Chapter : 1

INTRODUCTION

MEANING OF BANCASSURANCE
Bancassurance means selling insurance product through banks.

DEFINITION:
Bancassurance means selling insurance product through banks. Banks and
insurance company come up in a partnership wherein the bank sells the tied
insurance company's insurance products to its client.

NEED FOR BANCASSURANCE IN NDIA:Researches and present day statistics speak about the need of a well equipped
financial structure for a country that helps it to grow economically. The
financial resources in the hands of people should be channelized in effective
manner so as to increase the returns from the basic financial structure of nation
and also the quality of living of people. Insurance policies are
instruments/products that play major role in upholding the financial structure of
developed countries. Though the teething phase of insurance, one may say is
just past, a desirable foothold is yet to be found. With growth in number of
middle class families in the country, RBI recognized the need of an effective
method to make insurance policies reach people of all economic classes in every
corner of the nation. Implementing bancassurance in India is one such
development that took place towards the cause. The need and subsequent
development of bancassurance in India began for the following reasons:
To improve the channels through which insurance policies are sold/marketed so
as to make them reach the hands of common man
To widen the area of working of banking sector having a network that is spread
widely in every part of the nation
To improve the services of insurance by creating a competitive atmosphere
among private insurance companies in the market

Regulations under RBI and IRDA:The Reserve Bank of India and the insurance development and regulatory authority have a set
of guidelines for companies that couple to form bancassurance. Based on the equity a bank
should hold in joint venture, the highest allowable value of equity, the type of banks and

insurance companies that can couple together and the operation of bancassurance are all the
factors that are regulated by RBI and IRDA.
The IRDA has very recently drafted guidelines to promote open architecture in
bancassurance. Currently a bank has a tie-up with only one life insurer and one non-life
insurer. But in the new model the banks necessarily have to have multiple tie-ups. The
country is divided into zones and every bank has to choose multiple insurers within the zones.
With this the customer will have a wider range of insurance products offered by different
insurers. It will also lead to a deeper penetration in the selling of insurance products.
Advantages of bancassurance
TO BANK
Revenue diversification
Satisfaction of more financial needs under same roof
Customer retention increase customer loyalty
More profitable resource utilisation
TO INSURANCE COMPANIES
Revenue and channel diversification
Quality customer access
Increasing volume and profit
Improve brand equity
TO CUSTIOMERS
Enhanced convenience
One stop shopping for all financial services

Various Models for Bancassurance

Various models are used by banks for bancassurance.
(a) Strategic Alliance Model : Under this Model, there is a tie-up between a bank and
an insurance company. The bank only markets the products of the insurance company.
Except for marketing the products, no other insurance functions are carried out by the
bank.
(b) Full Integration Model: This model entails a full integration of banking and
insurance services. The bank sells the insurance products under its brand acting as a
provider of financial solutions matching customer needs. Bank controls sales and

insurer service levels including approach to claims. Under such an arrangement the
Bank has an additional core activity almost similar to that of an insurance company.
(c) Mixed Models: Under this Model, the marketing is done by the insurer's staff and the
bank is responsible for generating leads only. In other words, the database of the bank is
sold to the insurance company. The approach requires very little technical investment.

Business models across the world

'Integrated models' is insurance activity deeply integrated with bank's processes.
Premium is usually collected by the bank, usually direct debit from customer's account
held in that bank. New business data entry is done in the bank branches and workflows
between the bank and the insurance companies are automated. In most cases, asset
management is done by the banks asset management subsidiary.
Insurance products are distributed by branch staff, which is sometimes supported by
specialised insurance advisers for more sophisticated products or for certain types of
clients. Life insurance products are fully integrated in the banks range of savings and
investment products and the trend is for branch staff to sell a growing number of
insurance products that are becoming farther removed from its core business, e.g.,
protection, health, or non-life products.
Products are mainly medium- and long-term tax-advantaged investment products. They
are designed specifically for bancassurance channels to meet the needs of branch
advisers in terms of simplicity and similarity with banking products. In particular, these
products often have a low-risk insurance component.
Bank branches receive commissions for the sale of life insurance products. Part of the
commissions can be paid to branch staff as commissions or bonuses based on the
achievement of sales targets.
'Non-integrated models' The sale of life insurance products by branch staff has been
limited by regulatory constraints since most investment-based products can only be sold
by authorised financial advisers who have obtained a minimum qualification.
Banks have therefore set up networks of financial advisers authorised to sell regulated
insurance products. They usually operate as tied agents and sell exclusively the products
manufactured by the banks in-house insurance company or its third-party provider(s).
A proactive approach is used to generate leads for the financial advisers from the
customer base, including through mailings and telesales. There is increasing focus on
developing relationships with the large number of customers who rarely or never visit a
bank branch.

Financial planners are typically employed by the bank or building society rather than
the life company and usually receive a basic salary plus a bonus element based on a
combination of factors including sales volumes, persistency, and product mix.
Following the reform of the polarisation regime, banks will have the possibility to
become multi-tied distributors offering a range of products from different providers.
This has the potential to strengthen the position of bancassurers by allowing them to
meet their customers needs.

Entry of banks into Insurance business - insurance agency business/referral

arrangement
The banks need not obtain prior approval of the RBI for engaging in insurance agency
business or referral arrangement without any risk participation, subject to the following
conditions:
The bank should comply with the IRDA regulations for acting as composite corporate agent
or referral arrangement with insurance companies.
The bank should not adopt any restrictive practice of forcing its customers to go in only for a
particular insurance company in respect of assets financed by the bank. The customers should
be allowed to exercise their own choice.
The bank desirous of entering into referral arrangement, besides complying with IRDA
regulations, should also enter into an agreement with the insurance company concerned for
allowing use of its premises and making use of the existing infrastructure of the bank. The
agreement should be for a period not exceeding three years at the first instance and the bank
should have the discretion to renegotiate the terms depending on its satisfaction with the
service or replace it by another agreement after the initial period. Thereafter, the bank will be
free to sign a longer term contract with the approval of its Board in the case of a private
sector bank and with the approval of Government of India in respect of a public sector bank.
As the participation by a banks customer in insurance products is purely on a voluntary
basis, it should be stated in all publicity material distributed by the bank in a prominent way.
There should be no linkage either direct or indirect between the provision of banking
services offered by the bank to its customers and use of the insurance products.
The risks, if any, involved in insurance agency/referral arrangement should not get transferred
to the business of the bank.

Guidelines for Banks for Entry of banks into Insurance business

1.Scheduled commercial bank would be permitted to undertake insurance business as
agent of insurance companies on fee basis, without any risk participation. The

subsidiaries of banks will also be allowed to undertake distribution of insurance product on

agency basis.
2. Banks which satisfy the eligibility criteria given below will be permitted to set up a
joint venture company for undertaking insurance business with risk participation,
subject to safeguards. The maximum equity contribution such a bank can hold in the joint
venture company will normally be 50 per cent of the paid-up capital of the insurance
company. On a selective basis the Reserve Bank of India may permit a higher equity
contribution by a promoter bank initially, pending divestment of equity within the prescribed
period (see Note 1 below). The eligibility criteria for joint venture participant are as under:(a) The net worth of the bank should not be less than Rs.500 crore;

(b) The CRAR of the bank should not be less than 10 per cent;
(c) The level of non-performing assets should be reasonable;
(d) The bank should have net profit for the last three consecutive years;
(e) The track record of the performance of the subsidiaries, if any, of the concerned bank
should be satisfactory.
3. In cases where a foreign partner contributes 26 per cent of the equity with the approval of
Insurance Regulatory and Development Authority/Foreign Investment Promotion Board,
more than one public sector bank or private sector bank may be allowed to participate
in the equity of the insurance joint venture. As such participants will also assume
insurance risk, only those banks which satisfy the criteria given in paragraph 2 above, would
be eligible.
4. A subsidiary of a bank or of another bank will not normally be allowed to join the
insurance company on risk participation basis. Subsidiaries would include bank
subsidiaries undertaking merchant banking, securities, mutual fund, leasing finance, housing
finance business, etc.
5. Banks which are not eligible as joint venture participant as above, can make
investments up to 10% of the networth of the bank or Rs.50 crore, whichever is lower, in
the insurance company for providing infrastructure and services support. Such participation
shall be treated as an investment and should be without any contingent liability for the bank.
The eligibility criteria for these banks will be as under:
(i) The CRAR of the bank should not be less than 10%;
(ii)The level of NPAs should be reasonable;

(iii) The bank should have net profit for the last three consecutive years.
6. All banks entering into insurance business will be required to obtain prior approval of
the Reserve Bank. The Reserve Bank will give permission to banks on case to case basis
keeping in view all relevant factors including the position in regard to the level of nonperforming assets of the applicant bank so as to ensure that non-performing assets do not
pose any future threat to the bank in its present or the proposed line of activity, viz., insurance
business. It should be ensured that risks involved in insurance business do not get transferred
to the bank and that the banking business does not get contaminated by any risks which may
arise from insurance business. There should be arms length relationship between the bank
and the insurance outfit.

Status of Bancassurance in India

Reserve Bank of India (RBI) has recognized "bancassurance" wherein banks are allowed to
provide physical infrastructure within their select branch premises to insurance companies for
selling their insurance products to the banks customers with adequate disclosure and
transparency, and in turn earn referral fees on the basis of premia collected. This would utilize
the resources in the banking sector in a more profitable manner.
Bancassurance can be important source of revenue. With the increased competition and
squeezing of interest rates spreads profit of the are likely to be under pressure. Fee based
income can be increased through hawking of risk products like insurance.
There is enormous potential for insurance in India and recent experience has shown massive
growth pace. A combination of the socio-economic factors are likely to make the insurance
business the biggest and the fastest growing segment of the financial services industry in
India.
However, before taking the plunge in to this new field, banks as insurers need to work hard
on chalking out strategies to sell risk products especially in an emerging competitive market.
However, future is bright for bancassurance. Banks in India have all the right ingredients to
make Bancassurance a success story. They have large branch network, huge customer base,
enjoy customer confidence and have experience in selling non-banking products. If properly
implemented, India could take leadership position in bancassurance all over the world
Government of India Notification dated August 3, 2000, specified Insurance as a
permissible form of business that could be undertaken by banks under Section 6(1)(o) of the
Banking Regulation Act, 1949. Then onwards, banks are allowed to enter the insurance
business as per the guidelines and after obtaining prior approval of Reserve Bank of India.
Description: Bancassurance arrangement benefits both the firms. On the one hand, the bank
earns fee amount (non interest income) from the insurance company apart from the interest
income whereas on the other hand, the insurance firm increases its market reach and
customers. The bank acts as an intermediary, helping insurance firm reach its target customer
in order to increase its market share.

CHAPTER 2:
LETERATURE REVIEW

INTRODUCION
INTRODUCTION OF SBI BANK
State Bank of India is an Indian multinational, Public Sector banking and financial services
company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra and also its corporate office in Mumbai, Maharashtra. As of December 2013, it
had assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it
the largest banking and financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of Baroda, Punjab
National Bank and ICICI Bank.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the
founding, in 1806, of the Bank of Calcutta, making it the oldest commercial bank in the
Indian Subcontinent. Bank of Madras merged into the other two "presidency banks" in British
India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India, which in
turn became the State Bank of India.[8] Government of India owned the Imperial Bank of India
in 1955, with Reserve Bank of India (India's Central Bank) taking a 60% stake, and renamed
it the State Bank of India. In 2008, the government took over the stake held by the Reserve
Bank of India.
State Bank of India is a regional banking behemoth and has 20% market share in deposits and
loans among Indian commercial banks.

History

Seal of Imperial Bank of India.

The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank
of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of
Bengal was one of three Presidency banks, the other two being the Bank of Bombay
(incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All

three Presidency banks were incorporated as joint stock companies and were the result of
royal charters. These three banks received the exclusive right to issue paper currency till 1861
when, with the Paper Currency Act, the right was taken over by the Government of India.
The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity
took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock
company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On
1 July 1955, the Imperial Bank of India became the State Bank of India. In 2008, the
Government of India acquired the Reserve Bank of India's stake in SBI so as to remove any
conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made
SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and
operatonal take-over between September 1959 and October 1960, which made eight state
banks associates of SBI. This acquisition was in tune with the first Five Year Plan, which
prioritised the development of rural India. The government integrated these banks into the
State Bank of India system to expand its rural outreach. In 1963 SBI merged State Bank of
Jaipur (est. 1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which
SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National
Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the
patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small
moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a
Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was
the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in
Kerala.
There has been a proposal to merge all the associate banks into SBI to create a "mega bank"
and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra
merged with SBI, reducing the number of associate state banks from seven to six. Then on 19
June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3%
in State Bank of Indore. (Individuals who held the shares prior to its takeover by the
government hold the balance of 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets will inch very close to the 10
trillion mark (10 billion long scale). The total assets of SBI and the State Bank of Indore
stood at 9,981,190 million as of March 2009. The process of merging of State Bank of

Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI
branches on 26 August 2010.[12]
On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank.

INTRODUCTION OF INSURANCE
SBI Life Insurance is a joint venture life insurance company between State Bank of India
(SBI), the largest state-owned banking and financial services company in India, and BNP
Paribas Assurance. SBI owns 74% of the total capital and BNP Paribas Assurance the
remaining 26% of the capital. SBI Life Insurance has an authorized capital of 20 billion
(US$310 million)and a paid up capital of 10 billion (US$160 million).
In 2007, CRISIL Ltd, a subsidiary of global rating agency Standard & Poor's, gave the
company a AAA/Stable/P1+ rating.

History
When the government of India opened the life insurance sector to private companies, SBI
started SBI Life as a joint venture with BNP Paribas in 2001. While in its initial stage its
business was mainly from bancassurance channel, now it is developing its own agency team
for selling its life insurance products.
Mumbai, Sept 5:
State Bank of India on Friday launched two new Savings Bank products Pehla Kadam and
Pehli Udaan for children.
Pehla Kadam is a Savings Bank account for minor of any age operated jointly with his/her
parent/guardian, while Pehli Udaan is a singly operated Savings Bank Account for a minor
aged 10 years and above and who can sign uniformly.
Specially branded passbook and cheque book have been designed for these products. All the
account holders will be given an exclusively designed personalised photo ATM-cum-Debit
Card, the bank said in a statement.
Other features bundled along with the two products include Internet banking with limited
transaction facilities like bill payment, opening of fixed deposits, recurring deposits, etc. with
per day transaction limit of Rs. 5,000, and mobile banking with limited transaction facilities
like bill payment, and top-ups with per day transaction limit of Rs. 2,000.

While launching the products on Teachers day, students of the school were handed over
account kits containing their personalised debit cards, pass books, cheque books, etc.

PRODUCTS OFFERED BY SBI BANK

SBI STUDENT LOAN SCHEME

A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.

Repayment period of upto 12 years after Course Period + 12 months of

repayment holiday*

No processing / upfront charges will be levied on Education loans.

All those students who approach us for an education loan for more than Rs
4.00 lacs for Studies abroad will be required to make a deposit of Rs 5000/-. If
the applicant avails of the loan, the amount of Rs 5000/- will be adjusted
against the contribution of margin money by him. If no margin is payable by
him, the amount may be adjusted against the interest payable on the loan. If
the applicant does not avail of the loan within a period of 4 months of
sanction of the loan, the amount will be appropriated by the bank.

However the expenses connected with the Title investigation Report (TIR) of the borrower /
Guarantor and valuation reports on the same will be borne by the borrower.
Eligibility
Eligibility
A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.
Courses Covered
a. Studies in India:

Graduation, Post-graduation including regular technical and professional

Degree/Diploma courses conducted by colleges/universities approved by
UGC/ AICTE/IMC/Govt. etc

Regular Degree/ Diploma Courses conducted by autonomous institutions like

IIT, IIM etc

Teacher training/ Nursing courses approved by Central government or the

State Government

Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping

etc. approved by Director General of Civil Aviation/Shipping/ concerned
regulatory authority

b. Studies abroad:

Job oriented professional/ technical Graduation Degree courses/ Post

Graduation Degree and Diploma courses like MCA, MBA, MS, etc offered by
reputed universities

Courses conducted by CIMA (Chartered Institute of Management

Accountants) - London, CPA (Certified Public Accountant) in USA etc.

Expenses Covered

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms, Purchase of

computers- essential for completion of the course (maximum 20% of the total
tuition fees payable for completion of the course)

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% of

tuition fees for the entire course)

Travel Expenses/Passage money for studies abroad

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc
Loan Amount

For studies in India - maximum Rs. 10 lacs

Studies abroad - maximum Rs. 30 lacs

Security

Particular

Security

Upto Rs. 4 lacs loan Only Parent/ Guardian as co-borrower

amount

Above Rs. 4 lacs to Parent/ Guardian as co-borrower and Collateral security in the form of
Rs. 7.50 lacs loan

amount

suitable third party guarantee*.

*Third Party Guarantee can be replaced with Parent/Guardian as coborrower provided the Gross Annual Income of Parent/Guardian (coborrower) as given in latest Income Tax Return is 3 times of the loan
amount.

Above Rs. 7.50 lacs Parent/ Guardian as co-borrower and tangible collateral security
loan amount

In case of married person, co-obligator can be either spouse or the parent(s)/ parentsin-law
Margin

For loans up to Rs.4.0 lacs : No Margin

For loans above Rs.4.0 lacs:

Studies in India: 5%
Studies Abroad: 15%

Repayment:
Maximum Loan Limit

Repayment Period

Upto Rs. 4 Lacs

Upto 10 years

Above Rs. 4 Lacs and upto Rs. 7.5 Upto 10 years

Lacs

Above Rs. 7.5 Lacs

Upto 12 years

Repayment will commence one year after completion of course or 6 months

after securing a job, whichever is earlier.

In case second loan is availed for higher studies later, to repay the combined
loan amount in 12 years after completion of second course

EMI Generation:

The accrued interest during the moratorium period and course period is
added to the principle and repayment is fixed in Equated Monthly
Installments (EMI).

If full interest is serviced before the commencement of repayment; EMI is

fixed based on principle amount only.

it Loans standing in the name of a borrower. However this is subject to the overall EMI/NMI
ratio of 50%
Margin : Nil EDUCATION LOAN
Base Rate 9.70% w.e.f. 08.06.2015

EDUCATION LOANS
1) SBI STUDENT LOAN SCHEME
Loan Amount

Rate of Interest*

For loans upto Rs.4 lacs

3.65% above Base Rate, currently 13.35% p.a.

Above Rs.4 lacs and upto Rs.7.50 3.90% above Base Rate, currently 13.60% p.a.
lacs

Above Rs.7.50 lacs

1.90% above Base Rate, currently 11.60% p.a.

*(0.50% concession in interest for girl students)

1% concession for full tenure of the loan, if interest is serviced promptly as

and when applied during the moratorium period, including course duration#)

IT exemption under Section 80(E) in respect of interest paid in all Education Loans

2) SBI SCHOLAR LOAN SCHEME

Education Loans for Students securing admission in IITs, IIMs, NITs, AIIMS and other
reputed institutions.
Rate of Interest:
List

ROI

List AA 25 bps above Base Rate i.e., 9.95% p.a. at present (Upto Rs. 30 Lacs without
collateral)

List A

25 bps above Base Rate i.e., 9.95% p.a. at present (Upto Rs. 20 Lacs without
collateral, upto Rs. 30 with collateral)

List B

50 bps above Base Rate i.e., 10.20% p.a. at present (Upto Rs. 20 Lacs without
collateral)
Further concessions:

25 bps if collateral security >= the loan amount

25 bps work experience of more than 2 years

(effective rate of interest with both concessions not to be lower than 25 bps above
Base Rate presently, 9.95% p.a.)

List C

175 bps above Base rate i.e. 11.45% p.a. (Upto Rs. 7.5 Lacs without collateral,
upto Rs. 30 with collateral)

1% concession for full tenure of the loan, if interest is serviced

promptly as and when applied during the moratorium period,
including course duration#

Click here for List of Institution

IT exemption under Section 80(E) in respect of interest paid in all Education Loans
3) SBI LOAN SCHEME FOR VOCATIONAL EDUCATION AND TRAINING
Rate of Interest
3.65% above Base Rate, currently 13.35% p.a.

1% concession for full tenure of the loan, if interest is serviced promptly as

and when applied during the moratorium period, including course duration#

Note:1% interest concession for servicing interest is available if interest is serviced promptly
soon after application but not later than the following month.
IT exemption under Section 80(E) in respect of interest paid in all Education Loans
LOANS TO PENSIONERS
If you are a Central or State Government pensioner drawing your pension through one of our
branches and are not more than 76 years of age, you can avail of a loan from your branch to
meet your personal expenses. We understand you may have an urgent or unexpected need for
funds or a family obligation to be fulfilled and appreciate your association with us.
Nominal processing fees, no hidden costs and no prepayment penalties. Whenever you have
some surplus funds, you can credit your loan account, thereby reducing your loan liability
and interest burden.
(1) Eligibility:
(a) For Pensioners:
The pensioner should not be more than 76 years of age In addition, pensioners whose
pensions are disbursed by Government Treasuries by means of cheques drawn in favour of
our branches, as per mandate of the pensioner, are also proposed to be included. In such
cases, the original Pension Payment Order (PPO) remains in the custody of the Treasury and
the pensioner gives a mandate to the Treasury for payment of pension through a particular
branch of a bank.
Such pensioners will be included under the purview of the Scheme subject to the following
conditions:
(i) The pensioner concerned furnishes an irrevocable undertaking that he will not amend his
mandate to the Treasury to pay his pension from the branch, during the currency of a loan
availed by him from SBI.
(ii) The Treasury concerned consents in writing that it will not accept any request from the
pensioner to transfer his pension payment to any other bank/ branch till an NOC is issued by
the Bank.

All other terms and conditions of the Scheme will be applicable, including guarantee of the
spouse (who will be eligible for family pension) or a suitable third party. The norms for
family pensioners will continue.
(b) For Family Pensioners:

(1) Family pensioner, i.e. spouse authorized to receive pension after the death of the
pensioner, subject to condition that family pensioner should not be more than 76 years of age.
(2) Loan Amount:
(A)
For
Minimum
:
Maximum : 18 months' Pension with a ceiling of:

Rs.

Pensioners:
25,000/-

Rs. 14.00 lacs: For Pensioners who are upto 72 years of age.

Rs. 12.00 lacs: For Pensioners who are above 72 years and upto 74 years of
age.

Rs. 7.50 lacs: For Pensioners who are above 74 years and upto 76 years of age.

(EMI / NMP not to exceed 50% in all the cases for Pensioners)
(EMI / NMP not to exceed 50% in all the cases for Pensioners)
EMI
=
NMP = Net Monthly Pension

Equated

Monthly

Instalments

(B) For Family Pensioners:

Minimum : Rs. 25,000/-

Maximum: 18 months' Pension with a ceiling of:

Rs. 5.00 lacs: For Pensioners who are upto 72 years of age.

Rs. 4.50 lacs: For Pensioners who are above 72 years and upto 74 years of age.

Rs. 2.50 lacs: For Pensioners who are above 74 years and upto 76 years of age.

(EMI / NMP not to exceed 33% in all the cases for Family Pensioners)
(3) Collateral Security:
The spouse eligible for family pension should guarantee the loan or any other family member
or a third party worth the loan amount.
(4) Age & Repayment Period:

(a) For Pensioners:

Age at the time of Loan sanction

Repayment
Period

Age at the
Repayment

Up to 72 years of Age

60 months

77 years

More than 72 years and up to 74 48 months

years

78 years

More than 74 years and up to 76 24 months

years

78 years

time

of

full

time

of

full

(b) Family Pensioners:

Age at the time of Loan sanction

Repayment
Period

Age at the
Repayment

Up to 72 years of Age

60 months

77 years

More than 72 years and up to 74 48 months

years

78 years

More than 74 years and up to 76 24 months

years

78 years

(5) Processing Fees:

0.51% of the Loan Amount (including Service Tax) subject to Minimum of Rs. 250/(Processing Fee is not applicable for SBI Pensioners)
(6) Margin: Nil
Interest

REFER BELOW TABLE

XPRESS CREDIT PERSONAL LOAN

About
Do you want funds readily available to you whenever you desire or need, be it a sudden
vacation that you plan with your family or urgent funds required for medical treatment? SBI
Xpress Credit Personal Loan is the answer to your questions.
Enjoy the SBI Advantage:

Low interest rates. Further, we charge interest on a daily reducing balance!!

Low processing charges;

No hidden costs /administrative charges.

No security required, minimal documentationsomething that you had

always wanted.

No prepayment penalties. Reduce your interest burden and optimally utilize

your surplus funds by prepaying the loan.

Features
Purpose

We provide personal loans to the employees of undernoted entities maintaining salary

account with us at zero margin, and very competitive interest rates with fast and easy
processing:

Central and state Government

Quasi-Government

Central PSUs

Profit making State PSUs

Educational Institutions of National Repute

Selected Corporates

Income

Minimum NMI: Rs.7500/-

EMI/NMI Ratio should not exceed 50

Loan Amount
(i) Term Loan:

Min: Rs.24,000/-

Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.

(ii) Overdraft:

Minimum: Rs.10.00 lacs,

Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.

The OD will be subject to monthly reduction in DP so that DP becomes NIL in 60 months

Note: Maximum loan amount for School Teachers is capped at 12 months Gross Salary
both under Term Loan and Overdraft facility
Repayment Period

Min 6 month

Maximum 60 months or residual service period whichever is less

Provision for 2nd Loan

Second Loan can be taken after 1 year of disbursement of the 1st loan provided the 1st loan has
been satisfactorily conducted and is regular at the time of sanction of 2nd Loan. There cannot
be more than 2 Xpress Cred
Security : Nil
Third Party Guarantee : Nil

Charges/Fees
Processing Fees
1.01% of the Loan Amount
Penal Interest
Penal interest will not be charged for loans up to Rs.25, 000.
For Loans above Rs.25000/-, if the irregularity exceeds EMI or installment amount, for a
period of one month, then penal interest would be charged @2% p.a. (over and above the
applicable interest rate) on the overdue amount for the period of default. If part installment
or part EMI remains overdue then penal interest will not be levied.
Prepayment Charges : Nil
Interest Rate

XPRESS CREDIT PERSONAL LOAN

About
Do you want funds readily available to you whenever you desire or need, be it a sudden
vacation that you plan with your family or urgent funds required for medical treatment? SBI
Xpress Credit Personal Loan is the answer to your questions.
Enjoy the SBI Advantage:

Low interest rates. Further, we charge interest on a daily reducing balance!!

Low processing charges;

No hidden costs /administrative charges.

No security required, minimal documentationsomething that you had

always wanted.

No prepayment penalties. Reduce your interest burden and optimally utilize

your surplus funds by prepaying the loan.

Features
Purpose
We provide personal loans to the employees of undernoted entities maintaining salary
account with us at zero margin, and very competitive interest rates with fast and easy
processing:

Central and state Government

Quasi-Government

Central PSUs

Profit making State PSUs

Educational Institutions of National Repute

Selected Corporates

Income

Minimum NMI: Rs.7500/-

EMI/NMI Ratio should not exceed 50

Loan Amount
(i) Term Loan:

Min: Rs.24,000/-

Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.

(ii) Overdraft:

Minimum: Rs.10.00 lacs,

Maximum: 24 times NMI subject to maximum of Rs 15.00 lacs.

The OD will be subject to monthly reduction in DP so that DP becomes NIL in 60 months

Note: Maximum loan amount for School Teachers is capped at 12 months Gross Salary
both under Term Loan and Overdraft facility
Repayment Period

Min 6 month

Maximum 60 months or residual service period whichever is less

Provision for 2nd Loan

Second Loan can be taken after 1 year of disbursement of the 1st loan provided the 1st loan has
been satisfactorily conducted and is regular at the time of sanction of 2nd Loan. There cannot
be more than 2 Xpress Credit Loans standing in the name of a borrower. However this is
subject to the overall EMI/NMI ratio of 50%
Margin : Nil
Security : Nil
Third Party Guarantee : Nil

Charges/Fees
Processing Fees
1.01% of the Loan Amount
Penal Interest
Penal interest will not be charged for loans up to Rs.25, 000.
For Loans above Rs.25000/-, if the irregularity exceeds EMI or installment amount, for a
period of one month, then penal interest would be charged @2% p.a. (over and above the
applicable interest rate) on the overdue amount for the period of default. If part installment
or part EMI remains overdue then penal interest will not be levied.
Prepayment Charges : Nil
Interest Rate

REFER FRM TABLE

SBI SARAL PERSONAL LOAN

About
Do you want funds readily available to you whenever you desire or need, be it a
suddenvacation that you plan with your family or urgent funds required for medical
treatment? SBISaral - Personal Loan is the answer to your questions.
Features
Purpose
The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for domestic
orforeign travel, medical treatment of self or a family member, meeting any financial
liability,such as marriage of son/daughter, defraying educational expenses of wards, meeting
marginsfor purchase of assets etc.)
Eligibility
You are eligible if you are a Salaried individual of good quality corporate, self
employedengineer, doctor, architect, chartered accountant, MBA with minimum 2 years
standing.
Loan Amount
Your personal loan limit would be determined by your income and repayment capacity.
Minimum :
Rs.24,000/- in metro and urban centres
Rs.10,000/- in rural/semi-urban centres
Maximum :
12 times Net Monthly Income for salaried individuals and pensioners subject to a ceiling of
Rs.10 lacs in all centres
Documents Required

Important documents to be furnished while opening a Personal Loan

Account:
For existing bank customers

Passport size photograph

From salaried individuals

Latest salary slip and Form 16

Margin : We do not insist on any margin amount.

Repayment
The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish
to,without attracting any prepayment penalty.
Security : NIL
Fees
Processing Fees :
Processing charges are 2.02%-3.03% of the loan amount.
Prepayment Charges : NIL
Interest Rates
Refer to the Interest Rate page

FESTIVAL LOANS
It is the festive season!!! Is the unavailability of ready funds, dampening the celebrations?
Avail of SBI's Festival Loan and bring back the cheer and celebrate in style!!! Hurry, the gifts
and the sweets are waiting.
SBI offers you the unique facility of Festival Loans to help you meet any kind of festival
related expenses.
Enjoy the SBI Advantage :

Low interest rates, currently 15.50% p.a.(compare with the 18.00% - 30%
p.a. charged by others for personal loans/credit card companies.)

Low processing charges; 1.10% of loan amount(inclusive of service tax) per

application.

No hidden costs or administrative charges.

No security required if check off is available. Which means minimal

documentation.something that you had always wanted.

No prepayment penalties.

Repayment period of upto 12 months.

Complete Transparency.

The Scheme
Purpose
To meet any kind of festival related expenses.
Eligibility
You are eligible to avail a Festival Loan if you are:

An Employee of Govt., PSUs, profit making public/private limited companies/

institutions etc with a minimum of 2 years service OR

Self employed person with minimum 3 years standing/experience OR

A person having regular source of income from verifiable channels like

Pension and interest from TDRs/NSCs/Govt. Securities etc

You have a net monthly income of Rs.3000/- and above.

Your spouse's income can also be considered in calculating the loan amount
provided he/she guarantees the loan or the loan is taken jointly.

Loan Amount
Your festival loan limit would be determined by your income and repayment capacity.
Minimum : Rs.5000/Maximum : 4 times your Net Monthly Income, subject to a ceiling of Rs.50,000/-.
Documents Required

Passport Size Photograph

Proof of official address for self employed individuals and professionals. This
can include shop and establishment certificate/Lease deed/Telephone Bill.

Latest Salary Slip and Form 16, in the case of salaried persons IT returns for
the last two financial years, in the case of self employed individuals and
professionals

Margin : NIL

Repayment
You can repay the loan over a period of 12 months through Equated Monthly Installments
(EMI). Should you wish to deploy your surplus funds towards prepayment of the loan, feel
free to do so without any prepayment penalty.
Security
Personal guarantee of the spouse or any other person of adequate worth where check off
facility is not available.
Processing Fee
You need to pay only a nominal processing fee of 1.10% of the loan amount
PERSONAL LOAN SCHEMES
Base Rate 9.70% w.e.f. 08.06.2015
Personal Loans
Scheme Name

Check Off

Rate of Interest*

Xpress Credit

Full Check-off (Category I)

315 - 365 bps above Base Rate i.e.,

12.85% - 13.35% p.a. currently

Partial Check-off (Category 415 - 465 bps above Base Rate i.e.,
II)
13.85% - 14.35% p.a. currently

No Check-off (Category III)

SBI Pension Loans

515 - 565 bps above Base Rate i.e.,

14.85% - 15.35% p.a. currently

3.65% above Base Rate, currently

13.35% p.a.

Jai Jawan Pension Loan

4.75% above Base Rate, currently

14.45% p.a.

SBI Saral

8.50% above Base Rate floating,

currently 18.20% p.a.

Festival Loan Scheme

6.75% above Base Rate, currently

16.45% p.a.

Clean Overdraft

8.25% above Base Rate, currently

17.95% p.a.