RETAIL LOANS IN ALLAHABAD BANK

A Summer Internship Project Report submitted for the partial fulfilment of Post
Graduate Diploma Management Degree in Finance.

BY
MOUSAMI DUTTA
(ROLL NO: PGDM/2018/01/008 REGISTRATION NO: PGDM/2018-20/09/008)
,

Under the Guidance of:

SRI VEEJENDRA RAI

CHIEF MANAGER

Prof. ANURADHA SAHA

ASSISTANT PROFESSOR
Department of …Finance
For the Academic Year 2018-2020.
DATE OF THE PROJECT-19TH JUNE TO 12TH AUGUST

Institute of Engineering & Management

Y-12, Salt Lake, Sector-V, Kolkata-700091

Affiliated TO:
 CERTIFICATE
TO WHOM IT MAY CONCERN
This is to certify that the project report entitled “RETAIL LOANS IN ALLAHABAD
BANK”, submitted by

MOUSAMI DUTTA
(Registration No.PGDM/2018-20/09/008 of 2018-2020 Roll no.PGDM/2018/01/008),
of INSTITUTE OF ENGINEERING &MANAGEMENT, in partial fulfilment of
requirements for the award of the degree of POST GRADUATE DIPLOMA IN
MANAGEMENT in [FINANCE], is a Bonafede work carried out under the supervision and
guidance of Prof. ANURADHA SAHA during the academic session of 2018-2020.The content of
this report has not been submitted to any other University or Institute for the award of any other
degree.
It is further certified that work is entirely original and its performance has been found to be
quite satisfactory.

_______________________________ ____________________________
Prof. ANURADHA SAHA………
Prof. Dr. Sujit Dutta
Project Guide H.O. D
Dept. of FINANCE Dept. Of Management
Institute of Engineering & Management Institute of Engineering &Management

Prof. Dr. Indraneel Mukhopadhyay

Principal - Management
Institute of Engineering & Management
Sector-V, Salt Lake Electronics Complex, Kolkata-700091
COMPANY CERTIFICATE TO BE ENCLOSED
A ACNOWLEDGEMENT
We should like to take this opportunity to extend our gratitude to the following revered persons
without whose immense support, completion of this project wouldn’t have been possible.

We are sincerely grateful to our external Guide and Internal Guide [ANURADHA SAHA] of
the (DEPARTMENT OF FINANCE), IEM Kolkata, for his/her constant support, significant
insights and for generating in us a profound interest for this subject that kept us motivated
during the entire duration of this project.

We would also like to express our sincere gratitude to Prof. Dr. Satyajit Chakrabarti
(Director, IEM), Prof. Dr. Indraneel Mukhopadhyay (Principal-Management, IEM) and
Prof. Dr. Sujit Dutta, HOD of (Management) and other faculties of Institute of Engineering
& Management, for their assistance and encouragement.
Last but not the least, we would like to extend our warm regards to our families and peers who
have kept supporting us and always had faith in our work.

MOUSAMI DUTTA
Reg.No:PGDM/2018-20/09/008
Dept. of Management
Institute of Engineering & Management, Kolkata
A. EXECUTIVE SUMMARY

a) Objectives of the study:

Loans are the lifeblood of a bank. All businesses sell products, and a
bank's product is money. Banks make money by taking in funds
from depositors and other sources and then lending money out to
customers. The bank spread is the difference between what the
interest a bank must pay to obtain the funds and the rate the bank
charges on the loan. For example, a bank might pay two percent
interest to a depositor and charge a customer six percent interest on a
loan. The four percentage points is the bank's spread, and its profit.
Banks make all sorts of loans, but they can broadly be broken down
into two categories: residential and commercial. Residential loans
represent money lent to people looking to finance a home purchase
with a mortgage. These can be fixed-rate or adjustable with terms
varying from a few years to 40 years. Banks often sell their long-
term mortgage loans rather than keeping them on their books as a
protection against inflation. Commercial loans are loans made to
people looking to start or expand a business.

b) Methodology in brief:

The loans aimed in this survey, are those granted to residents of the
euro area by domestic credit institutions, among which loans or credit
lines to non-financial corporations, loans to households for house
purchase and consumer credit and other lending to households. The
definition of loans used is the one as defined in Regulation (EG) nr.
25/2009 of the European Central Bank of 19 December 2008
concerning the balance sheet of the monetary financial institutions
sector (Recast) (ECB/2008/32). Inter-bank loans are not included.
Based on this definition, the financial lease agreements granted by
MFI are to be considered as loans (this is not the case for operational
lease agreements). Within the scope of this survey, factoring has to be
treated as a loan, under the condition that it has been foreseen by an
MFI. Financial lease agreements and factoring offered by a non-MFI,
are outside the scope of this survey.
The credit standards are the internal guidelines or standards reflecting
the credit granting policy of a credit institution. They constitute of
written or unwritten criteria, or other acting methods regarding this
policy, who determine which type of loans are desirable or undesirable
 for the bank, which geographical area is the priority, which type of
collateral is (in)acceptable. Whenever a change in credit standards is
mentioned in the questionnaire, the credit institution also needs to
indicate the change in the adoption of this policy.

c) Major findings:

Loans, or a bank lending money and earning interest income in return,

are usually paid back as equated monthly instalments. These
instalments have a principal payback component and an interest
component. The interest component is what a bank earns. The bank
also has an interest cost for earning this interest component. This is true
for all loans. Loans are the traditional earning stream for banks. In
recent years, trading assets had grown in importance, but after the sub-
prime crisis, the importance of loans increased again. Now let’s look at
the trends in loans in the banking system. Loan share has remained
nearly the same due to two important factors. The first is that demand
for loans has weakened in many segments, notably mortgages. Some
loan segments like commercial and industrial loans have grown on the
other hand. The net effect has been very little loan growth in 2014. The
second reason is that many banks have also increased trading assets to
benefit from changes in monetary policy. If we segregate banks
according to their asset size, some very interesting trends emerge in
terms of the percentage of loans as assets. The first important trend is
that loans as assets are less important for larger banks. In other words,
large banks tend to have a more diversified asset portfolio.

d) Conclusion:

Everyone needs money at every stage of their life. Sometimes it so

happens that they have keen desire to purchase their favourite stuff but
they are incapable to purchase due to shortage of money. Here lies a
question that a person who does not have a good amount of money at
particular time has no right to see dreams? Is he not authorized to fulfil
his desires on time? Should he stop dreaming? No, because there is
solution for these queries. Loans are available for these purposes only.
Loans are provided to people for such critical circumstances which may
occur at any time. In anyone's life a situation may come when all of
sudden you require cash. A moment when you do not want to borrow
cash from your relatives. There may occur any kind of emergency when
you need huge amount of money. There are various types of loans like
home loans, personal loans, student loan, business loan etc. You can
 take any type of loan you need. For each and every kind of need, loans
are available. Home loans are available for general home purposes like
buying a luxurious car, going for a holiday trip, educational purpose,
home improvement etc. Many of your desires can be fulfilled by this
loan. Personal loans are available for personal requirements like
wedding ceremony, purchasing a home etc. Student loan as it itself
suggest is that it is provided basically to students for higher education.
Students who want to study more but cannot afford can get apply for
such loans and continue their studies. To start a new business, you
require a huge amount of money. A person willing to setup a business
may not have that much cash which can meet out his requirements. For
this business loans are available. You can get business loans to start and
well establish a new business in market. Whatever may be the kind of
loan, all have full-fledged facilities. All kind of loans have their own
importance. Above all, need of money explains the importance of loan.
Appling for loan is very easy. Apply for that loan whichever is needed
to you. But before applying you should go through different lender's
policies and apply for that lender which is beneficial for you.

e) Recommendation:

Bank loans have an increasing role for corporate activities. In most

countries, bank loans are the main source of financing for small and
medium-sized enterprises. Even though the role of banks decreased in
the last years, banks take advantage of a privileged position which
allows them to provide liquidity cheaply than other intermediaries.
The activity of bank lending is often influenced by the adverse
selection due to the fact that corporate clients are often reluctant, in
providing the complete and real information about them. As a result,
the information asymmetry may have a negative impact both on banks
and companies. The most important effects of the financial and
economic crisis on the companies are the drastic drop in demand for
goods and services and a tightening in credit terms, which are severely
affecting their cash flows. Also, companies face financing constraints
which often amplify the effects of crisis. A bank loans money to a
 business based on the value of the business and its perceived ability to
service the loan by making payments on time and in full. Unlike with
equity finance where the business issues shares, banks do not take any
ownership position in businesses. Bank personnel also do not get
involved in any aspect of running a business to which a bank grants a
loan. This means you get to retain full management and control of
your business with no external interference. Bank loans are available
to finance the purchase of inventory and equipment as well as to
obtain operating capital and funds for business expansion. These loans
are a time-honoured and reliable method of financing a small business,
but banks often only finance firms with substantial collateral and a
long track record, and the terms they offer are often very strict.
Business owners should weigh the advantages and disadvantages of
bank loans against other means of finance.

f) Your Contribution:

 Analysis of individual customer’s files.

 Research appraisal report of the customers
 Checking their CBIL reports
 Checking eligibility criteria and rules and regulations of
Allahabad Bank.
B. TABLE OF CONTENTS
- It should include topics covered and appropriate in most reports only the major headings
and subheadings are included. The table of contents is followed by list of tables /graphs

SN Contents Page No.

1 Introduction

2 Industry / Company overview

3 Review of Literature/ Theoretical Background

4 Research Methodology

5 Data Analysis and findings

6 Conclusions

7 Recommendations & Limitations of the project

8 Bibliography

9 Appendix
 B. MAIN BODY

1. INTRODUCTION

1.1.Importance of Finance: -
Finance is the elixir that assists in the formation of new businesses, and allows
businesses to take advantage of opportunities to grow, employ local workers
and in turn support other businesses and local, state and federal government
through the remittance of income taxes. The strategic use of financial
instruments, such as loans and investments, is key to the success of every
business. Financial trends also define the state of the economy on a global level,
so central banks can plan appropriate monetary policies.
Venture capital is an area of finance that specializes in funding new companies
and their expansion efforts. Trade finance makes international trade possible by
issuing Letters of Credit (LOC) used to purchase goods from overseas
companies. An LOC funds the manufacturing of products when a company uses
the LOC as collateral for a manufacturer's loan.
Bank loans help finance accounts receivable, and credit cards help finance a
company's travel and entertainment expenses. All this activity in turn serves to
keep money flowing throughout the global economy.
Functions in Finance
Finance is the process of creating, moving and using money, enabling the flow
of money through a company in much the same way it facilitates global money
flow. Money is created by the sales force when they sell the goods or services
the company produces; it then flows into production where it is spent to
manufacture more products to sell. What remains is used to pay salaries and
fund the administrative expenses of the company.
Benefits of Finance
The flow of finance starts on Wall Street with the creation of capital used to
fund business through the issuance of common stock to provide capital, bonds
to lend capital and derivatives (packaged groups of securities that help to hedge
against financial risk and replace the money banks lend out to borrowers).
Public companies and municipalities use this capital to help fund their
operations, and banks use it to lend to companies, municipalities and individuals
to finance the purchase of goods and services.
Significance of Finance
When some element of the finance process breaks down companies go out of
business and the economy moves into recession. For example, if a major bank
loses a significant amount of money and faces the risk of insolvency, other
banks and corporate customers will stop lending or depositing money to the
problem bank. It will then stop lending to its customers and they will not be able
to purchase the goods or pay the bills for which they were seeking funding. The
flow of money throughout the financial system slows down or stops as a result.
All facets of the global economy depend upon an orderly process of finance.
Capital markets provide the money to support business, and business provides
the money to support individuals. Income taxes support federal, state and local
governments. Even the arts benefit from the financial process because they draw
their money from corporate sponsors and individual patrons. Capital markets
create money, businesses distribute it, and individuals and institutions spend it.
Business finance is the art and science of managing your company's money.
The role of finance in business is also to make sure there are enough funds to
operate and that you're spending and investing wisely. The importance of
business finance lies in its capacity to keep a business operating smoothly
without running out of cash while also securing funds for longer-term
investments. Finance relies on accounting, but while accounting is mainly
descriptive, finance is active, using accounting information to manifest
tangible results. The three main sources of funding for a business are revenues
from business operations, investor finances such as owner’s, partner’s or
venture capital, and loans from individuals or financial institutions. Businesses
need finances for daily operations and to meet essential expenses and payments.
Expenses are either short term, such as payroll payments, or long term, such as
purchasing buildings. It is impossible to achieve your long-term and short-term
goals without effectively managing your finances. Inefficient management of
finances could lead to liquidity shortages. You need funds for business growth,
market competition, and to keep your business operational and maintain your
customer base. If your finances are restricted, risks that can negatively affect the
accumulation of necessary business funds should be hedged with adequate
insurance coverage and effective internal controls. You can obtain insurance for
accidents, liabilities and business vehicles to protect your finances from sudden
untoward impacts. Your business can come to a halt or your working capital
management may be jeopardized if you do not have the essential finances to
cover short-term expenses. Creditors can demand payment for the items or
services they have delivered to you at any time. Failure to meet these demands
can cause inventory shortages or damaged business relations. Short-term
sources of finance, such as cash revenue and advance receipts, must be obtained
sufficiently through effective debt and discount policies. Preparing cash budgets
can help you forecast outflow of money and the amount of finances needed to
meet those outflows. Long-term sources of finance must be available for
achievement of long-term goals, such as purchasing new machines. Relying on
short-term sources would lead to a finance shortage for long-term projects and
could repeatedly stall these projects. Finance long-term projects using your
business’s savings, or obtain bank loans. To fund expenses of such magnitude,
you cannot rely on short-term financial sources, because doing so could
adversely impact your short-term activities. Use tools such as capital budgeting
and proper planning to time when your long-term expenses occur. Every
business owner has a vision for his company, and that vision is frequently
manipulated by managing and prioritizing the use of financial resources. Given
a set amount of finances, your financial objectives and anticipations will shape
how you spend your business funds. For example, your immediate goal may be
to increase sales by financing discounts, or you may have a long-term goal of
expanding your manufacturing capacity for lower average costs. If you draw
most of your finances from loans, repaying the principal amount and interest
should concern you. If you obtain financing from your investors’ money, giving
them the best possible returns must be a key objective.

1.2 Objectives of the project: -

Importance of Retail Loan: -

Loans are the lifeblood of a bank. All businesses sell products, and a bank's
product is money. Banks make money by taking in funds from depositors and
other sources and then lending money out to customers. The bank spread is the
difference between what the interest a bank must pay to obtain the funds and the
rate the bank charges on the loan. For example, a bank might pay two percent
interest to a depositor and charge a customer six percent interest on a loan. The
four percentage points is the bank's spread, and its profit. Banks make all sorts
of loans, but they can broadly be broken down into two categories: residential
and commercial. Residential loans represent money lent to people looking to
finance a home purchase with a mortgage. These can be fixed-rate or adjustable
with terms varying from a few years to 40 years. Banks often sell their long-
term mortgage loans rather than keeping them on their books as a protection
against inflation. Commercial loans are loans made to people looking to start or
expand a business. Loans, or a bank lending money and earning interest income
in return, are usually paid back as equated monthly instalments. These
instalments have a principal payback component and an interest component.
The interest component is what a bank earns. The bank also has an interest cost
for earning this interest component. This is true for all loans. Loans are the
traditional earning stream for banks. In recent years, trading assets had grown in
importance, but after the sub-prime crisis, the importance of loans increased
again. Now let’s look at the trends in loans in the banking system. Loan share
has remained nearly the same due to two important factors. The first is that
demand for loans has weakened in many segments, notably mortgages. Some
loan segments like commercial and industrial loans have grown on the other
hand. The net effect has been very little loan growth in 2014. The second reason
is that many banks have also increased trading assets to benefit from changes in
monetary policy. If we segregate banks according to their asset size, some very
interesting trends emerge in terms of the percentage of loans as assets. The first
important trend is that loans as assets are less important for larger banks. In
other words, large banks tend to have a more diversified asset portfolio.
Everyone needs money at every stage of their life. Sometimes it so happens that
they have keen desire to purchase their favourite stuff but they are incapable to
purchase due to shortage of money. Here lies a question that a person who does
not have a good amount of money at particular time has no right to see dreams?
Is he not authorized to fulfil his desires on time? Should he stop dreaming? No,
because there is solution for these queries. Loans are available for these
purposes only. Loans are provided to people for such critical circumstances
which may occur at any time. In anyone's life a situation may come when all of
sudden you require cash. A moment when you do not want to borrow cash from
your relatives. There may occur any kind of emergency when you need huge
amount of money. There are various types of loans like home loans, personal
loans, student loan, business loan etc. You can take any type of loan you need.
For each and every kind of need, loans are available. Home loans are available
for general home purposes like buying a luxurious car, going for a holiday trip,
educational purpose, home improvement etc. Many of your desires can be
fulfilled by this loan. Personal loans are available for personal requirements like
wedding ceremony, purchasing a home etc. Student loan as it itself suggest is
that it is provided basically to students for higher education. Students who want
to study more but cannot afford can get apply for such loans and continue their
studies. To start a new business, you require a huge amount of money. A person
willing to setup a business may not have that much cash which can meet out his
requirements. For this business loans are available. You can get business loans
to start and well establish a new business in market. Whatever may be the kind
of loan, all have full-fledged facilities. All kind of loans have their own
importance. Above all, need of money explains the importance of loan. Appling
for loan is very easy. Apply for that loan whichever is needed to you. But before
applying you should go through different lender's policies and apply for that
lender which is beneficial for you. A retail loan is given to an individual by a
commercial bank, a credit union, or a financial institution to purchase assets like
property, vehicles, consumer electronics, etc. Generally, a bank or a financial
institution lends to customers with a high enough credit score in order to ensure
they repay the money and do not default. Customers pay interest on a monthly
or annual basis, for the entire term of the loan based on a pre-agreed rate.

So why do people opt for Retail Loans? A simple reason is that that many
would want to make a purchase sooner, but might not have the full amount until
much later. A typical example is the purchase of a house. Real estate is
expensive, and it is unlikely that an average worker will have the entire amount
required for a purchase in full. It may take years until he can gather the amount
needed to buy a house. So, the bank lends him the money and the consumer
agrees to pay the money back bit by bit over the course of several years. It
should be clear how this benefits a home buyer. He did not have to pay the full
amount now but gets to live in a house of his own. If not for the loan, it
would’ve taken years for him to make the purchase, all the while
wasting money in rent. The major benefit here is that a customer can enjoy a
certain asset long before he can actually afford it.

1.3 Justification for choosing the organization: -

The Oldest Joint Stock Bank of the Country Allahabad Bank was founded in
April 24th of the year 1865 at the confluence city of Allahabad by a group of
Europeans. At that occasion Organized Industry Trade and Banking started
taking shape in India. Thus the History of the Bank spread over three Centuries
- namely Nineteenth Twentieth and Twenty-First. As a leading public sector
commercial banks in India Allahabad Bank offering banking products and
services to corporate and commercial customers and retail customers. The Bank
particularly focuses on the retail banking while serving all sectors of the Indian
economy. Bank's operations for corporate and commercial customers cater to
large corporate customers as well as to small and middle market businesses and
Government entities. Corporate and commercial products include Term Loans
Bill Discounting Export Credit and other business credit and financing products.
Also the bank offers a wide range of retail products including Home Loans
Personal Loans and Automobile Loans as well as Debit Cards. In addition,
specialised products and services to the agricultural sector also one of entity of
the bank. All the above products and services of the bank offered through
extensive branch network extension counters ATMs phone banking and the
Internet. Allahabad Bank has pan India presence of 3245 branches. Out of 3245
domestic branches 1207 are at Rural 764 at Semi-urban 648 at Urban and 626 in
Metropolitan Centres. The bank has 1105 ATMs/CDs as on 31 March 2018.
The bank is having one overseas branch with a dealing room at Hong Kong.
The bank also has a centralized fully equipped forex dealing room at Integrated
Treasury Branch Mumbai which handles forex transactions in 9 currencies and
maintains 12 Nostro accounts and 1 Vostro account. Allahabad Bank is a
corporate agent of Life Insurance Corporation of India and Ms. Universal
Sompo General Insurance Company Limited. The bank distributes the Mutual
Fund schemes of 6 AMCs i.e. Reliance Nippon AMC Principal PNB AMC
Kotak Mutual Fund AMC UTI MF AMC Franklin Templeton AMC and Essel
(formerly known as Peerless) AMC through its branches. The bank provides
Depository services to the customers of the bank. It is a Depository participant
of NSDL & CDSL. The bank provides broking facility to its demat customers in
association with Ms. Aditya Birla Money Limited. IN Twentieth Century the
Bank became a part of P & O Banking Corporation's group with a bid price of
Rs.436 per share in 1920. The Head Office of the Bank was shifted to Calcutta
on business considerations during the year of 1923. The Bank crossed its
century year in 1965. In July 19th of the year 1969 Allahabad Bank was
nationalized (with 151Branches - Rs.119 crores of Deposits and Rs.82 crores of
Advances) along with 13 other banks. United Industrial Bank Ltd was merged
with the bank in October of the year1989. The Bank made a foray into merchant
banking activity in 1984 and subsequently instituted All Bank Finance Ltd as a
wholly owned subsidiary for Merchant Banking in the year of 1991. The
Official Language Implementation Committee of Calcutta awarded the
Rajbhasha Shield to the Bank as Second Prize for its best performance for the
year 1991. During the year 1995 The Bank had entered into an MOU with the
Small Industries Development Bank of India (SIDBI) for financing small-scale
industrial units. In 1996 The Bank had set up Information Technology Centre to
provide in-depth computer training to Officers at Calcutta and Lucknow.
Consequent to the SEBI Rules and Regulation the company surrendered its
merchant banking registration in 1998 and got it registered as a Non-Banking
Financial Company (NBFC) with Reserve Bank of India (RBI). In the same
year of 1998 the bank had received permission from the RBI for gold trading.
Allahabad Bank has entered into an arrangement informally though with IDBI
and ICICI in regard to funding of infrastructure projects. During the year 1999
Allahabad Bank has launched two new schemes to increase the pace of credit
off take and in the same period TATA Consultancy Services (TCS) has entered
into a contract with Bank for implementing the Integrated Standard Banking
System (ISBS) a branch mechanisation package at 60 branches. The Bank
bagged three major core sector clients namely the National Thermal Power
Corporation (NTPC) Power Grid Corporation and Indian Railway Finance
Corporation Ltd (IRFC). In Twenty-First Century Allahabad Bank has launched
its new personal loan scheme for pensioners in the year of 2001. As at October
of the year 2002 the bank came out with Initial Public Offer (IPO) of 10 crores
share of face value Rs.10 each reducing Government shareholding to 71.16%
and in the same year 2002 Allahabad has tied up with National Institute of
Banking Management Crisil and Earnst & Young for development of HRM risk
Management and general business strategy. The Bank signed a Memorandum of
Understanding (MoU) in the year 2003 with Corporation Bank for mutual
sharing of their ATM Network. The Bank has entered into an MOU in the year
of 2004 with the Export Credit Guarantee Corporation of India (ECGC) for
distribution of their products to the exporters. UTI Mutual Fund and Allahabad
Bank on April 5 2004 announced a strategic tie-up for distribution of UTI MF
schemes. During April of the year 2005 the bank made Follow on Public Offer
(FPO) of 10 crores equity shares of face value Rs.10 each with a premium of
Rs.72 reducing Government shareholding to 55.23%. The Bank has signed
MoU with Mahindra Gujarat Tractor Ltd in the identical year 2005 for financing
Hindustan brand tractor under special finance scheme. Allahabad Bank
transcended beyond the National Boundary Allahabad bank had opened a
representative office at Shenzen China in June 2006. In October of the same
year 2006 the bank rolled out its first branch under Core Banking Services
(CBS). During February of the year 2007 The Bank opened its first overseas
branch at Hong Kong. During the calendar year of 2007 100 more branches
opened throughout the country the total number of branches were stirred from
2042 to 2142 of which rural are 983 (46%) semi-urban 402 (19%) urban 450
(21%) and metropolitan 307 (14%). Allahabad Bank has opened its 2154th
branch in at Pudukkottai Tamil Nadu during March of the year 2008. One of the
premier nationalised banks of the country Allahabad Bank has commenced the
process of implementing the Agricultural Debt Waiver and Debt Relief Scheme-
2008 in June of the year 2008. During the year 2010-11 the Bank has brought
all its branches and offices under Core Banking Solution(CBS) ambit. The
notable developments in the area of technology adoption include launching of
internet banking SMS banking e-banking implementation of Real Time Gross
Settlement / National Electronic Fund Transfer (RTGS/NEFT) On-line Tax
Accounting System (OLTAS) etc. Bank's Internet Website is now available in 3
languages i.e. Hindi English and Bengali. The Bank entered into Tie-Up
arrangement with 'Unique Identification Authority of India Ltd' with a view to
allot Unique Identification Number to Customers of the Bank nation-wide.
During the year 2011-12 Bank has entered into a strategic alliance with M/S
Aditya Birla Money Ltd for providing online-trading facility to the Demat
customers of the Bank. Bank has signed a MOU with M/S American Express
Banking Corporation for issuance of 'Program Cards' i.e. Charge/Credit Cards
to the customers of the Bank. It has also signed MOU with ICRA Limited for
Credit Rating of Micro & Small Enterprises. During the year 2012-13 the Bank
launched the following three products: 1. RuPay the branded domestic ATM
card 2. Prepaid Gift Card a non-reloadable prepaid card for providing gift to
one's near and dear ones on any occasion 3. IMPS (Inter Bank Mobile Payment
System) an electronic fund transfer service through mobile phones. The Bank
has also launched Allahabad Bank VISA international Gold Debit - cum ATM
card and Allahabad Bank VISA International Platinum Debit- cum ATM Card.
During the year 2013-14 On the occasion of the 149th Foundation Day on
24.04.2013 the Bank launched a new product - the RuPay Debit Card.In 2014-
15 two new products viz. 'All Bank Credit Loyalty Benefit Scheme' and 'All
Bank New Saral Loan Scheme' have been launched to boost the retail credit
portfolio. The Bank has also signed a Memorandum of Understanding (MoU)
with Bharat Sanchar Nigam Limited (BSNL) for extending Retail Loans to the
employees of BSNL at concessional rates in six different schemes. In 2015-16
the Bank has launched RuPay Platinum Debit Card (International) with higher
limits of withdrawals at ATMs (Rs. 1.00 lac per day) PoS and e-commerce site
(RS. 2.00 lac per day). Accidental insurance coverage of Rs. 2.00 lac is also
provided by NPCI in this card. The Bank has tied up with Travel aggregator
`GoIbibo' for providing cash discounts at the time of booking train & flight
tickets and hotel bookings by the customers of the Bank in their portal and with
M/s NSDL e-Governance Infrastructure Ltd. for providing the Will preparation
services wherein the customers of the Bank can get their `Will' prepared online.
The Bank has improved its performance and established its visibility and strong
presence in the market. The Bank is steadily moving at a faster pace to
consolidate its position in the coming days introducing extensive
computerization to ensure the state-of-the-art service comfort for its customers.
Bank's plan is to expand in areas where the Bank's presence is not very much
visible now and where business potentiality is good. During the financial year
ended 31 March 2017 Allahabad Bank initiated various measures to arrest fresh
slippage. To improve asset quality, the bank initiated consistent recovery drive.
The bank also formulated two new one-time settlement (OTS) schemes for
small NPA accounts which resulted in accelerated settlement of Farm Sector/
Unsecured small borrowal accounts. Further compromise/negotiated settlement
through Rin Mukti Shivir and one-to-one meeting with borrowers was adopted
as another vital tool to tackle NPAs. However, recovery in big borrowal
accounts above Rs 1 crore remained a constraint for the bank for obvious
reasons. For follow-up monitoring and recovery in these accounts online
module PARTH (Portal for Asset Resolution through Hot chase) was introduced
which was very useful in assuring resolution in this segment. During the year
under review the bank started monitoring of daily recovery with Zones/ FGMOs
to improve penetration in NPA accounts. The Bank organized 33 Recovery
Camps in the previous year involving all the branches which was very
successful in terms of recovery that amounted to Rs 3157.26 crore. Services of
Recovery Agencies and Banking Correspondents were properly utilized for
marketing of One Time Settlement Schemes (OTS). The bank participated in
National Lok Adalat actively and settled 15154 cases having outstanding of Rs
148.30 crore.E-auctions of charged immovable & movable securities were
carried out through-out the year. Special thrust was given in taking physical
possession of immovable properties either with the help of Enforcement
Agencies or by moving application before the concerned DM/CMM taking
advantage of amended SARFAESI Act. This step had resulted into increase in
the percentage of properties under physical possession of the bank which
leading to auction of properties. Initiatives for identifying Wilful Defaulters
were undertaken in terms of guidelines of Reserve Bank of India. On
completion of due diligence exercise identified borrowers were declared as
Wilful Defaulter by the bank and the number of Wilful Defaulter increased to
101 a three-fold jump from March 2016 figure of only 32. During FY17
Allahabad Bank launched upgraded version of its Mobile App which enables
customer do transactions with ease. The bank has also introduced the facility to
register for Mobile Banking through its network of ATMs. During FY17 a new
department New Business Initiative was opened for strategic business
development. During FY17 Allahabad Bank opened a total of 40 new branches
out of which 12 are at Rural 14 at Semi Urban 7 each at Urban and Metro
centres. The rural branches include opening of 7 branches in unbanked rural
centres. Further 2 Metro and 1 each in Urban and semi-urban branches have
been merged to consolidate the business of close by located centres. During
FY17 Allahabad Bank participated in four tranches of Sovereign Gold Bond
Scheme launched by Govt. of India aiming to reduce the holding of the yellow
metal and also to reduce import of Gold. During FY17 the bank participated in
Income Declaration Scheme 2016 and Pradhan Mantri Garib Kalyan Deposit
Scheme (PMGKDS). During the year ended 31 March 2018 Allahabad Bank
initiated various measures to arrest fresh slippage. To improve asset quality, the
bank initiated consistent recovery drive and recovered Rs 3379.08 crore out of
which Cash Recovery was Rs. 2071.86 crore with a growth of 28.58 % due to
concerted efforts daily monitoring and account specific resolution plan. The
bank also made suitable amendments in existing OTS schemes by increasing the
cut off limit from Rs 10 lakh to Rs 15 lakh in OTS module for other NPA a/cs
in Thumb Rule module as in existing module for Farm Sector. This resulted in
accelerated settlement of unsecured small borrowal accounts. Further
compromise negotiated settlement through Rin Mukti Shivir and one-to-one
meeting with borrowers was adopted as another vital tool to tackle NPAs.
However recovery in big borrowal accounts above Rs 1 crore remained a
constraint for the bank for obvious reasons. During the year under review
Allahabad Bank introduced War Room with dedicated executives (Two Asstt.
General Managers and One Chief manager) at Head Office level for close
monitoring of due process in NPA accounts having outstanding balance of Rs
50 lakh and above. The bank organized 12 Recovery Camps in the previous
year (one camp in each month) involving all the branches. This step was very
successful in terms of recovery that amounted to Rs 3564.55 crore. The bank
participated in National Lok Adalat actively and settled 26950 cases having
outstanding of Rs 314.56 crore. E-auctions of charged immovable & movable
securities were carried out through-out the year. The bank updated its Internet
Banking Services during FY18. The Internet Banking Customers of the bank
reached 12.8 lacs as on 31 March 2018. During FY18 upgraded version of the
Mobile App was introduced enabling the customers to do transactions with
more ease. The bank opened 3 new branches during FY18 out of which 1 is at
Rural and 2 at Semi Urban centres. Further 2 Metro and 1 semi-urban branches
have been merged to consolidate the business of closely located centres. During
FY18 Allahabad Bank participated in 3 series (14 tranches) of Sovereign Gold
Bond Scheme launched by Govt. of India aiming to reduce the holding of the
yellow metal and also to reduce import of Gold. Owing to high non-performing
assets (NPA) and negative Return on Assets (RoA) for two consecutive years
Allahabad Bank was brought under Prompt Corrective Action (PCA)
framework by RBI on 2 January 2018AllBank Finance Ltd. a wholly owned
subsidiary of Allahabad Bank engaged in Corporate Advisory Services Project
Appraisal Issue Management Loan Syndication Debenture Trusteeship and
Underwriting was merged with the bank with effect from 14 March.2018.

1.4 Research Methodology: -

The loans aimed in this survey, are those granted to residents of the
euro area by domestic credit institutions, among which loans or credit
lines to non-financial corporations, loans to households for house
purchase and consumer credit and other lending to households. The
definition of loans used is the one as defined in Regulation (EG) nr.
25/2009 of the European Central Bank of 19 December 2008
concerning the balance sheet of the monetary financial institutions
sector (Recast) (ECB/2008/32). Inter-bank loans are not included.
Based on this definition, the financial lease agreements granted by
MFI are to be considered as loans (this is not the case for operational
lease agreements). Within the scope of this survey, factoring has to be
treated as a loan, under the condition that it has been foreseen by an
MFI. Financial lease agreements and factoring offered by a non-MFI,
are outside the scope of this survey.
The credit standards are the internal guidelines or standards reflecting
the credit granting policy of a credit institution. They constitute of
written or unwritten criteria, or other acting methods regarding this
policy, who determine which type of loans are desirable or undesirable
for the bank, which geographical area is the priority, which type of
collateral is (in)acceptable. Whenever a change in credit standards is
mentioned in the questionnaire, the credit institution also needs to
indicate the change in the adoption of this policy. Loans, or a bank
lending money and earning interest income in return, are usually paid
back as equated monthly instalments. These instalments have a
principal payback component and an interest component. The interest
component is what a bank earns. The bank also has an interest cost for
earning this interest component. This is true for all loans. Loans are
the traditional earning stream for banks. In recent years, trading assets
had grown in importance, but after the sub-prime crisis, the
importance of loans increased again. Now let’s look at the trends in
loans in the banking system. Loan share has remained nearly the same
due to two important factors. The first is that demand for loans has
weakened in many segments, notably mortgages. Some loan segments
like commercial and industrial loans have grown on the other hand.
The net effect has been very little loan growth in 2014. The second
reason is that many banks have also increased trading assets to benefit
from changes in monetary policy. If we segregate banks according to
their asset size, some very interesting trends emerge in terms of the
percentage of loans as assets. The first important trend is that loans as
assets are less important for larger banks. In other words, large banks
tend to have a more diversified asset portfolio. Bank loans have an
increasing role for corporate activities. In most countries, bank loans
are the main source of financing for small and medium-sized
enterprises. Even though the role of banks decreased in the last years,
banks take advantage of a privileged position which allows them to
provide liquidity cheaply than other intermediaries. The activity of
bank lending is often influenced by the adverse selection due to the
fact that corporate clients are often reluctant, in providing the
complete and real information about them. As a result, the information
asymmetry may have a negative impact both on banks and companies.
The most important effects of the financial and economic crisis on the
companies are the drastic drop in demand for goods and services and a
tightening in credit terms, which are severely affecting their cash
flows. Also, companies face financing constraints which often amplify
the effects of crisis. A bank loans money to a business based on the
value of the business and its perceived ability to service the loan by
making payments on time and in full. Unlike with equity finance
where the business issues shares, banks do not take any ownership
position in businesses. Bank personnel also do not get involved in any
aspect of running a business to which a bank grants a loan. This means
you get to retain full management and control of your business with
no external interference. Bank loans are available to finance the
purchase of inventory and equipment as well as to obtain operating
capital and funds for business expansion. These loans are a time-
honoured and reliable method of financing a small business, but banks
often only finance firms with substantial collateral and a long track
record, and the terms they offer are often very strict. Business owners
should weigh the advantages and disadvantages of bank loans against
other means of finance.

1.5 Literature Review: -

A number of studies have been conducted in India and abroad on

various aspects of banking especially retail banking. Some worthwhile
studies relating to the present topic are reviewed here. Birla Institute of
Scientific Research (1981)1 in its study makes a comparative
assessment of the performance of public sector banks and major private
sector banks since nationalisation. They find that the performance of
public sector banks is not satisfactory in rural development activities
when compared to the private sector banks. Jain, Pinson and Malhotra
(1987)2 in their study “Customer loyalty as a construct in the marketing
of bank services” feel that customer loyalty is a very useful construct.
Their contention is that the human aspect of banking should be given
utmost importance by the loyal segment for the marketing of bank
services. R Jayakumar (1993)3 in his study of “Performance of private
sector banks in Kerala” makes a comparative examination of
performance of public sector banks and private sector banks in Kerala.
He finds that in Kerala private sector banks perform better than their
public sector counterparts. Delvin James (1995)4 makes a case study
of the retail banking services in UK using First Direct, a subsidiary of
Midland Bank. He concludes that banks can increase their market share
 through proper communication and prompt delivery of products
Govindarajalu (1996) 5 in his article “Satisfaction and dissatisfaction
with bank services” views that the Indian banks have lost the quality of
customer service. The dissatisfaction of customers with bank services
is an important issue to be considered by banks and policy makers for
the development of banking sector. Sarkar and Das (1997)6 make a
comparison of the performance of the three bank sectors - public,
private and foreign - for the year 1995-1996. These banks are compared
in terms of profitability, productivity and financial management. They
find that the public sector banks are very poor in performance on the
basis of these variables than the other two sectors. D Mishra (1997)7
makes a study on the performance of commercial banks in India
choosing relevant parameters like quality of service, risk management,
profitability etc. His conclusion is that the banks should try to increase
quality, balance risk management, and optimise profitability in order to
survive and succeed. He identifies four challenges for the bank namely
competition, credit, customer and control.

2. INDUSTRY/COMPANY OVERVIEW
.
ALLAHABAD BANK

In 1920 the bank became a part of the P&O Banking Corporation which paid Rs 436
per share of the bank. By 1923 the bank had shifted its headquarters to Calcutta
from Allahabad. In 1969 the government of India nationalized the bank which at that
time had over 151 branches.

The government diluted its stake to 71.60% by going in for an Initial Public Offer of
10 crores in October 2002 and further reduced the stake to 55.23% with a follow on
IPO. By 2007 the bank’s turnover exceeded Rupees One Lakh Crores.

Today the bank has operations even in Hong Kong where it opened its first overseas
branch in 2007.housing loans form a major part of its retail lending.
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Allahabad Bank is a nationalised bank with its headquarters in Kolkata, India.

It is the oldest joint stock bank in India. On 24 April 2014, the bank entered into
its 150th year of establishment. It was founded in Allahabad in 1865.
As of 31 March 2018, Allahabad Bank had over 3245 branches across
India. The bank did a total business of INR 3.8 trillion during the FY 2017-18.
The bank's market capitalisation in June 2018 was US$573 million and it ranked
#1,882 on the Forbes Global 2000

In the early 20th century, with the start of Swadeshi movement, Allahabad Bank
witnessed a spurt in deposits. In 1920, P & O Banking Corporation acquired
Allahabad Bank with a bid price of ₹436 (US$6.30) per share. In 1923 the bank
moved its head office and the registered office to Calcutta for reasons of both
operational convenience and business opportunities. Then in 1927 Chartered
Bank of India, Australia and China (Chartered Bank) acquired P&O Bank.
However, Chartered Bank continued to operate Allahabad Bank as a separate
entity
Allahabad Bank opened a branch in Rangoon (Yangon). At some point
Chartered Bank amalgamated Allahabad Bank's branch in Rangoon with its
own.[10] In 1963 the revolutionary government in Burma nationalized the
Chartered Bank's operations there, which became People's Bank No. 2.[11]

In October 1989, Allahabad Bank acquired United Industrial Bank, a Calcutta-

based bank that had been established in 1940 and that brought with it 145
branches. Two years later, Allahabad Bank established All Bank Finance Ltd, a
wholly owned Merchant Banking subsidiary.
The government's ownership of Allahabad Bank shrank in October 2002 after
the bank engaged in an Initial Public Offering (IPO) of ₹100
million (US$1.4 million) of shares, each with a face value ₹ 10. The IPO
reduced the Government's shareholding to 71.16%. Then in April 2005 the bank
conducted a second public offering of 100 million of shares, each with a face
value 10 and selling at a premium of 72.
 This offering reduced the Government's ownership to 55.23%.In June 2006 the
bank opened its first office outside India when it opened a representative office
in Shenzen, Mainland China. In February 2007, Allahabad Bank opened its first
overseas branch, in Hong Kong. In March, the bank's business crossed the 10
million mark
As on 31 March 2013, the bank had 22,557 employees, out of which 3,293 were
women (15%).Out of the total employees, 51% were officers, 30% were clerks
and remaining 19% were subordinate staff. The bank recruited 1,950 employees
(1,421 Officers, 390 Clerks and 139 subordinate staff) during the same financial
year. The company incurred INR 20 billion on employee benefit expenses
during the same financial year.
Employee productivity: During the FY 2013–14, the business per employee was
INR 13.50 crores and it earned a net profit of INR 4.77 lakhs per employee.

Allahabad Bank Company History and Annual

Growth Detail
1865 - Allahabad Bank was set up on 24th April, at Allahabad by a Group of
Europeans with subscribed capital of Rs.3 lakh. It is the oldest Bank in the
country at present. 1920 - The P & O Banking Corporation took over the bank
by acquiring its shares. 1965 - The Bank celebrated Centenary. In 1969 it was
nationalised. The bank has reached all social banking targets. - It has introduced
the Crop Credit Card (Fasli Shigra Ring Patra). It has launched the credit card
"India Card - Allahabad Bank". 1992 - During the year the country faced its
economic challenges Boldly and emerged with creditable achievements despite
the following constraints. - Longer maturity Treasury Bills (364 days) have
been introduced. - The Bank has adopted 23 villages as `Model villages' for
their integrated development. - International Branch at Moradabad became the
first nationalised bank outside a metropolitan city to handle foreign exchange
business. - The Bank has been designated as one of the banks to handle India
Development Bonds Scheme under which the Bank mobilised subscriptions of
Rs. 14.85 crore. - The Bank's Computer Based Terminal was commissioned at
International Branch, Mumbai. - The Bank has joined the elite group of 3000
banking/financial institutions in 72 countries for rapid transfer of standardised
messages among SWIFT members by using state of art communication
technology. - A dedicated communication line was set up between the
mainframe computer and the Central Accounts Department to accelerate data-
transfer and update data files. - The Bank has an effective vigilance set up to
handle the Bank's vigilance matters. - The Bank was awarded Fourth Prize by
the RBI under the Reserve Bank of India Shield Scheme for its commendable
work regarding implementation of Hindi in Region `C'. It was awarded a
certificate and the Third Prize in the Indira Gandhi Official Language Shield
Competition 1991. - The Rajbhasha Shield was awarded to the Bank as Second
Prize for its best performance by the Official Language Implementation
Committee of Calcutta for the year 1991. Rajbhasha Shields were awarded to
Patna, Kanpur and Lucknow Zones and Hyderabad Regional Office. - The Bank
organised an Official Language Conference at Jaipur during December 1991, It
is regularly publishing the House Journal `Triveni Dhara' which contains Hindi
section. - The Head Office Official Language Department has been publishing
the journal `Ila Bharati' in Hindi. - The Bank has introduced mechanisation of
Draft Reconciliation System at 11 Service Branches. 1993 - It has been
proposed to set up a Securities Trading Corporation. - During the year, a
Memorandum of Understanding was signed with Bank of India for issuing the
Bank's INDIACARD with Mastercard affiliation. - The Bank implemented the
new scheme of the Government called "Simplified Scheme for payment of
income tax by shopkeepers and other retail traders". - The International Branch,
Mumbai, has been connected to the SWIFT network. - During the year
Shresthta Ka Pramanpatra was awarded to the Bank by TOLIC, Calcutta. 1994 -
International Divisions have been opened at Nadesar Varanasi, Agra City and
Kanpur. 1995 - The Bank has entered into an MOU with the Small Industries
Development Bank of India (SIDBI) for financing small scale industrial units. -
The Bank will shortly be setting up a housing subsidiary with a proposed name
"All Housing Finance Ltd." - The Bank has 5 International Branches and 4
International Divisions. - The Bank organised 123 Hindi Workshops at different
training centres and at Zonal Office level during the year in which 2389
officers/employees were imparted practical training in Hindi. - The Reserve
Bank of India has awarded first prize to the Bank for commendable work in
Hindi in Region `A' during the year. - The Bank emerged as the champion in the
8th All-India InterBank Football Tournament, sponsored by the Banks' Sports
Board, IBA, held in Calcutta in February 1995, in which 10 banks pariticipated.
1996 - The Bank set up Information Technology Centre to provide in-depth
computer training to Officers at Calcutta and Lucknow. - The Bank emerged as
the runners-up in the 7th Inter-Bank Football Tournament (Eastern Region),
sponsored by the Banks' Sports Board, IBA, held at Durgapur from 15.2.1996 to
21.2.1996 in which 8 banks participated. 1997 - A one-day token strike was
observed in all the 475 branches of Allahabad Bank in West Bengal to protest
the management's alleged apathetic attitude towards the employees long
standing demand. - Wipro the Indian computer giant, is set to win the first phase
of the computerisation contract from the Calcutta based Allahabad Bank. - The
Calcutta based Allahabad Bank has decided to close down all its 11 zonal
offices and relocate some of its regional offices as part of the restructuring
process in the bank. - Allahabad Bank, the Calcutta-based public sector bank,
which has received an in-principle clearance from the Reserve Bank of India
(RBI) for setting up a housing finance subsidiary, is reviewing its decision to do
so in the light of the present market scenario. - Allahabad Bank has set up a
committee in order to evolve a new formula for advancing loans for working
capital requirements of businesses. - The Calcutta-based public sector
Allahabad Bank has recently beefed up its Tier-II capital by a revaluation of its
assets, chiefly real estate assets, by Rs 132 crore. This has enabled an increase
in the bank's capital adequacy ratio (CAR) by one percentage point to above 10
per cent. - Allahabad Bank has set up a committee in order to evolve a new
formula for advancing loans for working capital requirements of businesses. An
expert committed has set up around two days ago which is studying the issue.
1998 - Allahabad Bank is scouting for foreign tie-ups in the area of gold
trading, for which it has recently received permission from the Reserve Bank of
India (RBI). - The Allahabad Bank has become one of the first banks in the
country to draw up a credit management policy following the dismantling of the
Reserve Bank of India-prescribed Maximum Permissible Bank Finance (MPBF)
norms. - Allahabad Bank has entered into an arrangement, informally though,
with IDBI and ICICI in regard to funding of infrastructure projects. - Allahabad
Bank is all set to widen its term deposit portfolio with the launch of its Flexifix
Deposit Scheme on January 1. Flexifix Deposit offers to the customers high
interest returns of the fixed deposit scheme along with the option of
withdrawing a part of their deposits prematurely without affecting the rate of
interest or maturity date of the balance part of the deposits. - The bank is
installing 14 automated teller machines (ATMs) in eight cities throughout India,
the Rs.1.20 crore contract for which has been awarded to Siemens Nixdorf
Information Systems Ltd. - The Allahabad Bank launched the Allahabad Bank
Green Card for farmers to enable adequate and timely credit support to them,
not just to meet cultivation costs but also domestic needs. 1999 - Allahabad
Bank has launched two new schemes to increase the pace of credit offtake. -
TATA Consultancy Services (TCS) has entered into a contract with Allahabad
Bank for implementing the Integrated Standard Banking System (ISBS), a
branch mechanisation package, at 60 branches of the bank. - The city-based
Allahabad Bank has bagged three major core sector clients –
NationalThermalPower Corporation (NTPC), Power Grid Corporation and
Indian Railway Finance Corporation Ltd (IRFC).

PRODUCT AND SERVICES

1. Personal Banking
2. Social Banking
3.MSME Banking
4.Corporate Banking
5.International Banking
6. Other Services

PERSONAL BANKING
Personal banking of Allahabad Bank is further divided into three main
categories:
i) Deposit Products
ii) Retail Credit Products; and
iii) Other Credit Products
Deposit Products:
It includes:-
a) Flexi-Fix Deposit
b) Mahila Sanchay Account
c) Monthly Plus
d) Current Plus Deposit Scheme
e) Rs 5 Banking
f) Vikash SB Account
g) Sishu Mangal Deposit Scheme
h) Premium SB Account
i) Premium Current Account
j) Tax Benefit Term Deposit Scheme
 Retail Credit Products
It includes:
a) Housing Loan
b) Saral Loan
c) Furnishing Loan
d) Gyan Dipika Scheme
e) Gold Loan Scheme
f) Personal Loan for Pensioners
g) Education Loan
h) Loan Against NSC (National Saving Certificate)/KVP (Kisan Vikas Patra)
i) Property Scheme
j) Reverse Mortgage Scheme
k) Loan Scheme for Doctors/Medical Practitioners
l) Commercial Vehicle Finance
m) Dream Car
n) Bank Rent Scheme
o) Trade Scheme
p) IPO/FPO Finance Scheme
q) Mobike Scheme
r) Overdraft Facility in SB Account
s) Housing Loan Scheme for NRI’s (Non-Resident Indians)/PIO’s (Persons of
Indian Origin)

Other Credit Products:

a) Akshay krishi – Kisan Credit Card Scheme
b) Allahabad Bank – EXPO Scheme
c) Allahabad Bank Tax Benefit Term Deposit Scheme

SOCIAL BANKING
Social Banking is also further segmented into three different categories:
i) Priority Sector
ii) Financial Inclusion
iii) Credit Facilities to Minority Communities

MSME BANKING
MSME stands for Micro, Small and Medium Enterprise. An “enterprises”
means an Industrial undertaking or a business concern or any other
establishment, by whatever name called, engaged in the manufacture or
production of goods pertaining to any industry specified in the First Schedule to
the Industries (Development and Regulation) Act 1951 or employing plant and
machinery in the process of value addition to the final product having a distinct
name or character or use or engaged in providing or rendering of any service or
services.
Some important MSME portals of Allahabad Bank are:
i) MSME Policy of the Bank
ii) Presence in MSME Cluster
iii) Specialized MSME Branches in Each State
iv) MSME Campaigns held and number of borrowers given loan in the
campaigns
v) Training provided for the bank staff on MSME needs and number of
persons trained
vi) Online system of acknowledgement of loan application and loan tracking
system
vii) Format of loan application form with check list
viii) Interest on MSME/Services Charge
ix) OTS Scheme of the Bank
x) Rehabilitation of sick MSME
xi) Number of people trained in RSETI’s and of them those provided credit
linkage
xii) Branch Level Customer meets held
xiii) Grievance Redressal Mechanism for MSME’s
xiv) Name of Nodal Officer of the bank for MSME complaints and queries:
Sri A.K. Mohapatra
Assistant General Manager
Priority Sector Credit Department
Head Office, 2 N.S. Road
Kolkata – 700001

CORPORATE BANKING
Corporate banking includes:
i) Cash Management Services
ii) Gold Card Scheme for Exporters
iii) Allahabad e – Trade
iv) 3 – IN – 1 Account (Triple Advantage)

INTERNATIONAL BANKING

Allahabad Bank is well spread out in India and one overseas Branch at Hong
Kong, besides a Representative office at Shenzhen, China. Bank has also
arrangements with correspondents at various important overseas locations,
which will ensure extending to all our NRI customers rich banking experience.
We understand your needs and value your patronage and would request you to
invest your surplus funds in the various products offered by our Bank.
Non – Resident:
A. In terms of Regulation 2(vi) of FEMA 5, a Person resident outside India,
who is
a citizen of India or is a person of Indian Origin.
B. Indian Residents working abroad on assignment with Foreign Governments,
Government agencies or in UNO and its affiliates IMF, IBRD etc and
Government officials and other officials of PSU's deputed abroad or
assignments or posted abroad to their own offices including Diplomatic
Missions abroad.
C. A person of Indian Origin who is a citizen of any other country other than
Bangladesh or Pakistan if:
i. He/she at any point of time, held an Indian Passport.
ii. He/she or either of his/her parents or any of his/her grandparents was a
citizen
of India by virtue of Constitution of India or Citizenship act 1955 (57 of 1955).
iii. The persons are a spouse of an Indian Citizen or a person referred to in sub
clause b (i) or (ii) above.

Students going abroad for studies are treated as Non Resident Indians provided
their stay abroad is for more than 182 days in the preceding financial year and
their intention to stay outside India for an uncertain period when they go abroad
for studies.

Deposit Account:
Non Resident Indians can open accounts under Repatriable and Non
Repatriable deposit schemes. In respect of Repatriable scheme the NRIs have
the choice of following schemes for depositing
Students going abroad for studies are treated as Non Resident Indians provided
broad is for more than 182 days in the preceding financial year and
their intention to stay outside India for an uncertain period when they go abroad

Non Resident Indians can open accounts under Repatriable and Non
Repatriable deposit schemes. In respect of Repatriable scheme the NRIs have
the choice of following schemes for depositing their savings with Our Bank.

OTHER SERVICES
Other important services of Allahabad Bank are:
i) Insurance and Mutual Fund
ii) Government Business
iii) Depository Services
iv) E – Products
v) Cards
vi) ASBA (Application Supported by Block Amount) Facility
vii) Account – Portability
viii) Agriculture Debt Wavier
ix) All Ayushman Bima Yojana
x) Samadhan Financial Literacy & Credit Counselling Centre
xi) Deceased – Settlement
xii) Depository Receipt
xiii) International Debit
xiv) Money Transfer Services
xv) National Eligibility Fund Transfer(NEFT)
xvi) New Pension System(NPS)
xvii) Non – Life Business Insurance
xviii) Real Time Gross Settlement(RTGS)
xix) Regional MSME Care Centres

NOTE:
VARIOUS RETAIL LENDING SCHEMES (Hyperlink):
Rate of Interest under Retail Credit Products.
Discretionary Authority under Various Retail Schemes.
Services Charges, Processing Fees and Prepayment Fees.
THER SERVICES

Other important services of Allahabad Bank are:

Insurance and Mutual Fund
Government Business
Depository Services
ASBA (Application Supported by Block Amount) Facility

Portability
Agriculture Debt Wavier
All Ayushman Bima Yojana
Samadhan Financial Literacy & Credit Counselling Centre

Settlement
Depository Receipt
International Debit – Cum – ATM Card
Money Transfer Services
National Eligibility Fund Transfer(NEFT)
New Pension System(NPS)
Life Business Insurance
Real Time Gross Settlement(RTGS)
Regional MSME Care Centres
VARIOUS RETAIL LENDING SCHEMES (Hyperlink):
Rate of Interest under Retail Credit Products.
Discretionary Authority under Various Retail Schemes.
Services Charges, Processing Fees and Prepayment Fees
ASBA (Application Supported by Block Amount) Facility
Samadhan Financial Literacy & Credit Counselling Centre

VARIOUS RETAIL LENDING SCHEMES (Hyperlink):

Discretionary Authority under Various Retail Schemes.
Services Charges, Processing Fees and Prepayment Fees.

WORK FLOW MODEL

DEPOSITS
Customer approaching the
bank/enquiry

Introduction

Documentation

Saving , Fixed ,Current and Recurring

A/c
↓

A/C holder facility

↓
DEPOSITS WITHDRAWAL
↓
↑

CASHIER CASHIER

↓ ↑

ACCOUNT FOR THE CUSTOMER

ACCOUNTS
CHOOSE AN INSTITUTION

GO TO THE BANK OR WEBSITE

PICK THE PRODUCT YOU WANT

PROVIDE YOURINFORMATION

AGREE TO TERMS

PRINT ,SIGN AND MAIL (IF APPLICABLE)

CONGRATULATE YOURSELF
 ANCHOR PRODUCTS UNDER RETAIL
ALLBANK AASHIANA SCHEME (GUIDELINES)

SL. PARAMETRES Guidelines

NO
For construction of residential house on land already
owned.
For purchase of plot from Govt. Agency / Development
Authority/
any Govt. recognized agency (viz., HUDA, HOUSEFED)/
any lawful
owner of the plot and construction of residential house
thereon in
authorized colonies/ locations only.
For purchase of house/flat to be used for residential
1 PURPOSE purpose.
For renovation / extension / repair of residential house
already
owned.
For purchase of unfinished / old house and renovation
/extension /
repair of the same.
For taking over of housing loans from other finance
companies/
financial institutions / banks.
Finance for acquiring 2nd residential unit.
Supplementary Finance due to increased income for
carrying out
alterations/ additions/repairs to the house/flat or for finishing
Persons having regular income or owner of the property,
having no
income may also be considered subject to the condition that
income
of father /mother /spouse /son /daughter having future
interest in the
2 ELIGIBILITY property is included as co borrower/s to determine the
quantum of
loan and repayment capacity.
Housing Loan to HUF is not to be considered.
The employees who have availed of housing loan from
their own
organizations may also avail of housing loan from the Bank
Bank’s employees may also avail loan under this scheme
with or
without Staff Housing loan as per eligibility criteria under
this scheme
 within his/her repaying capacity.
AGE –
Minimum age: 21 years
Maximum Age: (i.e. the age by which the loan should be
fully
repaid) 70 years. However, Age criteria will not be
applicable in
such cases where the applicant has no income and he/she
becomes co-borrower only due to owning the property.
Term Loan
Maximum Amount: Up to Rs.500 Lac

For loans up to Rs 30 Lac - 10% of Project cost. Max

LTV90%.
For loans above Rs 30 Lac up to Rs.75 Lac - 20% of
Project cost.
Max LTV 80%
For loans above Rs.75 Lac – 25% of Project Cost. Max
LTV75%.
3 Project cost will consist of:
Margin Purchase of land / house / flat
Cost of construction / renovation / extension (if
applicable)
Accrued interest amount of moratorium period, if
proposed to be
capitalized
Premium of Allahabad Bank Griha Mangal Scheme
Cost of installing Rooftop Solar PV
Stamp Duty, registration and other documentation charges
to the
cost of the house / dwelling unit may be included in the
Project Cost
in cases where the cost of the house / dwelling unit does not
exceed
Rs.10 Lac
Premium of Insurance of the mortgaged asset for a period
of loan
tenure or as agreed by the borrower, may also be included in
the
Project Cost.
GST as applicable may also be included in the Project
Cost.
Any refund applicable (on account of input tax credit) to the
Customer shall be deposited in the loan account. An
Undertaking for the same will be taken from both builder as
well as borrower.
It will be ensured that margin at all stages has been
contributed
proportionately by the borrower where disbursement is to be
made in
 phases and LTV will be maintained within the stipulated
guidelines.

6 Security

(a) Equitable / Registered Mortgage of the property

OR

Pari-Passu / Second charge over the property if the borrower

(salaried person) has already availed loan from his/her
organization.
(b) In case of delay in creation of equitable mortgage of the
Flats/
Dwelling Units to be purchased from the Developers/
Builders, the
Tripartite Agreement executed between the Bank, Borrower
and the
Developer/ Builder.
In case of Ready-Built Flats/Houses where borrower can
occupy
and mortgage the property immediately, the tripartite
agreement
may not be insisted upon.

2. Consolidated guidelines under “ALLBANK SARAL” Scheme Earlier

ALL BANK NEW SARAL (FOR PUBLIC)

SL.NO PARAMETRES GUIDELINES

Employees of Central Govt. /State Govt. / Central
PSUs / State PSUs
Govt.-aided educational Institution, Central/State
1 TARGET GROUP Universities and MNC
employees whose salaries are disbursed through
our branches for at
least past 6 months from any Bank. Inclusion of
employees of other
organization will be considered by HLCC GM on
case to case basis.
Employees of those Organizations only whose
salaries are being

2 ELIGIBILITY disbursed through our Bank Branches.

Minimum Gross Monthly salary of the
proponent should be
Rs.15000/- and he / she should be a permanent
employee with a
 minimum 2 years’ service in the same
Organization.
The salary of the employees of the organization
should have been
disbursed for at least past 6 months from any bank.
However, at
the time of designation of Institution and/or
considering loan
under this scheme, the salary account
must be transferred to Our Bank Branches
Quantum of
Loan

Eligibility –
The minimum gross monthly salary of the
3 Quantum of Loan borrower is Rs. 20,000/-
or more.
Quantum of Loan- 24 times of present Gross
Monthly Salary,
subject to maximum loan limit of Rs.7.50 Lac
and minimum loan
limit of Rs. 50,000/-.
The minimum gross monthly salary of the
borrower from
Rs. 15,000/- to less than Rs. 20,000/-
Quantum of Loan- 12 times of present Gross
Monthly Salary.
Loan amount should be assessed in such a
manner that the net take
home salary after taking into account all
deductions (existing and EMI
of Proposed loan) is not below 40% of the
monthly gross salary.
10 Margin 10% (to be calculated on the basis of
total Assets owned or to be
The age of the applicant should be minimum 21
years and loan
4 AGE should be repaid at least six months before
his/her retirement
from service.
10% (to be calculated on the basis of total Assets
owned or to be

5 MARGIN purchased by the borrower).

3. Consolidated guidelines for All Bank Mortage erstwhile
All Bank Liquid Mortgage
SL.NO PARAMETRES GUIDELINES

Individuals (singly or jointly) including

salaried persons, professionals &
1 Target Group self-employed and agriculturist/ firms /
companies / societies registered
under Society Act.
The loan for society will only be permitted for
those activities which are
covered under society deeds.
Loan to HUF & Trust is not to be considered.

Individual: An individual should be tax payer

and annual Income should
be minimum of Rs.8.00 Lacs per annum.
However, in case of salaried
customer (Employees of Central Govt. /State
Govt. / Central PSUs /
State PSUs/ Govt.-aided educational
2 Eligibility Institution, Central/State
(Income Universities and MNC), customer having
Criteria) annual income of Rs.5.00 Lac
p.a. is eligible.
Joint Borrower: While computing quantum of
loan in case of joint
borrowers, income of all borrowers may be
clubbed. Joint borrowers
may be the co-owner of the property or they
may not be co-owner (but
must be legal heirs of owner of the property /
PF nominee / Spouse
having future interest in the property) but their
income is to be considered
as one of the source for repayment of loan and
to calculate the quantum
of loan only if he/ she is tax payer (for at least
last 2 years and ITR is
being filed regularly on yearly basis) and
having annual income of
 Rs.5.00 Lac p.a for salaried and Rs.8.00 Lac
p.a. for others.
Further, in case of firm/ Company, Net Cash
Generation (after adding
back depreciation) may be considered as
income for calculation of
loan amount and considering repayment
capacity. However, the
income will be taken as per audited balance
sheet/ IT return of last
financial year.
In case of firm, personal income of proprietor/
partners and in case of
company personal income of Directors may be
clubbed (only if he/ she
is tax payer and having annual income of
Rs.8.00 Lac p.a & above)
with the income of firm /Company if the
source of income is different.
Minimum 21 years
Maximum age at entry- 65 years
Loan must be liquidated before attainment of
3 Eligibility 70 years of age.
(Age) In case of Firms/ Companies/ Society, it should
be in existence for past 3
years and had net profit continuously in
preceding 2 years

4 Consolidate Guidelines for All bank Vidhya Erstwhile

All Bank Education

PARAMETERS GUIDELINES
OBJECTIVE OF THE The Educational Loan Scheme outlined below aims at
SCHEME providing financial
support from the banking system to meritorious students for
pursuing higher
 education in India and abroad. The main emphasis is that a
meritorious student,
though poor, is provided with an opportunity to pursue
education with the
financial support from the Banking System with affordable
terms and conditions.
The Educational Loan Scheme is meant to provide need-
based assistance to
meritorious students in pursuing higher education. If the
student has obtained
admission to an eligible course through a merit based
selection process, he/she
could be considered a meritorious student. Generally,
admission to professional
and technical courses is through common entrance tests and
those who get
admission through this process could be considered
meritorious. Where the
admission is purely based on the marks scored in qualifying
examinations, then the cut off marks for loan eligibility is
50%.

The student should be an Indian National

Eligibility Should have secured admission to a higher education
Criteria course in recognized
(Student institutions in India or Abroad through Entrance Test/ Merit
Eligibility Based Selection
process after completion of HSC (10 plus 2 or equivalent).
The Selection
procedure should be transparent in nature.
Where the admission is purely based on the marks scored
in qualifying
examinations then the cut off marks for loan eligibility is
50%.
Meritorious Students admitted under Management Quota
are also
eligible for loan.

All Bank Vidhya

Approved courses leading to graduate/ post graduate

degree and PG
diplomas conducted by recognized colleges/ universities
recognized by
UGC/ Govt. / AICTE/ AIBMS/ ICMR/ NAAC accredited
‘A’ rated Institutions
etc.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIMs, IITs, IISc, XLRI. NIFT, NID
etc.
 Regular Degree/Diploma courses like Aeronautical, pilot
training, shipping,
Nursing or any other discipline; approved by Director
General of Civil
Aviation/Shipping/Indian Nursing Council or any other
regulatory body
as the case may be.
Approved courses offered in India by reputed foreign
universities.
Job oriented courses for studying part-time courses
(evening classes or
otherwise) and approved by the appropriate Authorities.
Job oriented specialized programmes like maritime

5. All Bank Suvidha erstwhile All Bank Cash Option

PARAMETERS GUIDELINES
TARGET GROUP All Existing Individual account holders including our Bank employees
(Existing, VRS/Retired employee), above the age of 18 Years.
Corporate/Firm will not be eligible under this product.

PURPOSE To meet personal need/Business Need and all other kind of expenses.

LOAN LIMITS Minimum Loan Amount- Rs.10000/- (Rupees Ten Thousand only)

No Maximum Limit
RATE OF INTEREST 1% over Deposit Rate (0.50% over deposit rate for our Bank employee

(Existing, VRS/Retired employee))

REPAYMENT OF i. Repayment is On Demand and co-terminus with the underlying term

LOAN deposit if outstanding in overdraft account reaches to threshold level
(i.e. 95% of the deposit amount along with accrued interest).
ii. On maturity, If the outstanding is well within the threshold level
(i.e.
95% of the deposit amount along with accrued interest) the underlying
term deposit and also the existing OD Limit will be renewed for
original
period of deposit at the prevailing deposit rate. The rate of interest in
overdraft account shall be adjusted accordingly. At every renewal of
deposit, Rate of Interest shall automatically be updated in Overdraft
accounts.
6. All Bank Vahan erstwhile All Bank Dream Car
PARAMETERS GUIDELINES

PURPOSE 1. Purchase of new Vehicle for personal use / official use for

Companies / Partnership Firms.

2. A) Purchase of pre-owned vehicle (up-to 1800 CC), which is
not
more than 3 years old for personal use / official use for
Companies / Partnership Firms.
B) Purchase of pre-owned high end / Luxury vehicle of more
than 1800 CC, which is not more than 5 years old for personal
use / official use for Companies / Partnership Firms.
3. The term Vehicles includes: Car, Van, JEEP, Multi Utility
Vehicles (MUVs).
In case of Pre-owned vehicle, latest Road worthiness certificate &
latest Pollution Certificate must be available.
TARGET GROUP 1. Our existing corporate customers, their Directors and

employees.
2. Full-time permanent employees of Govt. / Quasi Govt.
Undertakings / Public Sector Corporations / Companies of
repute / Institutions / Medical & Engineering Colleges /
Universities, who have served at least TWO YEARS and have
still 3 YEARS of service to put before the date of their normal
retirement.
3. Eminent professionals like Doctors, Lawyers, Chartered
Accountants, Engineers as also Businessmen with proven track
record.
4. Partnership Firms and Corporate accounts.
5. Agriculturists having income to repay the loan.
6. Staff / Officer of our Bank, on case to case basis with
permission of Zonal Head.
Pensioners of Central, State Govt. and our Bank’s employee
pensioners, who are drawing pension from our branches.
ELIGIBILITY 1. Salaried Person: Minimum monthly gross income of Rs.
25,000/-
and above per month, having a net take home pay of at least
40%, after adjustment of the monthly installments of proposed
loan, within the permissible repayment period.
2. Agriculturist: Minimum 5 acres of irrigated land should be
owned. Income per Acre per year to be taken as Rs.40000/- for
calculation of loan eligibility and it should be supplemented by
self-certification by Farmer / Agriculturist.
However, take home criteria after deduction of proposed
installment
will be 40%, after adjustment of all existing deductions (If any)
including the monthly instalment of proposed loan.
3. Professional & Self-Employed / Businessmen: An IT
 assessee having Gross Annual Income of Rs.3.00 Lac & above
as per latest ITR. It should be ensured that ITR has been filed
on regular basis (i.e. on yearly basis). However, take home
criteria after deduction of proposed installment will be 40%, after
LOAN LIMITS For Salaried Class: Maximum 48 times of Gross Monthly

Salary.
For Retired Individual: Maximum 36 times of Gross Monthly
Pension.
For Farmers & Agriculturists: Maximum 3 times of net
annual income of previous financial year. Income of Rs.40000
Per acre per year to be taken for arriving at loan eligibility.
For Others: Maximum 3 times of Average Net Annual Income
for the last two years as per latest Income Tax Returns.

DATA ANALYSIS AND FINDINGS

(CASE STUDY)

 PROCEDURE OF AVAILING A LOAN

(CAR LOAN APPRAISAL)
EXAMPLE:
ACCOUNT MR DHANANJAY KUMAR SINGH
BRANCH HIRAPUR RMPC DHANBAD FGMG RANCH
,DHANBAD

Subject: -
To consider the following:
Sanction of All Bank Dream Car Loan of Rs. 12.00 Lakh under All Bank Vahan Scheme
for purchase of one new
four wheeler of model & make “TATA Harrier XZ” from authorized dealer M/s
KRAFT AUTO PVT LTD, having
their showroom at Plot no-A-18,City Center,Sector-IV,Bokaro Steel city-827004

Sanctioning RMPC Head (chief Date of last sanction NA( fresh loan)
Authority Manager)

(PURPOSE) BACKGROUND
BORROWERS /GURANTORS

PAN NO UID NO DOB DATE OF NW IN

SL.NO NAME ROLE PROFIT/LOSS CDR LAKH
 NAME CIBIL SCORE
DHANANJAY
KUMAR SINGH 801
1 DHANANJAY BORROWER …………….
KUMAR
SINGH
GUIDELINES
Purchase of new Vehicle for personal use / official
use for Companies / Partnership Firms.
The term Vehicles includes: Car, Van, JEEP, Multi
Utility Vehicles (MUVs).
Eminent professionals like Doctors, Lawyers,
Chartered Accountants, Engineers as also
Businessmen with proven track record.
(Eligibility - Income)
Professional & Self-Employed / Businessmen:
An IT Applicant Mr Dhananjay Kumar Singh is a
Account: Dhananjay Kumar Singh 5 | Page
assessee having Gross Annual Income of Rs.3.00
Lac
& above as per latest ITR. It should be ensured
that
ITR has been filed on regular basis (i.e. on yearly
basis). However, take home criteria after deduction
of proposed installment will be 40%, after
CRIF SCORE REMARKS
NA SATISFACTORY
AIOPSS653H 8881457 10.06.73 14.06.1990 90.82
LAKHS
Compliance/Description
Car to be purchased for personal use of the
applicant.
The present proposal is for purchase of one
new four wheeler of model & make “TATA
Harrier XZ” from authorized dealer KRAFT
AUTO
PVT LTD having their showroom at Plot no-A-
18, City Center, Sector –IV, Bokaro Steel City -
827004
Car – TATA Harrier XZ
Mr. Dhananjay Kumar Singh is an electrical
contractor & receives work order from railway
department. He is in the same line of business
since last seven years with good track record.
He is also enjoying Cash Credit facility in the
name of UNIFIED ELECTRICALS ENGINEERS
(A/C-50027159128) of Rs one crore from
Haripur branch with satisfactory conduct.
railway contractor who is in the line of
business for about seven years with good track
records.
Mr Dhananjay Kumar Singh has gross monthly
income of Rs. 583304.00 As per two years
average ITR net take home calculated below: -
Gross Salary: Rs 583304.5
60% of monthly income= Rs. 349983.00
Monthly deduction – Rs 82000/- (Existing
EMI) + Rs.175335.00(Income tax) = Rs
257335.00

RATE OF INTEREST
Other than Salaried person / Retired Individual:
Repayment period will be allowed in such a way
that
loan is repaid before attaining the age of 70 years.
LOAN LIMIT
For Others: Maximum 3 times of Average Net
Annual Income for the last two years as per latest
Income Tax Returns.
EMI for a loan of Rs. 12.00 Lakh for a
period of 84 months @ 8.55% is Rs.
19100.00
Total deductions including proposed EMI-
Rs 276435.00
Loan Applied: Rs 12.00 Lakh.
Percentage (%) of total deductions
including proposed EMI to monthly
income stands at 47.39% which is less than
60%. Take home stands at 52.61%. Hence
fulfils the minimum take home criteria of
the bank.
Eligible Loan limit: Rs. 12.00 Lakh
(applied for)
Rating in the present case has been assessed at
AB-2 (Rating done at RMPC Dhanbad on
17/06/2019).
Hence, ROI to be applied as 1 Yr MCLR+0.75%.
Now, as the CIBIL Score of the applicant is 801,
he is eligible for 1% concession in applicable
Rate of Interest.
Therefore, the effective ROI will be @MCLR
MCLR at present being 8.55%
Date of Birth of the applicant being 10.06.1973.
Age on date being 46 years.
Date of retirement: NA
Loan tenure (door to door) applied for 7 years.
Therefore, the proposed loan will be repaid well
before the applicant attaining the age of 70
Average of net annual income for last two years
Rs. 3093407/- (Rs.4711093/- + 1475721/- =
6186814/2)
3 times of Net Annual Income = 3 X 3093407 =
Rs. 9280221/-
Loan limit applied for Rs. 1200000.00, which is
well under the maximum loan eligibility.
 For New Vehicle: 15% of the cost of vehicle on On Road price of the vehicle in the present case
Road is Rs. 1969011/=.
(i.e. one-time registration + first time Road tax Margin available Rs. 769011.00, which is 39.05%
& of cost of vehicle.
insurance charges etc.) with authority for Comments: Above the stipulated margin, so it
relaxations is accepted.
by %age at various levels as under: -
GM (Retail Credit) ED/CMD
5% 10%

Maximum number of Car loan to Individuals should The applicant do have one car loan from
not be more than 2 at any point of time from our Haripur Branch presently. This will be his 2nd
Bank subject to the repayment capacity. However car.
there is no restriction on Maximum number of Cars Note – One existing car loan of amt Rs
that may be financed to Partnership Firms & 500000.00 as mentioned in the application has
Companies, subject to the repayment capacity. been closed on 15.06.2019.
However, the total outstanding / exposure under
Car loan to Individuals, Partnership Firms &
Companies should not exceed maximum
discretionary authority specified for Car Loan of the
Sanction authority

SANCTION LETTER
A/C: MR DHANANJAY KUMAR SINGH
BRANCH: HIRAPUR, DHANBAD

SUB: SUBMISSION OF CREDIT PROPOSAL FOR APPROVAL BY THE RMPC

HEAD

In terms of instructions conveyed by HO vide HOIC no. 16484/Retail

Credit/2019-20/01 dated 10/04/2019; From 01.05.2019 all branches linked to
RMPC will forward proposals above Rs.5.00 Lakh under Retail Credit & above
Rs. 10.00 Lakh under MSME to RMPC only for processing and
Sanction/approval or otherwise.

The assigned officers of Retail Credit channel under RMPC Dhanbad has
prepared a memorandum on 17/06/2019 regarding the sanction/approval of
following loan facility to Sri Dhananjay Kumar Singh. The discretionary
authority for considering sanction is vested with RMPC Head.

AlLBank Dream Car Loan of Rs. 12.00.00 Lakh under All Bank Vahan
Scheme for purchase of one new four wheeler of model & make “TATA
Harrier XZ” from authorized dealer M/s KRAFT AUTO PVT LTD.
“Perused the memorandum for the Credit Department and
sanction/approval is hereby accorded for the following facilities:

Sanction of All Bank Dream Car Loan of Rs.12.00 Lakh under All Bank Vahan
Scheme for purchase of one new four wheeler of model & make “TATA Harrier
XZ” from authorized dealer M/s KRAFT AUTO PVT LTD, having their
showroom at Plot no-A-18, City Center, Sector-IV, Bokaro Steel city-827004.
All other terms and conditions as mentioned in the appraisal note are to be
imposed.
Petrus Kujur)
(Bhawna Roy)
Senior Manager, RMPC Dhanbad
Manager, RMPC Dhanbad
(Ananad Prakash)
(Preeti Kumari)
Officer, RMPC Dhanbad
Officer, RMPC Dhanbad

------------------------------------------------------------------------------------------------
------------------------------------------------

Having gone through the memorandum, we hereby sanction /approve loan

of Rs. 12.00 Lakh under All Bank Dream Car scheme to Mr Dhananajay Kumar
Singh on terms & conditions as mentioned in the appraisal memorandum as above

_______________________________
(Pramod Kumar)
Chief Manager
Retail & MSME Processing Centre, Dhanbad
SWOT ANALYSIS

STRENGHTS:
• It has an extensive distribution network comprising of 2716
branches.
• The Bank has a strong retail depository base & has good number of
customer.
• Bank boasts of strong brand equity.
• The bank has a near competitive edge in area of operations.
• The bank has a market leader in cash settlement service for the
major stock exchanges in its country.

• Allahabad Bank is one of the largest public sector banks operating in

India.
• It has a highly automated environment in terms of information
technology & communication system.

• Infrastructure is best.
• It has many innovative products like kids Insta pay, NRI services.

WEAKNESS:
Sometime account opening and delivery of cheque book take
comparatively more time.
Occasionally link failure.
OPPORTUNITY:
Branch expansion.
Door step services.
Infrastructure improvements & better systems for trading &
settlement in the government securities & foreign exchange markets.
THREATS:
o The bank has started facing competition from players like SBI,
HDFC
Bank in the finance market itself.
o This reduces the profit margins in the future.

o Some Private Banks have 7 days banking.

RESEARCH METHODOLOGY

TITLE OF THE PROJECT

“A Study on Retail Banking with special reference to Allahabad Bank”

STATEMENT OF THE PROBLEM

As there are immense opportunities of the retail banking in India. This project is
on the issues and challenges in the retail banking because of the competition of
the various banks and the customer satisfaction of the services which the banks
are providing and at the same time to solve the complaints of the customer and
maintaining the sound relationship for the future and by this way to estimate the
future growth of the retail banking.
OBJECTIVES OF STUDY
To study the issues and challenges in retail banking.
To study the recent trends in retail banking.
To ensure high satisfaction level and reduce percentage of
complaints of customer in retail banking.
To estimate the future growth of Indian retail banking.
To understand Optimization of retail banking channels.
To suggest strategies for improvement in Customer Service.

OPERATIONAL DEFINITION
Retail banking refers to banking in which banking institutions execute
transactions directly with consumers, rather than corporations or other banks.
Services offered include: savings and checking accounts, mortgages, personal
loans, debit cards, credit cards, and so forth. And to know about the customer’s
perceptions about the different products of the bank like current account,
savings account, FD, Smart Saver, Smart Access and others.

DATA COLLECTION
There are several approaches of data collection. The primary sources of data
collection are done through: -
Observation
 Questionnaire
Questionnaire:
Questionnaire is the method of data collection, which is very much popular,
particularly in big cities. Different modes of questions are put up on the paper
and the particular universe, on which the research is conducted, are asked to fill
their responses.
The Secondary source includes data collection through
Magazines, Journals, Books, Newspapers etc.
Company Website.

SAMPLING TECHNIQUE
(a) Sampling Unit: - Walk in customers and the company database of high
ended customer.

(b) Sample Size: -

Sample size for this project was restricted to 50 respondents. Since it was not
possible to cover the whole universe in the available time period, it was
necessary for me to take a sample size of 50 respondents.
(c) Sampling Method: -
There are three methods of sampling: -
1. Probability Sampling
2. Non-Probability Sampling
3. Quota
For this research work Non- Probability Convenience Sampling has been
chosen because time limit for the completion of the work is limited.

Area of Study - DHANBAD, JHARKHAND

Duration - 2 months (19th JUNE ’2019– 12 th AUGUST’2019)

DATA COLLECTION METHOD

Data for the present study is collected from two sources:
1. Primary Data:
The data are collected directly from the universe by conducting
interviews, etc. these are the original sources from which the researcher
directly gathers data which are not previously referred. All the people
from different profession were personally visited and interviewed. They
were the main source of primary data. The method of collection of
primary data was personal direct interview through a structured
questionnaire.
The primary data was collected by means of survey. Questionnaires were
prepared and customers of Allahabad Bank were approached to fill up these
questionnaires. The filled up information was later analysed to obtain the
required information.
2. Secondary Data:
The data are collected from the secondary sources such as magazines,
journals, etc. These sources consist of already variable data in the form of
statements, and reports, which may include sensory reports, financial
statements of the company, reports of governments departments, etc.
It was collected from internal sources. The secondary data was collected
on the basis of organizational file, official records, newspapers,
magazines, management books, preserved information in the company’s
database and the website of the company.
Both Primary and Secondary sources was used for data collection.
For primary source, Questionnaire was used. For secondary source
Internet, Books and Newspapers etc. were used.

RESEARCH DESIGN
Research design is simply the framework or plan for a study, used as a guide in
collecting and analyzing data. There are three types of Research Design: -

1. Exploratory Research Design

2. Descriptive Research Design
3. Casual Research Design
For the study, Exploratory Research Design was undertaken to classify the
investors on their risk and return profile.

PLAN OF ANALYSIS
The data obtained from the structured questionnaire was interpreted and
recorded. The table and graph were constructed using data from the
questionnaire through simple techniques like average, percentage, etc. which
was then used for analyzing the acquired data.

LIMITATIONS
Designing own and new financial products is very costly and time
consuming for the bank.

Customers now-a-days prefer net banking to branch banking. The banks

that are slow in introducing technology-based products, are finding it
difficult to retain the customers who wish to opt for net banking.

Customers are attracted towards other financial products like mutual

funds etc.

Though banks are investing heavily in technology, they are not able to
exploit the same to the full extent.

A major disadvantage is monitoring and follows up of huge volume of

loan accounts inducing banks to spend heavily in human resource
department.

Long term loans like housing loan due to its long repayment term in the
absence of proper follow-up, can become NPAs.

The volume of amount borrowed by a single customer is very low as

compared to wholesale banking. This does not allow banks to exploit the
advantage of earning huge profits from single customer as in case of
wholesale banking.

OPPORTUNITIES AND CHALLENGES

Retail banking has immense opportunities in a growing economy like India. As

the growth story gets unfolded in India, retail banking is going to emerge a
major driver. How does the world view us? The BRIC report is viewing India as
an economic superpower. A.T. Kearney, a global management-consulting firm,
recently identified India as the ―second most attractive retail destination of 30
emergent markets.

The rise of Indian middle class is an important contributory factor in this regard.
The percentage of middle to high-income Indian households is expected to
continue rising. The younger population not only wields increasing purchasing
power, but as far as acquiring personal debt is concerned, they are perhaps more
comfortable than previous generations. Improving consumer purchasing power,
coupled with more liberal attitudes towards personal debt, is contributing to
India‘s retail banking segment.

The combination of above factors promises substantial growth in retail sector,

which at present is in the nascent stage. Due to bundling of services and
delivery channels, the areas of potential conflicts of interest tend to increase in
universal banks and financial conglomerates. Some of the key policy issues
relevant to the retail-banking sector are: financial inclusion, responsible lending,
and access to finance, long-term savings, financial capability, consumer
protection, regulation and financial crime prevention.
Challenges for the Industry and its Stakeholders:
First, retention of consumers is going to be a major challenge. According
to a research by Riechheld and Sasser in the Harvard Business review, 5
percent increase in customer retention can increase profitability by 35
percent in banking business, 50 percent in insurance and brokerage, and
125 percent in the consumer credit card market. Thus, banks need to
emphasis on retaining consumer and increasing the market share.
Second, rising indebtedness could turn out to be a cause for concern in the
future. India’s position, of course, is not comparable to that of developed
world where household debt as a proportion of disposable income is
much higher. Such a scenario creates high uncertainty. Expressing
concerns about the high growth witnessed in consumer credit segments
the reserve bank has, as a temporary measure, put in place risk
containment measures and increased the weight from 100 percent to 125
percent in the case of consumer credit including personal loans and credit
cards.
Third, information technology poses both opportunities and challenges.
Even with ATM machines and Internet Banking, many of the customers
still prefer the personal touch of their neighbourhood branch bank.
Technology has made it possible to deliver services throughout branch
network, providing instant updates to checking accounts and rapid
movement of money for stock transfers. However, this dependency on the
network has bought IT department ‘s additional responsibilities and
challenges in managing, maintaining and optimizing the performance of
retail banking networks.
Fourth, KYC Issues and money laundering risks in retail banking is yet
another important issue. Retail lending is regarded as a low risk area for
money laundering because of the perception of the sums involved.
However, competition for clients may also lead to KYC procedures being
waived in the bid for new business. Banks must also consider seriously
the type of identification documents the will accept and other processes to
be completed. The Reserve Bank has issued details guidelines on
application of KYC norms in November 2004.

Trends in Retail Banking

Growing a retail banking business is becoming increasingly challenging. The
yield curve is flattening, reducing bank’s net interest margin. Competition is
intensifying, as new, non-traditional players enter the retail banking space. And
consumer preferences for financial products, payment methods and distribution
channels continue to evolve, providing revenue opportunities, but also
introducing new operational challenges
The changing dynamics of the retail banking business have significant
implications for financial institutions. In order to successfully compete in this
environment, banks must provide a distinctive customer experience and offer
innovative product solutions in order to differentiate their value proposition in
the marketplace.

Key trends in retail Banking are:

1. Bifurcation of the retail banking business:
National- Consolidate- Credit Cards
Home Equity Loans Mortgages
Local- Fragmented- Deposits
Instalment Loans & Small Business Loans
2. Lack of differentiation in retail financial services:
Many financial institutions are struggling to differentiate their value
propositions in the retail banking market.
Free checking is now offered by all or most financial institutions.
Most institutions no longer charge for online banking or online bill
payment.
Extended branch hours are increasingly common in many markets, as
banks seek to increase customer convenience.
3. Proliferation and growth of electronic payments.
4. Increasing demand for ATM access.

Strategies for Ensuring high Customer Satisfaction

Set service expectations and standards of behaviour - this means that
managers must set clear service expectations and standards of
behaviour, beginning with defining "excellent service."

Identify and eliminate barriers and obstacles. Policies that do not

make sense; procedures that get in the way; and rules, norms that
make satisfying customers difficult all need to be eliminated to
successfully improve service.
Learn and develop skills. Clearly, personnel at all levels should learn
new skills related to service excellence and serve the customer.

Listen to your customers. Measurement of customer satisfaction can

be a powerful way to improve service if the feedback is not focused
on punishment.

Managers need to help staff hear, first hand, how they are doing. For
this feedback to be effective, however, it must be tied to specific
targets and goals and needs to be frontline driven.

Reinforce and support continuous improvement. The real challenge is

keeping the energy, learning, and improving alive.

SUGGESTIONS
Suggestions are always considered to be the most important part of any project
report because for every pros; there is cons associated with and to reduce the
effect of latter, following suggestions must be taken into consideration in regard
to retail banking.
The Branch personnel should listen to customer patiently and should
be able to respond to their queries and clarifications because some
customer are new to some of the bank services and until and unless
they will come to know about those services they will be not be
satisfied.

With reference as not many respondents said that

Branch Personnel are helpful and courteous, so I will suggest that
Bank personnel should be helpful & courteous towards maximum
number of customers.

With reference, larger number of branch personnel

should do ‘Need Analysis’ & ‘Risk Assessment’ before
recommending any investment option to customer.

With reference more branch personnel should be aware

of Product and Services and responded to customer’s queries.

With reference to Allahabad bank should look into the

feedback provided by customer and takes necessary action wherever
required.
With reference to bank should focus on Mahila Sanchay
Saving Bank, A/C as small 10% of customer likes this.

Sometime the customer has to wait at the Teller Counter, the service
should be improved by appointing more staff.

Information in the Bank Statement should be more clear, easy to

understand and adequate.

Along with customer satisfaction employee’s participation must be

kept active by appraising their salary as well as their work.

Frequently customers must be kept delighted by providing them

regards and by maintaining customer relationship so that their interest
can be kept maintained.

The Allahabad bank should focus on business and service portfolio for
a reputation of being niche players in the industry.

The bank should concentrate on few reliable high net worth

companies and individuals rather than cater to the mass market.
As 10% customer response is not good for the clarification of the
queries response towards them so bank personnel should improve this
issue because customer is a source through which business can be
increase and satisfy customers is a source to create more customers,

As it is only 10% respondent said that sometime there was a error in

the transaction happened so to avoid these kinds of errors should be
avoided because it is unnecessarily results in wastage of time for both
staff members and service rendered .

There should be increase in the number of events organize by bank

because it is a opportunity for the bank to introduce new products and
services and at the same time it is a open opportunity for the customer
to come forward and suggest its views which might prove to add the
values for the bank because 10% customer still not have a good
response.

Communication with the customer should be improved and increased

so that bank can easily response towards them and in result the
customer would be satisfy and no question that they will recommend
the Allahabad Bank to their friends and relatives because only 2% of
customer are not responding in a positive manner.
CONCLUSIONS – FUTURE GROWTH
The project aims to study the retail banking operations of ALLAHABAD
BANK. The study was very fruitful, it yielded the desired results, helped me
understand the retail banking. The study also helps in what are the customer
opinions towards operations of bank & its various product and services
.
Any serious discussion of the future of the retail banking industry eventually
raises a basic question: will future customers still need retail banks? The
answer, it turns out, depends on banks themselves. With technology and non
blank businesses providing new options for safeguarding and managing their
finances, customers will continue to depend on banks only as long as banks can
provide service and value that cannot be found anywhere else.

The need to become highly customer focused has forced the slow-moving
public sector banks to adopt a fast track approach. The unleashing of products
and services through the net has galvanized players at all levels of the banking
and financial institutions market grid to look a new at their existing portfolio
offering. Conservative banking practices allowed.

Indian banks to be insulated partially from the Asian currency crisis. Indian
banks are now quoting at higher valuation when compared to banks in other
Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major
problems linked to huge Non Performing Assets (NPAs) and payment defaults.
Co-operative banks are nimble footed in approach and armed with efficient
branch networks focus primarily on the high revenue niche retail segments.
The Indian banking has finally worked up to the competitive dynamics of the
new Indian market and is addressing the relevant issues to take on the
multifarious challenges of globalization. Banks that employ IT solutions are
perceived to be futuristic and proactive players capable of meeting the
multifarious requirements of the large customer’s base.

ALLAHABAD BANK has a great opportunity to increase their market potential

in the present market situation.
LEARNING EXPERIENCE

The dissertation is to define the retail banking and regarding the general
services of bank.

The study was very fruitful, it yields the desire result, helped me to understand
the banking services better. The study also yields what are the factors that
banking is looking forward for the customer.

The Indian banking has come from a long way from being a sleepy business
institution to a highly proactive and dynamic entity. This transformation has
been largely brought about by the large dose of liberalization and economic
reforms that allowed banks to explore new business opportunities rather than
generating revenues from conventional streams (i.e. borrowing and lending).
The banking in India is highly fragmented with 30 banking units contributing to
almost 50% of deposits and 60% of advances.

Under the ambit of the nationalized banks come the specialized banking
institutions. The bank gives great importance towards customer satisfaction.
The senior staffs with their busy schedule try to advice the customer how to
invest in better way. The employees in the bank are well behaved and give a
great deal of satisfaction to see them how they approach their customers.
The bank plays an important role not only to fulfil their duties towards customer
but also to understand them better regarding what they want and how to
maximize the return on the investment.

The bank has set up separate department to impart training program for the
employees. The biggest achievement is the implementation of core banking
solution.
A. How was the Branch experience?

1) Is the branch timings (10:00 am to 3:30 pm from Monday to Friday and 10:00 am to 12:30
pm on Saturday) are convenient?

a) Very Good b) Good c) Satisfactory d) Could be better

2) Is the branch atmosphere & layout is very friendly?

a) Very Good b) Good c) Satisfactory d) Could be Better

3) Is the Branch was clean and well maintained? a) Very Good b) Good c) Satisfactory d)
Could be Better

B. How did you find our Branch personnel?

4) Is the Branch personnel have listened to you patiently and have been able to respond to
your queries and clarifications?

a) Very Good b) Good c) Satisfactory d) Could be better

5) Is the Branch personnel have been very helpful and courteous?

a) Very Good b) Good c) Satisfactory d) Could be better

6) Is the branch personnel have done a ‘Need Analyses’ & ‘Risk Assessment’ before
recommending any investment option?

a) Very Good b) Good c) Satisfactory d) Could be better

7) Is the branch personnel were aware of Product and Services and responded to your
queries?
a) Very Good b) Good c) Satisfactory d) Could be better

C. How was your experience of transacting in our Branches?

8) Is the waiting time at the Teller Counter was minimal?

a) Very Good b) Good c) Satisfactory d) Could bebe better

9) Is the transactions done by us have been smooth & error free?

a) Very Good b) Good c) Satisfactory d) Could be better

10) Is Allahabad bank looks into the feedback provided by you and takes necessary action
if required?

a) Very Good b) Good c) Satisfactory d) Could be better

11) Are you Happy with the TAT (Turn Around Time) post request?

a) Very Good b) Good c) Satisfactory d) Could be better

12) Which feature of the Allahabad Bank Savings account you like most?

a) Mahila Sanchay b)Vikash SB A/C c) Current plus Deposit Scheme d) Rs 5 Banking

D. How do you like what we send to you?

13) How do you rate the COMMUNITY EVENTS held at Allahabad Bank?

a) Very Good b) Good c) Satisfactory d) Could be better

14) Is the information in the Bank Statement clear, easy to understand and adequate?

a) Very Good b) Good c) Satisfactory d) Could be better

15) Will you recommend Allahabad Bank to your friends and relatives?

a) Most Definitely b) Yes c) May be d) No

 BIBLIOGRAPHY

BOOKS:

Retail Banking (By Indian Institute of Banking and Finance), Macmillan Retail
Management (By Bajaj Tulsi Shrivastva), OXFORD, University Press

INTERNET:

www.allahabadbank.in

www.rbi.org.in

www.wikipedia.org

www.moneycontrol.com

www.wikipedia.org/Mckinsey_7S_Framework

www.mindtools.com/pages/article/newSTR_91.htm