Credit Analysis of PL

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A PROJECT REPORT ON “CREDIT ANALYSIS OF PERSONAL LOAN” OF

ABN AMRO BANK MAY-JULY. 2007 IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR MANAGEMENT COURSE OF MASTER OF BUSINESS ADMINISTRATION ADMINISTRATION BY SIDDHARTH SHRIKANT RAUT UNDER THE GUIDANCE OF MRS SMITA SOVANI MADAM VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE-411048

To Whomsoever It May Concern

This to certify that Mr. Siddharth Shrikant Raut is a student of Vishwakarma Institute Of Management , PUNE .He has successfully carried out his summer project titled “ CREDIT ANALYSIS OF PERSONAL

LOAN” at ABN AMRO BANK , Pune from 20-05-2007 to 31-07-2007 ,in the
partial fulfillment of Masters in Business Administration Course of University of Pune (2006 – 2008 ) .

He has worked under our guidance and directions. His work is found to be good and complete in all respects .during the period we found him hard working, sincere and loyal.

We wish him all the best for his Future.

ACKNOWLEDGEMENT
Taking advantage of the occasion of submission of this project, I take an opportunity to thank to all who were directly or indirectly involved in this project and without there guidance, co-operation and support this would not have been possible.

I am highly obliged to Mr. Atul Sharma(Head – Unsecured Asset) for providing spark in the dark and providing us the opportunity to work in CREDIT ANALYSIS of prestigious organization like ABN AMRO BANK I was fortunate to get every sought of guidance which acted as a pole star for me.

I would also like to thank Staff of ABN AMRO BANK who has been backbone of our project & for being “Friend, Philosopher & Guide” at every stage of the project. There valuable suggestions, encouragement & patience are only responsible for seeing this project through to completion.

I am proudly indebted to my project guide prof smita sovani mam for all her support and Guidance towards the completion of the project. .

It was their vision, my hard work & blessings of my parents, which made me capable to complete this project successfully.

I would be failing in my duty if I do not acknowledge the gratitude to Dr Sharad joshi , director, V I M for his keen interest and valuable suggestions that went all the way successful completion of this work.

Above all, I thank ‘God ‘for making this mortal venture possible.

Thanking All, Siddharth Raut

TABLE OF CONTENTS CHAPTER 1 : INTRODUCTION P.NO
EXECUTIVE SUMMARY....................................................................... OBJECTIVE OF THE PROJECT ……………………………………… 2 3

CHAPTER 2 :

COMPANY PROFILE

ABN AMRO BANK……………………………………………………… 5 CORPORATE VALUES & MISSION …………………………………... 6 THREE BUSINESS UNITS ……………………………………………… 8 1. Consumer & commercial clients 2. Private clients & asset management 3. Wholesale clients

ABN AMRO BANK IN INDIA …………………………………………..

11

ACHIEVEMENTS ………………………………………………………... 12

PRODUCT AND SERVICES: OVERVIEW ……………………………… 13

CHAPTER 3 :

PERSONAL LOAN

PERSONAL LOANS ……………………………………………………. 17 LOAN WITH INCOME STATEMENTS ………………………………. 19 SELF EMPLOYED PROFFESSIONALS ……………………………… 21 SELF EMPLOYED BUSINESSMEN …………………………………... 22 LOAN WITHOUT INCOME STATEMENTS ………………………… Credit cards Surrogate loan Relationship rewards for existing ABN AMRO customers 23

Personal loan top up schemes

CHAPTER 4 :

CREDIT LINE

CONCEPT OF CREDIT …………………………………………… 30
SALARIED SURROGATE BALANCE TRANSFER RELATIONSHIP REWARDS Co – Borrowers Guarantors INTREST RATES ………………………………………………………… 46

PERSONAL LOAN APPROVAL STAGES ……………………………… 47 GUIDELINENOTE ON NORMS ………………………………………… CONTACT POINT VERIFICATION POLICY ………………………….. 49 50

LIST OF APPROVED COMPANIES …………………………………….. 52

CHAPTER 5:
CASE STUDY …………………………………………………………….. 54

CHAPTER 6:
CONCLUSION ……………………………………………………………. 59

CHAPTER 7:
BIBLIOGRAPHY …………………………………………………………. 61

CHAPTER 1 INTRODUCTION

EXECUTIVE SUMMARY

ABN AMRO BANK is one of the fast growing foreign banks in India. It has got very important presence in the consumer as well as corporate sectors. I have undertaken a Project titled “CREDIT ANALYSIS OF PERSONAL LOAN “

The main objective of the project was to know the loan proposal system of ABN AMRO BANK. The analysis of any proposal consists of two parts

• •

Internal External

Internal is extract of internal analysis , consisting of calculation of tenor as per norms ,calculation of eligibility with reference to income shown by an applicant, then if approved, to calculate the equated monthly installments & actual disbursement.

External analysis involves collection of documenry proofs regarding income profile, residence verification, repayment capacity and the end use.

OBJECTIVE OF THE PROJECT

To find out exactly what is Credit Analysis is? How it is to be done? To find out what is the criteria to be considered by the banks to give loan for various purposes. How the processing is done on the applicant’s loan request & how it is to be accepter or rejected. To know and study various credit facilitities provided by the banks. How the eligibility for granting for granting the loan is calculated.

CHAPTER 2 COMPANY PROFILE

ABN AMRO Bank

On 29 March 1824 Kng Willem-I issued a royal decree creating the Nederlandsche handel-Maatschappij (NHM) with the aim of reviving trade between the Netherlands and the Dutch East Indies. It started with the Trade Company Edwards, Henriquez and Co., establish in 1856 in Curacao whose main activity was trade and sea transportation. Several years later the company began with money exchange-activities and little by little became a bank of full value. In 1964, NHM merged with De Twentsche Bank to form Algemene Bank Nederland (ABN), while Amsterdamsche Bank and Rotterdamsche Bank joined to become Amsterdam-Rotterdam (AMRO) Bank. In 1991, these two banks merged as ABN AMRO Bank. Today, ABN AMRO Ban has a powerful presence in world markets, building on a tradition of stimulation international trade. ABN AMRO Bank ranks 10th in Europe and 22nd in the world based on tier 1 capital, with over 3,500 branches in more than 70 countries, a staff of 110,000 full-time equivalents and total assets of EUR 597 billion (as per end March 2003). The Bank is listed on several exchanges, including the Amsterdam, London and New York Stock Exchanges.

Leadership in chosen markets is critical to ABN AMRO Bank's longteam success as well. We have three principle clients segments: Consumer and Commercial Clients, Wholesale Clients and Private Clients and Asset Management. Within ABN AMRO Bank's organizational structure, these are also core global Strategic Business Units. We strive to maximize the value of each of these businesses and the synergies between them.

Corporate Values & Mission

Our Corporate Values provide the foundation for the bank's newly introduced business principles. The bank formulated these Corporate Values in 1997.

Integrity: Above al, we are committed to integrity in all that we do, always, everywhere.

Teamwork: Teamwork is the essence of our ability to succeed as a trusted preferred supplier of financial solutions to our clients. Our overriding loyalty is to the good of the whole organization, requiring us all to learn from each other and to share our skills and resources across organizational boundaries for our client's benefit.

Respect: We respect every individual. We draw strength from equal opportunity and diversity, at the same time supporting personal growth and development. We value and we all benefit from the entrepreneurial spirit of each individual.

Professionalism: To be of service to our clients we are committed to the highest standards of professionalism, pursuing innovation deploying imagination, being open to new ideas and acting decisively and consistently. We are determined to deliver outstanding quality so that our relationships with our clients will be long lasting and close.

Mission: ABN AMRO Bank's Mission is to create maximum economic value for our shareholders through a constant relationship focus on the financial services needs of our chosen client segments and a strict adherence to our financial targets.

Excellence of service to our clients and leadership in our chosen markets are the reasons behind our long-term success.

We

strictly

follow

a

relationship

approach,

which

keeps

clients

requirements clearly in focus and provides excellent service through the professionalism and motivation of our employees across the globe

Three Business Units

1. Consumer & Commercial Clients (C & CC)

The business unit is to provide services to individuals and small to medium-sized enterprises requiring day-to-day banking. ABN AMRO serves approximately 15 million clients, mainly through their major presence in three home markets: the US Midwest, the Netherlands and Brazil. The Businesses Unit New Growth Markets is also expanding its consumer and commercial operations in selected countries such as India, Hungary and Thailand. For our personal customers we offer a range of products to meet the financial needs of the individual.

The financial services and solutions for small to medium sized businesses includes a variety of commercial financing and lending services such as business loans and lines of credit, cash management solutions, public services and small business opportunities, providing them with the financial tools necessary to manage their business.

2. Private Clients and Asset Management (PCAM)

Private Clients and Asset Management Unit is for individuals and institutional investors. ABN AMRO is a leading player in private banking both in the Netherlands and in France, and has strong positions in Luxembourg, Miami and Switzerland. Private clients ranks among the world's top 10, with EUR 94 billion in Assets under Administration (as per end March 2003). Asset Management has a local presence in 30

countries and FUR 148 billion in Assets under Management (as per end March 2003). We offer highly personalized banking for our private clients, aiming to structure and enhance wealth with services ranging from discretionary portfolio management to international estate planning and Trust. At Asset Management we offer strong capabilities in the management of equities, fixed income, money market, property and quantitative products.

Solutions are suggested in the areas of • • • • • •

Banking Investment advisory Discretionary portfolio management Investment funds Trust International estate planning

3. Wholesale Clients (WCS)

ABN AMRO Bank's traditional strength lies in its leadership in providing a gamut of services to corporate and institutions, combing its corporate and investment banking activities in one integrated business unit - Wholesale Clients. This is one of the largest Europe-based wholesale banking businesses with around EUR 5 billion in annual revenue (as per end 2002), 10,000 clients, 20,000 staff and operations in over 45 countries. With a global network, specialists in all major industry sectors and a broad range of products, ABN AMRO provides local and global expertise for complex cross-border deals. For our corporate and institutional clients we aim to be a leading provider of commercial and investment banking products and services

By combining our sector expertise with in –depth product knowledge in both corporate and investment banking, We deliver a broad range of benefits, including

• • • •

Sector Expertise Integrated Product Offering Local Presence Financial strength

ABN AMRO Bank in India

ABN AMRO Bank started its operations in India in 1920. till the early 1990's it was largely a bank catering to the diamond trade. It started wholesale banking in 1995, the securities business and corporate finance services soon after, and consumer banking in 1999. ABN AMRO Bank took over the consumer banking business of Bank of America in 1999 as part of a purchase agreement covering acquisition of this line of business in India, Taiwan and Singapore. The consumer banking business of Bank of America acquired by ABN AMRO Bank included consumer lending, deposit mobilization, auto finance and mortgage activities. The acquisition was in part of US$ 200 million deal signed between the two banks for purchasing the consumer banking business by ABN AMRO Bank in these three countries.

ABN AMRO Bank (India) has an 83 years long experience of the Indian business scenario. Traditionally known as a strong "diamondfinancing bank", it has turned into a bank providing a comprehensive range of services with a difference.

The bank took off in a big way in 1991, after the merger of ABN and AMRO worldwide. The Delhi branch was functional in the very same year. ABN AMRO Bank was launched in other cities throughout India between 1994 and 1999. They were Chennai in 1994, Pune in 1997 and Baroda in 1999, while the Hyderabad and Bangalore branches were opened in 2001. The year 2002 saw the opening of the Noida office. AA Securities (I) Pvt. Ltd. formed in September 1998.

Achievements

Best at cash management Award in September 2001 – The banker

Corporate Finance India ranked second in M&A in the investment Banking arena in 2001 – The Economic Times.

ABN AMRO Securities India Best foreign bond house No 1 arranger in private sector Euro money 2000.

Top bank on “MANAGEMENT QUALITY “parameter business India ‘Best banks survey 2000’. 7th most admired commercial bank in the world fortune magazine 2000

Top foreign bank in India The Economic Times – CMIE Survey 1999

Second overall in banking industry financial express – BRIS Survey 1999

Judged India’s No 1 bank by business today magazine in December 2002

Products and Services : Overview

Our local expertise is backed by the strength of ABN AMRO Bank's vast international network. This enables us to offer the most innovative financial products and services across banking segments, to help achieve company's strategic local, regional and international goals and fulfill client's personal investment needs.

Core Business Consumer Banking

Products and Services CREDIT CARD LOAN PRODUCTS • • • Loans against Securities Car loans Persona loans

DEPOSIT PRODUCTS • • • • Savings Accounts Current Accounts Fixed Deposits

Products & Services

SERVICES

INVESTMENT SERVICES • Mutual Funds

SERVICES • • • • • • • • • • • Debit Card Net Banking Express Cash ATM Services 24 Hour Bank by Phone Bill Payment Doorstep Banking Depository Services National Access 365 Days Banking Extended Banking Hours

Wholesale Banking • • • • • • • Structured Products Trade Services Cash Management Correspondent Banking Precious Metals Electronic Banking Custodial & Security

Services Products • •

Structured

Corporate

INR Interest ate Swaps Currency cum Interest

Private Banking • Portfolio Advisory Value Added Services

CHAPTER 3 PERSONAL LOAN

PERSONAL LOAN

Personal loans help you to take care of your immediate requirements Without much of a hassle. The most attractive feature of the personal loan is that you do not have to give any kind of security to avail this loan. No Security, Collateral or Guarantors are required to avail personal loans. Also, no questions regarding the end use of the loan are asked since personal loans do not require any security or hypothecation of assets, the rate of interest charged by them is higher compared to any other secured loans.

.

ABN AMRO Personal Loans are completely flexible - you can take your loan for purchase of assets and consumer durables, home improvements, tax saving investments, higher education, holidays and travel, emergency medical needs, marriage in family … in short, for any declared legal use without pledging any security.

You may also avail of our "Balance Transfer Program" to retire any high cost loans that you may have taken, including your credit card dues by simply opting for an ABN AMRO Personal Loan.

There are no hidden charges - our Personal Loans come to you with minimum formalities, at attractive interest rates and only a one time nonrefundable processing fee. If you are an existing ABN AMRO customer, you could be eligible for special discounts on the interest rates and simplified application formalities under our "Relationship Rewards Program".

Loan with Income Statements / Salaried Employees

The loan offered to salaried employees is given according to the companies they are working with. ABN AMRO Bank has around 7500 companies listed with them, and they offer loans to the employees working in these companies only. The criteria for listed companies are according to the company profile, past performance, profit earning ability etc. These companies are again been divided into 3 categories i.e. Category A, B & C, according to the above factors.

ABN AMRO Bank gives loan to the officers and management cadres only. They don't give loans to the employees below the officers grade i.e. to the supervisor, the workers etc. The applicant should be earning a Gross annual salary of minimum Rs. 1, 00,000/- per annum. The conditions are as follows.

Conditions • Officer or management cadre • Working in the current employment for at least 1 year or overall 3 years work experience • Age between 23 to 60 years • Gross annual salary more than Rs. 1, 00,000/- per annum. This maximum amount that can be given to an applicant is subject to his net monthly income. The amount calculated by the applicants Net Adjusted salary.

Following is the table that is used to calculate the maximum loan amount. Tenure 1 year 2 years 3 years 4 years 5 years Max Loan Amount 5 times net adjusted salary 10 times net adjusted salary 12 times net adjusted salary 15 times net adjusted salary 18 times net adjusted salary

Document Required: 1. 2. 3. 4. 5. Application form Latest 2 months salary slip Bank statement Photograph (signed on back side) Identity proof • PAN Card • Driving License • Passport • (if the above documents are not available then LIC premium receipt/SSC Certificate with Photo and sign verification is required) 6. Employment proof (Form 16 H or appointment letter)

Self Employed Professionals Doctors (BDS, MBBS, MD, MS only)

The loan offered to the self-employed professionals is, at present limited to doctors (BDS, MBBS, MD, MS) only. The rate of interest for this category is 16.5%. The conditions for this category area as follows.

Conditions: • Net Annual Income should be Rs. 1,00,000/- per annum (at least Rs. 75,000/- from profession) • Overall 3 years in the business or profession • Age between 23 to 65 years.

The maximum amount that the bank can give is subject to the Net adjusted salary of the applicant. The calculation for the same is done in the following manner.

NAS (P) = Net Income (ITR) - (EMI * 12) - (IT paid in a particular year) Degree MBBS & BDS MD & MS Max Loan Amount 4 times net adjusted salary 5 times net adjusted salary

Self Employed Businessmen

The loan offered to the self-employed businessmen is limited to the Proprietor, Director, Partner only. The rate of interest for this category is 22.5% for the Director and Partners.

Conditions • Net Annual Income should be Rs. 1,00,000/- per annum • Overall 3 years in the business • Age between 23 to 65 years The multiplier used here is as follows. NAS (B) = Net Income (ITR) - (EMI * 12) - (25% CC) - (IT paid)

Document Required: 1. Application form 2. Latest 2 years ITR with Balances sheet and P & L statement 3. Bank statement 4. Photograph (signed on back side) 5. Identity proof a. PAN Card b. Driving License c. Passport d. (if the above documents are not available then LIC premium receipt/SSC Certificate with Photo and sign verification is required) 6. Establishment proof 7. Telephone connection is a must in the office sand residence both.

Loan without Income Statements

Credit Cards In this program the loan is offered against the credit card limit. ABN AMRO Bank gives loan to applicants having the credit cards of all MNC's, SBI, ICICI, HDFC except to the employees of Private Limited Companies.

Conditions: • Rate of interest 21.5% if loan amount <=50000 otherwise 21%. • Tenure 1 to 3 years • Multiplier : 1.2 times credit limit for salaried 1 for other i.e. SEPs and SEBs. • Maximum loan limit Rs. 3,00,000/- (in case of charge card/ diners club limit is Rs. 1,00,000/-)

Documents Required: • Application form • Latest 2 months billing for Credit Card (No late charges allowed) • Photocopies of both sides of credit card • Identity proof • PAN Card • Driving License • Passport

• (if above documents are not available then LIC premium receipt/SSC certificate with photo and sign verification is required) • Photograph (signed on both sides) • Employment / Establishment proof (Form 16H or appointment letter/shop license) • Card must be at least 1 year old

Surrogate Loan (Track Record of Previous PL/Auto/Housing Loan)

In this program the loan is offered on the track record of the previous Personal Loan, Car loan and Housing loan. Track record on the loan taken from the following companies will make the applicant eligible for the loan offered by ABN AMRO Bank. • State Bank of India (SBI • ICICI • HDFC • Kotak Mahindra • Amex • HSBC • Sundaram Fin. • Tata Fin. • IDBI • ING Vyshya • UTI • DCB • Centurain Bank of Punjab • GE Money/ Countrywide • Citi Fin. Conditions • Previous loan should be matured at least for 12 months for the salaried class and 18 months for businessmen. • Loan limit will be Rs. 25,000/- to Rs. 3,00,000/• Interest will be 20% for car/housing loan

• Interest 1% less than previous personal loan (should not be less than 17.5%) • Tenure 1 to 5 years • Multiplier is 15 times of EMI for salaried • For Businessmen and others If loan seasoning is done between 12 - 18 months 12 times of EMI 18 months and above 15 times of EMI

Documents Required • Application form • Identity proof • PAN Card • Driving License • Passport • (if above documents are not available then LIC premium receipt/SSC certificate with photo and sign verification is required) • Photograph (signed on both sides) • Track record of last 12 months/ 15 months bank statement • Employment / Establishment proof (Form 16H or appointment letter/shop license)

Relationship Rewards for Existing ABN AMRO Customers

Car Loan/ Personal Loan (With relation of at least 8 months) • Max loan limit - Rs. 25,000/- to 4,00,000/• Interest 21% for self employed • All others at respective rack rates • Tenure 12 months to 60 months • Multiplier - Maturity of previous loan • 8 months - 12 months * EMI paid • 12 months - 18 months (EMI * No of installments)* 1.2 times • 18 months and above (EMI* No of installments)* 1.3 times subject to a Max of 30 installments Consideration upto 6 months from completion of previous loan

Personal Loan Top Up Scheme

Under this program, any applicant can go for the top up scheme. Here after the completion of six months, the applicant can get an additional loan amount to the EMI of the loan and the completed tenure of the loan.

CHAPTER 4 CREDIT LINE

CONCEPT OF “CREDIT”

1. It is the idea that if you build up a reputation for paying bills and debts on time you will be able to borrow money in the future. 2. Credit is important because it enables you to borrow money when you need it. In addition, the better your creditworthiness the more cheaply you will be able to borrow money whether for a car, education, home or some other large expenses. 3. On the other hand, if you are not a good credit risk, you may not be able to borrow when you need to, or you might be able to borrow but only at a high interest rate.

SIGNIFICANCE OF CREDIT

• Credit is used primarily in order to obtain loans. Loans can be excellent way to be fund large purchases and business initiative ,but managing debt can be complicated process • It can take just few months to get into financial trouble and years to get out. • Although debt is some time useful, there is diff between good debt and bad debt the two most important characteristics are how you borrow the money and what you do it .HOW FRUITFULLY YOU USE IT. • Even though debt is a part of life, the key to preventing it from becoming destructive is knowing its benefits and risks.

REASONS FOR CREDIT ANALYSIS

Unfortunately credit fraud is increasingly serious problem having grown almost threefold in frequency in the last five years. Under the most common scham called “Identity Theft “the criminal opens a credit card or other account with another person name. The criminal then purchases goods and services and you get stuck with the bill. Credit card fraud & credit analysis are not related with each other. Sometimes the creditor / borrower may qote wrong information about his personal loan details. his capacity to pay off the loan ,the reasons for taking the loan.

Therefore to overcome all this fraudulent activity credit analysis is to be done, to check out the worthiness of the creditor to repay the loan and pay the intrest.

“CREDIT ANALYSIS”DEFINATION:

“The process of evaluating an applicant's loan request or a corporation's debt issue in order to determine the likelihood that the borrower will live up to his/in obligations.”

SALARIED

Min Age - 23 Max Age (on loan maturity) - 60 Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or SelfOwned resi or Gross Sal> 3.6L Job Stability - 1 yr at current job or 3 yrs total work experience Basic Documents - (1) photo with sign on back side (2) ID proof (3) Job/Business Stability proof

Self employed - Biz Min Age - 25 Max Age (on loan maturity) - 65 Residence Stability - 2 yrs in Pune of 1 yr in current resi OR self owned resi Job Stability - 3 yrs in same biz Basic Documents - (1) photo with sign on back side (2) ID proof (3) Job/Business Stability proof

RR Customers Min Age - 21 Max Age (on loan maturity) - 70 Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or SelfOwned resi or Gross Sal> 3.6L Job Stability - 1 yr at current job or 3 yrs total work experience Basic Documents - (1) photo with sign on back side (2) ID proof (3) Job/Business Stability proof

Verified Income Program Cat A Min Income - Gross 1 Lac Max loan amt - 10 lacs Max Tenor - 5 yrs Emp Continuity Req Maximum Loan eligibility-Multiplier 1 yr - NAS x 5

2 yrs - NAS x 10 3 yrs - NAS x 12 4 yrs - NAS x 15 5 yrs - NAS x 18 Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting 3 Salary Credits. Additional Qualifying requirements NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

Cat B Min Income - Gross 1 Lac Max loan amt - 5 lacs Max Tenor - 4 yrs Emp Continuity Req Maximum Loan eligibility-Multiplier 1 yr - NAS x 4.5

2 yrs - NAS x 9 3 yrs - NAS x 10 4 yrs - NAS x 13 Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting 3 Salary Credits. Additional Qualifying requirements NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

Salaried Min Income - Gross 1 Lac Max loan amt - 3 lacs Max Tenor - 4 yrs Emp Continuity Req Maximum Loan eligibility-Multiplier 1 yr - NAS x 4

2 yrs - NAS x 8 3 yrs - NAS x 9 4 yrs - NAS x 11 Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting 3 Salary Credits. Additional Qualifying requirements NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

Salaried Min Income - Gross 1 Lac Max loan amt - 1.25 lacs Max Tenor - 3 yrs Emp Continuity Req Maximum Loan eligibility-Multiplier 1 yr - NAS x 4

2 yrs - NAS x 8 3 yrs - NAS x 9 Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting 3 Salary Credits. Additional Qualifying requirements NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

Software Professionals Min Income - Net 1.5 Lacs Max loan amt - 5 lacs Max Tenor EMP Continuity Req Maximum Loan eligibility-Multiplier 1 yr - NAS x 3.5

2 yrs - NAS x 7.5 3 yrs - NAS x 9 4 yrs - NAS x 11.25 5 yrs - NAS x 13.5 Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting 3 Salary Credits (3) must Additional Qualifying requirements - Must have 12 months old loan with approved financier ( lac AL/HL or 75,000 PL) OR CC with min 40,000 limit.

NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

EMPLOYEES OF BPO , CALL CENTER Min Income - Net 2.4 lacs Max loan amt - Cat A - 5 lacs & Cat B - 3 lacs Max Tenor EMP Continuity Req - Min 3 yrs Maximum Loan eligibility-Multiplier 1 yr - NAS x 3.75

2 yrs - NAS x 7.5 3 yrs - NAS x 9 4 yrs - NAS x 11.25 5 yrs - NAS x 13.5 Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting 3 Salary Credits (3) must Additional Qualifying requirements Min age of 23 yrs and must not be staing in shared rented

accommodation. NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC

Surrogate Program Loan track record NRR Max loan - 7.5 lacs Min vintage - 8 months Max tenor - 5 yrs Program requirement - Min 10 EMI's paid and Min loan taken Rs. 50,000/-

Max Loan eligibility 10-12 EMI's x EMI x No. of EMI's paid x 1.25 >12-18 EMI's - EMI x No. of EMI's paid x 1.45 (subj to Max of 30 EMI's) > 18-24 1.5 Eligibility Citibank, StanC, AmEx, HSBC, ICICI, HDFC, Sundaram Fin. Kotak Mah, Tata Fin, IDBI, ING Vysya, UTI, KOTAK, DCB, Centurian Bank of Punjab, GE Money/Countrywide**, Citi Fin**, Maruti Countrywide** Documentation - (1) Repayment track, (2) 3 months bank statements OR (1) Amortization schedule & 8 months banking.

Surrogate Program Mobile Phone Max loan - 1.25 lacs Min vintage - 3 months Max tenor - 3 yrs Program requirement - Min Avg Billing of Rs. 1500/- for last 3 months Max Loan eligibility * Rs. 1500 - Rs. 2500 - 75,000 > Rs. 2500 - 1, 25,000 Eligibility Aritel, Reliance, Idea, Hutch, BSNL, Tata Mobile & BPL Documentation - Latest 3 months mobile bill statements showing min billing of Rs. 1,500/-

Surrogate Program Other Bank Deposit Max loan - 3 lacs Min vintage - 6 months Max tenor - 3 yrs Program requirement - Saving Bank A/c with 6 months relationship Max Loan eligibility * 6-12 months - ADB x 1 * 12-18 months - ADB x 2 *> 18 months - ADB x 3 Eligibility ICICI, HDFC, StanChart, Citibank, HSBC, AmEx, UTI, IDBI & SBI Documentation - Latest 6 months bank statements from S/B a/c with last days avg balance >/= Rs. 25,000/-

Balance Transfer Program Credit Card Max loan - 3 lacs Min vintage - 8 months Max tenor - 3 yrs Program requirement * Min Credit Limit - 25,000/* Limit utilization on Card =/<80% * Card should have transaction in last 2 months. Max Loan eligibility * 8-12 months - Cr limit x 2 * 12 months - Cr limit x 3

Eligibility Sai Employees of Prop & P'ship mush have min MOB>12 months Documentation - (1) Latest 2 months Card Statement (2) front & back copy of the Card.

Balance Transfer Program PL Max loan - 4lacs Min vintage - 1 yr Max tenor - 4 yrs Program requirement Min 12 EMI's paid and Min loan taken 1 lac Max Loan eligibility * 12 to 18 EMI's = 1.2 x Principal Outstanding * 18 EMI's = 1.3 x Principal Outstanding Eligibility -

Documentation - (1) Repayment track for the last 12 months (2) 3 months bank Statement OR (1) 12 months bank statements (2) amortization schedule & (3) Resi. & DOB Proof. ROI - Personal Loan: 1% less than competition subject to min of 16%

RR Program C A/c Min vintage - 6 months Max loan - 6 lacs Max tenor - 5 yrs MUE Program eligibility 6 months ADB 40,000/Loan eligibility * 6 to 12 months - ADB x 3 * 12 to 18 months - ADB x 5 * > 18 months - ADB x 6

RR Program SB A/c Min vintage - 6 months Max loan - 6 lacs Max tenor - 5 yrs MUE Program eligibility 6 months ADB 20,000/Loan eligibility * 6 to 12 months - ADB x 3 * 12 to 18 months - ADB x 5 * > 18 months - ADB x 6

RR Program Cards Min vintage - 8 months Max loan - 4 lacs Max tenor - 4 yrs MUE - 8.5 Iacs Program eligibility Min Credit Limit - 25,000/Loan eligibility * 8 -12 months - Cr limit x 2 * > 12 months - Cr limit x 3

RR Program Auto Loan Min vintage - 8 months Max loan - 7.5 lacs Max tenor - 4 yrs MUE - 8.5 Iscs Program eligibility 8 EMI's paid Loan eligibility * 8 -12 MOB - EMI x No. of EMI's paid x 1.5 * > 12-18 MOB - EMI x No. of EMI's paid x 1.75 * > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)

RR Program Mortgage Min vintage - 8 months Max loan - 7.5 lacs Max tenor - 5 yrs MUE - 8.5 Iscs Program eligibility -

Loan eligibility EMI x No. of EMI's paid x 1.5 * Subj to a Max of 18 EMI's & LTV of HI < 80%

Top Up Program Min loan enhancement - Rs. 50,000/Max loan - For Salaried, loan amount caps as per present employer category (Cat A/B) AND for SE as per program Min vintage - 8 months Max tenor - New loan tenor either same as earlier loan of higher subject to program caps (depending on whether existing loan is RR/VI/SI etc). Program requirement # Any applicant who has availed a loyalty/special loyalty auto loan from the bank in the last 3 months will not be eligible for a loan under the Top Up program. # If existing PL has already closed/run off, then the loan multipliers will apply ONLY if the last payment is not more than 12 months old. if last payment is 12-24 months old, the PL can be processed as Overridehowever multipliers will not apply. # Max 4 Top up loans allowed.

# The EMI's for the top up loan should be from the same account as that of the existing loan and the existing business/employer (entity only) and residence addresses should be unchanged, failing which, a full verification will be done i.e., residence and/or business/employer. # The new loan may be approved for either the same tenor as the earlier tenor or a higher tenor subject to the maximum tenor allowed for the specific program. # The applicant category must be unchanged from the original application i.e. if the applicant was earlier salaried and now self employed he will not be eligible under the Loan eligibility If, 8 -12 EMI's paid then EMI's paid x 1.2 & If, > 12 months then EMI's paid x 1.3 * > 12-18 MOB - EMI x No. of EMI's paid x 1.75 * > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)

Co-borrowers

This program is only for the salaried applicants. In this program the spouse can be the co-borrower for the loan amount.

The income of the spouse can be added in the gross income for the multiplier, to find the maximum loan that can be given to the applicants. Here 60% of the spouse’s gross income can be added for eligibility.

Guarantors

Although ABN AMRO BANK does not require guarantors for personal loans, but there are some exceptions where there is need for the guarantors. The following are the conditions when there is need for guarantors.

1. 2. 3. 4.

If the person is staying alone If the applied amount for loan is very high For self employed business For software professionals if the applied amount of loan is grater than Rs. 3, 00,000/-

INTREST STRUCTURE
PERSONAL LOANS Salaried Individuals Relationship Rewards Programs Track Record/Special Surrogate Programs Processing fee for Regular Programs Processing Fee for Relationship Reward Programs Processing Fee for loan amount less than Rs. 100000 16% - 23% 16% - 22% 18% - 26% 2.25% 2% Rs. 20

Disclaimer - The rate of interest mentioned above are the standard and average rates under standard income criteria for each class of borrowers and shall be higher/lower depending on the parameters which are met by the customers. They would also vary by tenor. These rates are currently applicable and can be changed any time from time to time, at the sole discretion of ABN AMRO Bank and without any prior or post notice to the customer and such changes shall be final and binding on all customers of ABN AMRO Bank

Personal Loan Approval Stages

Marketing Executive

File Checking Documents Coordinator Initiating Verification {Crystal Info Services (P) Ltd.

Central Processing Agency

Credit Department

Approval / Decline

Post Approval Documents

Delhi

Disbursement

After a file is logged in by the Marketing Executive, the Coordinator checks the documents and also initiates the Verification. Verification is done by an external agency 'Crystal Info Services Pvt. Ltd." The Verification is done by a surprise visit to the applicant’s residence and office premises, subject to a maximum of 3 times. Once the verification is done by the agency the report is submitted to the credit department.

Meanwhile, the documents submitted by the applicant are being forwarded to the Central Processing Agency (CPA), which checks the details of the documents for processing. This work is also given to an external agency 'Lovelock & Lewis Pvt. Ltd.'.

The two external agencies submits their report to the Credit Department, which actually decides for Approval/Decline of the case, for further processing. The details of the report are put into a programme that calculates the maximum sanctioned amount for the loan.

Once the loan is approved, the Cheque is disbursed to the applicant and the documents are sent to Delhi Office.

Guideline Notes on Norms

Eligibility Criteria:

1,

Age - Needs to be ascertained from Date of Birth as given in the address proof or the ID proof or the SSC Certificate.

2.

Loan Eligibility - Multiplier to Net Income

3.

Number of years in present/previous job/ business - it is very important norm, which helps assess the stability of the applicants career and also the regularity of the incomes for repayments of the loan.

4.

Salary - The minimum requirement of Salary of the applicant is set to Rs. 1, 00,000/- only.

5.

Telephone - a landline telephone connection is compulsory for every Scheme except for the Salaried applicants, for which a mobile connection will do along with the latest mobile bill.

Contact Point Verification Policy Contact Point Verification Policy (CPV) is a very important part of the Approval process. Objectives: • To ensure that the information is accurate • To enable the credit officer to construct a profile of customer for credit evaluation • To select and eliminate fraudulent applicant Purpose: • To establish identity of the borrower, ascertain and reconfirm his residential and office address, length of stay and stability, and match them with the information given by the applicant in the application form. • Residence verification is an external input to evaluate the standard of living of the applicant's household in terms of his visible quality of life indicators like T.V., Refrigerator, AC, Music System etc. • The office verification will reconfirm the name and address of his employer and his designation in the company. In case of self employed Professional/Businessman, the office CPV will provide data on number of years of business, employees in the company, size and location of the office etc.

Contact Point Verification is an aid to, and not replacement or a substitution to credit evaluation process. A positive CPV does not guarantee Credit Approval.

Division of files according to Programs

35 30 25
No. of Files

20 15 10 5 0
Relationship Rew ards Top Up Scheme Balance Transfer SEVI Self Employed Professional Salaried Program Surrogate Program

Series1 Series2 Series3

Programs

List of approved companies

ABN AMRO BANK has 7500 companies listed with them for the personal loan scheme. We can give loan only to the employees who are working in these companies. These companies are listed according to their past performance, track record, profit earned in the past years, number of employees working there etc.

The new company that has to be listed should first give the details of the requirements. Once the company is listed, the employees can apply for personal loan.

CHAPTER 5 CASE STUDY

CASE STUDY

Name: Siddharth Dixit Date of Birth: 25-07- 1975 Gender: Male Martial status: Married Existing Relationship: NO Residential Address: Pl no 22, Purnanand Soc, Sadashiv Peth, Pune: 411030 Name of Buiseness Entity: Sanchi Silk Business Address: Laxmi Road, Pune 411012 Proprietor Name: Siddharth Dixit No of years in Business: 12 yrs Telephone No: 24216545 Mobile No: 9860542165 Residence Type: Self Live in the city of Residence for: since Birth Live in the current residence for: 10 yrs Detail of Spouse: Name: Yogini Occupation: House Wife Number of Dependant: 2 Surrogate Loan 1: HDFC Bank Type of Loan: Auto Loan

Monthly EMI: 22550 No of EMI Paid: 15 Current Loan Rate: 20%

You want a loan of RS: 5, 00,000 Banking Relationship Detail Login Documents Provided: 1) Application Form 2) Pan Card 3) MSEB Bill Xerox 4) Telephone Bill Xerox Of Sanchi Silk 5) Renewal Shop Act 6) EMI reflected banking only, Bank A/c Statement, Current A/c from Janata sah Bank 7) Welcome Letter 8) Repayment Schedule 9) 2 References who knows the applicant their telephone no , Residential Address 10) Photograph Customer attestation is compulsory on each document; Sign behind the Photograph is must.

STEP 2

After the file logd in properly it went to Contact Point Verification for Telephone Verification Then it is initiated as Telicalling Ok

Additional Document Required: ITR Copy of 2002, to see Income from Business & Profession the case is under self employed. For business continuity the 2002 copy demanded. After it went to credit Then Physical verification was initiated. VR done at Residence, Resi Owned, Prime Location, Met Wife. VR done at Office, Met the Staff, Prime Location prop conformed, set up activity seen. Then CIBIL Report Checked, CIBIL report is Credit Information Bureau India Limited Report. CIBIL: All information Contained in this credit report has been collated by Credit Information Bureau India Limited based on information provided by its various members .Consequently CIBIL disclaims any and all responsibility on the accuracy, completeness, and veracity of any and all such information provided. The information is current and up to date to such extent as provided by its members. Any information contained herein does not reflect the views of CIBIL or its directors or employees. The use of this report is governed by the terms and conditions of rules for CIBIL and its members.CIBIL report gives details about All MNCS Loans & Credit Cards History.

After found Target Loans reflect in CIBIL with Clear track. It will go to Eligibility, and then it will process for Disbursement.

Disbursement Documents Required: A. Agreement B. New Application Form ( NO Correction, Overwriting) C. Applicants Photograph D. Post Dated Cheque 60 cheque E. If its ECS then 9 cheques required for security F. ECS done by the Bank only which submitted in primary Level. G. If the Cheque given by current a/c then Sole Proprietor Declaration is require

Applicant Loan Eligibility: 20, 00,000 Applicant Sanction Loan: 5, 06,000 Rack Intrest Rate: 19% Processing Fee: 2% Tenure: 60 Months Program: Surrogate Self Employed Auto Loan EMI: RS.11, 133.00 Advance EMI: 0

CHAPTER 6 CONCLUSION

CONCLUSION

ABN AMRO BANK has successful lead on personal loan market .Moreover they working for customer satisfaction .Bank very much stuck to the policy , the policy is not flexible to everyone it mainly concentrate on Higher middle class group and Mass public. Bank mainly deal with surrogate program it will go through the process very soon as compare to other.

Basically CREDIT ANALYSIS is a programmed carried out by Banks to Minimized the Risk involved to lending money .Credit appraisal intention is to verify Financial soundness & his repayment capacity, to check MCNF (Master Card Negative Feedback) and very important is CIBIL report.

CHAPTER 7 BIBLIOGRAPHY

BIBLIOGRAPHY SITE: WWW.ABNAMRO.CO.IN

BOOKS: RISK MANAGEMENT INDIAN FINANCIAL SYSTEM: M Y Khan

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