LOAN AND ADVANCES

OF
PUNJAB
BANK AND SIND

BY:

AASTHA SINGLA

RR1709B56

3020070108
CONTENTS
 Introduction

 Functions

 Loan schemes for customer at a glance

 Complete loan scheme
 Loan policy
 Appraisal & sanction of loans
 Risk pricing policy & credit rating system
 Working capital assessment
 Graphical presentation
 Problems

 Recommendations
 INTRODUCTION
 Founder : Bhai Vir Singh Ji , Sir Surinder Singh Ji , Sir Tarlochan
Singh Ji in1908
 Headquarters : Rajendra Palace, N.D
 Zonal Offices : 19
 Branches : 754
 Extension Counters : 136
 Capital : 243.06 crores
 Total Deposits : 13223.62 crores
 Provides customer services
 Rural development Center in Ludhiana
9 international banking divisions
 FUNCTIONS
 Primary functions :

 Accepting of deposits
 Advancing of loans

• Secondary functions :

 Agency functions
 General utility services
 Development functions
MEMBERS IN PANIPAT
BRANCH
 Sr manager : VK Dhavan
 Loan Head : DS Kapoor
 Manager : PS Chawla
 Astt. Loan dept. : PK Gupta
 Manager (foreign exchange) : Amarjit Singh Saggu
 Head Cashier : Kuldeep Singh
 Assistant : Subash Singla

Mahendra Ahuja
 LOAN SCHEME FOR CUSTOMER AT A GLANCE

With Punjab and Sind Bank, you get the personal touch and quality of
service that only we offer. Our schemes are designed around the
best interest rates and involve simplest procedure.
COMPLETE LOAN SCHEME
(KHETI UDYOG KHAZANA YOJANA)
 Eligibility : Atleast one acre irrigated land
 Area of operation : Punjab, Haryana, U.P. & Sri Ganganagar Distt Of
Rajasthan
 Limit : Rs 7.50 lacs for 10 yrs. 50000/- acre for irrigated & 15000/- for
unirrigated land.
 Security : Primary
 Repayment
 Rate of Intt. : As per RBI guidelines depending upon the quantum of loan
 Margin : Upto 25%
LOAN POLICY
 Objective of the loan policy
 Thrust area of lending
 Term loans
 Bank policy for finance against shares & debentures.
 Loan pricing – Credit rating
 Delegation of discretionary lending power
 Loan committees
 Takeover of borrower A/C from another bank
 Casual/ temporary limit

(contd….)
(contd….)

 Loan proposal sanction thereof

 Loan policy assessment of working capital
 Classification of advances
 Collateral security
 Release of title deed
Appraisal and sanction
of loans

 Preparation of loan proposal

 Loan officer to have proper knowledge
 Obtaining papers, documents, information
 Credit report on borrower/ guarantor
 Obtaining financial statements
 Some important borrower accounts
 Advances to relative of staff members
 Undertaking/ declaration from the clients
 Goods offered as security
 Immovable property as security/ additional security

(contd…)
(contd…)

 Visit to the unit

 B/O to check
 Zonal office to check
 Sanction letter
RISK PRICING POLICY AND CREDIT RATING
SYSTEM

Background :
 The small borrowers would continue to be protected and they
enjoy credit limit upto Rs. 25000 will be charged int @ 11.5% PA.
 If the credit limit of borrowers would be deregulated then bank
would be required to obtain approval from their respective
boards for fixation of min rate of interest.
 CRR & SLR requirement have been reduced to 4.75% &
25%respectively over a period of last 8 years.
Prime lending rate:
 The lowest interest rate offered to the most trustworthy borrowers i.e.
where the credit risk is almost non-existing or near to zero.

 It determine on the basis of following factors:

a. Cost involved

b. Competition in the market

c. Relationship

d. Value

The factors are normally governed by the market forces and the banks
are unable to have any control over it.
Credit risk
It is delay in repayment by the borrower or not paying the
advances at all. This cause mismatch between the maturities of
assets and liabilities and banks may have to suffer/bear loss and
re-establish near equilibrium between the two.
Credit rating
 Assessment of the degree of risk associated with each loan a/c
and its profitability.
 Minimizing the risk by proper pre-lending appraisal,
documentation, disbursement and post leading care.
Credit rating system of our bank
Our bank has also devised its own credit rating system and risk pricing
policy. It is applicable to all working capital advances exceeding Rs 2
lakh and for term loan repayable in 3 years and above.

RATING PARAMETERS

The borrowers are divided into 4 categories

A++ A+

A B
Advantages of credit rating system
a. It is a cost – plus pricing policy

b. Profitable margin will be clear and transparent

c. It serves as a major indicator of the impact of changes in

monetary policy.
WORKING CAPITAL
ASSESSMENT
GRAPHICAL PRESENTATION OF BRANCH OFFICE, PANIPAT
GRAPHICAL PRESENTATOI
N OF BANK
 PROBLEMS:

The
 major problem is that bank is non-computerized in many branches.

Also
 the branches which are computerized don’t have full connectivity.
Poor recovery is also lending to higher account of NPA.

The
 employees have only those skills required for doing general banking work. They

lack in marketing, selling and product development capabilities needed for the

success in retail banking.

The
 branch managers don’t have adequate powers, so they have to send most of the

files to their superiors for final approval. This takes a lot of time and customers who

need loan immediately have to wait.

The
 formalities which are to be fulfilled by the customer for final approval of loan are

much more than in case of private banks.

There
 is lack of motivation among the employees for during work is lacking.
RECOMMENDATIONS:
 Branches should be fully computerized
 Full connectivity between branches should be established to enable the
customer to take benefit of anywhere banking
 Proper recovery system should be established
 More ATM’s should be established
 Training to the employees should be provided from time to time to keep them
updated. This will also help them to work effectively
 More powers should be delegated to the branch manager
 One person should be made to sit at the “may I help u: counter permanently to
help the person who are illiterate and those who have some problem in filling
of various forms of bank
 Formalities required for taking loan should be reduce to minimum in order to
make the bank competent against the private banks
MY PERSONAL VIEWS
TOWARDS TRAINING
 FRIENDLY ATMOSPHERE
 MOTIVATION
 KNOWLEDGE
 PRACTICAL EXPERIENCE
 PROPER GUIDANCE
THANK YOU…………