0601094 credit analysis for personal laon

A

PROJECT REPORT ON

“CREDIT ANALYSIS OF PERSONAL LOAN”

OF

ABN AMRO BANK

MAY-JULY. 2007

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR

MANAGEMENT COURSE

OF

MASTER OF BUSINESS AMASTER OF BUSINESS AMASTER OF BUSINESS AMASTER OF BUSINESS ADMINISTRATIONDMINISTRATIONDMINISTRATIONDMINISTRATION

BY

SIDDHARTH SHRIKANT RAUT

UNDER THE GUIDANCE OF

MRS SMITA SOVANI MADAM

VISHWAKARMA INSTITUTE OF MANAGEMENT

PUNE-411048

To Whomsoever It May Concern

This to certify that Mr. Siddharth Shrikant Raut is a student of

Vishwakarma Institute Of Management , PUNE .He has successfully carried

out his summer project titled “ CREDIT ANALYSIS OF PERSONAL

LOAN ” at ABN AMRO BANK , Pune from 20-05-2007 to 31-07-2007 ,in the

partial fulfillment of Masters in Business Administration Course of

University of Pune (2006 – 2008 ) .

He has worked under our guidance and directions. His work is found to be

good and complete in all respects .during the period we found him hard

working, sincere and loyal.

We wish him all the best for his Future.

ACKNOWLEDGEMENT

Taking advantage of the occasion of submission of this project, I take an opportunity to

thank to all who were directly or indirectly involved in this project and without there

guidance, co-operation and support this would not have been possible.

I am highly obliged to Mr. Atul Sharma(Head – Unsecured Asset) for

providing spark in the dark and providing us the opportunity to work in CREDIT

ANALYSIS of prestigious organization like ABN AMRO BANK I was fortunate to get

every sought of guidance which acted as a pole star for me.

I would also like to thank Staff of ABN AMRO BANK who has been backbone

of our project & for being “Friend, Philosopher & Guide” at every stage of the project.

There valuable suggestions, encouragement & patience are only responsible for seeing

this project through to completion.

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

.

It was their vision, my hard work & blessings of my parents, which made me

capable to complete this project successfully.

I would be failing in my duty if I do not acknowledge the gratitude to Dr Sharad joshi ,

director, V I M for his keen interest and valuable suggestions that went all the way

successful completion of this work.

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

Thanking All,

Siddharth Raut

TABLE OF CONTENTS

CHAPTER 1 : INTRODUCTION P.NO

EXECUTIVE SUMMARY....................................................................... 2

OBJECTIVE OF THE PROJECT ……………………………………… 3

CHAPTER 2 : COMPANY PROFILE

ABN AMRO BANK……………………………………………………… 5

CORPORATE VALUES & MISSION …………………………………... 6

THREE BUSINESS UNITS ……………………………………………… 8

1. Consumer & commercial clients

2. Private clients & asset management

3. Wholesale clients

ABN AMRO BANK IN INDIA ………………………………………….. 11

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

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

CHAPTER 3 : PERSONAL LOAN

PERSONAL LOANS ……………………………………………………. 17

LOAN WITH INCOME STATEMENTS ………………………………. 19

SELF EMPLOYED PROFFESSIONALS ……………………………… 21

SELF EMPLOYED BUSINESSMEN …………………………………... 22

LOAN WITHOUT INCOME STATEMENTS ………………………… 23

Credit cards

Surrogate loan

Relationship rewards for existing ABN AMRO customers

Personal loan top up schemes

CHAPTER 4 : CREDIT LINE

CONCEPT OF CREDIT …………………………………………… 30 SALARIED

SURROGATE

BALANCE TRANSFER

RELATIONSHIP REWARDS

Co – Borrowers

Guarantors

INTREST RATES ………………………………………………………… 46

PERSONAL LOAN APPROVAL STAGES ……………………………… 47

GUIDELINENOTE ON NORMS ………………………………………… 49

CONTACT POINT VERIFICATION POLICY ………………………….. 50

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

CHAPTER 5:

CASE STUDY …………………………………………………………….. 54

CHAPTER 6:

CONCLUSION ……………………………………………………………. 59

CHAPTER 7:

BIBLIOGRAPHY …………………………………………………………. 61

CHAPTER 1

INTRODUCTION

EXECUTIVE SUMMARY

ABN AMRO BANK is one of the fast growing foreign banks in India. It has got very important presence in the consumer as well as corporate sectors. I have undertaken a Project titled “CREDIT ANALYSIS OF PERSONAL LOAN “ The main objective of the project was to know the loan proposal system of ABN AMRO BANK. The analysis of any proposal consists of two parts

• Internal • External

Internal is extract of internal analysis , consisting of calculation of tenor as per norms ,calculation of eligibility with reference to income shown by an applicant, then if approved, to calculate the equated monthly installments & actual disbursement. External analysis involves collection of documenry proofs regarding income profile, residence verification, repayment capacity and the end use.

OBJECTIVE OF THE PROJECT

� To find out exactly what is Credit Analysis is?

� How it is to be done?

� To find out what is the criteria to be considered by the banks to give loan for various purposes.

� How the processing is done on the applicant’s loan request & how it is to be accepter or rejected.

� To know and study various credit facilitities provided by the banks.

� How the eligibility for granting for granting the loan is calculated.

CHAPTER 2

COMPANY PROFILE

ABN AMRO Bank

On 29 March 1824 Kng Willem-I issued a royal decree creating the

Nederlandsche handel-Maatschappij (NHM) with the aim of reviving trade

between the Netherlands and the Dutch East Indies. It started with the

Trade Company Edwards, Henriquez and Co., establish in 1856 in

Curacao whose main activity was trade and sea transportation. Several

years later the company began with money exchange-activities and little by

little became a bank of full value. In 1964, NHM merged with De

Twentsche Bank to form Algemene Bank Nederland (ABN), while

Amsterdamsche Bank and Rotterdamsche Bank joined to become

Amsterdam-Rotterdam (AMRO) Bank. In 1991, these two banks merged

as ABN AMRO Bank. Today, ABN AMRO Ban has a powerful presence in

world markets, building on a tradition of stimulation international trade.

ABN AMRO Bank ranks 10th in Europe and 22nd in the world based

on tier 1 capital, with over 3,500 branches in more than 70 countries, a

staff of 110,000 full-time equivalents and total assets of EUR 597 billion

(as per end March 2003). The Bank is listed on several exchanges,

including the Amsterdam, London and New York Stock Exchanges.

Leadership in chosen markets is critical to ABN AMRO Bank's long-

team success as well. We have three principle clients segments:

Consumer and Commercial Clients, Wholesale Clients and Private Clients

and Asset Management. Within ABN AMRO Bank's organizational

structure, these are also core global Strategic Business Units. We strive to

maximize the value of each of these businesses and the synergies

between them.

Corporate Values & Mission

Our Corporate Values provide the foundation for the bank's newly

introduced business principles. The bank formulated these Corporate

Values in 1997.

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

everywhere.

Teamwork: Teamwork is the essence of our ability to succeed as a trusted

preferred supplier of financial solutions to our clients. Our overriding loyalty

is to the good of the whole organization, requiring us all to learn from each

other and to share our skills and resources across organizational

boundaries for our client's benefit.

Respect: We respect every individual. We draw strength from equal

opportunity and diversity, at the same time supporting personal growth and

development. We value and we all benefit from the entrepreneurial spirit

of each individual.

Professionalism: To be of service to our clients we are committed to the

highest standards of professionalism, pursuing innovation deploying

imagination, being open to new ideas and acting decisively and

consistently. We are determined to deliver outstanding quality so that our

relationships with our clients will be long lasting and close.

Mission: ABN AMRO Bank's Mission is to create maximum economic

value for our shareholders through a constant relationship focus on the

financial services needs of our chosen client segments and a strict

adherence to our financial targets.

Excellence of service to our clients and leadership in our chosen markets

are the reasons behind our long-term success.

We strictly follow a relationship approach, which keeps clients

requirements clearly in focus and provides excellent service through the

professionalism and motivation of our employees across the globe

Three Business Units

1. Consumer & Commercial Clients (C & CC)

The business unit is to provide services to individuals and small to

medium-sized enterprises requiring day-to-day banking. ABN AMRO

serves approximately 15 million clients, mainly through their major

presence in three home markets: the US Midwest, the Netherlands and

Brazil. The Businesses Unit New Growth Markets is also expanding its

consumer and commercial operations in selected countries such as India,

Hungary and Thailand. For our personal customers we offer a range of

products to meet the financial needs of the individual.

The financial services and solutions for small to medium sized

businesses includes a variety of commercial financing and lending services

such as business loans and lines of credit, cash management solutions,

public services and small business opportunities, providing them with the

financial tools necessary to manage their business.

2. Private Clients and Asset Management (PCAM)

Private Clients and Asset Management Unit is for individuals and

institutional investors. ABN AMRO is a leading player in private banking

both in the Netherlands and in France, and has strong positions in

Luxembourg, Miami and Switzerland. Private clients ranks among the

world's top 10, with EUR 94 billion in Assets under Administration (as per

end March 2003). Asset Management has a local presence in 30

countries and FUR 148 billion in Assets under Management (as per end

March 2003). We offer highly personalized banking for our private clients,

aiming to structure and enhance wealth with services ranging from

discretionary portfolio management to international estate planning and

Trust. At Asset Management we offer strong capabilities in the

management of equities, fixed income, money market, property and

quantitative products.

Solutions are suggested in the areas of

• Banking

• Investment advisory

• Discretionary portfolio management

• Investment funds

• Trust

• International estate planning

3. Wholesale Clients (WCS)

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

By combining our sector expertise with in –depth product knowledge in

both corporate and investment banking, We deliver a broad range of

benefits, including

• Sector Expertise • Integrated Product Offering • Local Presence • Financial strength

ABN AMRO Bank in India

ABN AMRO Bank started its operations in India in 1920. till the early

1990's it was largely a bank catering to the diamond trade. It started

wholesale banking in 1995, the securities business and corporate finance

services soon after, and consumer banking in 1999. ABN AMRO Bank

took over the consumer banking business of Bank of America in 1999 as

part of a purchase agreement covering acquisition of this line of business

in India, Taiwan and Singapore. The consumer banking business of Bank

of America acquired by ABN AMRO Bank included consumer lending,

deposit mobilization, auto finance and mortgage activities. The acquisition

was in part of US$ 200 million deal signed between the two banks for

purchasing the consumer banking business by ABN AMRO Bank in these

three countries.

ABN AMRO Bank (India) has an 83 years long experience of the

Indian business scenario. Traditionally known as a strong "diamond-

financing bank", it has turned into a bank providing a comprehensive range

of services with a difference.

The bank took off in a big way in 1991, after the merger of ABN and

AMRO worldwide. The Delhi branch was functional in the very same year.

ABN AMRO Bank was launched in other cities throughout India between

1994 and 1999. They were Chennai in 1994, Pune in 1997 and Baroda in

1999, while the Hyderabad and Bangalore branches were opened in 2001.

The year 2002 saw the opening of the Noida office. AA Securities (I) Pvt.

Ltd. formed in September 1998.

Achievements

Best at cash management Award in September 2001 – The banker Corporate Finance India ranked second in M&A in the investment Banking arena in 2001 – The Economic Times. ABN AMRO Securities India Best foreign bond house No 1 arranger in private sector Euro money 2000. Top bank on “MANAGEMENT QUALITY “parameter business India ‘Best banks survey 2000’. 7th most admired commercial bank in the world fortune magazine 2000 Top foreign bank in India The Economic Times – CMIE Survey 1999 Second overall in banking industry financial express – BRIS Survey 1999 Judged India’s No 1 bank by business today magazine in December 2002

Products and Services : Overview

Our local expertise is backed by the strength of ABN AMRO Bank's

vast international network. This enables us to offer the most innovative

financial products and services across banking segments, to help achieve

company's strategic local, regional and international goals and fulfill client's

personal investment needs.

Core Business Products and Services

Consumer Banking CREDIT CARD

LOAN PRODUCTS

• Loans against Securities

• Car loans

• Persona loans

DEPOSIT PRODUCTS

• Savings Accounts

• Current Accounts

• Fixed Deposits

• Products & Services

SERVICES

INVESTMENT SERVICES

• Mutual Funds

SERVICES

• Debit Card

• Net Banking

• Express Cash

• ATM Services

• 24 Hour Bank by Phone

• Bill Payment

• Doorstep Banking

• Depository Services

• National Access

• 365 Days Banking

• Extended Banking Hours

Wholesale Banking

• Structured Products

• Trade Services

• Cash Management

• Correspondent Banking

• Precious Metals

• Electronic Banking

• Custodial & Security

Services Structured Corporate

Products

• INR Interest ate Swaps

• Currency cum Interest

Private Banking

• Portfolio Advisory

Value Added Services

CHAPTER 3

PERSONAL LOAN

PERSONAL LOAN Personal loans help you to take care of your immediate requirements

Without much of a hassle. The most attractive feature of the personal loan

is that you do not have to give any kind of security to avail this loan. No

Security, Collateral or Guarantors are required to avail personal loans.

Also, no questions regarding the end use of the loan are asked since

personal loans do not require any security or hypothecation of assets, the

rate of interest charged by them is higher compared to any other secured

loans.

.

ABN AMRO Personal Loans are completely flexible - you can take your

loan for purchase of assets and consumer durables, home improvements,

tax saving investments, higher education, holidays and travel, emergency

medical needs, marriage in family … in short, for any declared legal use

without pledging any security.

You may also avail of our "Balance Transfer Program" to retire any

high cost loans that you may have taken, including your credit card dues

by simply opting for an ABN AMRO Personal Loan.

There are no hidden charges - our Personal Loans come to you with

minimum formalities, at attractive interest rates and only a one time non-

refundable processing fee. If you are an existing ABN AMRO customer,

you could be eligible for special discounts on the interest rates and

simplified application formalities under our "Relationship Rewards

Program".

Loan with Income Statements / Salaried Employees

The loan offered to salaried employees is given according to the

companies they are working with. ABN AMRO Bank has around 7500

companies listed with them, and they offer loans to the employees working

in these companies only. The criteria for listed companies are according to

the company profile, past performance, profit earning ability etc. These

companies are again been divided into 3 categories i.e. Category A, B & C,

according to the above factors.

ABN AMRO Bank gives loan to the officers and management cadres

only. They don't give loans to the employees below the officers grade i.e.

to the supervisor, the workers etc. The applicant should be earning a

Gross annual salary of minimum Rs. 1, 00,000/- per annum. The

conditions are as follows.

Conditions

• Officer or management cadre

• Working in the current employment for at least 1 year or

overall 3 years work experience

• Age between 23 to 60 years

• Gross annual salary more than Rs. 1, 00,000/- per annum.

This maximum amount that can be given to an applicant is subject to

his net monthly income. The amount calculated by the applicants Net

Adjusted salary.

Following is the table that is used to calculate the maximum loan amount.

Tenure Max Loan Amount

1 year 5 times net adjusted salary

2 years 10 times net adjusted salary




Document Required:

1. Application form

2. Latest 2 months salary slip

3. Bank statement

4. Photograph (signed on back side)

5. Identity proof

• PAN Card

• Driving License

• Passport

• (if the above documents are not available then LIC premium

receipt/SSC Certificate with Photo and sign verification is

required)

6. Employment proof (Form 16 H or appointment letter)

Self Employed Professionals

Doctors (BDS, MBBS, MD, MS only)

The loan offered to the self-employed professionals is, at present

limited to doctors (BDS, MBBS, MD, MS) only. The rate of interest for this

category is 16.5%. The conditions for this category area as follows.

Conditions:

• Net Annual Income should be Rs. 1,00,000/- per annum

(at least Rs. 75,000/- from profession)

• Overall 3 years in the business or profession

• Age between 23 to 65 years.

The maximum amount that the bank can give is subject to the Net

adjusted salary of the applicant. The calculation for the same is done in the

following manner.

NAS (P) = Net Income (ITR) - (EMI * 12) - (IT paid in a particular year)

Degree Max Loan Amount

MBBS & BDS 4 times net adjusted salary

MD & MS 5 times net adjusted salary

Self Employed Businessmen

The loan offered to the self-employed businessmen is limited to the

Proprietor, Director, Partner only. The rate of interest for this category is

22.5% for the Director and Partners.

Conditions

• Net Annual Income should be Rs. 1,00,000/- per annum

• Overall 3 years in the business

• Age between 23 to 65 years

The multiplier used here is as follows.

NAS (B) = Net Income (ITR) - (EMI * 12) - (25% CC) - (IT paid)

Document Required:

1. Application form

2. Latest 2 years ITR with Balances sheet and P & L statement

3. Bank statement

4. Photograph (signed on back side)

5. Identity proof

a. PAN Card

b. Driving License

c. Passport

d. (if the above documents are not available then LIC premium

receipt/SSC Certificate with Photo and sign verification is

required)

6. Establishment proof

7. Telephone connection is a must in the office sand residence both.

Loan without Income Statements

Credit Cards

In this program the loan is offered against the credit card limit. ABN

AMRO Bank gives loan to applicants having the credit cards of all MNC's,

SBI, ICICI, HDFC except to the employees of Private Limited Companies.

Conditions:

• Rate of interest 21.5% if loan amount <=50000 otherwise

21%.

• Tenure 1 to 3 years

• Multiplier : 1.2 times credit limit for salaried

1 for other i.e. SEPs and SEBs.

• Maximum loan limit Rs. 3,00,000/- (in case of charge card/

diners club limit is Rs. 1,00,000/-)

Documents Required:

• Application form

• Latest 2 months billing for Credit Card (No late charges

allowed)

• Photocopies of both sides of credit card

• Identity proof

• PAN Card

• Driving License

• Passport

• (if above documents are not available then LIC premium

receipt/SSC certificate with photo and sign verification is

required)

• Photograph (signed on both sides)

• Employment / Establishment proof (Form 16H or appointment

letter/shop license)

• Card must be at least 1 year old

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

In this program the loan is offered on the track record of the previous

Personal Loan, Car loan and Housing loan. Track record on the loan taken

from the following companies will make the applicant eligible for the loan

offered by ABN AMRO Bank.

• State Bank of India (SBI

• ICICI

• HDFC

• Kotak Mahindra

• Amex

• HSBC

• Sundaram Fin.

• Tata Fin.

• IDBI

• ING Vyshya

• UTI

• DCB

• Centurain Bank of Punjab

• GE Money/ Countrywide

• Citi Fin.

Conditions

• Previous loan should be matured at least for 12 months for the

salaried class and 18 months for businessmen.

• Loan limit will be Rs. 25,000/- to Rs. 3,00,000/-

• Interest will be 20% for car/housing loan

• Interest 1% less than previous personal loan (should not be

less than 17.5%)

• Tenure 1 to 5 years

• Multiplier is 15 times of EMI for salaried

• For Businessmen and others

If loan seasoning is done between

12 - 18 months 12 times of EMI

18 months and above 15 times of EMI

Documents Required

• Application form

• Identity proof

• PAN Card

• Driving License

• Passport

• (if above documents are not available then LIC premium

receipt/SSC certificate with photo and sign verification is

required)

• Photograph (signed on both sides)

• Track record of last 12 months/ 15 months bank statement

• Employment / Establishment proof (Form 16H or appointment

letter/shop license)

Relationship Rewards for Existing ABN AMRO Customers

Car Loan/ Personal Loan

(With relation of at least 8 months)

• Max loan limit - Rs. 25,000/- to 4,00,000/-

• Interest 21% for self employed

• All others at respective rack rates

• Tenure 12 months to 60 months

• Multiplier - Maturity of previous loan

• 8 months - 12 months * EMI paid

• 12 months - 18 months (EMI * No of installments)* 1.2 times

• 18 months and above (EMI* No of installments)* 1.3 times

subject to a Max of 30 installments

Consideration upto 6 months from completion of previous loan

Personal Loan Top Up Scheme

Under this program, any applicant can go for the top up scheme. Here after the

completion of six months, the applicant can get an additional loan amount to the

EMI of the loan and the completed tenure of the loan.

CHAPTER 4

CREDIT LINE

CONCEPT OF “CREDIT”

1. It is the idea that if you build up a reputation for paying bills and debts on

time you will be able to borrow money in the future.

2. Credit is important because it enables you to borrow money when you need

it. In addition, the better your creditworthiness the more cheaply you will

be able to borrow money whether for a car, education, home or some other

large expenses.

3. On the other hand, if you are not a good credit risk, you may not be able to

borrow when you need to, or you might be able to borrow but only at a high

interest rate.

SIGNIFICANCE OF CREDIT

• Credit is used primarily in order to obtain loans. Loans can be

excellent way to be fund large purchases and business initiative

,but managing debt can be complicated process

• It can take just few months to get into financial trouble and years

to get out.

• Although debt is some time useful, there is diff between good debt

and bad debt the two most important characteristics are how you

borrow the money and what you do it .HOW FRUITFULLY YOU

USE IT.

• Even though debt is a part of life, the key to preventing it from

becoming destructive is knowing its benefits and risks.

REASONS FOR CREDIT ANALYSIS

� Unfortunately credit fraud is increasingly serious problem having grown

almost threefold in frequency in the last five years. Under the most

common scham called “Identity Theft “the criminal opens a credit card or

other account with another person name. The criminal then purchases

goods and services and you get stuck with the bill.

� Credit card fraud & credit analysis are not related with each other.

� Sometimes the creditor / borrower may qote wrong information about his

personal loan details. his capacity to pay off the loan ,the reasons for taking

the loan.

Therefore to overcome all this fraudulent activity credit analysis is to be

done, to check out the worthiness of the creditor to repay the loan and pay the

intrest.

“CREDIT ANALYSIS”DEFINATION:

� “The process of evaluating an

applicant's loan request or a corporation's debt issue in order to

determine the likelihood that the borrower will live up to his/in

obligations.”

SALARIED Min Age - 23

Max Age (on loan maturity) - 60

Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or Self-

Owned resi or Gross Sal> 3.6L

Job Stability - 1 yr at current job or 3 yrs total work experience

Basic Documents - (1) photo with sign on back side (2) ID proof (3)

Job/Business Stability proof

Self employed - Biz

Min Age - 25


Residence Stability - 2 yrs in Pune of 1 yr in current resi OR self owned

resi

Job Stability - 3 yrs in same biz

Basic Documents - (1) photo with sign on back side

(2) ID proof

(3) Job/Business Stability proof

RR Customers

Min Age - 21


Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or Self-

Owned resi or Gross Sal> 3.6L

Job Stability - 1 yr at current job or 3 yrs total work experience

Basic Documents - (1) photo with sign on back side (2) ID proof (3)

Job/Business Stability proof

Verified Income Program -

Cat A

Min Income - Gross 1 Lac

Max loan amt - 10 lacs

Max Tenor - 5 yrs

Emp Continuity Req -

Maximum Loan eligibility-Multiplier - 1 yr - NAS x 5

2 yrs - NAS x 10

3 yrs - NAS x 12

4 yrs - NAS x 15

5 yrs - NAS x 18

Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting

3 Salary Credits.

Additional Qualifying requirements -

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

Cat B



Max Tenor - 4 yrs


Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4.5

2 yrs - NAS x 9

3 yrs - NAS x 10

4 yrs - NAS x 13


3 Salary Credits.



Salaried



Max Tenor - 4 yrs



2 yrs - NAS x 8

3 yrs - NAS x 9

4 yrs - NAS x 11


3 Salary Credits.



Salaried


Max loan amt - 1.25 lacs

Max Tenor - 3 yrs



2 yrs - NAS x 8

3 yrs - NAS x 9


3 Salary Credits.



Software Professionals

Min Income - Net 1.5 Lacs


Max Tenor -

EMP Continuity Req -


2 yrs - NAS x 7.5

3 yrs - NAS x 9

4 yrs - NAS x 11.25

5 yrs - NAS x 13.5


3 Salary Credits (3) must


- Must have 12 months old loan with approved financier ( lac AL/HL or

75,000 PL) OR CC with min 40,000 limit.


EMPLOYEES OF BPO , CALL CENTER

Min Income - Net 2.4 lacs

Max loan amt - Cat A - 5 lacs & Cat B - 3 lacs

Max Tenor -

EMP Continuity Req - Min 3 yrs


2 yrs - NAS x 7.5

3 yrs - NAS x 9

4 yrs - NAS x 11.25

5 yrs - NAS x 13.5


3 Salary Credits (3) must


- Min age of 23 yrs and must not be staing in shared rented

accommodation.


Surrogate Program

Loan track record NRR

Max loan - 7.5 lacs

Min vintage - 8 months

Max tenor - 5 yrs

Program requirement - Min 10 EMI's paid and Min loan taken Rs.

50,000/-

Max Loan eligibility -

10-12 EMI's x EMI x No. of EMI's paid x 1.25

>12-18 EMI's - EMI x No. of EMI's paid x 1.45 (subj to Max of 30 EMI's) >

18-24 1.5

Eligibility -

Citibank, StanC, AmEx, HSBC, ICICI, HDFC, Sundaram Fin. Kotak Mah,

Tata Fin, IDBI, ING Vysya, UTI, KOTAK, DCB, Centurian Bank of Punjab,

GE Money/Countrywide**, Citi Fin**, Maruti Countrywide**

Documentation - (1) Repayment track, (2) 3 months bank statements OR

(1) Amortization schedule & 8 months banking.

Surrogate Program

Mobile Phone

Max loan - 1.25 lacs


Max tenor - 3 yrs

Program requirement - Min Avg Billing of Rs. 1500/- for last 3 months


* Rs. 1500 - Rs. 2500 - 75,000 > Rs. 2500 - 1, 25,000

Eligibility -

Aritel, Reliance, Idea, Hutch, BSNL, Tata Mobile & BPL

Documentation - Latest 3 months mobile bill statements showing min

billing of Rs. 1,500/-

Surrogate Program

Other Bank Deposit

Max loan - 3 lacs


Max tenor - 3 yrs

Program requirement - Saving Bank A/c with 6 months relationship


* 6-12 months - ADB x 1

* 12-18 months - ADB x 2

*> 18 months - ADB x 3

Eligibility -

ICICI, HDFC, StanChart, Citibank, HSBC, AmEx, UTI, IDBI & SBI

Documentation - Latest 6 months bank statements from S/B a/c with last

days avg balance >/= Rs. 25,000/-

Balance Transfer Program

Credit Card

Max loan - 3 lacs


Max tenor - 3 yrs

Program requirement -

* Min Credit Limit - 25,000/-

* Limit utilization on Card =/<80%

* Card should have transaction in last 2 months.


* 8-12 months - Cr limit x 2

* 12 months - Cr limit x 3

Eligibility -

Sai Employees of Prop & P'ship mush have min MOB>12 months

Documentation - (1) Latest 2 months Card Statement (2) front & back

copy of the Card.

Balance Transfer Program

PL

Max loan - 4lacs

Min vintage - 1 yr

Max tenor - 4 yrs


Min 12 EMI's paid and Min loan taken 1 lac


* 12 to 18 EMI's = 1.2 x Principal Outstanding

* 18 EMI's = 1.3 x Principal Outstanding

Eligibility -

Documentation - (1) Repayment track for the last 12 months (2) 3 months

bank Statement OR (1) 12 months bank statements (2) amortization

schedule & (3) Resi. & DOB Proof.

ROI - Personal Loan: 1% less than competition subject to min of 16%

RR Program

C A/c


Max loan - 6 lacs

Max tenor - 5 yrs

MUE -

Program eligibility -

6 months ADB 40,000/-

Loan eligibility -

* 6 to 12 months - ADB x 3


* > 18 months - ADB x 6

RR Program

SB A/c


Max loan - 6 lacs

Max tenor - 5 yrs

MUE -


6 months ADB 20,000/-

Loan eligibility -



* > 18 months - ADB x 6

RR Program

Cards


Max loan - 4 lacs

Max tenor - 4 yrs

MUE - 8.5 Iacs


Min Credit Limit - 25,000/-

Loan eligibility -

* 8 -12 months - Cr limit x 2

* > 12 months - Cr limit x 3

RR Program

Auto Loan


Max loan - 7.5 lacs

Max tenor - 4 yrs

MUE - 8.5 Iscs


8 EMI's paid

Loan eligibility -

* 8 -12 MOB - EMI x No. of EMI's paid x 1.5

* > 12-18 MOB - EMI x No. of EMI's paid x 1.75

* > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)

RR Program

Mortgage


Max loan - 7.5 lacs

Max tenor - 5 yrs

MUE - 8.5 Iscs


Loan eligibility -

EMI x No. of EMI's paid x 1.5

* Subj to a Max of 18 EMI's & LTV of HI < 80%

Top Up Program

Min loan enhancement - Rs. 50,000/-

Max loan - For Salaried, loan amount caps as per present employer

category (Cat A/B) AND for SE as per program


Max tenor - New loan tenor either same as earlier loan of higher subject to

program caps (depending on whether existing loan is RR/VI/SI etc).


# Any applicant who has availed a loyalty/special loyalty auto loan from the

bank in the last 3 months will not be eligible for a loan under the Top Up

program.

# If existing PL has already closed/run off, then the loan multipliers will

apply ONLY if the last payment is not more than 12 months old. if last

payment is 12-24 months old, the PL can be processed as Override-

however multipliers will not apply.

# Max 4 Top up loans allowed.

# The EMI's for the top up loan should be from the same account as that of

the existing loan and the existing business/employer (entity only) and

residence addresses should be unchanged, failing which, a full verification

will be done i.e., residence and/or business/employer.

# The new loan may be approved for either the same tenor as the earlier

tenor or a higher tenor subject to the maximum tenor allowed for the

specific program.

# The applicant category must be unchanged from the original application

i.e. if the applicant was earlier salaried and now self employed he will not

be eligible under the

Loan eligibility -

If, 8 -12 EMI's paid then EMI's paid x 1.2 & If, > 12 months then EMI's paid

x 1.3

* > 12-18 MOB - EMI x No. of EMI's paid x 1.75

* > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)

Co-borrowers This program is only for the salaried applicants. In this program the spouse can

be the co-borrower for the loan amount.

The income of the spouse can be added in the gross income for the multiplier,

to find the maximum loan that can be given to the applicants. Here 60% of the

spouse’s gross income can be added for eligibility.

Guarantors

Although ABN AMRO BANK does not require guarantors for personal loans, but

there are some exceptions where there is need for the guarantors. The following

are the conditions when there is need for guarantors.

1. If the person is staying alone

2. If the applied amount for loan is very high

3. For self employed business

4. For software professionals if the applied amount of loan is grater than Rs.

3, 00,000/-

INTREST STRUCTURE

PERSONAL LOANS

Salaried Individuals 16% - 23%

Relationship Rewards Programs

16% - 22%

Track Record/Special Surrogate Programs

18% - 26%

Processing fee for Regular Programs

2.25%

Processing Fee for Relationship Reward Programs

2%

Processing Fee for loan amount less than Rs. 100000

Rs. 20

Disclaimer - The rate of interest mentioned above are the standard and average

rates under standard income criteria for each class of borrowers and shall be

higher/lower depending on the parameters which are met by the customers. They

would also vary by tenor. These rates are currently applicable and can be changed

any time from time to time, at the sole discretion of ABN AMRO Bank and

without any prior or post notice to the customer and such changes shall be final

and binding on all customers of ABN AMRO Bank

Personal Loan Approval Stages

Marketing Executive

File

Checking Documents

Coordinator

Initiating Verification

{Crystal Info Services (P) Ltd.

Central Processing Agency

Credit Department

Approval / Decline

Post Approval Documents

Delhi Disbursement

After a file is logged in by the Marketing Executive, the Coordinator checks

the documents and also initiates the Verification. Verification is done by an

external agency 'Crystal Info Services Pvt. Ltd." The Verification is done by

a surprise visit to the applicant’s residence and office premises, subject to

a maximum of 3 times. Once the verification is done by the agency the

report is submitted to the credit department.

Meanwhile, the documents submitted by the applicant are being

forwarded to the Central Processing Agency (CPA), which checks the

details of the documents for processing. This work is also given to an

external agency 'Lovelock & Lewis Pvt. Ltd.'.

The two external agencies submits their report to the Credit

Department, which actually decides for Approval/Decline of the case, for

further processing. The details of the report are put into a programme that

calculates the maximum sanctioned amount for the loan.

Once the loan is approved, the Cheque is disbursed to the applicant

and the documents are sent to Delhi Office.

Guideline Notes on Norms

Eligibility Criteria:

1, Age - Needs to be ascertained from Date of Birth as given in the

address proof or the ID proof or the SSC Certificate.

2. Loan Eligibility - Multiplier to Net Income

3. Number of years in present/previous job/ business - it is very

important norm, which helps assess the stability of the applicants

career and also the regularity of the incomes for repayments of

the loan.

4. Salary - The minimum requirement of Salary of the applicant is

set to Rs. 1, 00,000/- only.

5. Telephone - a landline telephone connection is compulsory for

every Scheme except for the Salaried applicants, for which a

mobile connection will do along with the latest mobile bill.

Contact Point Verification Policy

Contact Point Verification Policy (CPV) is a very important part of the

Approval process.

Objectives:

• To ensure that the information is accurate

• To enable the credit officer to construct a profile of customer for

credit evaluation

• To select and eliminate fraudulent applicant

Purpose:

• To establish identity of the borrower, ascertain and reconfirm his

residential and office address, length of stay and stability, and match

them with the information given by the applicant in the application

form.

• Residence verification is an external input to evaluate the standard

of living of the applicant's household in terms of his visible quality of

life indicators like T.V., Refrigerator, AC, Music System etc.

• The office verification will reconfirm the name and address of his

employer and his designation in the company. In case of self

employed Professional/Businessman, the office CPV will provide

data on number of years of business, employees in the company,

size and location of the office etc.

Contact Point Verification is an aid to, and not replacement or a

substitution to credit evaluation process. A positive CPV does not

guarantee Credit Approval.

Division of files according to Programs

0

5

10

15

20

25

30

35

RelationshipRew ards

Top UpScheme

BalanceTransfer

SEVI SelfEmployed

Professional

SalariedProgram

SurrogateProgram

Programs

No

. of

File

s

Series1

Series2

Series3

List of approved companies

ABN AMRO BANK has 7500 companies listed with them for the personal

loan scheme. We can give loan only to the employees who are working in

these companies. These companies are listed according to their past

performance, track record, profit earned in the past years, number of

employees working there etc.

The new company that has to be listed should first give the details of

the requirements. Once the company is listed, the employees can apply for

personal loan.

CHAPTER 5

CASE STUDY

CASE STUDY

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

Monthly EMI : 22550 No of EMI Paid: 15 Current Loan Rate: 20% You want a loan of RS: 5, 00,000 Banking Relationship Detail Login Documents Provided:

1) Application Form 2) Pan Card 3) MSEB Bill Xerox 4) Telephone Bill Xerox Of Sanchi Silk 5) Renewal Shop Act 6) EMI reflected banking only, Bank A/c Statement,

Current A/c from Janata sah Bank 7) Welcome Letter 8) Repayment Schedule 9) 2 References who knows the applicant their telephone

no , Residential Address 10) Photograph

Customer attestation is compulsory on each document; Sign behind the Photograph is must.

STEP 2 After the file logd in properly it went to Contact Point Verification for Telephone Verification Then it is initiated as Telicalling Ok

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

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

Disbursement Documents Required:

A. Agreement B. New Application Form ( NO Correction,

Overwriting) C. Applicants Photograph D. Post Dated Cheque 60 cheque E. If its ECS then 9 cheques required for security F. ECS done by the Bank only which submitted

in primary Level. G. If the Cheque given by current a/c then Sole

Proprietor Declaration is require

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

CHAPTER 6

CONCLUSION

CONCLUSION

ABN AMRO BANK has successful lead on personal loan market .Moreover they

working for customer satisfaction .Bank very much stuck to the policy , the policy

is not flexible to everyone it mainly concentrate on Higher middle class group and

Mass public. Bank mainly deal with surrogate program it will go through the

process very soon as compare to other.

Basically CREDIT ANALYSIS is a programmed carried out by Banks to

Minimized the Risk involved to lending money .Credit appraisal intention is to

verify Financial soundness & his repayment capacity, to check MCNF (Master

Card Negative Feedback) and very important is CIBIL report.

CHAPTER 7

BIBLIOGRAPHY

BIBLIOGRAPHY SITE: WWW.ABNAMRO.CO.IN

BOOKS:

RISK MANAGEMENT

INDIAN FINANCIAL SYSTEM: M Y Khan