Loans& Advances

Study on Loans & Advances
CHAPTER: I
INTRODUCTION
Al-Ameen Institute Of Management Studies Page 1

INTRODUCTION TO LOAN
A loan is a type of debt. Loan entails the redistribution of financial assets over
time, between the lender and the borrower. The borrower initially receive an amount of
money from the lender, which he has to pay back, usually but not always in regular
installments, to the lender. This service is generally provided at a cost, referred to as
interest on the debt. A loan is of the annuity type if the amount paid periodically (for
paying off and interest together) is fixed.
A borrower may be subject to certain restrictions known as loan covenants under

the terms of the loan. Acting as a provider of loans is one of the principal tasks for
financial institutions. For other institutions, issuing of debt contracts such as bonds is a
typical source of funding.
Legally, a loan is a contractual promise between two parties where one party, the
creditor, agrees to provide a sum of money to a debtor, who promises to return the money
to the creditor either in one lump sum or in parts over a fixed period in time. This
agreement may include providing additional payments of rental charges on the funds
advanced to the debtor for the time the funds are in the hands of the debtor (interest).
TYPES OF LOANS
SECURED
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property)
as collateral for the loan.
A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The
financial institution, however, is given security — a lien on the title to the house — until

the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have
the legal right to repossess the house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be secured by the
car; in much the same way as a mortgage is secured by housing. The duration of the loan
period is considerably shorter — often corresponding to the useful life of the car. There
are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives
the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an
intermediary between the bank or financial institution and the consumer.
A type of loan especially used in limited partnership agreements is the recourse note.
A stock hedge loan is a special type of securities lending whereby the stock of a borrower
is hedged by the lender against loss, using options or other hedging strategies to reduce
lender risk.
A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based
on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases
are eligible for a pre-settlement loan. This is considered a secured non-recourse debt due
to the fact if the case reaches a verdict in favor of the defendant the loan is forgiven.
UNSECURED
Unsecured loans are monetary loans that are not secured against the borrower's assets.
These may be available from financial institutions under many different guises or
marketing packages:
• credit card debt

• personal loans
• bank overdrafts
• credit facilities or lines of credit
• corporate bonds

The interest rates applicable to these different forms may vary depending on the lender
and the borrower. These may or may not be regulated by law. In the United Kingdom,
when applied to individuals, these may come under the Consumer Credit Act 1974.
ABUSES IN LENDING
Predatory lending is one form of abuse in the granting of loans. It usually involves
granting a loan in order to put the borrower in a position that one can gain advantage over
him or her. Where the moneylender is not authorized, it could be considered a loan shark.
Usury is a different form of abuse, where the lender charges excessive interest. In
different time periods and cultures the acceptable interest rate has varied, from no interest
at all to unlimited interest rates. Credit card companies in some countries have been
accused by consumer organizations of lending at usurious interest rates and making
money out of frivolous "extra charges". Abuses can also take place in the form of the
customer abusing the lender by not repaying the loan or with an intent to defraud the
lender.
UNITED STATES TAXES
Most of the basic rules governing how loans are handled for tax purposes in the United
States are uncodified by both Congress (the Internal Revenue Code) and the Treasury
Department (Treasury Regulations — another set of rules that interpret the Internal
Revenue Code).[2] Yet such rules are universally accepted.
1. A loan is not gross income to the borrower: Since the borrower has the
obligation to repay the loan, the borrower has no accession to wealth.
2. The lender may not deduct the amount of the loan: The rationale here is that
one asset (the cash) has been converted into a different asset (a promise of
repayment). Deductions are not typically available when an outlay serves to create
a new or different asset.

3. The amount paid to satisfy the loan obligation is not deductible by the
borrower.
4. Repayment of the loan is not gross income to the lender: In effect, the promise
of repayment is converted back to cash, with no accession to wealth by the lender.
5. Interest paid to the lender is included in the lender’s gross income: Interest
paid represents compensation for the use of the lender’s money or property and
thus represents profit or an accession to wealth to the lender. Interest income can
be attributed to lenders even if the lender doesn’t charge a minimum amount of
interest.
6. Interest paid to the lender may be deductible by the borrower: In general,
interest paid in connection with the borrower’s business activity is deductible,
while interest paid on personal loans are not deductible. The major exception here
is interest paid on a home mortgage.
INCOME FROM DISCHARGE OF INDEBTEDNESS
Although a loan does not start out as income to the borrower, it becomes income
to the borrower if the borrower is discharged of indebtedness. Thus, if a debt is
discharged, then the borrower essentially has received income equal to the amount of the
indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness”
in Section 62(a) (12) as a source of gross income.
Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y

$50,000. For purposes of calculating income, this should be treated the same way as if Y
gave X $50,000.
INDIAN BANKING SYSTEM

Banks and institutional management in the country are under going momentous
“change”. India is one of the fastest growing economies in the world. Banking dates back
to 1786, the first bank established in India, then the nationalization of banks in 1969 and
recently the liberalization of the same since 1991.

Indian banking is the lifeline of the nation. Its network over 62,500 offices is
spread across the length and breadth of the country, servicing nearly 40 crores depositors.
Financing diverse needs of more than 6 crores entrepreneur customers providing a nation
wide framework for payment clearing and settlements and vital sectors of economy like
agriculture , industry, trade and commerce Banks play an important role in the growth of
GDP. According to revised estimates released by the Central Statistical Organization
(CSO) in May 2006, real GDP accelerated from 7.5 per cent in 2006-07 to 9.6 percent, an
18 year high during 2006-07.
Banks plays very important role in the economic development of every nation.
They have control over a large part of the supply of money in circulation. A strong
banking sector is, therefore, vital for growth, creation of jobs, generation of wealth,
eradication of poverty, entrepreneurial activity and increasing the Gross Domestic
Product (GDP), all necessary factors for a country to emerge as a developed one. Banks
are the main stimulus of the economic progress of a country, because, the economic
development highly depends upon the extent of mobilization of resources, investment and
on the operational efficiency of the various segments of the economy.
The Reserve Bank of India (RBI), as the Central Bank of the country, is at the
head of this group. RBI is the central bank of the country since 1934. It regulates,
controls credit, issue licenses and functions as banker of all banks and the government. In
general the Indian Financial System consists of Commercial Banks, Development Banks,
Co-operative Banks and Specialized financial institutions.
INDIGENOUS BANKING IN INDIA:

During independence, India had an indigenous banking system with a centuries –
old tradition. This system had developed the hundi, a financial instrument still in use that
is similar to the commercial bills of Western Europe. Hundis were used to finance local
trade as well as trade between port towns and inland Centres of production.
Indigenous bankers combined banking with other activities such as the goldsmiths,
merchants, and shippers. They usually belonged to certain castes or communities, such as
the Multanis, Marwaris and Chettiars, and they differed in the extent to which they relied
on their own resources, rather than deposits and other funds for their lending.

Indigenous bankers often endorsed hundis issued by traders and sometimes

provided personal guarantee for loans from commercial banks. Such bankers were
collectively called as shroffs. The main moneylenders were Sowkars (who lent to farmers
by their own resources or funds borrowed from Chettiars and other indigenous bankers)
and the Pathans (who lent mainly to poor).
INDIAN FINANCIAL SYSTEM:

The ancient Indigenous banking system gave raise to the Financial System in
India. The Financial System consists of many institutions, instruments and markets.
Financial institutions range from pawnshops and moneylenders to banks, pension funds,
insurance companies, brokerage houses, investment trusts and stock exchange.
The Indian financial system comprises of an impressive network of banks, other
financial and investment institutions, offering wide range of products and services, which
together function in a fairly developed capital and money markets. As such, financial
system has come to occupy an important role in the process of economic development.
The economic development of a country depends on its financial structure. In the
long run, the larger the proportion of financial assets to real assets, the greater the scope
of economic growth. Investment is a pre-condition of economic growth.
The primary role of any financial institution is to act as a conduit for the transfer
of financial resources from net savers to borrowers i.e., from those who spend less than
they earn to those who earn less than what they spend.

FUNCTIONS OF FINANCIAL INSTITUTIONS
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THE STUCTURE OF BANKING SYSTEM:

The structure of banking system is determined by economic and legal. The
development of the economy and the spread of banking habit calls for increasing banking
services. The demand for these banking services affects the banks’ structure and
organization. National objectives and aspirations result in government regulations, which
have a profound influence on the banking structure.
According to the IBA Bulletin, the banks in India are classified in to six major
categories are Public sector Banks, Private sector Banks, Foreign Banks, State Co-
operative Banks, District Co-operative Banks and Primary Co-operative Banks.
Vasanth Desai (2006) from his book titled as ‘Banks and institutional
Management’ classified the structure of financial institutions in India in to three major
sectors
1. Commercial Banks
2. Co-operative Societies
3. Other Institutions.
COMMERCIAL BANKS
Commercial Banks are the oldest, biggest and fastest growing financial
intermediaries in India. They are also the most important depositories of public sector and
the most important disbursers of finance. Commercial Banking in India is a unique
system similar to that exists nowhere in the world.
The commercial banking structure in India consists of: Scheduled
Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute
those banks, which have been included in the Second Schedule of Reserve Bank of India
(RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the
criteria laid down vide section 42(6)(a) of the act.

FUNCTIONS OF COMMERCIAL BANKS
FUNCTIONS OF COMMERCIAL BANKS
PRIMARY FUNCTIONS SECONDARY FUNCTIONS
RECEIVING OF
DEPOSITS
AGENCY SERVICES
GENERAL UTILITY
LENDING OF FUNDS PAYMENT OF SERVICES
OVERDRAFT RENT
CASH CREDIT COLLECTING OF SAFE CUSTODY
DISCOUNTINGB CHEQUES DEPOSITS
TIME LIABILITIES ILLS OF DEALING IN
FIXED DEMAND SAFE DEPOSIT
EXCHANG FOREIGN LOCKER
DEPOSITS LIABILITY E EXCHANGE
RECURRING SAVING FACILITIES
LOANS AND LOANS AND TRANSFER OF
DEPOSITS BANK ADVANCES ADVANCES
MISCELLANEO ACCOU MONEY
VENTURE ACTING AS ISSUE OF
US NT CAPITAL TRUSTEES
DEPOSITS CURRENT TRAVELLERS
GUARANTEES CHEQUE
CASH ACCOU
CERTIFICA NT ACTING AS
TES REFEREES
MERCHANT
BANKING
ATM
CREDIT CARDS
GIFT CHEQUES
EXECUTOR &
TRUSTEE
MISCELLANEOUS

CLASSIFICATION OF INDIAN COMMERCIAL BANKS:
Indian commercial banks can be broadly classified into two categories. They are
i) Public Sector Banks
ii) Private Sector Banks
A. PUBLIC SECTOR BANKS:

Public sector Banks refer to commercial banks, which are owned by the
Central Government either directly or through the RBI. They are also referred to as
National Banks. They are established by special Acts passed by the Parliament. Among
the Public Sector Banks in India, United Bank of India is one of the 14 major banks,
which were nationalized on July 19, 1969. Its predecessor, in the Public Sector Banks, the
United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz.
Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla
Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).
Public sector banks can be further classified in to two categories. They are
1. State Bank of India
2. Associates banks
3. 14 Nationalized Banks
4. 6 Nationalized Banks
5. Regional rural banks
STATE BANK OF INDIA:

In accordance with the recommendation of the All India Rural Credit Survey
Committee, the Imperial Bank of India was nationalized and changed in to the State Bank
of India on 1st July, 1955 under a separate Act called the State Bank of India (SBI) Act of
1955 passed on 8th May, 1955. The SBI took over the assets and liabilities of the Imperial
Bank of India.

SBI ASSOCIATES:
In accordance with the Recommendation of the All-India Rural Credit, the
SBI (Subsidiary Banks) Act was passed in September 1959 for the merger of ten State
associated banks. Today, there are only seven state associated banks, which are
connected with the SBI as its subsidiaries. The seven Associate banks of the SBI are;
1. The State Bank of Bikaner and Jaipur (SBBJ)
2. The State Bank of Patiala (SBP)
3. The State Bank of Indore (SBIN)
4. The State Bank of Saurashtra (SBS)
5. The State Bank of Hyderabad (SBH)
6. The State Bank of Mysore (SBM)
7. The State Bank of Travancore (SBT)
Each of these subsidiary banks is an autonomous institution. It has
individually and independence in its day-to-day operations. The State Bank of India has
only the general power of direction, control and supervision over the Associate banks
NATIONALIZED BANKS:
By the 1960s, the Indian banking industry has become an important tool to
facilitate the development of the Indian economy. At the same time, it has emerged as a
large employer, and a debate has ensued about the possibility to nationalize the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the
GOI in the annual conference of the All India Congress Meeting in a paper entitled
"Stray thoughts on Bank Nationalization”.
The paper was received with positive enthusiasm. Thereafter, her move was
swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest
commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan,
a national leader of India, described the step as a "masterstroke of political sagacity."
Within two weeks of the issue of the ordinance, the Parliament passed the Banking

Companies (Acquisition and Transfer of Undertaking) Bill, and it received the

presidential approval on 9th August, 1969.
A second dose of nationalization of 6 more commercial banks followed in
1980. The stated reason for the nationalization was to give the government more control
of credit delivery. With the second dose of nationalization, the GOI controlled around
91% of the banking business of India. After this, until the 1990s, the nationalized banks
grew at a pace of around 4%, closer to the average growth rate of the Indian economy
B.PRIVATE SECTOR BANKS:

Private banking in India was practiced since the beginning of banking system in
India. The first private bank in India to be set up in Private Sector Banks in India was
IndusInd Bank. It is one of the fast growing Private Sector Bank in India. IDBI ranks the
tenth largest development bank in the world as Private Banks in India and has promoted a
world class institutions in India
The first Private Bank in India to receive an in principle approval from the
Reserve Bank of India was Housing Development Finance Corporation Limited, to set up
a bank in the private sector banks in India as part of the RBI's liberalization of the Indian
Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with
registered office in Mumbai and commenced operations as Scheduled Commercial Bank
in January 1995.
The private sector can be further classified as follows

 Other private banks
 New-sophisticated private banks;
 Co-operative banks included in second schedule;
 Foreign banks in India, representative offices
 One non-schedule banks

There are 33 private banks in India and some of the private banks are
 Axis Bank
 HDFC Bank
 IDBI Bank
 ICICI Bank
 ING Vysya
 Karnataka Bank limited
 Kotak Mahindra Bank
 Yes Bank
 Lord Krishna Bank
CO-OPERATIVE SOCIETIES:
The Co-Operative banking sector has been developed in the country to

supplant the village moneylender, the predominant source of rural finance, as the terms
on which he made finance available have generally been detrimental to the development
of Indian agriculture.
The Co-Operative sector can be further classified into 4 types
 Primary Co-Operative credit societies
 Central Co-Operative banks
 State Co-Operative banks
 Land development banks

CHAPTER: II
RESERCH DESIGN

STATEMENT OF THE PROBLEM:

A Study on “Loans and Advances of State Bank of India in Bangalroe”.
It is important to know the evolution of the workplace to understand as to why and how
things are being done today.
OBJECTIVES OF THE STUDY:

1. To study the role of SBI in Indian banking sector.
2. To study the regulations followed by SBI while providing the loans and
advances.
3. To study different types of the loans and advances made by SBI.
4. To evaluate operational performance of loans and advances made by bank.
5. To make suggestions on the basis of the analysis.
SCOPE OF THE STUDY:

Customers are facing many problems in terms of availing loan and therefore SBI
is providing assistance to the development of them as it plays a vital role in development
of Indian economy. It is essential to study the norms and regulations of the SBI in lending
money to the public.
METHODOLOGY:
This data will be collected from the bank and will be analyzed to draw appropriate
conclusion.
The data is collected on the basis of Primary as well as Secondary sources.
Primary data

The primary data is collected through direct communication with the branch
manager and staff members of bank
Secondary data
The sources of secondary data are published materials such as Company records,
textbooks, Internet, Magazines and annual reports of SBI.
LIMITATIONS OF THE STUDY
• The bank may not reveal certain financial details due to authenticity of the bank.
• The outcome of the study depends entirely on the fairness of information supplied
by the bank.
• A study will be conducted within specified time period of 8 weeks.

CHAPTER: III
Company PROFILE

COMPANY HISTORY
The roots of the State Bank of India rest in the first decade of 19th century, when
the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806.
The Bank of Bengal and two other Presidency banks, namely, 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 the royal charters. These three banks received the exclusive right to issue paper
currency in 1861 with the Paper Currency Act, a right they retained until the formation of
the Reserve Bank of India. The Presidency banks amalgamated on 27 January 1921, and
the reorganized banking entity took as its name Imperial Bank of India. The Imperial
Bank of India continued to remain a joint stock company.
Pursuant to the provisions of the State Bank of India Act (1955), the Reserve
Bank of India, which is India's central bank, acquired a controlling interest in the
Imperial Bank of India. On 30 April 1955 the Imperial Bank of India became the State
Bank of India. The Govt. of India recently 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.
Offices of the Bank of Bengal

In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act,
enabling the State Bank of India to take over eight former State-associated banks as its
subsidiaries. On Sept 13, 2008, State Bank of Saurashtra, one of its Associate Banks,
merged with State Bank of India.SBI has acquired local banks in rescues. For instance, in
1985, it acquired Bank of Cochin in Kerala, which had 120 branches. SBI was the
acquirer as its affiliate, State Bank of Travancore, already had an extensive network in
Kerala.
INTERNATIONAL PRESENCE
State Bank of India (SBI), Mumbai Main Branch.
The bank has 141 overseas offices spread over 32 countries as on 31st Dec 2009.
It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg,
London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka,
Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and
Singapore, and representative offices in Bhutan and Cape Town. SBI operates several
foreign subsidiaries or affiliates. In 1990 it established an offshore bank, State Bank of
India (Mauritius).In 1982, the bank established a subsidiary, State Bank of India
(California), which now has eight branches - seven branches in the state of California and
one in Washington DC that it opened on 23 November 2009. The seven branches in
California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego
and Bakersfield. The Canadian subsidiary, State Bank of India (Canada) too dates to

1982. It has seven branches, four in the greater Toronto area and three in British
Columbia.
In Nigeria SBI operates as INMB Bank. This bank began in 1981 as the Indo-
Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It
now has five branches in Nigeria. In Nepal SBI owns 50% of Nepal SBI Bank, which has
branches throughout the country. In Moscow SBI owns 60% of Commercial Bank of
India, with Canara Bank owning the rest. In Indonesia it owns 76% of PT Bank Indo
Monex. State Bank of India already has a branch in Shanghai and plans to open one up in
Tianjin.
ASSOCIATE BANKS
There are six associate banks that fall under SBI, and together these six banks
constitute the State Bank Group. All use the same logo of a blue keyhole and all the
associates use the "State Bank of" name followed by the regional headquarters' name.
Originally, the then seven banks that became the associate banks belonged to princely
states until the government nationalized them between October, 1959 and May, 1960. In
tune with the first Five Year Plan, emphasizing the development of rural India, the
government integrated these banks into State Bank of India to expand its rural outreach.
There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline operations. The first step along these lines occurred on 13 August
2008 when State Bank of Saurashtra merged with State Bank of India, which reduced the
number of state banks from seven to six. Furthermore on 19th June 2009 the SBI board
approved the merger of its subsidiary, State Bank of Indore, with itself. SBI holds 98.3%
in the bank, and the balance 1.77% is owned by individuals, who held the shares prior to
its takeover by the government. The acquisition of State Bank of Indore will help SBI add
470 branches to its existing network of 11,448. Also, following the acquisition, SBI’s
total assets will inch very close to the Rs 10-lakh crore mark. Total assets of SBI and the
State Bank of Indore stood at Rs 998,119 crore as on March 2009.

The Subsidiaries of SBI till date are
• State Bank of Indore

• State Bank of Bikaner & Jaipur
• State Bank of Hyderabad
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore
GROWTH
State Bank of India has often acted as guarantor to the Indian Government, most
notably during Chandra Shekhar's tenure as Prime Minister of India. With 11,448
branches and a further 6500+ associate bank branches, the SBI has extensive coverage.
State Bank of India has electronically networked all of its branches under Core Banking
System (CBS). The bank has one of the largest ATM networks in the region, with more
than 9000 ATMs across India. The State Bank of India has had steady growth over its
history, though it was marred by the Harshad Mehta scam in 1992. In recent years, the
bank has sought to expand its overseas operations by buying foreign banks. It is the only
Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and
various other rankings.
GROUP COMPANIES
• SBI Capital Markets Ltd

• SBI Mutual Fund (A Trust)
• SBI Factors and Commercial Services Ltd
• SBI DFHI Ltd
• SBI Cards and Payment Services Pvt Ltd
• SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)
• SBI Funds Management Pvt Ltd
• SBI Canada

MILESTONES OF SBI:
1806: The Bank of Calcutta is established as the first Western-type bank.

1809: The bank receives a charter from the imperial government and changes its name to
Bank of Bengal.
1840: A sister bank, Bank of Bombay, is formed.
1843: Another sister bank is formed: Bank of Madras, which, together with Bank of
Bengal and Bank of Bombay become known as the presidency banks, which had the right
to issue currency in their regions.
1861: The Presidency Banks Act takes away currency issuing privileges but offers
incentives to begin rapid expansion, and the three banks open nearly 50 branches among
them by the mid-1870s.
1876: The creation of Central Treasuries ends the expansion phase of the presidency
banks.
1921: The presidency banks are merged to form a single entity, Imperial Bank of India.
1955: The nationalization of Imperial Bank of India results in the formation of the State
Bank of India, which then becomes a primary factor behind the country's industrial,
agricultural, and rural development.
1969: The Indian government establishes a monopoly over the banking sector.
1972: SBI begins offering merchant banking services.
1986: SBI Capital Markets is created.
1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's stepped-
up international banking operations.
1998: SBI launches credit cards in partnership with GE Capital.
2002: SBI networks 3,000 branches in a massive technology implementation.
2004: A networking effort reaches 4,000 branches.

FINANCIAL PERFORMANCE OF SBI
Profit
The Operating Profit of the Bank for 2008-09 stood at Rs. 17,915.23 crores as
compared to Rs.13,107.55 crores in 2007-08 registering a growth of 36.68%. The
Bank has posted a Net Profit of Rs. 9,121.23 crores for 2008-09 as compared to Rs.6,
729.12 crores in 2007-08 registering a growth of 35.55%. While Net Interest Income
recorded a growth of 22.63% and Other Income increased by 45.96%, Operating
Expenses increased by 24.11% attributable to higher staff cost and other overhead
expenses.
Dividend
The Bank has increased dividend to Rs. 29.00 Per share (290%) from Rs. 21.50
Per share (215%) in the last year.
Net Interest Income

The Net Interest Income of the Bank registered a growth of 22.63% from
Rs. 17,021.23 crores in 2007-08 to Rs. 20,873.14 crores in 2008-09. This was due to
growth in interest income on advances. The gross interest income from global operations
rose from Rs.48, 950.31 crores to Rs. 63,788.43 crores during the year. This was mainly
due to higher interest income on advances. Interest income on advances in India
registered an increase from Rs. 32,162.68 crores in 2007-08 to Rs. 42,989.36 crores
in 2008-09 due to higher volumes. Also average yield on advances in India
increased from 9.90% in 2007-08 to 10.15% in 2008-09. Interest income on
advances at foreign offices also increased due to higher volumes.
Income from resources deployed in Treasury operations in India increased
by 28.60% mainly due to higher average resources deployed. The average yield,
which was 6.92 % in 2007-08, has increased to 7.10% in 2008-09. Total interest
expenses of global operations increased from Rs. 31,929.08 crores in 2007-08 to Rs.
42,915.29 crores in 2008-09. Interest expenses on deposits during 2008-09 recorded

an increase of 40.74% compared to the previous year, whereas the average level
of deposits grew by 24.85%. This resulted in an increase in the average cost of
deposits from 5.59% in 2007-08 to 6.30% in 2008-09. However, as substantial high
cost deposits are maturing and present level of deposit rate being lower, it is
expected that there will be a fall in the average cost of deposits.
Non-Interest Income
Non-interest income stood at Rs. 12,690.79 crores in 2008-09 as against Rs.
8,694.93 crores in 2007-08. During the year, the Bank received an income of Rs.
409.60 crores (Rs. 197.41 crores in the previous year) by way of dividends from
Associate Banks/subsidiaries and joint ventures in India and abroad.
Operating Expenses
There was an increase of 25.19% in the Staff Cost from Rs. 7,785.87 crores in
2007-08 to Rs. 9,747.31 crores in 2008-09 attributable to higher pension provisioning
and increased staff strength. Staff Cost included an amount of Rs. 1,414 crores towards
wages revision provision as compared to Rs. 575 crores in the previous year. Other
Overhead Expenses have also registered an increase of 22.36% mainly due to
increase in expenses on rent, taxes and lighting as a result of opening of new
branches, advertising & publicity, printing & stationary, postage and telephones and
miscellaneous expenditure. Operating Expenses, comprising both staff cost and other
overhead expenses, have registered an increase of 24.11% over the previous year.
Provisions and Contingencies

Major amounts of provisions made in 2008-09 were as under:
• Rs. 707.16 crores towards provision for depreciation on investments, excluding
amortization of premium on ‘Held to Maturity’ category (as against write back Rs.
88.68 crores in 2007-08).
• Rs. 5,971.52 crores towards Provision for Tax (as against Rs. 3,823.50 crores in 2007-
08).

• Rs. 142.00 crores towards Fringe Benefit Tax (as against Rs. 105.00 crores in 2007-08).
• Rs. 2,474.96 crores (net of write-back) for non-performing assets (as against Rs.
2,000.94 crores in 2007-08).
Reserves and Surplus

• An amount of Rs. 5,291.79 crores (as against Rs. 4,839.07 crores in 2007-08) was
transferred to Statutory Reserves.
• An amount of Rs. 826.56 crores (as against Rs. 4.44 crores in 2007-08) was transferred
to Capital Reserve Fund.
• An amount of Rs. 306.89 crores (as against Rs. 362.09 crores in 2007-08) was
transferred to Other Reserve Funds.
Assets
The total assets of the Bank increased by 33.66% from Rs. 7,21,526.31
crores at the end of March 2008 to Rs. 9,64,432.08 crores as at end March 2009.
During the period, the loan port folio increased by 30.17% from Rs. 4, 16,768.20 crores
to Rs. 5, 42,503.20 crores. Investments increased by 45.62% from Rs. 1, 89,501.27 crores
to Rs. 2,75,953.96 crores as at the end of March 2009. A major portion of the
investment was in the domestic market in government and other approved
securities. The Bank's market share in domestic advances was 16.03% as of March
2009.
Liabilities
The Bank’s aggregate liabilities (excluding capital and reserves) rose by
34.79% from Rs. 6,72,493.65 crores on 31st March 2008 to Rs. 9, 06,484.38 crores
on 31st March 2009. The increase in liabilities was mainly contributed by increase in
deposits and Other Liabilities & Provisions. The Global deposits stood at Rs.
7,42,073.13 crores as on 31st March 2009, representing an increase of 38.08 %
over the level on 31st March 2008. The Bank’s market share in domestic deposits was
17.72% as of March 2009.

TABLES SHOWING THE FINANCIAL PERFORMANCE OF SBI
FOR THE YEAR 2007-08 2008-09 % change

Total Income (Rs. crores) 57,645 76,479 32.67
Total Expenditure (Rs. crores) 44,538 58,564 31.49
Net Profit (Rs. crores) 6,729 9,121 35.55
Earnings per Share (Rs.) (Basic) 126.62 143.77 13.54
Return on Average Assets (%) 1.01 1.04 2.97
Return on Equity (%) 17.82 15.73 (-) 11.73
Profit per Employee (Rs. thousands) 372.57 473.77 27.16
AT THE END OF 2008 2009 %Change

Paid-up Capital and Reserves & 49,033 57,948 18.18
Surplus (Rs. crores)
Deposits (Rs. crores) 5,37,404 7,42,073 38.08
Advances (Rs. crores) 4,16,768 5,42,503 30.17
Number of Domestic Branches 10,186 11,448 12.39
Number of Foreign Branches/Offices 84 92 9.52

Capital Adequacy Ratio (%) (Basel- 12.64 14.25 12.74
II)
Net NPA (%) 1.78 1.76 (-) 1.12


PRINCIPAL SUBSIDIARIES: Bank of Bhutan (Bhutan); Indo Nigeria Merchant Bank

Ltd. (Nigeria); Nepal SBI Bank Ltd. (Nepal); SBI (U.S.A.); SBI (Canada); SBI Capital
Market Ltd.; SBI Cards & Payments Services Ltd.; SBI Commercial and International
Bank Ltd.; SBI European Bank plc (U.K.); SBI Factors & Commercial Services Ltd.; SBI
Funds Management Ltd.; SBI Gilts Ltd.; SBI Home Finance Ltd.; SBI Securities Ltd.;
State Bank International Ltd. (Mauritius); State Bank of Bikaner & Jaipur; State Bank of
Hyderabad; State Bank of Indore; State Bank of Mysore; State Bank of Patiala; State
Bank of Saurastra; State Bank of Travancore.
PRINCIPAL COMPETITORS:
• ICICI Bank;
• Bank of Baroda;
• Canara Bank;
• Punjab National Bank;
• Bank of India;
• Union Bank of India;
• Central Bank of India;
• HDFC Bank;
• Oriental Bank of Commerce

STATE BANK OF INDIA, KORAMANGALA BRANCH
Koramangala Branch
#117,7th Block
Industrial Layout, Koramangala,
Bangalore – 560095
State Bank of India, Koramangala branch was inaugurated by Mr. O.P.

Bhatt, the chairman of SBI, on 25th November 2007. The Branch Manager of State Bank
of India, Koramangala branch is Mr. N.R. Ganapathy and it constitutes three officers and
six other staffs.
The total deposits in State Bank of India, Koramangala branch for the year
2009-10 is about 46 crores. As it compared to the early stage there is a huge increment in
the deposits over these period. In the early stage it was just about 4.97 crores. The total
advances for the year 2009-10 is about 59 crores and the net profit of the bank is 94 lakhs
as on March 2010.
PRODUCTS AND SERVICES OFFERED BY SBI, KORAMANGALA BRANCH
 PERSONAL BANKING
• Current Accounts
• Savings Bank
• Term Deposits
• Recurring Deposits
• Housing Loans
• Car Loans
• Education Loans
• Personal Loans
• Loans against Shares and Debentures
• Gold Loan
• Demand Loan Loan on Term Deposit
 CORE BANKING SERVICES
 INTERNET BANKING SERVICES

 REAL TIME GROSS SETTLEMENT

TABLE SHOWING THE TOTAL DEPOSITS AND ADVANCES OF SBI,
KORAMANGALA BRANCH FOR THE LAST 3 FINANCIAL YEARS
YEAR Total Deposits (Rs in crores) Total Advances (Rs in crores)
2007-08 4.97 7.60
2008-09 32.36 17.59
2009-10 46 59
GRAPH SHOWING THE TOTAL DEPOSITS AND ADVANCES OF SBI,

KORAMANGALA BRANCH FOR THE LAST 3 FINANCIAL YEARS

TABLE SHOWING THE NET PROFIT / NET LOSS OF SBI, KORAMANGALA

BRANCH FOR THE LAST 3 FINANCIAL YEARS
YEAR NET PROFIT / LOSS
2007-08 (- 43,00,000)
2008-09 9,00,000
2009-10 94,00,000
GRAPH SHOWING THE NET PROFIT / NET LOSS OF SBI, KORAMANGALA

BRANCH FOR THE LAST 3 FINANCIAL YEARS

CHAPTER-IV
ANALYSIS
&
INTREPRETATION OF DATA
SBI HOMELOANS
SBI Home Loans come to customers on the solid foundation of trust and
transparency built in the tradition of State Bank of India. Best Practices followed in SBI
mentioned below will tell why it makes sense to do business with State Bank of India.

SBI Home Loans Unique Advantage
 Package of exclusive benefits.

 Lowest interest rates. Further, SBI charge interest on a daily reducing balance!!
 Low processing charges.
 No hidden costs or administrative charges.
 No prepayment penalties.
PRODUCTS
 SBI HI FIVE LOAN
 SBI EASY HOME LOAN
 SBI ADVANTAGE HOME LOAN
 OTHER PRODUCTS
SBI HI-FIVE LOAN
SBI Hi-Five is available up to 31st March 2010
Amount Maximum Rs.5 Lacs

Term Maximum 120 months (i.e. 10 years) including moratorium
period.
Interest Rates 8% p.a. Fixed interest rate during first 60 months.
61st month Onwards - floating at 2.75% below SBAR
Or
Fixed interest at 1.25% below SBAR
Processing Fee
The revised processing fee structure (including service tax) from 9th November 2009 is
as under :

Processing
Loan Amount
Fee(Revised)
Upto Rs.5 Lac Rs.1000/-
SBI EASY HOME LOAN – FOR LOAN AMOUNT UPTO Rs. 50 Lacs
SBI Easy is available up to 31st March 2010
Getting dream home has become easier with SBI Easy Home Loan. With low interest
rates for home loan under Rs. 50 lakhs category, SBI Easy ensures that not burdened
with high interest for home loan. Plus with over 12000 SBI branches nationwide we can
get our Home Loan account parked at a branch nearest to our present or proposed
residence.
Interest Rate
• Interest rate during the first year (i.e. till first anniversary date from the date of
first disbursement) is fixed at 8% p.a.
• Interest rate during next two years is fixed at 8.5% p. a
• Interest rate after three years may be Fixed or Floating as per the borrower’s
choice made at the time of sanction. If floating rate option is chosen, then the rate
will be 2.75% below SBAR. If fixed rate option is chosen, then the rate will be
1.25% below SBAR prevailing on the third anniversary date from the date of first
disbursement, and shall have a reset frequency of 5 years from the third
anniversary date of the loan. Fixed interest rate shall be subject to force-majeure
clause.
Processing Fee
as under :

Loan Amount Processing Fee(Revised)
Above Rs.5 Lac and upto Rs.10 Lac </O:P Rs.2000/-
Above Rs.10 Lac and upto Rs.20 Lac </O:P Rs.5000/-
Above Rs.20 Lac and upto Rs.50 Lac </O:P Rs.7,000/-
SBI ADVANTAGE HOME LOAN – FOR LOAN AMOUNT ABOVE Rs. 50 Lacs
SBI Advantage is available up to 31st March 2010 SBI Advantage Home Loan with
competitive rates of interest is available for home loans above Rs.50 lakhs.
Interest Rate
• Interest rate during the first year (i.e. till first anniversary date from the date of
first disbursement) is fixed at 8% p.a.
• Interest rate during next two years is fixed at 9% p. a
• Interest rate after three years may be Fixed or Floating as per the borrower’s
will be 1.75% below SBAR. If fixed rate option is chosen, then the rate will be
0.75% below SBAR prevailing on the third anniversary date from the date of first
disbursement, and shall have a reset frequency of 5 years from the third
anniversary date of the loan. Fixed interest rate shall be subject to force-majeure
clause.
Processing Fee
as under :
Loan Amount Processing

Fee(Revised)
Above Rs.50 Lac and upto Rs.1 Cr Rs.8,000/-
Above Rs.1 Cr and upto Rs.5 Cr </O:P Rs.10,000/-
Above Rs.5 Cr </O:P Rs.20,000/-
OTHER PRODUCTS
 HOME LOAN PRODUCT VARIANTS
 HOME LOAN TOP-UP PRODUCTS
 RELATED HOME LOAN PRODUCTS
HOME LOAN PRODUCT VARIENTS
i) SBI Max Gain
HOME LOAN AS AN OVERDRAFT
An innovative and customer-friendly product to enable to earn optimal yield on savings

and minimize interest burden on Home Loans, with no extra cost.
The loan is granted as an Overdraft facility with the added flexibility to operate Home
Loan Account like SB or Current Account.
The product serves to minimize interest cost by enabling to park our surplus funds in
‘SBI-Maxgain’ (with the benefit to withdraw the surplus funds whenever we require),
specially in the wake of low yields from other deposit/ investment avenues.

Minimum Loan Amount: Rs.5 lacs
ii) SBI Freedom
A revolutionary product designed for customers who are on the look out for a source of
finance for a property they want to invest in without mortgaging the same. All customers
have to do is pledge any financial security that they have and they will get a Home Loan
for their dream home.
A must-take for those who do not want to pay stamp duty for mortgage of their
property or go through the hassles of creation of mortgage.
Customers also have an option to take the loan by way of mortgage of the property and
pledge financial securities in lieu of margin money.
Repayment is highly customized, giving customers the option to repay through regular
EMIs or through maturity proceeds of the securities pledged.
iii) SBI Realty
HOME LOANS FOR PURCHASE OF PLOT OF LAND FOR THE PURPOSE OF

CONSTRUCTION OF A DWELLING UNIT
A unique product if customers are on the lookout for a loan to purchase a plot of land
for house construction. The loan is available for a maximum amount of Rs.1 crore* and
with a comfortable repayment period of upto 15 years.
Customers are also eligible to avail another Housing Loan for construction of house on
the plot financed above with the benefit of running both the loans concurrently.
(House construction should commence within 2 years from the date of availment of ‘SBI-
Realty’ Housing Loan)
(Other terms and conditions – as applicable to regular Home Loans)
(* relaxation considered on case to case basis)
iv) SBI Flexi

HOME LOANS WITH A COMBINATION OF FIXED AND FLOATING INTEREST

RATES
Home Loans with an option to choose a combination of floating interest rate and fixed
interest rate, in a pre determined ratio.
Minimum Loan Amount Rs.5.00 lacks.
A customized product designed to enable borrowers to hedge their Home Loan against
unfavorable movement in interest rates. The product gives them a onetime irrevocable
option to choose one of the three customized combinations of fixed and floating interest
rates and also to choose the order in which the fixed and floating rate will be availed.
v) NRI Home Loans
HOME LOANS TO NON RESIDENT INDIANS (NRIs) AND PERSONS OF INDIAN

ORIGIN (PIOs HOLDING A FOREIGN PASSPORT)
Eligibility
Individual(s) over 18years of age with a steady source of income who
 Are Non Resident Indians (NRIs) holding a valid Indian passport.
 Are persons of Indian origin(PIOs) holding a foreign passport.
 Minimum employment tenure in India/abroad not less than 2 years.
Loan Amount
The loan amount is to be determined on the basis of repayment capacity taking into
account income, age, assets and liabilities, qualifications, stability of occupation, and
employment prospects on return. The loan amount is subject to the following:
Minimum: Rs. 3 lacs

Maximum: Maximum permissible loan amount would be determined by EMI/NMI ratio

criteria as applicable to regular Home Loans scheme for Resident Indian customers,
which is 40% for Net Annual Income (NAI) upto Rs.2 Lac, 50% for NAI above Rs..2 Lac
and upto Rs.5 Lac, 55% for NAI above Rs.5 Lacs.
vi) SBI Optima
Innovative and value added products extended to existing Home loan borrowers with a
satisfactory repayment record of 3 years and whose loan is Standard Asset, with a view to
reinforce the customer loyalty and to maintain long term relationship with the borrowers.
In case of take-over of Home Loans from other Banks/HFCs, the borrower should have
fulfilled the above conditions with the present Bank/HFC.
vii) SBI Tribal Plus
SPECIAL HOME LOAN SCHEME FOR HILLY/TRIBAL AREAS
'SBI-Tribal Plus' Home Loans, a Special Scheme designed for Hill/Tribal areas for
extending financial assistance to individuals in such areas to :
a. Purchase or construction of a new house / flat (without mortgage of land)
b. Purchase of an existing (old) house / flat which is not more than 10 years old (In such
cases, valuation report from empanelled valuer and a certificate on the condition of the
house to be given by a structural engineer or Govt. approved architect should be taken);
c. Repair /Renovation/extension of an existing house or flat.
viii) Gram Niwas
HOME LOANS TO FARMING AND POOREST OF THE POOR IN RURAL AREAS
The Scheme covers all rural and sEMI-urban centres. “Rural Area” for the purpose of the
Scheme is the area comprised in any village including the area comprised in any town,
the population of which does not exceed 50000 as per 2001 census.The scheme seeks to
provide home loans to farming and poorest of the poor in rural areas for the purpose of

purchase or construction of a house, repairs and renovation, purchase of plot for the
purpose of construction of a house/shed etc.
ix) Sahyog Niwas
RURAL HOME LOANS TO SELF HELP GROUPS
The Sahyog Niwas scheme has been instituted to finance the self help groups with a good
track of payment record for 2 years, for on lending to members for housing in rural areas,
covering the following purposes.
i) For the purchase or construction of a house exclusively or including the housing needs
of activities carried by them. ( Dairy shed, tailoring shed/shop, grocery stores etc.)
ii) For the renovation or repair of an existing house / shed
iii) For the purchase of a plot of land for the purpose of house construction.
iv) For the extension of existing house / work space to existing house / shed.
x) SBI Happy Home Loans
HOME LOANS AT 8% P.A

The SBI Happy Home Loans scheme enables the genuine needy buyers to buy dwelling
units by freezing interest rate at 8% p.a. for a period of one year from the date of
disbursement on new Home Loans including SBI Special Home Loans scheme.
xi) SBI Green Home Loan
State Bank of India has adopted a Green Banking Policy with an objective of contributing
towards the fight against the adverse climate change. One of the initiatives approved by
the Board for this purpose is incentivizing customers who go in for Green Projects, i.e.
those projects which reduce Carbon Emissions and promote Renewable Energy. “Green
Housing” or “Green Home” is one of the types of projects identified for this purpose.

At present State Bank of India the only Bank in the country supporting the cause of
Green Buildings by offering a 5% concession in margin, 0.25% concession in interest
rate and waiver of processing fees, on the existing home loan products to customers who
go in for Green Projects.
HOME LOAN TOP-UP PRODUCTS

i) SBI Home Line
SBI Home Line Special Personal Loans come with inbuilt provision to sanction personal
loans to home loans borrowers with a satisfactory repayment record of 3 years. The rate
of interest charged on these personal loans is only 50 bps above the Home Loan interest
rate applicable to the repayment tenure opted by the borrower (floating rates only),
prevailing as on the date of sanction of ‘SBI-Home Line’ Special Personal Loans.
ii) SBI Home Plus
SBI Home plus is scheme is launched for granting personal loans to the banks home
loans customers against the security of their house property. All home loans customers
with a satisfactory repayment record of at least one year and who maintain a Savings
bank or current account with SBI.
The loan can be used for any purpose, viz. extension/repair of house, purchase of car/
consumer durables, education / medical expenses of family members, personal expenses,
etc. There will be no need to obtain documentary evidence for the end-use of funds.
However a certificate from the customer in the application to the effect that the loan will
not be used for speculative purposes would be obtained.
iii) SBI Life style Loan
LOANS TO MEET LIFE STYLE NEEDS OF HOME LOANS CUSTOMERS
State Bank of India launched the SBI Life Style Loans to help home loan customers meet
any short term expenditure, (Vacation travel, purchase of Gold, Lifestyle goods) except
speculative investments, which adds comfort to the life style of the borrower with

satisfactory repayment record. SBI has tie up with various reputed travel houses, lifestyle
product companies for discounts to our customers.
RELATED HOME LOAN PRODUCTS
i) Earnest Money Deposit (EMD) Scheme

Many Government agencies, like Urban Development Authorities and Housing Boards,
periodically come out with schemes for sale of plots/houses, wherein applicants have to
submit 10-20% of the cost of plot/house as Earnest Money Deposit (EMD) and
allotments are made by draw of lots.
The SBI EMD scheme is designed for financing against earnest money for allotment of a
house/plot. Individuals above 21 years of age and with a steady source of income are
eligible to avail loans under this scheme.
ii) SBI Reverse Mortgage Loan
LOAN FOR WELFARE OF SENIOR CITIZENS IN INDIA
SBI Reverse Mortgage Loan Enables house-owning Senior Citizens having inadequate
income to meet their financial needs for renovation/repairs to house, medical & other
personal purposes. There is no compulsion for the borrower to repay a RML during his or
her lifetime or till such time he or she continues to stay in the house. The borrower
continues to retain ownership of the house. Also, the borrower will have the option to
prepay the loan at any time during the loan tenure and there will be no pre-payment
penalty.
Home Loans – Processing Fee
as under:
Loan Amount Processing Fee(Revised)

Above Rs.5 Lac and upto Rs.10 Lac Rs.2000/-
Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/-
Above Rs.20 Lac and upto Rs.50 Lac Rs.7,000/-
Above Rs.50 Lac and upto Rs.1 Cr Rs.8,000/-
Above Rs.1 Cr and upto Rs.5 Cr Rs.10,000/-
Above Rs.5 Cr Rs.20,000/-
NOTE
1) 75 % of the processing fee may be refunded in the following cases:
(a) Rejection of loan application on account of unsatisfactory pre-sanction survey report.
(b) Rejection of loan application on account of unsatisfactory legal/valuation reports.
In cases where applications are sanctioned or rejected after complete loan processing, fee
will not be refunded.
2) Actual charges for the following will be payable by the customer in addition to
the processing fee:
a) Pre-sanction
(i) Advocate's fee for property search and the title investigation report.
(ii) Valuer's fee for valuation report.
b) Post-sanction
(i) Stamp duty payable for Loan agreement & mortgage.
(ii) Property insurance premium.
Pre-closure Penalty

No penalty if the loan is preclosed from own savings/windfall gains for which
documentary evidence is produced by the customer.
INTEREST RATES
 Interest will be charged at the rates prescribed by the Bank from time to time.
 Borrowers availing loans upto Rs. 75 lacs can opt for paying interest either at
fixed rate or floating rate.
 Interest on individual loans for over Rs. 75 lacs must be charged only at the
floating rate interest linked to SBAR.
REPAYMENT
Repayment period: Maximum 25 years (or) Up to the age of 70 years (the age by which
the loan should be fully repaid) of the borrower, whichever is early.
Moratorium period (Repayment holiday): The moratorium period is included within

the maximum repayment period.
Minimum age: 18 years as on the date of sanction
Maximum age: limit for a Home Loan borrower is fixed at 70 years, i.e. the age by
which the loan should be fully repaid, subject to availability of sufficient, regular and
continuous source of income for servicing the loan repayment.
Loan Amount: Actual loan amount will be determined taking into consideration such
factors as applicant’s income and repaying capacity, age, assets and liabilities, cost of the
Proposed house/ flat etc. To enhance loan eligibility customers have option to add:
1) Income of his/her spouse/ son/ daughter living with you, provided they have a steady
income and his/ her salary account is maintained with SBI.

2) Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is
proposed to be rented out.
3) Depreciation, subject to some conditions.
4) Regular income from all sources.
Security:
 Equitable mortgage of the property
 Other tangible security of adequate value

like NSCs, Life Insurance policies etc., if
the property cannot be mortgaged
Margin:
Loan Amount Margin (Min.) Maximum LTV Ration (Max.)
Upto Rs. 75 Lacs 20% 80%
Above Rs. 75 Lacs. 25% 75%
DOCUMENTS
List of papers/ documents applicable to all applicants:
 Completed loan application
 3 Passport size photographs
 Proof of identify (photo copies of Voters ID card/ Passport/ Driving

license/ IT PAN card)
 Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/
Property tax receipt/ Passport/ Voters ID card)
 Proof of business address for non-salaried individuals
 Statement of Bank Account/ Pass Book for last six months
 Signature identification from present bankers
 Personal Assets and Liabilities statement
For guarantor (wherever applicable):

 Personal Assets and Liabilities Statement
 2 passport size photographs
 Proof of identification as above
 Proof of residence as above
 Proof of business address as above
 Signature identification from his/her present bankers
Additional documents required for salaried persons :

 Original Salary Certificate from employer
 TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly
acknowledged by IT Department.
Additional documents required for Professionals/self- employed/ other IT assesses:

 Acknowledged copies of three years I.T. returns/ Assessment Orders.
 Photocopies of challans evidencing payment of Advance Income Tax.
SHORT TERM HOUSING LOAN

Home is where the heart is! At SBI, they know this better than most - the toil and sweat
that goes into building/buying a house and the subsequent pride and joy of owning one.
This is why Their Housing loan schemes are designed to make it simple to make a choice
at least as far as financing goes!
No hidden clauses or costs or unnecessary documentation. Their loans have the longest
tenors and repayment terms are amongst the most flexible. SBI offer a totally transparent
process and there is no fine print and also given in-principle approval prior to identifying
a house/flat, relieving of the tension of anticipating the approved amount!
Last, but not the least, they have specialized Housing loan branches to serve Peoples
needs better. .
SBI newly opened Personal Banking branches also specialize in this. Their special Short
Term Housing Loan Scheme for loans of repayment period up to 5 years carries still
lower rates of interest.
The Scheme
Customers can avail of a housing loan for:
• Purchase or construction of a new house/ flat.

• Purchase an existing (old) house/ flat.
• Extension, repair, renovation or alteration of a house/ flat.
• Purchase a plot of land meant for construction of a dwelling unit.
SBI Advantage
• Excellent service and lower costs.

• Lowest Equated Monthly Installments (EMI)
Lowest interest rates, currently between 7.50% pa and 8.50% p.a. on daily
reducing balances

A nominal processing fee of 0.25% will be charged. Compare this with the 1.5% -
2% charged by others.
• No hidden costs or administrative costs
• In-principle approval given prior to identifying a house /flat, giving flexibility in
choice.
• Complete transparency - When SBI say our rate of interest is 8% p.a. customers
pay only 8%. When others say 8.5%, they may be paying even 10% p.a., as
interest may be levied even on the amounts they have already repaid. This is
because SBI apply interest on a daily reducing balance while housing finance
companies/ other banks mostly apply interest on annual reducing balance.
Purpose
Customers can take a loan for:
 Purchase or construction of a new house/ flat.

 Purchase an existing (old) house/ flat.
 Extension, repair, renovation or alteration of a house/ flat.
 Purchase a plot of land meant for construction of a dwelling unit.
 Repayment of housing loan availed from other banks/financial institutions to
avail of the benefit of SBI low rates of interest.
Eligibility
customers can avail of an SBI Housing loan if they are over 21 years of age and have
steady source of income.
Documents Required
customers will need to furnish the following documents along with the completed
application form:
• Passport size photograph

• Proof of residence
(This applies only to new or non-bank customers, and could be either a PAN
identity card, voter identification card or passport)
• Sale Deed/ Agreement of Sale.
• Bank account Statement or passbook, for the last six months.
• For employees or people in service, also need to provide.
• Salary certificate and other information, if any, about customer’s repayment
capacity.
• Form 16 or a copy of the Income Tax Returns for the last 2 years
• For self employed and other IT assesses.
• IT returns for the last 3 years· Receipts of advance tax paid
• Any other information about repayment capacity
In addition to the above mandatory documents, customers are also required to furnish one
or more of the following documents wherever applicable:·
• Letter of allotment from the housing board or society

• Copy of the approved plan
• Permission for construction
• Copy of the relative order in the case of conversion of agricultural land. (not
required where the house/flat has been constructed by an approved builder)
• In the case of an old existing house, customers will need to get a valuation
certificate from approved valuers as well as a certificate from a government
approved architect /structural engineer regarding the condition of the flat/house as
well as its remaining life. This will give them the comfort of knowing that the
property they are purchasing is of sound construction.
Loan Amount
While there is no ceiling to the amount of loan we sanction the actual loan amount is
determined on the basis of repayment capacity taking into account customer’s income,

age, assets and liabilities. As a rule of thumb – Upto 60 times the net monthly income
will be sanctioned depending upon your age. Usually, customer’s spouse's income and
the expected rental would also be taken into account.
Margin
Customer’s contribution (margin) for the housing loan is as under: 15% for new house/
flat 20% for old house/ flat 20% for repairs and renovation.
Interest
Avail of the lowest interest rates in the market. SBI give the option of locking in the low
interest rates for the full tenure of the loan or keeping customer’s interest option open by
linking it to the Bank's Term Lending rate. Therefore, they could either avail the loan at a
fixed rate of interest, which stays constant throughout the loan period, or at a floating rate
of interest where the interest changes (increases or decreases) depending on changes in
the Bank's Term Lending Rate.
Repayment
In 60 Equated Monthly Instalments.SBI repayment terms are amongst the most flexible
in the market. Depending on customer’s age and capacity to repay, they could pay back
the loan in easy installments. They may prepay at will without attracting any penalty, or
pay more than their stipulated monthly installment at any time, depending upon
availability of funds with them. However, in case of takeover of loan by other
banks/finance companies, prepayment penalty of 2% may be levied.
Security
As per bank's extant instructions.
Take Over of Loan

If customer’s have already taken a housing loan from any other bank/financial institution
and wish to benefit from SBI low rates of interest, SBI can take over their existing loan.
In-principle Approval
SBI also give in-principle approvals based on customer’s income and capacity to repay,
to enable customer to identify a house/ flat with full confidence.
CAR LOAN
Finance to include vehicle registration charges, insurance, one-time road tax and
accessories (subject to conditions).
Customers can apply for an SBI Car Loan to purchase:
• A new car, jeep, Multi Utility Vehicle (MUV) or SUV (any make or model)
• A used car / jeep / MUV /SUV (not more than 5 years old). (any make or model)
SBI Advantage:
• Lowest interest rates

• Longer repayment period of upto 84 months.
• No hidden costs or administrative charges.
• Finance for one-time road tax, registration fee, insurance premium and
accessories

• No advance EMIs.(Some Banks/companies ask customers to pay one or more

EMIs at the time of disbursement of loan, thereby effectively reducing their loan
amount.)
• Complete transparency : SBI levy interest on daily reducing balance method.
When customers pay one instalment, the interest is automatically calculated on
the reduced balance thereafter. When they pay interest on an annual reducing
balance, as charged by many other companies/banks, the interest amount for the
coming year is determined on the amount outstanding at the beginning of the year.
They continue to pay interest even on the amounts they repay during the year.
Always compare the Equated Monthly Installments (EMIs) and the total payments
customers would be required to make and not the rates of interest.
Purpose
Customers can take finance for :
• A new car, jeep or Multi Utility Vehicles (MUVs)

• A used car / jeep (not more than 5 years old). (Any make or model).
• Takeover of existing loan from other Bank/Financial institution (Conditions
apply)
Eligibility
To avail an SBI Car Loan, customers should be :
• Individual between the age of 21-65 years of age.

• A Permanent employee of State / Central Government, Public Sector
Undertaking, Private company or a reputed establishment or

• A Professionals or self-employed individual who is an income tax assessee or

• A Person engaged in agriculture and allied activities.
• Net Annual Income Rs. 100,000/- and above.
Salient Features
Loan Amount
There is no upper limit for the amount of a car loan. A maximum loan amount of 2.5
times the net annual income can be sanctioned. If married, his/her spouse's income could
also be considered provided the spouse becomes a co-borrower in the loan. The loan
amount includes finance for one-time road tax, registration and insurance. No ceiling on
the loan amount for new cars. Loan amount for used car is subject to a maximum limit
of Rs. 15 lacs.
Type of Loan
1. Term Loan
2. Overdraft - a) For New vehicles only
b) Minimum loan amount: Rs. 3 lacs.
Documents Required
Customers would need to submit the following documents along with the completed
application form if they are an existing SBI account holder:
1. Statement of Bank account of the borrower for last 12 months.

2. 2 passport size photographs of borrower(s).
3. Signature identification from bankers of borrower(s).
4. A copy of passport /voters ID card/PAN card.
5. Proof of residence.
6. Latest salary-slip showing all deductions

7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for
professional/self-employed/businessmen duly accepted by the ITO wherever
applicable to be submitted.
8. Proof of official address for non-salaried individuals.
If they are not an account holder with SBI they would also need to furnish documents that
establish their identity and give proof of residence.
Margin
New / Used vehicles: 15% of the on the road price.
Repayment
Customers can enjoy the longest repayment period in the industry with SBI.
Repayment period:
For Salaried : Maximum of 84 months
For Self-employed & Professionals : Maximum 60 months
Repayment period for used vehicles :Up to 84 months from the date of original purchase
of the vehicle (subject to maximum tenure as above).
Prepayment Penalty:
Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain
conditions.
Processing Fee
0.50% of Loan amount and to be paid upfront.
Minimum: Rs. 500/-
Maximum Rs. 10,000
25% of Processing fee will be retained if application is rejected after pre-sanction survey.
Security

SBI EZEE CAR LOAN SCHEME

SL. No PARAMETER SCHEME DETAILS
1 Applicable to All New Car Loans to Public
2 Scheme Period From July 1, 2009 to September 30, 2009
Period Term Loan Overdraft
First year 8% Fixed 8.5% fixed
rd
For 2nd & 3
10% fixed 10.5% fixed
Year
After 3rd year : The interest rate will be reset
3 Interest Rate to applicable card rate contracted on the date of
sanction.
No other interest concession will be given under
any tie-up arrangement or otherwise below the
offer rate.

Interest Rate will be reset on the anniversary

date of the loan to the applicable card rate
contracted as on the date of sanction under the
4 Reset Period
respective new car loan schemes i.e. Spreads
below/above SBAR as applicable on the date of
Sanction as per the agreement.
5 Processing fee Fully waived up to 30th September 2009
New Car including NRI Car Loan

Tenure Rate of Interest
Up to 3 years (for loans Rs. 7.5 lac & above) 0.75% below SBAR i.e. 11.00% p.a.
Up to 3 years (for loans below Rs. 7.5 lac) 0.50% below SBAR i.e. 11.25% p.a.
Above 3 yrs up to 5 yrs (for all loans) 0.50% below SBAR i.e. 11.25% p.a.
Car Loan Overdraft: New Car only

Up to 3 years (for loans Rs. 7.5 lac & above) 0.25% below SBAR i.e. 11.50% p.a.
Up to 3 years (for loans below Rs. 7.5 lac) At SBAR i.e. 11.75% p.a.
Above 3 yrs up to 5 yrs (for all loans) At SBAR i.e. 11.75% p.a.
Above 5 yrs up to 7 yrs (for all loans) 0.25% above SBAR i.e. 12.00% p.a.
Used Vehicles
Up to 3 years 3.00% above SBAR i.e. 14.75% p.a.
Above 3 yrs up to 7 yrs 3.25% above SBAR i.e. 15.00% p.a.

EDUCATION LOAN
A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.
Eligible Courses
All courses having employment prospects are eligible.
• Graduation courses/ Post graduation courses/ Professional courses

• Other courses approved by UGC/Government/AICTE etc.
Expenses considered for loan
• Fees payable to college/school/hostel

• Examination/Library/Laboratory fees
• Purchase of Books/Equipment/Instruments/Uniforms
• Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees
for the entire course)
• Travel Expenses/Passage money for studies abroad
• Purchase of computers considered necessary for completion of course
• Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.
Amount of Loan
• For studies in India, maximum Rs. 10 lacs

• Studies abroad, maximum Rs. 20 lacs
Interest Rates
SBI Student Loan Scheme
Loan Amount Rate of Interest
Loans upto Rs. 4.00 Lacs 0.50% below SBAR i.e. 11.25% p.a.
Loans above Rs. 4.00 Lacs and
1.00% above SBAR i.e. 12.75% p.a.
upto Rs. 7.50 Lacs
Loans above Rs. 7.50 Lacs At SBAR i.e. 11.75% p.a.
An Interest Rate concession of 0.50% to Girl Student availing Student Loans
Processing Fees
• No processing fee/ upfront charges

• Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted
in the margin money
Repayment Tenure
Repayment will commence one year after completion of course or 6 months after
securing a job, whichever is earlier.

Repayment Period
Place of Study Loan Amount
in Years
Studies in India Rs. 10.0 lacs 5-7
Studies Abroad Rs. 20.0 lacs 5-7
Security
For loans upto Rs. 10.00 lacs for Studies in

Amount
India and upto Rs. 20.00 lacs for studies abroad
Upto Rs. 4
No Security
lacs
Collateral security in the form of suitable third
party guarantee. The bank may, at its discretion, in
Above Rs. 4
exceptional cases, weive third party guarantee if
lacs to Rs.
satisfied with the net-worth/means of parent/s who
7.50 lacs
would be executing the documents as "joint
borrower".
Tangible collateral security of suitable value,
Above Rs.
along with the assignment of future income of the
7.50 lacs.
student for payment of installments.
All loans should be secured by parent(s)/guardian of the student borrower. In case
of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law
Margin
• For loans up to Rs.4.0 lacs : No Margin

• For loans above Rs.4.0 lacs:

o Studies in India: 5%
o Studies Abroad: 15%
Documentation Required
• Completed Education Loan Application Form.

• Mark sheets of last qualifying examination
• Proof of admission scholarship, studentship etc
• Schedule of expenses for the specified course
• 2 passport size photographs
• Borrower's Bank account statement for the last six months
• Income tax assessment order, of last 2 years
• Brief statement of assets and liabilities, of the Co-borrower
• Proof of Income (i.e. Salary slips/ Form 16 etc)

PROPERTY LOAN
SBI now makes ALL PURPOSE LOAN for customers to only keep their property but
also have liquid funds. Avail of an All-Purpose loan against mortgage of any of
customer’s property. SBI offer these loans at all their Personal Banking Branches and
those branches having Personal Banking Divisions amongst others.
Purpose
This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If
amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified
along with an undertaking that loan will not be used for any speculative purpose whatever
including speculation on real estate and equity shares.
Enjoy the SBI Advantage
 Complete transparency in operations

 Access this loan from SBI wide network of branches
 Interest rates are levied on a monthly/daily reducing balance method
 Lowest processing charges.
 Long repayment period of 60 months, upto 120 months for salaried individuals with
check-off facility
 No Hidden costs or administrative charges.
 No prepayment penalties. Borrowers can have surplus funds at any time thereby
conveniently reducing their loan liability and interest burden.

Eligibility
customers are eligible if they are:
A. An individual who is;

a. An Employee
b. A Professional, self-employed or an income tax assessee.
c. Engaged in agricultural and allied activities.
B. Customers Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual
Income (others) is in excess of Rs.1,50,000/-.
The income of the spouse may be added if he/she is a co-borrower or a guarantor.
C. Maximum age limit: 60 years.
Salient Features
Loan Amount
Minimum : Rs.25,000/-
Maximum : Rs.1 crore. The amount is decided by the following calculation:
• 24 times the net monthly income of salaried persons (Net of all deductions
including TDS) OR
• 2 times the net annual income of others (income as per latest IT return less taxes
payable)
Margin
SBI will finance upto 60% of the market value of your property.
Interest
Term Loan 1.00% above SBAR. i.e.13.25% p.a. Floating for loans upto Rs.1.00 crore. In
other cases 1.25% above SBAR i.e.13.50% p.a. Floating (w.e.f. 01.01.2009)
Repayment

Maximum of 60 equated monthly installments, upto 120 months for salaried individuals
with check-off facility. Customers could opt to divert any surplus funds towards
prepayment of the loan without attracting any penalty.
Security
As per banks extant instructions.
LOAN AGAINST SHARES \ DEBENTURES

Leverage investments in shares, debentures, public sector bonds and Government
securities for loans to meet unforeseen expenses. Avail of loans up to Rs.20.00 lacs
against shares/debentures to enable borrowers to meet contingencies, personal needs or
even for subscribing to rights or new issue of shares.
Note: Loan will not be sanctioned for
1. Speculative purposes
2. Inter-corporate investments or
3. Acquiring controlling interest in company/companies.
Enjoy the SBI advantage

• Low interest rates. Further, SBI charge interest on a daily reducing balance!!
• Low processing charges; only 1% of loan amount - compare with 1-3% of others.
• No hidden costs or administrative charges..
• No prepayment penalties.
Eligibility
This facility is available to SBI existing individual customers enjoying a strong
relationship with SBI. This loan could be availed either singly or as a joint account with
spouse in 'either or survivor'/ 'Former or Survivor' mode. It is offered as an Overdraft or
Demand Loan.
Purpose

For meeting contingencies and needs of personal nature. Loan will be permitted for
subscribing to rights or new issue of shares / debentures against the security of existing
shares / debentures. Loan will not be sanctioned for (i) speculative purposes (ii) inter-
corporate investments or (iii) acquiring controlling interest in company / companies.
Loan Amount
Customers can avail of loans up to Rs 20.00 lacs against their shares/debentures.
Documents Required
Customers will be required to submit a declaration indicating :
• Details of loans availed from other banks/ branches for acquiring shares/
debentures.
• Details of loans availed from other banks/ branches against security of shares/
debentures
Margin
Borrowers will need to provide a margin amount of 50% of the prevailing market prices
of the shares/ non-convertible debentures being offered as security. (The market prices
refer to the prices in the Stock Exchanges as reported in the Economic Times.)
Interest
2.25% above SBAR i.e. 14.50% p.a. (w.e.f. 01.01.2009)
Repayment Schedule
To be liquidated in maximum period of 30 months through a suitable reducing DP
program.
In case of a default or if the outstanding is over Rs.20.00 lacs, the shares/debentures will
be transferred in the name of the Bank.
Security:
Pledge of the demat shares/debentures against which overdraft is granted.

SBI PERSONAL LOAN

SBI personal loan will be granted for any legitimate purpose whatsoever e.g. expenses for
domestic or foreign 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 margins for purchase of assets etc.
SBI Advantage:
 Low interest rates. Further, we charge interest on a daily reducing balance!!
 Low processing charges; only 2%-3% of loan amount
 No hidden costs or administrative charges.
 No security required, which means minimal documentation, something that
customers had always wanted.
 No prepayment penalties. (1% of the loan amount will be charged if repay the loan
before 6 months)
 Long repayment period of up to 48 months.
Eligibility
Customers are eligible if they are a salaried individual of good quality corporate, self
employed engineer, doctor, architect, chartered accountant, MBA with minimum 2 years
standing.
Loan Amount
Personal loan limit would be determined by customer’s 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
SBI do not insist on any margin amount.
Repayment
The loan is repayable in 48 EMI. Customers are allowed to pay more than the EMI if they
wish to, without attracting any prepayment penalty.
Security
NIL
Processing Fee
Processing charges are 2-3% of the loan amount. This is amongst the lowest fees in the
industry. Processing fees have to be paid upfront. There are no hidden costs or other
administrative charges.

LOANS AGAINST GOLD ORNAMENTS, MORTGAGE OF

PROPERTY
a) Loan against Gold Ornaments
Size of Credit Limit Rate of Interest
Upto Rs. 1,00,000/- At SBAR i.e. 11.75% p.a.
Above Rs. 1,00,000/- 0.50 above SBAR i.e. 12.25% p.a.
b) Loan against Mortgage of Immovable Property

Size of Credit Limit Rate of Interest
(Term Loan)
Upto Rs. 1,00,00,000/- 1.00 above SBAR i.e. 12.75% p.a.
Above Rs. 1,00,00,000/- 1.25 above SBAR i.e. 13.00% p.a.
No Overdraft against Mortgage of Property

LOAN FOR EARNEST MONEY DEPOSIT

This product addresses the financial requirements towards Earnest Money Deposit to
book residential plots/ built-up houses/ flats being sold by Govt. Housing Agencies,
Urban Development Authorities like PUDA, HUDA and Housing Boards.
Scheme highlights
Easy availability of loan with minimum documentation.
Option to repay this loan from the proceeds of Housing Loan availed from SBI
Interest applied on daily diminishing basis.
No administrative charges or application fee.
Eligibility
Minimum age 21 years as on the date of sanction.
Steady source of income.
Maximum Loan Amount

Rs.100,000.
90% of application money, or
10 times Net Monthly Income of the applicant
Whichever is the least, subject to the following:
o One person can be financed only for one application at any point of time
o In case of applications in more than one name, incomes of all the applicants may
be taken into account
Security
Third party guarantee good for the loan amount.
Tangible security in the form of NSCs/ IVPs/ TDRs/ LIC policy/ SBI Life policy etc.
covering atleast 50% of the loan amount.

Tangible security clause waiver considered in respect of permanent employees of

reputed public/ private sector organizations, where check-off is available.
Repayment
In case of unsuccessful applicants – on receipt of refund from the Housing Board/
Urban Development Authority.
In case of successful applicants – lump sum repayment of the loan out of Housing
Loan availed from us for purchase of house allotted to or for construction of house on
the plot allotted.
No penalty for prepayment.
Rate of Interest
1% above SBAR i.e. 13.25% p.a. (w.e.f. 01.01.2009)
Processing Fee
0.5% of the loan amount (minimum Rs.100/-)
Disbursement
The loan would be disbursed by issuance of draft/ banker’s cheque favouring the
concerned Government Agency.
Documents
Letter of allotment from the concerned Housing Agency, Urban Development
Authority or Housing Board
Photograph
Proof of Identity
-Voters’ I-card/ Passport/ Driving License/ PAN Card etc.
Proof of residence
-Passport/ Driving License/ PAN Card/ Ration Card
-Any other satisfactory proof of residence
Proof of Income

not required if the applicant is maintaining an account with SBI
MEDI-PLUS SCHEME
The Specialised Medical Treatments, not only do the cost implications run into several
lakhs of rupees, but more often than not, these liquid funds also need to be generated at a
very short notice, in order to be able to make prompt hospital bill payments… With this
in mind, Medi Plus is specially designed to make life simpler for you under what could
well be trying circumstances.
Purpose
Loan for individuals to avail specialized expensive medical treatment e.g. coronary by-
pass, Hip and Knee replacement surgery, cochlear implants(surgical) for the hearing
impaired etc.
Customers may avail of loans under the Medi Plus Scheme to cover the cost of treatments
such as:
• Corneal Implant
• Orthodontic Treatment (fixed tooth implant)
• Ilazirav Technique of lengthening a limb
• Congenital heart surgery
• Angioplasty
• Heart Valve Replacement Surgery
• GIFT (in-vitro technique for child bearing)
• Serious Accidents and Multiple Injuries Surgery
• Hip and Knee Replacement Surgery
• Coronary Artery Bypass/ Graft Surgery
• Cochlear Implants (surgical) for the hearing impaired
• Onco-Surgery upto Grade I
• Reconstructive Nose Surgery with Face Lifting
• Penile Implant Surgery

• Artificial Limb Prosthesis
SBI advantage :
• Concessions in margin amounts, interest rates and processing charges.

• Lowest interest rates. Further, SBI charge interest on a daily reducing balance.
• Lowest processing charges; only 1% of loan amount -(compare with 1-3% of
others.)
• No hidden costs or administrative charges.
• No prepayment penalties.
• Flexible repayment period.
Eligibility
customers who qualify to avail of loans under this scheme, if they are:
• An employee of the Government/ a reputed PSU/ a profit making public limited

company, and if you have a minimum, 10 years of service
• A self-employed professional
• A pensioner, who has taken voluntary retirement and is not yet 60 years old
• An agent of Insurance/ KVP/ Mutual Funds etc. with a minimum annual income
of Rs.3 lacs
• An employee/ a pensioner with a minimum income of Rs.10,000 per month or if
customers are a neither, a minimum income of Rs. 3 lacs per annum.
Note : If the person being treated is a minor, the loan may be granted to a parent.
Loan Amount
The loan amounts range from a minimum of Rs.50,000/- to a maximum of 12 months

NMI (when it concerns salaried individuals and pensioners) or a 1 year net annual income
(when it comes to persons other than salaried individuals and pensioners), subject, to the
following ceilings:

• For Employees and Professionals : Rs.2.0 lacs

• For Pensioners and Agents : Rs.1.0 lac
Once sanctioned, the loan is disbursed by the issuance of a draft/ banker's cheque,
favouring the hospital, where the treatment is being undertaken or where it's proposed to
be undertaken.
Margin
20% of the total cost of treatment.
Security
Repayment Period
Borrower may comfortably repay their loan over a maximum - 60 Equated Monthly
Installments.
Interest
0.75% above SBAR i.e.13.00% p.a. (w.e.f. 01.01.2009)
Processing Fee : 0.50% of the entire loan amount, If the applicant already maintain a
regular Housing Loan Account with SBI the processing fee is waived.

RENT PLUS
Name of scheme
Rent Plus
Nature of facility
Term Loan
Period of repayment
7 years or the residual lease period, whichever is lower.
Eligible customer
Owners of residential buildings and commercial properties in Rural/Semi
urban/Urban/Metro areas which are to be rented or already rented to MNCs/ Banks/
Large & medium size corporate.
Purpose
To meet liquidity mis-match of the applicants.
Quantum of finance
Min. Rs. 50,000.00
Max. Rs. 5 crore for properties located at Non-Metro Centres and Rs. 7.50 crores for
properties located at Metro Centres. There will be no differentiation on the basis of
constitution of the applicant.
Margin
40%
Repayment
Equated Monthly Installments of 7 years or residual lease period.
Prepayment

1% of the loan amount prepaid.
Interest
Centre Loan Amount Rate of Interest

Metro Loan upto Rs. 7.50 Crores 1.00% above SBAR i.e. 13.25% p.a.
Above Rs. 7.50 Crores 1.25% above SBAR i.e. 13.50% p.a.
Non Metro Loan upto Rs. 5.00 Crores 1.00% above SBAR i.e. 13.25% p.a.
Above Rs. 5.00 Crores 1.25% above SBAR i.e. 13.25% p.a.
Primary Security
Assignment of receivables and recording of power attorney with the lessee is a must.
Collateral Security
i) First charge on buildings against the rentals of which the loan would be sanctioned
(value of the property should be double the amount of loan) or any other acceptable
property of equal value.
ii) Equitable Mortgage of immovable property by deposit of titledeed.
iii) In case of partnership firm, personal guarantee of the partners of the building. In case
of company personal guarantee of directors to be obtained.
Insurance
The amount of insurance should cover the value of assets charged to the Bank.
Applicability
Metro / Urban / Semi-urban/ Rural centers.
Processing charges and cost of valuation

2% of loan amount, subject to a maximum amount of Rs.1,00,000/=, to be paid upfront as
processing charges. The charges for valuation of the property are to be borne by the
applicant.

CHAPTER V
FINDINGS, SUGGESTIONS
&
CONCLUSION

FINDINGS
The study is carried out to know the kinds of loans and advances provided by SBI.
After finishing the analysis and observation of the collected data the following findings
were known:
1. SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES
in accordance with SBI's commitment to Environment protection.
2. Interest rate after three years may be Fixed or Floating as per the borrower’s
will be 2.75% below SBAR.
3. Interest rate subject to change without notice.
4. In car loan SBI provides Finance for one-time road tax, registration fee, insurance
premium and accessories.
5. In loan against shares and debenture SBI having Low processing charges as only
1% of loan amount as compare with 1-3% of others.
6. In Medi Plus scheme SBI having concession in interest rates, processing charges
and margin.
7. SBI offering complete transparency to the customers.
8. The accessibility of the SBI loans is that, it can be easily accessible.
9. In education loan a maximum limit of Rs 10 lakhs is offering by SBI to domestic
students and a maximum limit of Rs 20 lakhs to others.
10. The customer’s perception towards the service of SBI is good.

SUGGESTIONS
• SBI should provide much more customer service, should try and reduce interest
rates to make its products more competitive and also give its customers an option
of short term repayment period.
• SBI must try and introduce cash back policy on the processing fee/documentation
fee of the short-term loan.
• To speed up loan appraisal, embracement loan if asked from the customer should
be issued fast and interest charged on loans should be less.
• To introduce cash back policy in shopping center.
• To charge low interest rates on the personal loans, car loans and also on
educational loans.
• Banks should improve the operational efficiency to improve the processing speed
of the loans and reduce the time to provide loans.
• As SBI have large network it should introduce as many as schemes possible.

CONCLUSION
This project went through the deep study of loans and advances of State Bank of
India. It is satisfying thing to know that State Bank of India is growing towards a
“Service of Excellence”. All the achievements can be given a broader sky view by
applying and considering the findings and suggestions given in this project. Efforts have
been made to know all spectrum of possibilities through which State bank of India can
satisfy their customers more and understandingly.
The availability of computerized software much of the technicalities of the

assessment have been largely simplified. The efforts by SBI constantly update its
evaluation procedures, indicate its high level of professionalism and also explain why it is
in a leading position amongst the nationalized banks. The project can be had with
management of borrowing firms to get better idea about the business, its viability and
also the capacity of management to tackle exceptional situations.

BIBLIOGRAPHY
BULLETIN:
• Annual reports of SBI
• Annual reports of RBI and IBA (Indian Banks Association) Bulletin.
BOOKS:
• Vasanth Desai, “Banks and Institutional Management” First edition, published by
Himalaya Publishing House, Mumbai 2006.
• L. M. Bhole, “Financial institutions and Markets”, first edition, Tata McGraw Hill
Publications company Ltd., 2004.
WEBSITES:
• www.statebankof India.co.in
• www.rbi.org
• www.google.com

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Loans& Advances

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Study on Loans & Advances

Al-Ameen Institute Of Management Studies Page 1

A borrower may be subject to certain restrictions known as loan covenants under

Al-Ameen Institute Of Management Studies Page 2

• credit card debt

Al-Ameen Institute Of Management Studies Page 3

UNITED STATES TAXES

Al-Ameen Institute Of Management Studies Page 4

INCOME FROM DISCHARGE OF INDEBTEDNESS

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y

INDIAN BANKING SYSTEM

Al-Ameen Institute Of Management Studies Page 5

INDIGENOUS BANKING IN INDIA:

Al-Ameen Institute Of Management Studies Page 6

Indigenous bankers often endorsed hundis issued by traders and sometimes

INDIAN FINANCIAL SYSTEM:

Al-Ameen Institute Of Management Studies Page 7

FUNCTIONS OF FINANCIAL INSTITUTIONS

THE STUCTURE OF BANKING SYSTEM:

Al-Ameen Institute Of Management Studies Page 9

FUNCTIONS OF COMMERCIAL BANKS

FUNCTIONS OF COMMERCIAL BANKS

PRIMARY FUNCTIONS SECONDARY FUNCTIONS

Al-Ameen Institute Of Management Studies Page 10

CLASSIFICATION OF INDIAN COMMERCIAL BANKS:

A. PUBLIC SECTOR BANKS:

STATE BANK OF INDIA:

Al-Ameen Institute Of Management Studies Page 11

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Companies (Acquisition and Transfer of Undertaking) Bill, and it received the

B.PRIVATE SECTOR BANKS:

The private sector can be further classified as follows

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The Co-Operative banking sector has been developed in the country to

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STATEMENT OF THE PROBLEM:

OBJECTIVES OF THE STUDY:

SCOPE OF THE STUDY:

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LIMITATIONS OF THE STUDY

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Offices of the Bank of Bengal

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State Bank of India (SBI), Mumbai Main Branch.

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The Subsidiaries of SBI till date are

• State Bank of Indore

• SBI Capital Markets Ltd

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1806: The Bank of Calcutta is established as the first Western-type bank.

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FINANCIAL PERFORMANCE OF SBI

Net Interest Income

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Provisions and Contingencies

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Reserves and Surplus

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TABLES SHOWING THE FINANCIAL PERFORMANCE OF SBI