LOAN DETAILS IN SYNDICATE BANK

Loans in syndicate bank’s and there delegation of powers for sanctions the credit into the different branches, Loan recovery systems, Interest Rates, Loan file rejection from credit proposal, terms of loans, repayment of loans and loan guarantees.

Delegation of powers for sanctions the credit to

different branches:

The following are the delegation of powers for sanctions the credit to different branches.

Small Branch (Business upto Rs.2.00 crores):

The manager has the power to sanction loan upto Rs.10.00 lakhs (Per borrower) and out of which Rs.3.00 lakhs is for Agriculture.

Medium Branch (Business Upto Rs.2 to 5 crores)

The manager incharge has the power to sanction upto Rs.20.00 lakhs (Per borrower) and out of which Rs.8.00 Lakhs is for agriculture.

Large Branch (Business from Rs.15 to 50 Crores)

Senior manager / Manager has the power to sanctions upto Rs.30.00 lakhs (Per borrower) and out of which Rs.15 lakhs is for agriculture.

Very Large Branch (Business beyond Rs.50 crores)

The Chief Manager or Incharge has the power to sanction upto Rs.15 Lakhs and out which Rs.50 Lakhs is for agriculture.

Delegation of powers for sanctions the credit:

The delegation of powers is given by the head office to all the branch manager according to their grade, size of the branch, special feature of branch at present.

The following are the delegation of powers sanctioned by Head Office.

Grade	Secured Loan	Clean Loan
1	10 Lakhs	3 Lakhs
2	20 Lakhs	5 Lakhs
3	40 Lakhs	10 Lakhs
4	100 Lakhs	20 Lakhs
5	500 Lakhs	100 Lakhs

Source: Syndicate Bank Brochure.

Rate of Interest:

Loan upto 2 Lakhs PLR (12.5%) above 2 lakhs parties are graded according to their security, past performance and present feasibility.

The grade are divided into 3 category.

Credit Rating	Rate of Interest
03	PLR+1%
04	PLR+2%
05	PLR+2.5%

For small scale industries, issue the credit under a following grade and rate of interest.

Grade	Rate of Interest
03	PLR
04	PLR
05	PLR+0.5%

General purpose loan under a personal banking Loans à = PLR + 2%.

Following are the ways of recovery of credit by Bank, they are;

Personal Contact.

Issue of notice.

Register notice.

Advocate notice.

Notice under Securitization Act.

Compromise settlement in case of Bad loans (NPS).

Time norms for disposal of Credit Proposals:

The essence of the bank policy is to ensure timely disposal of credit proposals. In this regard following time norms shall be adhered to in disposing a credit proposals and accounting taken of services is issued to the applicant.

Loan upto Rs.25,000:

The loan upto Rs.25,000/- must be disposed with in 15 days.

Kisan Credit Card – Branch Power:

The Kisan credit card is given to the formers of the cultivation of the crops and for working capital need for agriculture. It must be disposed within 15 days of application.

Small Scale Industries (SSI):

The small scale industries or small medium enterprises loan upto Rs.25,000/- beyond Rs.25,000/-. It must be disposed within 4 weeks.

Export Credit under Gold Card Schemes:

Bank provide export credit under gold card scheme to the eligible borrowers under this scheme the rate of interest 15 less from 0.25%. The eligible borrower should have good turnover and good record under the bank. Under this scheme the fresh application must be sanction within 75 days and application for renewal of existing credit limit within 15 days and application for adhoc credit facilities (arranged or happening when necessary) or in urgent has to be sanction within 7 days.

Export Credit – Other than under gold card:

The fresh application for export credit other than gold card must be sanction within 45 days a application for renewal of existing credit limit within 30 days.

Rejection of Credit Proposals:

The bank as laid down certain condition bases on, which the credit proposal will be appraised and sanctioned by the otherwise the credit proposal will be rejected by the bankers based on these following conditions.

If the borrowers does not posses the technical feasibility in his credit proposals from the bank will be rejected the credit proposal.

If the borrower does not have economic viability in his proposal then also the banker will reject the proposal.

The other things, the banker will see his repaying capacity margin and character of the borrower.

The credit policy of the bank for rejection of credit proposals says that, rejection of credit proposal of SC/ST customer under government sponsored scheme and credit proposal for education Loan, should not be reject by the relevant authority before consulting next higher authority.

Documents are required to issue credit:

The following are the main required document to issue a credit.

Loan application form.

Stamp receipt.

Loan agreement.

Guarantee agreement.

Security details.

Mortgage deed.

Quotation in case of vehicles / machinery loans.

Working Capital:

Syndicate Bank shall provide need based working capital facilities.

Fund based or cash based.

Non fund based.

Short term lending products.

Turnover Method:

Under this method the limit shall be computed at 20% of the projected sales turnover accepted by the bank as working capital credit.

Applicability:

SSI borrowers seeking enjoying fund based working capital limits Rs.20.00 Lakhs.

Duration of Working Capital:

Normally it is upto a maximum of a year (12 months) from the date of sanction except into the following cases.

a)	In case of employee of the bank	2 years.
b)	O.D. against our banks term deposit	Upto the date of maturity of the terms deposit subject to yearly review.
c)	Gold cared for exporters	3 years subject to the scheme guidelines

Non-fund based facilities:

Inland Bank Guarantees.

Solvency Certificate and capability certificates.

Inland Bank Guarantees:

A contract of guarantee (Is also known as contract of Suretyship) is a contract to perform the promises or discharge the liability of a third person in case of his (third person) default.

There are 3 parties to a guarantees.

The person who gives the guarantee is called the surety or guarantor (Bank).

The person or whose behalf the guarantee is given is called the principle debtor.

The person in whose favour the guarantee is given is called the creditor or beneficiary.

In the case of bank the occasion to issue guarantee arises whenever the customer of the bank enter into obligation with others for constructions of building, supply of raw-material stocks etc., or to meet pecuniary obligation.

Types of Guarantees:

Financial Guarantees:

This guarantee is used for a repayment of a loan or a debt.

Performance Guarantees:

The guarantees issued in respect of performance of contract or obligation.

Deferred Payment Guarantees:

Insurance of differed payment guarantee favouring suppliers / manufacturers where goods / machineries are supplied on credit and the payment is to be made by different installment.

Advance Payment Guarantees:

Advances payment from their principal to meet part of the expenses for execution of contracts or to meet a part of the working capital requirements.

Solvency Certificate Customer:

Customer sometimes request the bank to issues solvency certificates which they are require for submission to government department or other organization for considering tender application or for similar other purpose.

Term Loans:

Term loan is a single transaction loan where the loan amount is disabused either in lumpsum or in stages and the same is repaid installment along with Interest. Unlike in an operative account the facility of reinstating the limit to the extent of repayment is not available.

Types of term loans:

Short terms loans:

Any loan repayable in a period less than 36 months is called as a short term loans.

Medium terms loans:

Medium term loan is a loan it is payable in 36 months and above but upto inclusive of 84 months.

Long terms loans:

Long term loan is a loan it is payable in a beyond 84 months.

The term loan is given both for industrial and non-industrial borrower i.e., both for activities involved in manufacture / processing repairing and business / trading activities agriculture etc.,

Repayment period of Term Loans:

The maximum period for which term loans can be granted shall be as under.

Sl. No.	Term Loans	Maximum Repayment Period
1.	Agriculture Loan	5 to 15 years
2.	Artisans and village industries	10 years
3.	Small Scale Industries	7 years
4.	Medium & Large Industry	9 years
5.	Infrastructure Projects	12 years (15 years in exceptional cases)
6.	Housing Finance	20 years
7.	Others	5 years

Source: Syndicate Bank Brochure.

Federal Reserve Credit Policy

Federal Reserve “Credit Policy”:

I do not intend for my remarks concerning monetary policy to imply that the federal Reserve cannot or does not take actions which have a direct bearing on commercial banks credit policies. Since monetary and the price of credit extended by banks are affected. This is one important channel through which monetary actions influence the real sectors of the economy.

However, a side from the monetary actions of the Federal Reserve which have a direct bearing on the growth of aggregate demand for goods and services, the Federal Reserve can and does take actions which have a significant impact on the quantity, and price of bank credit. Furthermore, these actions may have no more than marginal effect on the total amount of credit outstanding. This brings me back to my central point regarding the distinction between money and credit.

An increase in the stock of money increases the total purchasing power of the economy, whereas changes in the composition of total private sector credit may represent only a re-channeling of the flow of purchasing power that is transferred from some economic units to other economic unit chooses to save some of its current income by increasing its holdings of time or savings deposits at a bank, it is choosing to forego some present spending in order to preserve some purchasing power for future use. When a commercial bank, in its intermediary role, uses the proceeds of the increased deposits to purchase securities of increase its business or consumer loans, the present purchasing power preserved by one economic unit is transferred to another economic unit. This transfer permits some economic units to obtain more current command over services, consumption goods or investment goods than their own income would otherwise allow.

One example of an action that could be taken by the Federal Reserve, which would affect the credit policies of banks would be to lower or hold the maximum interest rates banks are permitted to pay on time and savings deposits below the yields available to servers from competing institutions or financial instruments. Under such circumstances, these deposits will flow out of commercial banks, and the amount of bank credit extended to the public will contract. In addition to a decrease in the volume of bank credit, there will be an increase in the price of such credit since banks will allocate the available supply of funds of those most willing and best able to pay, given quality and other considerations.

A decrease in the volume of bank credit resulting from such an action by the central bank will not necessarily reduce the total credit flow in the economy; only the flows through the most efficient channels are altered. The experience with regard to CDs U.S. Treasury bills, commercial paper, and direct loans in recent years confirms this pint. Once short-term market rates of interest had risen to the point that the yields banks were permitted to pay on time deposits were on longer competitive, the volume of these deposits at banks declined. Banks were forced to sell securities and contract loans. However, corporate depositors merely shifted to directed ownership of short-term Government securities and to placement of short-tem loanable funds on the commercial paper market.

INFLUENCING LOAN POLICY IN SYNDICATE BANK

Factors influencing loan policy in syndicate Bank

The important factors which go into the determination of loan policies of a bank are following.

Capital Position:

Capital position is probably the most important factor influencing loan policies of a bank. As observed earlier capital provides cushion to absorb losses that may occur. It serves as a protective factor against losses for depositors and guarantee fund to creditors. A bank with strong capital position can assure more credit risk than one with weak capital position. Accordingly the former can follows liberal lending policy and provide different types of loan including long-term loans promising higher interest rates which the latter cannot do so because of the greater risk involved.

Earning Requirements:

Profit making is one of the principal objectives of a commercial bank. However, some banks may be in a position to emphasis income, but others may stress on liquidity. These banks who have set income as the principal goal of their lending would follow aggressive policy of lending and might make large amount of term loans or consumer loans which normally are made at higher interest rates because of relatively greater amount of risks, which they accompany. This should not suggest that banker would take under risks for a accomplishing the objective of profitability, where earning receive greater emphasis in loan policy of a bank it may mean that the would keep a larger amount of secondary reserves or it would include in its investment account securities carrying shorter maturity periods and possess relatively less risks.

Deposit Variability:

Banks that have experienced credit movement in their deposits will have to follow conservative lending policy. They cannot afford to incur undue risks by extending term lending facilities. Similar policy should also be followed where banks are faced with declining deposits. In a refreshing contrast with this liberal lending policy can be pursued by banks whose deposits show little or no fluctuations and who can easily predict fluctuations in deposits and loan demands and make provision for them through secondary reserves. Banker whose deposits have shown rising tendency in the past and expect the rising trend to persist in future can also be liberal in their loan policy.

State of Local and National Economy:

In formulating lending policy for his banks the banker should also keep in mind economic conditions that are prevailing in the region served by the bank. A bank operating in an area which is subject to seasonal and cyclical fluctuations can ill afford to adopt liberal policy because that would entail the bank in hazards of illiquidity. But in stable economy where possibility of fluctuation in levels of deposits and loan demands is limited the banker can follow liberal loan policy. If economic conditions of the country are expected to improve and level of business activity is likely to increase banker can liberalise lending policy by relating credit standards and security requirements to accommodate those borrowers who were either refused banking faculties due to stiff credit policy.

Monetary Policy:

Monetary policy of central banking authorities goes a long way in determining the lending policy of a commercial bank. Through variation in minimum reserve requirement and net liquidity ratio central bank influence, the lending ability of banks. Thus, by reducing the proportion of minimum cash reserve which a commercial bank is required to carry with the central bank and reducing net liquidity ratio and bank would get additional funds which can be utilised in lending form. In the event the cash reserve ratio and net liquidity ratio is increased lending ability of bank is limited.

Ability and Experience of loan Officers:

Loan officers in a bank play a significant role in execution of loan policies of the bank. The board should therefore, consider the skill and competence of the bank loan officers while laying down loan policy. Where a bank is staffed with a larger number of credit officers having expertise knowledge and rich experience in diverse forms of loans the banker can afford to provide different types of lending faculties and formulate the policy accordingly. But this cannot be done by banks whose credit officers are competent to deal with certain types of loans. This is why smaller banks have been found limiting their lending business to short-term loans. Most of those banks have obtained from consumer lending and also term-lending to business enterprises because they were equipped with skilled personnel.

Competitive Position:

In formulating loan policy the management should give consideration to the competitive position of the bank. Where a bank finds that strong competing institutions exist, say in the field of term lending and the management feels that it cannot afford to provide the loans on terms being offered by the other existing institution, it might follow a policy of refraining the bank from entering in the sphere of term-loans.

Credit needs to the Area Served:

Credit needs of the area served by the bank would also influence the loan policy. A bank is supposed to meet Loan demands of all local borrowers who present logical and economically sound loan requests and granting of such requests would not violate the prudent banking. If this cannot be done there will be little justification for an institution to exist in that region. Thus in an economy predominantly dependent on agriculture, the bank must tailor its loan policy to meet the seasonal loan demands of the farmers.

Components of Credit Policy:

The credit policy of bank consist the five major components, which are as follows.

Objectives:

The first step in framing a credit policy in the formulation of objectives of the proposed policy with diverse objectives like profitability, liquidity, volume of business risk factor etc.

Volume of mix loan:

The policy should specify the targeted composition of the loan portfolio such composition being in terms of industry / location / size / interest rate / security.

DEPOSIT, INSURENCE & LOANS IN SYNDICATE BANK

Deposit Products

Current Account

Current Accounts can be opened by individuals, partnership firms, private and public limited companies, HUFs / specified associates, societies, trusts etc.

Savings Bank

Savings Bank Account is aimed at the day to day saving needs of ordinary individuals.

SyndSamanya Savings Bank Account Scheme- No Frills (Zero Balance) Account aimed at persons below poverty line

Eligibility : All individuals

Minimum Balance : Zero Balance

Cash Receipt : No restrictions

No Restrictions for ATM Transaction

Fixed Deposit

A flexible interest earning Term Deposit with minimum deposit amount of Rs.1000/- for a period as short as 15 days or as long as 10 years.

Social Security Deposit

An ideal monthly income plan. All you need to do is to invest a lumpsum amount for a fixed period and receive monthly interest (at discounted rates) or quarterly interest.

Vikas Cash Certificate

An option to receive interest compounded quarterly, at the maturity of the Deposit.

SyndSuvidha

A Fixed Deposit with partial withdrawal facility A flexible and convenient scheme whereby a deposit is made for a fixed period from which amounts can be withdrawn in multiples of Rs.1000/- when needed. Interest is payable every quarter.

Synd Tax Shield Deposit Scheme

The new product SyndTaxShield is drawn on the lines of the Union Government notification on Bank Term Deposit Scheme, 2006 for the purpose of Sec 80C(2)(xxi) of the Income Tax Act.

Eligibility: Individuals / HUF eligible to open an account with the Bank

Minimum Deposit: Rs.100/- and multiples of thereof.

Maximum Deposit: Rs.1 00,000/-per person per annum

Tenure: Minimum of 5 Years

Rate of Interest: 9% p.a.

Insurance Products

Life Insurance

Launch of insurance products is part of Bank’s strategy to emerge as a One-Stop Financial Shop to its multitude of customers by offering a range of Savings, Loan, Life Cover, Income Cover, Risk Cover, Long Term Investment with or without risk cover and also Payment Products. All these add to customer convenience and satisfaction.

This tie-up with Bajaj Allianz makes it easy for customers to buy insurance products.

SyndSuraksha

A Group Life Insurance Cover in association with LIC of India.

The scheme is a Group Term Assurance for the savings bank account holders with very low premium offered in association with LIC of India.

Eligibility- A person having savings bank account in any of CBS branches of our bank either singly or jointly and should have completed 18 years age and not over 59 years of age

The sum assured is Rs.1,00,000/- in case of normal death and Rs.2,00,000/- in case of accidental death.

SyndArogya

SyndicateBank in association with United India Insurance Co. Ltd. has launched

A unique Mediclaim Insurance-cum-Personal Accident Scheme under

brand name SyndArogya for the benefit of account holders

Floater Policy 1+3 (Husband, Wife with two dependent Children) with

premium as per Plan A table and 1+5 (Husband wife with two dependent

Children and dependent Parents) with premium as per Plan B table.

Cover Available to Dependent Parents also as per Plan B. Entry age for

parents also 65 years renewable up to 80 years of age.

Ambulance charge up to Rs.1000/- Maternity Benefits and Baby Care up to

5% of Sum Assured.

Sum Insured Increased to Rs.5/- lacs in multiples of 50000/-.

Cost of Health Check up to 1% of Sum Insured after 3 claim free years.

Hospital cash up to Rs.1,000/- in case of hospitalisation of children up to

12 years age.

Treatment anywhere in India, Nepal or Bhutan in Indian currency.

SyndSMS Banking

SyndicateBank welcomes to another useful facility for the benefit of its tech-savvy customers. A mobile phone can make your banking experience more friendly and enjoyable by allowing you to stay connected with your account at any time. SyndSMS Banking is independent of the handset model and you can avail this facility from most of the service providers (GSM/CDMA). All that you have to do is to enter simple text messages for operating this facility.

Loan Scheme:

SyndSuvidha

SyndicateBank meets the varied personal credit requirements of different classes of people. To meet urgent personal needs / purchase consumer durables like TV, Fridge, Washing Machine, Audio / Video Equipment etc.

Eligibility: Agriculturists

Quantum: 50% of average gross annual income or Rs.1 lakh whichever is less for clean loans. 80% of the durable or 50% of annual income or 0.50 lakh whichever is less.

SyndLaghuUdhyami

Persons / Units eligible for assistance

Business Units Retail, Small and Medium Traders

Artisans, Tiny Sectors

Small Scale Industrial Units

Professional and Self- Employed Persons

Maximum eligible limit Rs.10 lakhs

Credit Guarantee cover (CGMSE) available

SyndMahila

Working & non-working women with an identified source of income or savings:

Age group : 20 to 50years

Min Rs.10,000/-, Max Rs 1,50,000/-.

SyndNivas

Purpose: For construction / acquisition of a house / flat or for acquiring a

site and building a house thereon

For making extensions / renovation to existing house. For NRIs, loan

available for acquisition of house for self- occupation on return to India.

Applicant not more than 55 years of age For salaried class, applicant

should have completed 5 years of service and the remaining period of

service left shall not be less than 5 years

Quantum: 72 months’ gross salary or 5 times of annual agricultural

income.

SyndNivas Plus

To meet genuine personal or business credit requirement.

Eligibility: Housing loan customers of our Bank who have demonstrated a

satisfactory repayment record of 2 years

Subject to a maximum of Rs.3 lakhs.

SyndPigmy

To meet contingency of pigmy depositors with regular contribution of 24

months

3 times pigmy deposit balance with maximum Rs.1,50,000/-.

Repayment: 35 months for loans and overdrafts renewable on yearly basis

SyndRent

To meet urgent personal expenses / credit needs;

Eligibility: Bonafide owners of residential / commercial property

Quantum: 75% of the rental value

Repayment: Not exceeding 60 months

SyndVahan

To buy new / second hand 4-wheeler or new 2-wheeler

Persons having minimum annual income of Rs.1 lakh for 4 wheeler and

Rs.50,000/- for 2wheeler

Quantum: 95% on road price for new vehicle

SyndSaral

To meet urgent personal credit requirements

Eligibility: Permanent employees of Central / State Government Offices /

Undertakings / reputed companies / firms / educational institutions. Non-

salaried class like Doctors / Engineers / Lawyers Chartered Accountants /

Architects / Consultants and Pensioners

Quantum for Clean loan: Salaried Class: 12 months gross salary with

salary credit and maximum Rs.3 lakhs with letter of undertaking from the

employer.

Pensioners: Aged < 65 yrs: 10 months gross pension with a maximum of

Rs.2 lakhs. Aged 65-70 yrs. 6 months gross pension with a maximum of

Rs.1 lakh. Aged >70 yrs: 5 months gross pension-max. Rs.50000/-

Quantum for Non-salaried Class: 50% of gross annual income as per

Income Tax Assessment Order (ITAO) (100% of average gross annual

income, as per TAOs of immediate preceding 3 years) or 60% of value of

immovable property to be mortgaged to the Bank (subject to maximum

amount of Rs. 5 lakhs)

Quantum for Secured Loan: 80% of purchase price of NSC / IVP / KVP if

completed 24 months from date of purchase and 65% of purchase price if

completed 13-23 months); 80% of surrender value of LIC policy / purchase

price of RBI Relief Bonds / other Government securities.

SyndSenior

Pensioners in receipt of regular monthly pension through our Bank from Central / State Governments / Public Sector Units / Defence Establishments.

Quantum details of loan that can be sanctioned based upon age profile of the borrower are as follows: 60-65 years 18 times the gross monthly pension being routed through our Bank Rs. 3 Lakhs. 65-70 years 18 times the gross monthly pension being routed through our Bank Rs. 1 Lakh 50 thousand.

SyndVidya

SyndicateBank has introduced a comprehensive education loan scheme, Syndvidya, which is student responsive and parent-friendly. The scheme makes available finance to cover expenses related to education such as fees payable to College, Hostel, Examination, Library, Laboratory fees, Cost of Books, Equipments, Travel expenses for studies abroad etc. The loan scheme carries liberal limits of Rs.10 Lakhs for courses within the country and Rs.20 Lakhs for overseas courses.

SyndUdyog

Scheme for financing small and medium entrepreneurs

Target Group: Manufacturing Units, Trading Units & Service Entities

Eligibility: Credit requirement of the applicant party / unit shall not be more

than Rs.50 lakhs. The annual sales / revenue turnover of the applicant

party / unit shall not be more than Rs.250 lakhs.

Nature of facility: Overdraft / Loans, Bill limit, LCs / BGs offered in one

package at competitive rates within a predetermined overall limit (not

exceeding Rs.50 lakhs.)

Credit guarantee Scheme (CGMSE) available for SMES

SyndJaiKisan

To simplify the system of credit delivery to the farmers, taking a holistic view on their credit requirement covering entire gamut of expenditure related to investments on Agriculture, Contingencies, Consumption and other pressing social obligations, the Bank has introduced a hassle free, farmer friendly credit scheme called “SyndJaiKisan

All existing farm loan customers from the operational area of the Bank, with satisfactory past track record for a period of 2 years and owning irrigated lands and cultivating at least two crops annually or cash crops or plantation crops. Farmers cultivating single crop with assured irrigation are also eligible.

Farmers engaged in Pisciculture and Scampiculture activity in the farm

ponds established on theirown lands.

Farmers engaged in dairy, goatery, piggery and taking up the activity in a

scientific manner in the farms established on their own lands.

The farmer should have already mortgaged/ created charge on their lands

in favour of the Bank or willing to offer lands as security by way of

mortgage I charge creation to the Bank.

Major portion of the investment should be directly related to farm

development.

For consumption and other pressing social obligation there is maximum

ceiling of 30% of total limit to be sanctioned.

SyndSwarna Express

Personal Loans / OD against pledge of Gold ornaments to salaried professional / self-employed individuals.

Repayment: Repayable within 24 months in case of loan. In case of OD, limit shall be renewed once in two years, interest to be serviced regularly. Reasonable rate of interest & simplified documentation. In case of OD facility, interest will be charged only on utilisation.

NEFT: No amount limit. Best suited for retail customer remittance of below Rs. 1.00 lakh. Funds get credited on- line from any NEFT enabled Bank branch to any NEFT enabled Bank branch across the country. Only Rs.25/- per transaction.

RTGS: Faster remittance of large value transactions of Rs,1 .00 lakh and above from any RTGS enabled Bank branch to any RTGS enaed Bank branch across the country.