSNL Employees 11.00%

41
 CANARA PENSION 11.90%

TEACHERS LOAN 12.65%

CANARA CASH 15.15%

ALL OTHER PERSONAL LOANS (including Loans to 14.15%

Individuals against other approved securities)

Time norms for retail loan applications

Time Norms*
S.No. Nature of Credit facilities
Sanctions at Sanctions Sanctions at
Branch/ RAH at Circle HO

1 Housing Loans upto Rs. 25 lacs 21 days 30 days 6 to 8 weeks

2 Housing loans above Rs. 25 lacs 30 days 45 days 8 to 9 weeks

3 Canara Rent NA 45 days 8 to 9 weeks

Canara Mortgage / other
4 NA 45 days 8 to 9 weeks
Mortgage based loans
5 Canara Jeevan NA 30 days NA

6 Canara Vehicle 7 days 15 days 2 to 3 weeks

7 Canara Budget 7 days 15 days 2 to 3 weeks

8 Teacher's Loan 7 days 15 days 2 to 3 weeks

9 Canara Consumer Loan 7 days 15 days 2 to 3 weeks

Table 3.4- Time norms for loan sanctioning

*Number of working days/weeks from the date of submission of all required documents.

42
 COMPARISION AND ANALYSIS

COMPARISION OF INTEREST RATE FOR VARIOUS LOANS

INTEREST RATE MEAN INTEREST
TYPE OF LOAN
RANGE RATE
Housing Loan 9.15% to 10.55% 9.42%

Canara Budget 11.50% to 14.65% 12.67%

Canara Vehicle 9.45% to 12.55% 9.90%

Canara Mortgage 12.15% to 12.35% 12.27%

Canara Rent 11.25% to 12.35% 11.40%

Table 3.5- Comparison of Interest rate for various loans

COMPARISION OF INTEREST RATE FOR VARIOUS LOAN

14.00% 12.67% 12.27%

12.00%
11.40%
9.42% 9.90%
INTEREST RATE

10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
TYPE OF LOAN
Housing Loan Canara Budget Canara Vehicle Canara Mortgage Canara Rent

Interpretation
Housing loan has the minimum mean interest rate of 9.42% followed by Canara
vehicle and Canara rent with 9.90 % and 11.40% respectively. Canara Budget offers loan
at the highest mean interest rate of 12.67%. This shows that Canara Bank is more feasible
in case of housing loans to its customers.

43
 COMPARISION OF INTEREST RATE FOR HOUSING LOAN

STATE
BANK
LOAN CANARA BANK ICICI AXIS
OF HDFC
AMOUNT BANK OF BANK BANK
BARODA
INDIA

BELOW 30
8.80% 8.70% 8.75% 8.80% 9.10% 8.95%
LAKHS

ABOVE 30
LAKHS TO
8.90% 8.70% 8.85% 9.05% 9.20% 9.10%
BELOW 75
LAKHS

ABOVE 75
8.95% 8.95% 8.95% 9.10% 9.30% 9.15%
LAKHS

Table 3.6- Comparison of Interest rate for housing loans

***These interest rates are respect to non-salaried male criteria***

COMPARISION OF INTEREST RATE FOR HOUSING LOAN

9.40%
9.30%
9.30%
9.20%
9.20% 9.15%
9.10% 9.10% 9.10%
9.10% 9.05%
9.00% 8.95% 8.95%8.95%8.95%
8.90%
8.90% 8.85%
8.80% 8.80%
8.80% 8.75%
8.70% 8.70%
8.70%

8.60%

8.50%

8.40%
BELOW 30 LAKHS ABOVE 30 LAKHS TO BELOW 75 ABOVE 75 LAKHS
LAKHS

CANARA BANK BANK OF BARODA STATE BANK OF INDIA HDFC ICICI BANK AXIS BANK

44
Interpretation
• For the comparision of interest rate for housing loan offered by canara bank, two
leading public sector banks namely SBI and BOB and the top three private sector
banks, HDFC, ICICI Bank, Axis Bank are taken.The interest rates taken here are
for male non-salaried class people.
• It is very evident that BOB offers loan at the least interest rate of 8.70% for both
below 30 lakhs catogory and between 30 to 75 lakhs catogory.For loans above 75
lakhs the BOB charges 8.95% with an increas of 0.25% from the previous
catogory.
• Canara Bank and HDFC bank offers loan upto 30 lakhs for the same interest rate
of 8.80%. Also it is seen that canara bank charges only additional 0.10% i.e.
8.90% while HDFC bank charges additional 0.25% i.e. 9.05% for the loans
between 30 to 75 lakhs.
• It is clear that ICICI bank’s interest rates are the highest for all the three loan
amount catogaries 9.10%, 9.20%, 9.30% respectively.
• ICICI bank charges the high interest rate of 9.30% for loans above 75 lakhs. All
the three public sector banks Canara Bank, SBI, BOB all charge the same interest
rate of 8.95% for loans above 75 lakhs.
• In view of public sector bank, we can say that BOB charges less interest rate for
below 30 and 30-75 lakhs catogary.While all three bank charge the same rate in
the above 75 lakhs catogary.
• In view of private sector bank, we can say that HDFC charges less interest rate for
all the three catogory followed by Axis Bank and Icici Bank.

45
 CREDIT PORTFOLIO
(in crores)
Growth
Growth
Parameters (Amount O/s) Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 % Q-o-
% Y-o-Y
Q
I. Priority Sector Credit
1. Agriculture Credit
(a) Retail- Agri. Credit 77120 77970 80699 83497 84288 86462 2.58 10.89
(b) Non-Retail- Agri.Credit 5336 5507 5808 6395 6255 6227 -0.45 13.07
(c ) Total Agri.Credit (a+b) 82456 83477 86507 89892 90543 92689 2.37 11.04
2. MSME Credit
(d) Retail- MSME Credit 42602 42456 44098 45325 44932 45311 0.84 6.73
(e) Non-Retail- MSME Credit 39496 40627 44045 45481 40236 43540 8.21 7.17
(f) Total MSME Credit (d+e) 82098 83083 88143 90806 85168 88851 4.32 6.94
3. Other Priority Sector (OPS)
(g) Retail- OPS Credit 18393 18416 18490 18416 18115 24380 34.58 32.38
(h) Non-Retail- OPS Credit 366 365 397 1307 1300 1450 11.54 297.26
(i) Total OPS Credit (g+h) 18759 18781 18887 19723 19415 25830 33.04 37.53
(j) Total Priority
Credit(c+f+g+h) 183313 185341 193537 200421 195126 207370 6.27 11.89
II. Non- Priority Sector Credit
(k) Retail - Non Priority 38903 42269 47484 52560 54950 51870 -5.6 22.72
(l) Corporate Credit 173854 171753 181954 176952 188104 183832 -2.27 7.03
Out of whicj , infrastructure 52760 52260 55085 54893 56798 56717 -0.14 8.53
(m) Staff Loans 4773 4965 5183 5490 6036 6218 3.01 25.23
(n) Total Non- Priority (j+ k+l0 217530 218987 234621 235002 249090 241920 -2.88 10.47
Total Credit (j+n) 400843 404328 428158 435423 444216 449290 1.14 11.12

Table 3.7- Credit portfolio of Canara bank for the period 18 - 19

46
Interpretation
• It is very evident from the data, that the Other Priority Sector Credit shows the
maximum annual growth % with 11.89as well as maximum quaterly growth % with
6.27%.The Total OPS Credit Sector has increased only slightly fir the past five
quarters.In the last quarter alone its growth rate has gone exceptionally high with
6.27% .
• It is followed by Agricultural Credit Sector in the growth rate.There is a steady and
gradual increase in the Total Agricultural Credict sector.It shows an annual growth
of 11.04%.Next comes the Non Priority Sector credit with the growth rate of
10.47%. It had the highest growth in the quarter of Sep-2018. In all the past five
quarters it has increased considerably while in the last quarter alone it has declined
by 2.88%.
• The MSME Credit Sector’s growth is worth appriciating. In the first four quarters
this sector experinced continous growth. In the quarter Mar-2019 it has declined by
6.20% unexpectedly.But it has managed to cope up with an increase of 4.33%
slightly matching its position to the quarter of Dec-2018.
• On an overall basis, the credit portfolio shows an annual growth rate of 11.12% and
a quarterly growth rate of 1.14%. With this increase in growth it can expected that
in the next years the total credit may constitute about 48658 crores.

47
 COMPARISON OF RETAIL CREDIT OUTSTANDING BETWEEN
MAR-18 AND MAR-19
Jun-18 Jun-19 PERCENTAGE
TYPE OF LOAN
(in crores) (in crores) INCREASE
HOUSING LOAN 28978 34888 20.39

VEHICLE LOAN 6973 9787 40.36

EDUCATIONAL LOAN 8558 9036 5.59

OTHER PERSONAL LOAN 16176 22539 39.34

TOTAL 60685 76250 25.65

Table 3.8- Comparison of retail credit outstanding

Comparision of Retail credit outstanding

34888
ADVANCES ( in crores)

40000
28978
30000 22539
16176
20000
69739787 85589036
10000
0
HOUSING LOAN VEHICLE LOAN EDUCATIONAL OTHER
LOAN PERSONAL LOAN
LOAN TYPE

Jun-18 Jun-19

Interpretation
Housing loan contributes largely to the retail credit outstanding segment of the bank
in both the years. Though its increase percentage is just 20.39 % it still holds the top
position. The Vehicle loan shows the highest annual increase percentage with 40.36 % from
6973 to 9787 crores in just one year. It is followed by Other personal loan with an increase
of 39.34%. Educational loan holds the least share in the quarter Jun-19 with just 9036 crores
with the minimum increase in annual percentage of just 5.59%. On the whole there is an
increase of 25.65% in retail credit outstanding for the quarter Jun-2019

48
 RETAIL CREDIT OUTSTANDING AS ON MARCH 2019
LOAN QUANTUM
TYPE OF LOAN PERCENTAGE
(in crores)
HOUSING LOAN 34888 45.75

VEHICLE LOAN 9787 12.84

EDUCATIONAL LOAN 9036 11.85

OTHER PERSONAL
22539 29.56
LOAN
TOTAL 76250 100.00

Table 3.9- Retail Credit outstanding as on June – 19

RETAIL CREDIT OUTSTANDING ON JUNE 2019

29%
46%

12%
13%

HOUSING LOAN VEHICLE LOAN EDUCATIONAL LOAN OTHER PERSONAL LOAN

Interpretation
Housing loan contributes the largest share for retail credit outstanding in the quarter
JUN-19 with 46 % which is followed by personal loan with 29%. The Vehicle loan and
educational loan have almost equal share with only a difference of 1% i.e. Vehicle loan
hold nearly 13% leaving educational loan with a share of 12%

49
 CHAPTER IV
SUMMARY OF WORK DONE

S.NO DATE DETAIL OF WORK DONE

Learnt about the banking functions in general and about
1 10-06-2019
Retail Assets Hub

2 11-06-2019 Learnt about various retail lending

3 12-06-2019 Learnt about CLAPS, KYC, CIRs,CERSAI,ECS,EMI

Learnt about various loan products offered by the bank

4 13-06-2019
and interest rates for each loan
Learnt about procedure for applying and the various steps
5 14-06-2019
in sanctioning a loan

6 15-06-2019 Learnt about Housing Loan

7 17-06-2019 Learnt about Home Improvement loan

8 18-06-2019 Learnt about Canara Site Loan

9 19-06-2019 Learnt about Vehicle loan

10 20-06-2019 Learnt about Mortgage loan

11 21-06-2019 Learnt about Swarna (gold) loan

12 24-06-2019 Learnt about Canara Budget

13 25-06-2019 Learnt about Educational loan

14 26-06-2019 Learnt about Teacher's loan Pension loan

Learnt about documentation procedures and post-sanction

15 27-06-2019
activities

50
 CHAPTER V
Conclusion
This Institutional Training was a wonderful opportunity to get an exposure about
the operations of the Bank and about Retail Asset Hub in particular. Detail about the nature
of work and roles of each person was known through the interaction with the executives in
the bank.

Canara Bank is one of the main public sector banks. It is facing pressure in
competing with players one rung above them like State Bank of India, Bank of Baroda,
Punjab National Bank, Central Bank of India, IDBI.

Interest rate, possessing fees, tenure, security and margin money all these are very
important in all kinds of retail loans. So, banks should revise all above keeping in view all
other banks. Bank should appoint some marketing executives for this purpose who can give
information of market and other banks. These marketing executives gives report to head
office directly for timely processing so that the market can be fully captured as early as
possible.

The bank by launching retail loan festival campaign offers various concessions
during the campaign period to attract customers. The bank with assistance of insurance
companies provides life insurance cover to education loan and home loan customer. It has
developed numerous mobile application and e-banking facilities to provide timely service
to its customers.

The bank must take further step to strengthen its e-banking services so that minor
queries of loan applicants can be resolved and it can help the bank in building a loyal
customer base. In order to mobilize fresh retail business, the bank should adopt an
aggressive market strategy to increase its efficiency and profits.

People are the main resource of any organisation. It would be appropriate if the
bank puts a performance-based pay structure in place to motivate the employees to perform
their role Canara bank strongly believe that the customers are their backbone and therefore
strategies their loan products and service schemes with continual feedbacks. In short, the
bank strives to achieve its objectives through its moto “TOGETHER WE CAN”.

51