ABOUT
KBS BANK :
Krishna Bhima Samruddhi Local Area Bank
Limited (Samruddhi Bank) was incorporated in 1999 and was granted license by
Reserve Bank of India , the
bank regulator in India , to
carry on banking business as a local area bank in the districts of Mahboobnagar
in Andhra Pradesh state and Raichur and Gulbarga
The concept of Local Area Bank (LAB) was
introduced in 1996 with a view to mobilize rural savings and make them
available for investment in the local area of operation of such banks. The
local area banks were expected to bridge the gap in the availability of credit
and strengthen the institutional credit framework in rural and semi-urban
areas. LABs were required to finance and Isquo; priority sector and rsquo; that
included agriculture and allied activities, trading activities, non-farm sector
and cottage and village industries and small scale industries. Their lending to
priority sector consisting of the above activities was to be minimum 40% of
their net bank credit and lending to weaker section was to be at least 25% of
their priority sector lending vast number of poor people particularly in rural
areas.
Area of Operation:
Samruddhi Bank is operating in three most
backward districts located contiguously in two states of Andhra Pradesh and
Karnataka. Samruddhi Bank has a network of 14 branches locations are as under:
As per the RBI report, all the three districts are considered as under-banked
districts of the country. The profile of the area is given below:
Mahboobnagar District:
The district is located in the state of
Andhra Pradesh. Bank’s head office is
located in the district headquarter two of Mahboobnagar. There are 1477 villages in the district with
a population of 35.13 Lakhs. Agriculture
is the predominant economic activity with more than 75% of the people depending
on agricultural activities for their livelihoods. 48% of the landholdings are less than one
hectare in area. 22 Percent of net sown
area is under irrigation. Normal annual
rainfall is around 600 mm. Millets,
Pulses and oilseeds are the major crops with Castor alone occupying 30% of the
area. Other important economic
activities are handloom weaving and sheep / goat rearing.
There are 229 bank branches including RRBs
(70) and co-oprative banks (19) operating in the district. The deposits aggregate Rs.2,690 crores and
advances Rs.2,481 crores as on 31.03.2008 and the Credit Deposit ratio is 92%.
Branches in Andhra Pradesh
State
Mahboobnagar
Atmakur
Kodangal
Gadwal
Nargarkarnool
Raichur District:
The district is situated in Karnataka state.
It has 808 villages with a population of 16.70 lakhs. Normal rainfall is 621 mm
and the predominant economic activity is agriculture. The principal crops are
Paddy, Jowar, Tur, Groundnut, Sunflower and Cotton. 42% of landholdings have an
average area of 2 hectares and above. Irrigated area constitutes 30% of the net
sown area. The district also has substantial area under plantation crops like
Mango and Coconut. The district is a major centre for cotton production. There
are several agro based industries in the district viz. rice mills, oil mills,
cotton ginning and pressing factories and spinning mills.
There are 129 bank branches functioning in
the district. The aggregate deposits and advances as on 31.03.2008 are Rs.1456
crores and Rs.2002 crores respectively. Credit Deposit ratio is 138%.
Branches in Karnataka State
Raichur,
Manvi
Deodurg-Bank-on-Wheels (A Mobile Br.
Sidhanur
Gulbarga District:
There are 209 bank branches operating in the
district. The outstanding Deposits as on 31.03.2008 are Rs.2745 crores and
advances are Rs.2966 crores. Credit-Deposit ratio is 108%.
Branches in Karnataka State
Yadgirs
Kamalapur
Chowdapur
Aland
In addition to deposits, advances have also
shown healthy growth, especially in the farm and non-farm segments.
Loan Schemes:
Definitions
1.
A sum of money given to an individual or individuals with the intent
that it is to be repaid at some future date along with any agreed upon
interest.
2.
An advance of funds from a lender to a borrower on the agreement
that the borrower pays interest on the loan, plus paying back the initial
amount of the loan at or over an agreed time.
3.
When a lender gives money or property to a borrower, and the
borrower agrees to return the property or repay the borrowed money.
What is Loan?
A loan is a type of debt.
This article focuses exclusively on monetary loans, although, in practice, any
material object might be lent. Like all debt instruments, a loan entails the
redistribution of financial assets over time, between the lender and the borrower.
The
borrower initially does 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).
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
·
Credit facilities
or lines of credit
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
Other terms and conditions in Loan Products:
·
Crop loans / Samruddhi Kisan Credit Card (SKCC)
All
crop loans shall be though Samruddhi Kisan Credit Card, for SKCC loans the
limit will be Rs.1,00,000/- maximum, in which upto Rs.25,000/- should be
through JLG while above that will be individual loans with mortgage. Loans upto Rs.10,000/- invariably in JLG only
except for hospitalisation / emergency loan for staff. Loans above Rs.10,000/- to Rs.25,000/- either
in JLG or individual basis, with collateral security. Maximum limit for JLG for all loans is
Rs.25,000/- only. Loans above
Rs.25,000/- must invariably given as individual loans. There should be a minimum of 15 days gap
between date of loan closure and disbursements of repeat loan in crop
loans. Vegetable cultivation loans
should be given under crop loans.
·
Sudhama Loan:
Ceiling
on Sudhama loan will be savings plus Rs.3000/-.
·
Agri Investment Loans:
Agri-term
loans can be given in villages which have at least 10 monthly recovery accounts
and an OTRR >=95%.
·
Lift Irrigation Loans:
Distance
between points of lift to point of delivery must be 1500 Mtrs. Maximum limit: Rs.20,000/- per acre and
Rs.2,00,000/- per project.
·
NFS Growth Micro Enterprises Loans (Composite term loan)
Growth
enterprise loan product should be followed as given below;
Ø Micro Loans: Rs.50 K at 21%.
Ø Small Loans: > Rs.50K to Rs.200K at 15% - 18% based on rating.
Ø Macro Loans: > Rs.200K to Rs.500K at 15% - 18% based on rating.
Composite
term loan Includes loan for fixed assets and working capital requirements. NFS growth micro loan can be given for first
time borrowers. Growth-Micro loans are
restricted to activities, which generate direct and significant wage employment
and have regular cash flows.
·
Housing Construction / Repair or Extension:
Housing
loans can be given in villages which have at least 10 monthly recovery accounts
and an OTRR >=95%.
·
Vehicle loans to employees / LSPs
Vehicle
loan to employees / LSPs should be 85% of the vehicle cost (it will be only
cost of vehicle) and 60% of the depreciated value for used vehicle. All vehicles of staff and LSPs financed by
must be hypothecated in favour of Krishna Bhima Samruddhi Local Area Bank Ltd. Obtain copy of the R.C. book, insurance
copy. The same should be attested by the
Branch Head duly verifying the originals and the same to be kept along with the
loan documents. Comprehensive insurance
of the vehicle shall be done on the day of purchase and before on road. Signature on the “Change of ownership form”
Form No. 29 should be taken along with the application. It is the responsibility of the BH to ensure
this.
·
Vidya Samruddhi Loan Product and Procedures:
Target
customers of Vidya Samruddhi education loan will be students from rural areas /
towns staying in Krishna Bhima Samruddhi Local Area Bank Ltd. (KBS Bank)
operating areas and are admitted to job guaranteed courses offered by reputed
institutes.
Product:
·
Minimum loan amount is Rs.10,000/-.
·
Loan will be limited to maximum of 75% of the
cost of study of the courses, subject to a ceiling of Rs.2,00,000/-. The cost of study will include fee payable to
the institution, cost of books (as per the estimate provided by the
institution), cost of computer (if required for study and certified by
institution). All other expenses are to
be borne out of the own resources of the applications.
·
The repayment has to commence from 6 months
after completion of study or immediately on securing employment, which ever is
earlier. The maximum repayment period
will be 4 years from that date. Thus the
maximum tenor of the loan is 6½ years.
Interest has to be paid during the period of moratorium by the
co-applicant or guarantor.
·
Interest chargeable for Professional Higher
Education courses would be at the rate of 15% on diminishing balance, upfront
loan processing fee at the rate of 2% plus service tax as applicable.
·
Interest chargeable for Vocational courses at
the rate of 18% on diminishing balance, upfront loan processing fee of 2% and
service tax as applicable. Maximum
exposure upto 75% of the course fee and tenure Upto 3 years.
·
Recovery has to be made through post dated
cheques (PDCs) and / or through Electronic Clearing System (ECS).
·
Applicant would be the student, parent would
be co-applicant (preferably who is earning), guarantor must be an employee with
State / Central Government / PSUs / Reputed Corporate and Banks. Minimum net monthly income of the guarantor
should be Rs.5,000/- and should have sufficient service to cover the loan
period.
·
For the present, the scheme will be limited
to cover only domestic courses. The
maximum duration of the course has to be 2 years.
Procedures:
·
At the time of disbursement we have to
collect 3 PDCs from each applicant, co-applicant and guarantor as a security.
·
Disbursement will be made by the branch
favouring the educational institution and documents should be kept with unit.
Disbursement
has to be made direct to the institutes / vendors. Cost of books purchased can be reimbursed in
cash subject to production of receipts.
Financial Services
Savings;
Samruddhi Bank is offering different Deposit Products to its customers
depending on the needs of the customers.S.no Saving Product
Product Description
1)
Fixed Deposit IAWPA fixed deposit, which will
mature on a specific period in the future and payable after maturity along with
the interest.
2)
Fixed Deposit ARIA fixed deposit which will
mature on a specific period in the future and interest payable periodical basis
as requested by the depositor.
3)
Savings Bank: A Normal
savings bank with multiple deposits and multiple withdrawals.
4)
Samruddhi Life Savings Bank: A savings bank
with multiple deposit and multiple Withdrawals. The deposit holders will get a
free Accidental Insurance as well as Life Insurance
5)
Samruddhi Cash Certificate: A fixed deposit
payable after maturity.
6)
Recurring Deposit: A Fixed deposit with
monthly installments, payable on maturity along with interest.
7)
Samruddhi Daily Deposit: A daily deposit
product, a multiple of Rs.10I- to Rs.2501- for aperiod of 6 months, payable on
maturity.
8)
Current Account: A bank account with multiple
deposits and multiple withdrawals normally used by business entities.
9)
Samruddhi Life Term Deposit Insurance linked
fixed deposits.
10)
Samruddhi 365A fixed deposit which matures with
365 days and with 11% interest rate.
Loans
Samruddhi Bank offers a wide
range of loans catering to different segments of the poor and their varied
needs across a large number of economic activities, as follows:
·
Crop Loans through Joint Liability Groups! Crop loans through Bore
well users association.
·
Samruddhi Kisan Credit Card : Credit Card for crop loans
·
Sudhama
Loans- Loans
·
Agri
Allied
·
Non
Farm Micro and Growth Enterprises
·
Loans
to SHG/MACTSNO
·
Rural
Housing Loans
·
Loans
against bank’s deposit
·
Small
Road Transport Loans
Money
Transfer
Samruddhi Bank is offering cheaper money
transfer facility payable at more than 228 locations across India
Insurance
Samruddhi Bank is providing various
insurance services as follows:
·
Life
insurance for customer - Aviva Life Insurance Company
·
Livestock
insurance - Royal Sundram Insurance Company
·
Weather
insurance - ICICI Lombard Insurance Company
·
Crop
insurance - Agricultural Insurance Company of India
·
Health
insurance - Royal Sundram Insurance Company
Samruddhi Bank has established; Samruddhi
Centre for Livelihood Promotion; for extending Agriculture and Business
Development services mainly to its customers. Over 1000 of its customers
(largely dairy farmers) are already getting such services. The centre is in
process of extending such services to customers with agricultural crops like
red-gram, paddy and non-farm micro-enterprises like Kirana shops, vendors,
small restaurants etc. The centre will also provide technical services for
institutional development for such small groups of producers.
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