Blackbook Retail.pdf

AMITY GLOBAL BUSINESS SCHOOL MUMBAI

SUMMER INTERNSHIP REPORT ON

RETAIL BANKING AT BANK OF INDIA

SUBMITTED BY URMILA MADHAB GHOSH COURSE: MASTER OF BUSINESS ADMINISTRATION

ENROLLMENT NO: A30201916017

BATCH 2016 – 2018

UNDER THE GUIDANCE OF PROF. NAVEEN ROHATGI

Page | 1

DECLARATION I hereby declare that the work in this thesis entitled “RETAIL BANKING AT BANK OF INDIA” resulted out of the summer internship project undertaken at “Bank of India” during the period May 2017- July 2017 is original and has not been previously submitted anywhere else.

Name: Urmila Ghosh Enrolment No.: A30201916017

Page | 1

CERTIFICATE This is to certify that the work incorporated in the summer project “RETAIL BANKING AT BANK OF INDIA” submitted by MISS URMILA MADHAB GHOSH was carried out by the candidate under my supervision. Such material as has been obtained from other sources has been duly acknowledged in this report.

Name of the Guide: Prof. Naveen Rohatgi Signature of the guide: Date:

Page | 2

ACKNOWLEDGEMENT A Research cannot be said to be a work of an individual. A research is a combination of views and ideas, suggestions and the contributions of many people. While conducting this research, I was supported and helped by many people in many ways. I wish to express my deepest gratitude to Mrs. Bharti Goyal, Senior Branch Officer, Bank of India, Borivali (w), who gave me an opportunity to work with her and her branch. I learnt a lot about the working process of Bank of India, she made me acquainted with the basic pillars of retaining the customers, by providing them with the kind of services, which the customer wants and expects from the banking sector. I also wish to express my sincere gratitude to My Mentor, Mr. Naveen Rohatgi, under whose guidance the research was undertaken. Without his supervision at each stage of research, the task would not have been completed. I would like to thank Naveen Sir, also for taking out her valuable time for listening to my progress and giving advices, which was the best for my research, which even, kept me motivated and on track. I am thankful to the Officers, of the Branch, who took out their important time for briefing me about the entire process. I would also like to thank the savings Department, for helping me talk directly to the customers. This Research would have never seen the light of the day without the co-operation of the customers of Bank of India, Borivali Link Road Branch, who gave me a piece of their valuable time. I am thankful to all the customers for giving me their valuable time.

Page | 3

Page | 4

TABLE OF CONTENTS Sr.

Particulars

No. 1

Page No.

Executive Summary

6

2

Overview: BANK OF INDIA

7-10

3

Retail Banking: An Introduction

12-18

4

BOI : Retail Deposits

19-39

5

BOI : Retail Loans

39-52

6

Net Banking

53-54

7

Mobile Banking

55

8

CASA Term Insurance

56

9

Literature Review

57

10

Research Methodology

58-59

11

Data Collection Method

60

12

Research Design

61

13

Data Analysis and Interpretation

62-71

14

Opportunities and Challenges

71-76

15

SWOT Analysis

77-78

16

Suggestions and Recommendations

79-80

17

Summary of the Project

81

18

Conclusion- The Future Growth

82

19

Limitation of the project

83

20

Bibliography

84

21

Annexure

85-86

Page | 5

EXECUTIVE SUMMARY My project aims on Customer Retail Banking at Bank of India. In this research study 50 respondents from the Bank was taken. After analysing we conclude that even now a days banks are providing innovative services day by day, but still there are a lot of customers who are even not aware about these services, the usage of these service s is a different issue. Today Banks are using huge amount of funds to provide differentiate services to their customers from their competitors by providing new innovative services like deposits, loans, casa term insurance, online share trading, finance to msme and many others but still they are focusing only to provide the innovative services to the customers not focusing too aware them regarding these services and also there is a need to aware the customers about the use and benefits to the services provided by the bank, because it’s the way to get competitive advantage, as per as we all know that today most of the organizations are focusing on the promotion- element of marketing mix, which is providing financial as well as non-financial benefits like Brand image, so these Banks is not focusing over this element, The most important channel that aware customer most regarding the innovative services is family& friends.

Page | 6

OVERVIEW: BANK OF INDIA

Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalised along with 13 other banks.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalised banks.

The Bank has 4963 branches in India spread over all states/ union territories including specialized branches. These branches are controlled through 54 Zonal Offices. There are 60 branches/ offices and 5 Subsidiaries and 1 joint venture abroad.

The Bank came out with its maiden public issue in 1997 and follow on Qualified Institutions Placement in February 2008.

While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalised banks to establish a fully computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. Page | 7

The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio. Presently Bank has overseas presence in 22 foreign countries spread over 5 continents – with 60 offices including 5 Subsidiaries, 5 Representative Offices and 1 Joint Venture, at key banking and financial centres viz., Tokyo, Singapore, Hong Kong, London, Jersey, Paris and New York

Contribution of foreign branches in the global business of the Bank as at 30.06.2017 is as under: Deposits

25.95%

Advances

28.97%

Business Mix

27.27%

Products offered by Bank of India: 1. Commercial Banking: ➢ Commercial bank is a type of financial institution that provides services such as accepting deposits, making business loans, and offering basic investment products. ➢ "Commercial bank" can also refer to a bank, or a division of a large bank, which more specifically deals with deposit and loan services provided to corporations or large/middle-sized business. 2. Retail Banking: ➢ Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

Page | 8

➢ The term is generally used to distinguish these banking services from investment banking, commercial banking or wholesale banking. ➢ It may also be used to refer to a division or department of a bank dealing with retail customers. 3. Private Banking: ➢ Private banking is banking, investment and other financial services provided by banks to high-net-worth individuals with high levels of income or sizable assets. ➢ The term "private" refers to customer service rendered on a more personal basis than in mass-market retail banking. ➢ Private banking forms a more exclusive subset of wealth management. ➢ At least until recently, it largely consisted of banking services, discretionary asset management, brokerage, limited tax advisory services and some basic concierge-type services, offered by a single designated relationship manager. 4. Asset Management: ➢ Asset management, broadly defined, refers to any system that monitors and maintains things of value to an entity or group. ➢ It may apply to both tangible assets such as buildings and to intangible assets such as human capital, intellectual property, and goodwill and financial assets. ➢ Asset management is a systematic process of deploying, operating, maintaining, upgrading, and disposing of assets cost-effectively 5. Mortgage: ➢ A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise funds to buy real estate; by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. ➢ The loan is "secured" on the borrower's property. ➢ This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.

Page | 9

➢ Mortgage can also be described as "a borrower giving consideration in the form of collateral for a benefit (loan). ➢ Types: Fixed rate mortgage and Flexible rate mortgage.

Page | 10

RETAIL BANKING AT BANK OF INDIA

Page | 11

RETAIL BANKING-AN INTRODUCTION

Banking in India has come a full circle from the time when you had to wait in a queue to collect cash to getting it delivered at your doorstep at no extra cost. Add to that services like phone banking, Internet banking, 24 hour ATM, draft delivery at home, etc. and you have service spelt with a capital S. Though the contemporary banks' services have changed a lot over the last few years, the core function has remained the same. Banks handle deposits and withdrawal of money, provide loans, pay a part of the surplus as interest and the rest is kept back for the smooth functioning of the bank and profit making. A banks' functions can be divided into various divisions like: Retail/Personal Banking: This division provides a range of financial services to individual customers and small companies. It operates mainly through branch networks. Retail banking includes routine transactions like deposits and withdrawals of money; money transfer; foreign currency exchange and traveller's cheque encashment. They also deal with personal and small loans, credit and mortgages; insurance policies; investment schemes; pension funds; and advice to customers on various financial matters. Apart from offering home loans, car loans, educational loans, consumer loans, etc. they also develop various deposit schemes and help people fill their coffers. Corporate Banking: They deal with medium to large-scale companies and government agencies. It could start at the local branch manager level, though more complex dealings are routed through corporate divisions of clearing banks and their merchant banking subsidiaries. Corporate banking deals with credit and advances, trade finance, foreign exchange management, asset management, lease financing of heavy equipment, infrastructure, machinery, credit risk assessment, etc.

Page | 12

They also advise clients on matters such as corporate mergers and acquisition, raising capital and business strategy regarding competitors and outside factors. Merchant Banking: Investment management is the primary activity of this group. It could be on behalf of corporate clients, or institutional investors-like pension funds, investment trusts, or those in the securities business. This groups also handles public issue and marketing of shares, debentures and other such papers. It may also include other stock market functions like dematerialization services, investment advisory services, etc. Merchant banking executives research into capital market, advise and manage funds of various corporate and individual customers. Treasury group: This group takes care of the total funds of a bank including foreign exchange reserves. Responsibilities include bank portfolio management, dealing in foreign currency, etc. There are Forex (foreign exchange) dealers in this group who exclusively deal with the foreign market. They buy and sell foreign exchange at the minimum exchange cost thereby earning maximum profit from the transactions. Rural Banking: This group deals with the banking and credit needs of people in the rural sector. Not all banks have this group and some banks have separate subsidiary companies for rural banking. Product Management: This group conceptualizes various banking services and then develops, implements and manages them. They have the responsibility for a banking product (meaning services like personal loans, home loans, credit cards, loans against shares, educational loans, etc.) Apart from these main functional groups, there is an appraisal group to analyse economic feasibility of industrial projects, the bank's exposure to financial risk and long term returns. There are internal auditors who audit the bank's internal books of accounts. There are various groups of professionals like lawyers, engineers, agricultural scientists and economists who work in various departments in advisory capacities. They help make decisions on issues that are legal, technical or economic in nature. For example, the economist advises various functional groups on the implications of the Union budget on the business of the banks, consumer buying pattern, etc.

Page | 13

BANKING IN RETAIL With a jump in the Indian economy from a manufacturing sector, that never really took off, to a nascent service sector, Banking as a whole is undergoing a change. A larger option for the consumer is getting translated into a larger demand for financial products and customization of services is fast becoming the norm than a competitive advantage. With the Retail banking sector expected to grow at a rate of 30% [Chanda Kochhar, ED, ICICI Bank] players are focusing more and more on the Retail and are waking up to the potential of this sector of banking. At the same time, the banking sector as a whole is seeing structural changes in regulatory frameworks and securitization and stringent NPA norms expected to be in place by 2004 means the faster one adapts to these changing dynamics, the faster is one expected to gain the advantage. In this article, we try to study the reasons behind the euphemism regarding the Retail-focus of the Indian banks and try to assess how much of it is worth the attention that it is attracting. POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT The Indian players are bullish on the Retail business and this is not totally unfounded. There are two main reasons behind this. Firstly, it is now undeniable that the face of the Indian consumer is changing. This is reflected in a change in the urban household income pattern. The direct fallout of such a change will be the consumption patterns and hence the banking habits of Indians, which will now be skewed towards Retail products. At the same time, India compares pretty poorly with the other economies of the world that are now becoming comparable in terms of spending patterns with the opening up of our economy. For instance, while the total outstanding Retail loans in Taiwan is around 41% of GDP, the figure in India stands at less than 5%. The comparison with the West is even more staggering. Another comparison that is natural when comparing Retail sectors is the use of credit cards. Here also, the potential lies in the fact that of all the consumer expenditure in India in 2001, less than 1% was through plastic, the corresponding US figure standing at 18%. But how competitive are the players The fact that the statistics reveal a huge potential also brings with it a threat that is true for any sector of a country that is opening up. Just how competitive are our banks? Is the threat of getting drubbed by foreign competition real? To analyze this, one needs to get into the shoes of the foreign banks. In other words, how do they see us? Are we good takeover Page | 14

targets? Going by international standards, a large portion of the Indian population is simply not ―”bankable” – taking profitability into consideration. On the other hand, the financial services market is highly over-leveraged in India. Competition is fierce, particularly from local private banks such as HDFC and ICICI, in the business of home, car and consumer loans. There, precisely lie the pitfalls of such explosive growth. All banks are targeting the fluffiest segment i.e. the upwardly mobile urban salaried class. Although the players are spreading their operations into segments like self- employed and the semi-urban rich, it is an open secret that the big city Indian yuppies form the most profitable segment. Overdependence on this segment is bound to bring in inflexibility in the business. Typical products offered in retail banking include: 1. Transaction Account •

A transaction account, checking account, or demand deposit account is a deposit account held at a bank or other financial institution.

•

It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct.

•

In economic terms, the funds held in a transaction account are regarded as liquid funds.

•

Access may be in a variety of ways, such as cash withdrawals, use of cheques and debit by electronic transfer.

•

They normally do not earn any or a high interest and the financial institution that maintains the account commonly charges account maintenance or transaction fees to the account holder.

2. Saving Account: •

Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of a medium of exchange.

•

These accounts let customers set aside a portion of their liquid assets while earning a monetary return.

•

Withdrawals from a savings account are occasionally costly, and they are more timeconsuming than withdrawals from a demand (current) account. Page | 15

•

For the bank, money in a savings account may not be callable immediately and, in some jurisdictions, does not incur a reserve requirement.

3. Mortgage Loan: •

A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise funds to buy real estate; by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged.

•

The loan is "secured" on the borrower's property.

•

This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.

•

Mortgage can also be described as "a borrower giving consideration in the form of collateral for a benefit (loan).

•

Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.

•

The lender's rights over the secured property take priority over the borrower's other creditors which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.

4. Home equity loans: •

A home equity loan is a type of loan in which the borrower uses the equity of his or her home as collateral.

•

The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending institution.

•

A home equity loan creates a lien against the borrower's house and reduces actual home equity.

5. Personal loans: •

It is an unsecured debt i.e. any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. Page | 16

•

In the event of the bankruptcy of the borrower, the unsecured creditors will have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors.

•

The unsecured creditors will usually realize a smaller proportion of their claims than the secured creditors.

6. Certificate of deposits / Term deposits: •

A certificate deposits a money deposit at a banking institution that cannot be withdrawn for a specific term or period of time

•

In exchange for the customer depositing the money for an agreed term, institutions usually grant higher interest rates than they do on accounts that customers can withdraw from on demand—though this may not be the case in an inverted yield curve situation.

•

When the term is over it can be withdrawn or it can be held for another term.

•

The bank intends that the customer hold the CD until maturity, at which time they can withdraw the money and accrued interest.

•

Generally speaking, the longer the term the better the yield on the money.

•

CDs are negotiable and can be rediscounted when the holder needs some liquidity, while time deposits must be kept until maturity. General guidelines for interest rates include:

•

A larger principal should receive a higher interest rate, but may not.

•

A longer term usually earns a higher interest rate, except in the case of an inverted yield curve (i.e., preceding a recession).

•

Smaller institutions tend to offer higher interest rates than larger ones.

•

Personal CD accounts generally receive higher interest rates than business CD accounts.

•

Banks and credit unions that are not insured by the FDIC or NCUA generally offer higher interest rates.

Page | 17

7. Traveller’s Cheque: •

A traveller's cheque is a medium of exchange that can be used in place of hard currency.

•

Traveller's cheques are often used by individuals traveling on vacation to foreign countries.

•

Traveller's cheques can be denominated in one of a number of major world currencies and is pre-printed, fixed-amount cheque designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

•

They were generally used by people on vacation instead of cash, as many businesses used to accept traveller's cheques as currency.

Page | 18

PRODUCTS OF BANK OF INDIA BOI RETAIL DEPOSITS SAVINGS 1. BOI STAR YUVA ACCOUNT: •

Incentive for usage of Alternate Channels in place of Branch Network for financial transactions

•

Bingo card to all customers of BOI STAR YUVA ACCOUNT

•

Merchant offers: Exclusive and special tie up for merchant offers both online and offline

•

Personal Accident Insurance: Complimentary cover of up to Rs.50,000 for the age group of 18-21 years and after 21 years cover will be Rs.5,00,000/-to be activated by single POS Swipe every financial year

•

SUD life group term insurance scheme : Waiver of 1st year pro rata premium (presently Rs.125/- + service tax) The above premium is applicable for the age group 18-35 years and customer can continue this scheme at their cost for subsequent years on his first application for joining the SUD life group term insurance scheme for the age group of 18 -35 years.

ACCOUNT AQB Criteria

BOI STAR YUVA SB ACCOUNT SCHEME 1. Age group 21-35 years:2. Rs.5,000/-in Metro/Urban Branches 3. Rs. 2500/- in Semi-urban/Rural Branches

Charges for non-

Age group 21-35 years: - Penalty will be levied for Non-

maintenance of

maintaining Average Quarterly Balance (AQB) as follows:

Average Quarterly Balance (AQB)

1.

SB A/cs with Cheque Book facility:- Rs. 100/- per quarter at all centres

Page | 19

2.

SB A/cs without Cheque Book facility:- Rs. 60/- per quarter at all centres

2. BOI STAR MAHILA SB ACCOUNT: Eligibility

Women in the age group of 18 years and above. Singly or in joint names. The first account holder must belong to entitled group -Including salaried employee (Govt./ PSU/ Private Sector/ MNC etc.) -Self Employed Professionals like Doctors, Entrepreneurs etc. Women with independent source of regular income like rentals etc.

AQB Criteria

Average Quarterly Balance (AQB) of Rs.5000/-

Opening of Account/ Minimum Daily

No Daily Minimum Balance Requirement

Balance

However customer has to maintain Average Quarterly Balance (AQB) of Rs.5000/- or above, therefore AQB Clause to apply

Charges for Non Maintaining

No Penalty for Non Maintaining Daily Minimum

Minimum Balance/AQB

Balance In case of Non maintenance of AQB of Rs.5,000/Penalty will be levied as under: SB A/cs with cheque book facility: Penal charges: Rs.100/- per 3 months at all centres SB A/c without cheque book facility: Penal charges: Rs.60/- per 3 months at all centres

Charges for excess debit entries in

Up to 10 Customer induced debit entries a month:

Savings Bank account ATM /

FREE Beyond 10 debit entries:FREE Page | 20

INTERNET transactions not to be

(Presently Normal Savings A/C is charged with

counted / reckoned

Rs.10/- per entry for above 10 debit entries).

Personalized Cheque books per

50 Leaves (Free)

calendar year Issuance of DD/Pay slips

6 DD Per Quarter Free if AQB in the preceding quarter is maintained at Rs.10000/- and above else DD charges applicable

Global Debit cum ATM Card

Free Global Debit cum ATM card – Nil Annual Charges from next year

Easy Overdraft Facility

The account holder may be provided overdraft facility for maximum amount equal to one month of the salary amount (net credit to SB a/c last month) in their SB Account. The Rate of interest on overdraft is proposed to be Base rate + 3%. No Processing Charge will be recovered for overdraft.

3. BOI STAR SENIOR CITIZEN SB ACCOUNT: Target Group

Citizens who have completed 57 years and Senior Citizens who are drawing pension from other Banks

Eligibility

Singly or in joint names. The first account holder must belong to target group

Average Quarterly Balance

Average Quarterly Balance (AQB) of Rs.10000/-AQB

Criteria

shall be calculated for AMJ, JAS,OND & JFM quarters (for example AMJ stands for April, May, June) No Daily Minimum Balance Requirement

Opening of Account/ Minimum Daily Balance

However customer has to maintain Average Quarterly Balance (AQB) of Rs.10,000/- or above,

Page | 21

Charges for Non Maintaining

In case of Non maintenance of AQB of Rs.10,000/-

Average Quarterly Balance

Penalty will be levied as under: SB A/cs with cheque book facility: Penal charges: Rs.100/- per 3 months at all centres SB A/c without cheque book facility: Penal charges: Rs.60/- per 3 months at all centres

Charges for excess debit entries in

Up to 10 Customer induced debit entries a month :

Savings Bank account ATM /

FREE

INTERNET transactions not to be

Beyond 10 debit entries : FREE

counted / reckoned

(Presently Normal Savings A/C is charged with Rs.10/per entry for above 10 debit entries).

Personalized Cheque books per

50 Leaves (Free)

calendar year Issuance of DD/Pay slips

6 DD Per Quarter Free if AQB in the preceding quarter is maintained at Rs.10000/- and above else DD charges applicable

Global Debit cum ATM Card

Free Global Debit cum ATM card – Nil Annual Charges from next year

Group Personal Accident Death

1. Group Personal Accident Death Insurance

Insurance cover

Cover of Rs.5 lakhs on the Debit Card, which shall be activated by single POS Swipe. 2. The facility of Group Personal Accident Death Insurance Cover of Rs. 5 lakhs will be extended by the Bank to the Account holders of this scheme and the cost of premium will be borne by the Bank.

4. SB ACCOUNT FOR PENSIONERS: Target Group

All Pensioners who are drawing pension through Bank of India Branches irrespective of age Page | 22

Eligibility

Singly or in joint names only with spouse with operational instruction Either/Survivor or Former/Survivor

Average Quarterly Balance

NIL

Criteria Opening of Account/ Minimum

No Minimum Balance Requirement

Daily Balance Charges for Non-Maintaining

No Penalty for Non Maintaining AQB

Average Quarterly Balance Personalized Cheque books per

50 Leaves (Free)

calendar year Issuance of DD/Pay slips (NEW

6 DD/ Pay slips per Quarter : FREE

FEATURE) Global Debit cum ATM Card

Free issuance of Global Debit cum ATM card & Nil

(NEW FEATURE)

Annual Charges from next year

Group Personal Accident Death

1. Group Personal Accident Death Insurance

Insurance cover

Cover of Rs.5 lakhs on the Debit Card, which

(NEW FEATURE)

shall be activated by single POS Swipe. 2. The facility of Group Personal Accident Death Insurance Cover of Rs. 5 lakhs will be extended by the Bank to the Account holders of this scheme and the cost of premium will be borne by the Bank.

Easy Overdraft Facility

The account holder may be provided overdraft facility

(NEW FEATURE)

for maximum amount equal to 2 month of the pension amount in their SB Account upon fulfillment of terms and conditions and rate of interest on overdraft will be Base Rate + 1%.

Page | 23

SALARY 1. JAI JAWAN SALARY PLUS ACCOUNT FOR DEFENCE PERSONNEL Sr.

Particulars

Commissioned Officers

No 1.

Non-Commissioned Officers:

Eligibility

All permanent employees of Defence Forces i.e. Indian Army, Indian Air Force, Indian Navy and Coast Guards. Ex-servicemen and New Recruits (under training) are also eligible & covered in this Scheme.

2.

Minimum Balance

NIL

Requirement 3.

4.

Group Personal Accidental

Free Personal Accident Insurance cover of Rs.10 Lakhs

Death Insurance Cover

(Death Benefit only)

Free Platinum Debit Cum

i) Free Platinum Card with daily cash withdrawal limit

ATM Card

of Rs.50,000/- and POS limit of Rs. 1 Lakh.

(This card is of premium category Debit Cum ATM

ii) Nil Annual Renewal Charges iii) Free Add on Card

Card) 5.

Coverage of Ex-servicemen Ex-servicemen are also eligible Personnel

6.

Internet Banking

Free

7.

Star Sandesh

Free

8.

RTGS/NEFT payment

Free

through Branches/ Internet

(Free Facility of RTGS/NEFT payment was earlier

Banking

available through internet Banking only)

Mobile Banking

Free

9.

10. Cheque Leaves

All Cheque Leaves free to all Categories (All cheques are payable at all our branches in clearing)

Page | 24

11. Concession in charges of

30% concession

lockers for self &

(Subject to availability of Locker at the Branch)

immediate family member

(Family includes spouse & dependent children)

12. Easy Over draft (on

4 times of net salary

3 times of net salary

Maximum Rs.2 Lac

Maximum Rs.1 Lac

TOD should not exceed the

All other Conditions – as

All other Conditions – as

limit of Rs 1 lac and Rs 2

per Personal Loan Scheme

per Personal Loan

application) to be approved by the Manager. Loan plus

lac as mentioned in each

Scheme

category. The amount cap for TOD will also include the amount mentioned under cheque bounce facility. 13. Pass Book/Statement

Any one of them Available

(Monthly) 14. Interest Concession &

0.50 % less than usual rate in Retail Loan* subject to

Waiver of Processing

min Base Rate

Charges on Retail Loans*

100% Waiver of Processing Charges in Retail Loan*

*Retail Loans- Home Loan, Vehicle Loans and Personal Loans 15. Star Share Trade (3 in 1 account)i.e.

Annual Maintenance Charges waived (during first year)

Demat + Saving + Online share Trading 16. Demand Drafts/Pay orders

Free - Demand Draft/Pay Orders at Par (amount up to Rs.50,000/- per draft through salary account for genuine purpose)

17. Transactions at Non-home branches (a)

Cash Deposit at Other SOL

a) Free of charge

Cash withdrawal at other (b) SOL Max limit Rs 50,000/-

Page | 25

b) Free of Charge 18. Cheque bounce protection

Rs.50000/- (Max.)

Rs.25000/- (Max.)

International Gold Credit

India Card

for clearing cheques 19. Credit Card (No Annual Maintenance

Card

Charges) 20. Cheque Collection Charges

Free Cheque Collection up to Rs.25,000/- per month

21. SUD Life Group Term

SUD Life Group Term Insurance Cover at very

Insurance Cover

attractive rate. The salient features are:•

Wider entry age up to 65th birthday.

•

Choice of Sum assured up to 5 lakhs

•

Hassle free process with just a one pager enrollment form

22. BOI STAR JAI JAWAN

•

No medicals required

•

Competitive premium rates

•

Scheme for financing House/Flats constructed

HOME LOAN SCHEME

by Army Welfare Organization (AWHO), Air force, Naval Housing Board (ANHB) and Para Military Forces. •

There is 100% Waiver on processing charges in Home Loan under this scheme.

24

Online Income Tax return

Available at Discounted rate under Tie-up arrangement.

Facility

It can be filed from BOI Website

24. Nomination facility

Available as per the prevailing banking norms

Page | 26

2. BOI STAR GURUKUL SB ACCOUNT Eligibility

All Teaching and Non-Teaching staff of school/colleges/universities and all such educational institutes are eligible to open account under the scheme provided a minimum 10 employees and each employee having minimum take home salary of Rs.5000/- p.m. and above can join the scheme.

Opening of Account/

No minimum Balance requirement / Zero Balance Account

Minimum Daily Balance Charges for excess debit

Up to 10 Customer induced debit entries a month : FREE

entries in Savings Bank

Beyond 10 debit entries: Rs.10/- per entry.

account ATM / INTERNET transactions not to be counted / reckoned Personalized Cheque

50 Leaves (Free)

books per calendar year Issuance of DD/Pay slips

Free 24 DD/PSI of max. Rs.50,000 each in a calendar year

Global Debit cum ATM

Free global Debit cum ATM Card to all

Card NEFT/RTGS through Net

Free

Banking to BOI customers Concession on Loans

0.25% concession in ROI on Home Loan and Auto Loan subject to min Base rate

Processing Charges

50% concession in processing charges on Home Loan & Personal Loan

Credit Card

Free Gold Credit card to employees whose net salary above than Rs.10,000/- & above for last 6 months. Free Gold International Card to employees whose net salary is

Rs.25,000/- & above for last 6 months.

Page | 27

Star Share Trade

Available

( 3 in 1 account )

Waiver of AMC Charges on demat(for First Financial Year

Demat + Saving + Online

only)

Share Trading Easy Overdraft Facility

The account holder may be provided overdraft facility for maximum amount equal to 2, 00,000/- or last four months of the net salary amount (Whichever is lower) The Rate of interest on overdraft is proposed to be Base rate + 3%. No Processing Charge will be recovered for overdraft

Group Personal Accident Death Insurance cover

1. Group Personal Accident Death Insurance Cover of Rs.5 lakhs on the Debit Card, which shall be activated by single POS Swipe . 2. The facility of Group Personal Accident Death Insurance Cover of Rs. 5 lakhs will be extended by the Bank to the Account holders of this scheme and the cost of premium will be borne by the Bank.

Page | 28

3. BOI SARAL SALARY ACCOUNT SCHEME Eligibility: All employees on

Menu option OAAC

regular pay roll of any institute

Scheme Code will be 165 and special charge code

(Central Govt. / State Govt. / PSU /

will be:

Private sector etc.) With minimum 10 employees and

•

Government/ Universities/ colleges affiliated

each employee is having minimum

to universities

take home salary of Rs 5000/- p.m. and above.

0202 for Employees of Central and State

•

0203 Employees of Public Sector Undertakings and

•

0204 Employees of Private Sector (to be approved by the Branch Manager)

Please note that scheme code and special charge code are essential for identification of the account and their category and also for the extension of benefits to the depositor. Minimum Balance Requirement

NIL

Debit Card

Free Debit Card to all Free Platinum Debit Card to employees with minimum take home salary of Rs 25,000/- p.m. or average quarterly balance in SB a/c is Rs 1 Lakh

Group Personal Accidental Death

Free Personal Accident Death Insurance cover of

Insurance Cover

Rs.1 Lakh

(Group Insurance Policy taken at HO and premium is borne by H.O. centrally) Internet Banking/ Mobile

Free

Banking/RTGS/ NEFT payment through Internet Banking Page | 29

Cheque Leaves:

Free 100 Cheque leaves per calendar year

Demand Drafts / Pay orders

1 DD / PO free with maximum amount of Rs 50,000/- per month

Star Share Trade (3 in 1 account)

Available : Annual Maintenance Charges on Demat

Demat, SB, Online share Trading

waived (during first FY)

Pass Book/Statement (Monthly)

Any one of them Available

Credit Card

Free Gold Credit Card to employees with net take home Salaryof Rs 10,000/- & above for last 6 months. Free Gold International Credit Card to employees with net take home Salary of Rs 25,000/- & above for last 6 month.

Online Income Tax return Facility

Available at Discounted rate under Tie-up arrangement.

SUD Life Group Term Insurance

SUD Life Group Term Insurance Cover at very

Cover

attractive rate. The salient features are:-

Nomination facility

•

Wider entry age up to 65th birthday.

•

Choice of Sum assured up to 5 lakhs

•

No medicals required

•

Competitive premium rates

Available as per the prevailing banking norms

Page | 30

CURRENT 1. SILVER CURRENT ACCOUNT

BOI Silver Current Account is at Minimum AQB of Rs 20,000/- which comes with a host of privileges.

Ancillary Services

•

Phone Banking

•

Corporate Net banking

•

Free statements of Account

•

Missed Call alert facility for obtaining account balance

•

Online Income Tax return filing facility

•

Free utility bills payment facility through E-pay

•

ATM cum International Business Debit Card

•

Page | 31

Cash Deposit Facility

Unlimited (subject to chargeable for cash handling charges)

(Base & Non-Base Branches) Base Branch Cash

Unlimited

Withdrawal Facility Non-Base Branch Cash

Cash withdrawal up to Rs 50,000/- per day at other than Base branch

Withdrawal Facility Fund Transfer

•

Free Funds Transfer within the bank (Self A/c or Third party A/c)

•

90% of normal charges to apply on Collection of Cheques across Bank of India locations all over the country

Cheque Book NEFT/RTGS

Free 25 Cheque leaves per Quarter •

90% of normal charges to apply on payment of NEFT/RTGS whereas Collection is freeof cost

Demand Draft/Pay

•

Free NEFT/RTGS payment through Net Banking

•

3 DD/ PO - Free per Quarter (up to Rs.5.00 Lacs per

Order Special Privileges

instrument) •

25 % Waiver of Processing Charges on Retail Loans*

•

Free Gold International Corporate Credit Card*

•

Corporate Salary Package available*

•

Waiver of AMC Charges on Demat A/c for Ist Year

2. GOLD CURRENT ACCOUNT BOI Gold Current Account which comes with a host of privileges at a Minimum AQB of Rs.50,000/-. Cash Deposit Facility

Unlimited

Base Branch Cash

Unlimited

Withdrawal Facility

Page | 32

Non-Base Branch Cash

Cash withdrawal up to Rs 50,000/- per day at other than Base

Withdrawal Facility

branch

Fund Transfer

•

Free Funds Transfer within the bank (Self A/c or Third party A/c)

•

80% of normal charges to apply on Collection of Cheques across Bank of India locations all over the country.

Cheque Book NEFT/RTGS

Free 50 Cheque leaves per Quarter •

80% of normal charges to apply on payment of NEFT/RTGS whereas Collection is free of cost

Demand Draft/Pay Order

•

Free NEFT/RTGS payment through Net Banking

•

5 DD/ PO - Free per Quarter (up to Rs.5.00 Lacs per instrument)

Discount / Relaxation in

Up to 5 basis point (0.05%) Merchant Discount on Credit card

POS offer

from Prevailing rates*

Special Privileges

Ancillary Services

•

50 % Waiver of Processing Charges on Retail Loans*

•

Free Gold International Corporate Credit Card*

•

Free ATM cum Debit Card with Nil Renewal Charges

•

Corporate Salary Package available*

•

Cash Management facility at attractive rates*

•

Waiver of AMC Charges on Demat A/c for Ist Year

•

Phone Banking

•

Corporate Net banking

•

Free statements of Account

•

Missed Call alert facility for obtaining account balance

•

Online Income Tax return filing facility

•

Free utility bills payment facility through E-pay

•

ATM cum International Business Debit Card

Page | 33

3. PLATINUM CURRENT ACCOUNT BOI Gold Current Account which comes with a host of privileges at a Minimum AQB of Rs.10 lacs. Cash Deposit Facility

Unlimited

Base Branch Cash

Unlimited

Withdrawal Facility Non-Base Branch Cash

Cash withdrawal up to Rs 50,000/- per day at other than

Withdrawal Facility

Base branch

Fund Transfer

•

Free Funds Transfer within the bank

•

Free Collection of Cheques /Outstation Cheque collection across Bank of India locations.

Cheque Book NEFT/RTGS

Free 250 Cheque leaves per Quarter •

Free payment and Collection of NEFT/RTGS across Bank of Indialocations

•

Demand Draft/Pay Order

Free NEFT/RTGS payment through Net Banking

20 DD/ PO - Free per Quarter (up to Rs.5.00 Lacs per instrument)

Discount / Relaxation in

Up to 25 basis point (0.25%) Merchant Discount on Credit

POS offer

card from Prevailing rates*

Special Privileges

•

Relationship Manager available

•

Nil Processing Charges on Retail Loans*

•

Free 1+2 Add on GoldInternational Corporate Credit Card *

•

Free ATM cum Debit Card with Nil Renewal Charges.

Ancillary Services

•

Corporate Salary Package available*

•

Cash Management facility at attractive rates*

•

Waiver of AMC Charges on Demat A/c for Ist Year

•

Phone Banking Page | 34

•

Corporate Net banking

•

Free statements of Account

•

Missed Call alert facility for obtaining account balance

•

Online Income Tax return filing facility

•

Free utility bills payment facility through E-pay

•

ATM cum International Business Debit Card

4. STAR BENEFIT CD PLUS ACCOUNT Features

Benefits

Average Quarterly Balance

Rs.5,000/- per quarter

Free DD/PSI Up to Rs.5/- Lac each per

Three

month Star Speed Cheque Collection

Free

Debit Card for individuals & Proprietorship

Free for First year. Prevailing AMC

concerns

charges from 2nd year onwards

Cheque Book

First Time Free Cheque Book of 50 leaves.

NEFT/RTGS through Internet banking

Free

Penal charges on account of non-

Rs.600+Applicable Service Tax per quarter

maintenance of stipulated AQB requirement

TERMS 1. DOUBLE BENEFIT TERM DEPOSIT •

Double Benefit Deposits provide a higher yield on the principal at the end of the stipulated period as the interest is compounded on quarterly basis; but, the principal and the accrued interest is paid only at the end of the period for which the deposit is placed with the Bank and not monthly or half-yearly as in the case of other types of deposits.

Page | 35

•

This scheme is useful for short term and medium term investment ordinarily ranging from 12 months to 120 months.

•

KYC ( Know Your Customer) Norms for opening account are applicable for these accounts also hence proof of residence and proof of identification will be required along with recent photograph of the depositor/s

•

Period and Amount of Deposit : Deposits under Double Benefit Deposit Scheme are accepted for a fixed period from six months upto a maximum period of 120 months.

•

Minimum amount of Deposit : Minimum amount that may be accepted for the scheme shall be Rs.10,000/-in Metro and Urban Branches and Rs.5000/- at Rural and Semi urban Branches For senior citezens the min amount is Rs5000/-

•

Payment of Interest: Interest will be paid at the time of maturity along with principal with quarterly compounding.

•

PAN number is essential for those accounts where TDS is deducted.

•

The accounts may be opened in the names of :Individual — Single Accounts, Joint Accounts, SoleProprietary Concerns, Partnership Firms, Blind Persons, Minors, Limited Companies, Associations, Clubs, Societies, Trusts, Joint Hindu Families, Municipalities, Government and Quasi-Government Bodies, Religious, Educational and Charitable Institutions.

|2. FIXED / SHORT TERM DEPOSITS Mode of calculation of Interest on Short Deposits and Fixed Deposits for periods less than 12 months : Short Deposits

Interest should be paid for the actual number of days on

On deposits repayable

the basis of 365 days in a year

within six months Fixed Deposits

Interest will be calculated for the completed months and

On Deposits repayable

where the terminal month is incomplete- the actual number

after six months

of days on the basis of 365 days in a year.

(Fixed Deposits)

Page | 36

where the terminal month is complete or incomplete

•

Minimum amount Rs.1 lac for SDR and Rs.10,000/- for FDR in Metro and Urban Branches and Rs.5000/- in Rural and Semi urban branches and for senior citizens the minimum amount will be Rs 5000/-

•

Payment of Interest: (Subject to applicable TDS) Interest will be paid half yearly on 1st October and on 1st April and in case these dates falls on holidays then on the next working day.

•

The accounts may be opened in the names of : Individual — Single Accounts, Joint Accounts, Sole Proprietary Concerns, Partnership Firms, Blind Persons, Minors, Limited Companies, Associations, Clubs, Societies, Trusts, Joint Hindu Families, Municipalities, Government and Quasi-Government Bodies, Religious, Educational and Charitable Institutions.

3. RECURRING TERM DEPOSIT •

Recurring Deposit is a special type of deposit account which enables a depositor particularly in fixed income group to save by paying into the account an agreed fixed sum of money monthly over a stipulated period.

•

The deposits in this type of account earn compound interest on quarterly basis.

•

Longer the period for which monthly deposits are agreed to be made higher is the rate of interest subject to rules.

•

KYC ( Know Your Customer) Norms for opening account are applicable for these accounts also hence proof of residence and proof of identification will be required along with recent photograph of the depositor/s

•

The accounts may be opened in the names of : Individual , Joint Accounts, Illiterate Persons, Blind Persons, Minors

•

A Recurring Deposit account where the compounding of interest is to be done on quarterly basis shall be accepted for periods in multiples of three months only upto the maximum period of ten years..

•

Minimum Amount of monthly instalment: Recurring Deposits will be in equal monthly instalments. The core monthly instalment Page | 37

should be minimum Rs. 500/ in Metro and urban Branches and Rs.100/- or above in Semi urban/Rural Branches and in its multiples. There is no maximum limit. •

As per amendments brought about in Finance Act 2015, TDS will be applicable for Recurring Deposits.

4. STAR FLEXI-RECURRING DEPOSIT SCHEME •

Star Flexi Recurring Deposit offers flexibility to invest surplus fund

•

Star Flexi Recurring Deposit scheme is a unique Recurring Deposit scheme which offers flexibility to the customer to choose core installment and to also choose monthly flexi installments in multiples of the core installment.

•

Eligibility: Individuals & Joint Accounts (Including Minors).

•

Minimum Core Monthly installment amount: Rs.500/- and in its multiples - In respect of Metro and Urban branches Rs.100/- and in its multiples - In respect of Rural and Semi-Urban branches

•

Minimum amount of Monthly Installments: No Upper Limit.

•

Flexi Installment: Any amount in multiples of core monthly installment initially opted at the time of opening of account. Maximum Flexi installment can be any number of times of the core monthly installment.

•

Period: Minimum 12 months & Maximum 10 years. (In multiples of 3 months only)

•

Interest Rate: Core Installments (Fixed Rate) : As applicable for the period for which the A/c is opened. Flexible Installments: Applicable rate at the time of deposit of the Flexible installment.

•

Maturity Value: No fixed Maturity Value

Page | 38

BOI RETAIL LOANS 1. BOI STAR HOME LOAN •

Provides loans to purchase a Plot for construction of a House, to purchase/construct house/flat, as well as for renovation/ repair/alteration/addition to house/flat Maximum loan amount is Rs.500 lacs and repayment ranges up to 30 years, with reasonable margin and nominal processing charges. No commitment /administrative charges

•

The loan is available at very competitive rates of interest, currently available in the industry.

•

Option for different EMI amounts for different periods during tenure of loan to suit customer’s repayment capacity

•

Prepayment of Loan permitted. No prepayment charges under floating rate option

•

Interest is calculated on daily balance basis which is of great advantage to customer as it results in lower interest amount.

•

Loan to NRIs as well as Persons of Indian Origin.

•

Simplified application form/procedures for convenience of customers, and speedy approvals.

•

Free Personal Accident Insurance cover (Renewed at banks discretion)

•

Life Insurance Cover to borrowers for Loan Protection(optional)

•

Please visit our nearest Branch and avail loan to own your dream home Eligibility

Salaried employees, Professionals, Self-employed persons. Requests are also considered from NRIs, PIOs, HUF, and Prop. Firm, Partnership firms and corporate

Purpose

•

To purchase/construct house/flat

•

To renovate/extend/repair existing house/flat.

•

To purchase a plot of land for construction of house

•

Takeover of home loan from other banks/FIs- subject to conditions.

Margin

For Loan upto For Loan up to

For Loan

Rs.20 Lacs

above

Rs.75 Lacs:

Page | 39

Margin

Rs.75 Lacs: For 1st House

15%

20%

25%

For 2nd or Subsequent Home

20%

20%

25%

Loan/House/Flat

Where cost of house exceeds Rs.10 lacs – Margin is calculated on pure cost of the house/flat excluding stamp duty, Registration and other documentation charge. For houses with cost not exceeding Rs.10 Lacs – expenses towards stamp duty, registration and other documentation charge can be included in the project cost Repayment(can be

Highly flexible - maximum 30 yrs. including moratorium period

customized)

upto 36 months (max.) in monthly installments, including Bank’s approved projects. Loan to be normally repaid before date of retirement in case of salaried persons and before attaining 70 years of age in case of others. Repayment upto 70 years also allowed to salaried employees having assured post retirement income

Eligible Quantum

Calculation of quantum of loan is related to Income/repayment

of Loan/ EMI

capacity of proponent/borrower Salaried Employees :

72 times of gross monthly salary or 6 times of gross annual income based on I-T Returns.

Self-employed/

6 times of Gross annual income

Professionals etc.

based on I-T Returns

HUF/Proprietorship

6 times of cash accruals (PAT+

/Partnership Firm/ Company Depreciation) as per Balance Sheet/P&L Account

In case of Individuals

Page | 40

Net Take Home pay(NTH)/income (net of all deductions including EMI of Proposed loan) is stipulated as under :Gross Monthly Income up to Rs.1 Lacs NTH Minimum – 40% Gross Monthly Income over Rs.1 Lac up to Rs. 5 Lacs NTH Minimum – 30% Gross Monthly Income over Rs.5 Lacs NTH Minimum – 25%

In case of HUF/Proprietorship/ Partnership firm/Company: DSCR should be minimum 1.5. Rate of Interest

For Limits upto Rs.75 lacs

For Limits of Rs.75 lacs & above @

Security

1 Year MCLR

9.40

9.40

PREMIUM

0.00

0.25

Business Strategic Spread

0.30

0.30

Effective Applicable Rate

9.70

9.95 @

Mortgage/Equitable Mortgage (1st charge) on land/flat/house. Third Party guarantee (if mortgage could not be created before or at the time of disbursement).

Special Features

•

Free Personal Accident Insurance cover for the borrower as per terms of insurance policy covering loan outstanding as on the date of accident(Renewal at the discretion of the Bank).

•

Life Insurance cover to housing loan borrowers , at affordable premium against risk of death during tenure of loan under Group Insurance Scheme in tie up with Star Union Dai-Ichi Insurance Co. Ltd. at borrower’s own expenses & option.

•

Loan furnishing the house/flat at a rate of interest as applicable to housing loan under the scheme

•

Loan for installation of Solar PVs at home loan ROI

Other Attractive

•

Interest on Daily Reducing Balance Basis

Features

•

No Pre-Payment Charges on Floating Rate Loans

Page | 41

•

Facility for step up/ step down EMIs

•

Inclusion of notional rental income in case of 2nd House and also Employees staying in Staff Quarters;

•

Inclusion of Income of Close relatives for enhanced loan

•

Tax Benefit on Interest and Installments repaid in Home Loans

•

Facility for 100% loan irrespective of stage of construction OR Bridge Loan subject to conditions:

2. BOI STAR EDUCATION LOAN 1. OBJECTIVE & PURPOSE :

The Star Educational Loan Scheme aims at providing financial support from the bank to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student is provided with an opportunity to pursue education with the financial support on affordable terms and conditions. 2. ELIGIBILITY CRITERIA : a. STUDENT'S ELIGIBILITY: •

Should be an Indian National;

•

Student should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/Merit based selection process after completion of HSC (10 plus 2 or equivalent).

•

Good academic career.

•

The student should not have outstanding education loan from any other Institution.

•

Father/Mother should be co-borrower.

•

Branch nearest to the permanent residence of student will consider the loan.

Page | 42

3. STUDIES IN INDIA (INDICATIVE LIST): o

Approved Courses leading to graduate /post graduate degree and

P.G.

diplomas conducted by recognized colleges/ universities by UGC/Government/AICTE/AIBMS/ICMR o

Courses like ICWA,CA,CFA,etc.

o

Courses conducted by IIM, IIT, IISc, XLRI, NIFT, NID and other Institutes set up by Central/State Govt.

o

Regular Degree /Diploma courses like Aeronautical, Pilot Training Shipping, degree/diploma in nursing or any other discipline approved by Director General of Civil Aviation/Shipping/Indian Nursing Council

•

Studies abroad : •

Graduation: For job oriented professional/technical courses offered by reputed universities.

•

Post-Graduation: MCA, MBA, MS, etc.

•

Courses conducted by CIMA - London, CPA in USA, etc.

4. EXPENSES CONSIDERED FOR LOAN : •

Fee payable to college/school/hostel*

•

Examination/Library/Laboratory fee.

•

Purchase of books/equipments/instruments/uniforms.

•

Caution deposit/building fund/refundable deposit supported by Institution bills/receipts.

•

Travel expenses/passage money for studies abroad.

•

Purchase of computers/Laptops - essential for completion of the course.

•

Life Insurance Premium for life cover of student/co-borrower

•

Any other expenses required to complete the course - like study tours, project work, thesis, etc..

5. QUANTUM OF FINANCE •

Studies in India - Maximum Rs.10.00 lakh

•

Studies abroad - Maximum Rs.20.00 lakh. Page | 43

•

MARGIN : Upto Rs.4 lakh :

Nil

Above Rs.4 lakh - Studies in India : 5% and Studies Abroad : 15%· 6. SECURITY: UptoRs. 4 lakh

Parents or Guardian to be joint borrowers

Above Rs.4 lakh &upto Rs.7.5 lakh

Parents or Guardian to be joint borrowers

Above Rs.7.5 lakh

Co-obligation of Parents together with tangible Collateral security of suitable value

7. RATE OF INTEREST : Loan Amount

Revised Rate of Interest for New loans w.e.f. 01.04.2016

For loans upto Rs.7.50 lacs

3.00% + BSS (0.30%) above 1 Year MCLR

For loans above Rs.7.50 lacs

2.50% + BSS (0.30%) above 1 Year MCLR

Education Loan covered under Credit Guarantee

1.70% + BSS (0.30%) above 1 Year MCLR

Fund Scheme for Education Loan(CGFSEL) limit upto Rs.7.50 lacs

8. Simple interest during the repayment holiday/moratorium period. Penal interest @2% for loans above Rs.4 lakh for the overdue amount and overdue period. 9. INSURANCE: All the student borrowers are offered a specially designed OPTIONAL Term Insurance covers and the premium can be included as an item of finance. 10. REPAYMENT : Repayment holiday/Moratorium: Course period + 1 year Repayment Period: 15 years after commencement of repayment

Page | 44

3. BOI STAR LOAN AGAINST PROPERTY 1. PURPOSE : a. To meet the credit needs of trade, commercial activity, other general business/profession, as also for their bona fide requirements; b. To meet educational expenses of family members including near relatives c. To undertake repairs/renovation/extension to the residential/commercial property; d. To purchase / construct residential house/flat, purchase of plot of land for construction of house/ premises for business/commercial use *; e. For Repayment of existing loans availed from other Banks / FI’s conforming to the extant guidelines regarding “takeover” of account. 3. ELIGIBLE CUSTOMERS : People engaged in trade, commerce and business, professionals, self-employed, individuals with high net worth, salaried people, Proprietary firms, Partnership firms, Companies (Pvt. /Public Ltd.,) HUFs (excluding partnership firms where HUF is a partner), Societies, Staff members, NRIs- subject to compliance of Bank’s/RBI guidelines.

ADVANCES TO INDIVIDUALS: MAXIMUM AGE LIMIT: a) Individuals in permanent service max. 60 years. b) For Proprietary concerns/Self Employed/non-salaried people – Maximum -70 Years (Age limit is the maximum age at the end of the repayment Period); 4. TYPE OF ADVANCE : Demand/Term Loan , Overdraft (Reducible/Non-Reducible) 5. QUANTUM OF ADVANCE : The quantum of advance to be related to the value of security, margin requirement , take home pay and repayment capacity of the proponent , subject to limits as under :-

Page | 45

6.

Demand/Term

Overdraft

Overdraft

Loan

(Reducible)

(NotReducible)

Individual-Salaried/ Self-employed/ Professionals Doctor/s- in case of joint accounts all to be doctors Others i.e. Proprietorship/ Partnership Firm/Company etc.

500

200

NIL

500

500

NIL

500

500

500

6. CALCULATION OF QUANTUM OF ADVANCE: 1

Individuals-Salaried Employees /Self

48 times of average net emoluments

Employed/Professionals

(take home salary) based on salary slip/Form 16/Income Tax Return OR 4 times of net annual income with other rental income from property etc. based on I.T returns for last 2/3 Financial Years .

2

Doctor/s- in case of joint accounts all to

4 times of average net annual income

be doctors

of last 2/3 years based on IT Returns for last 2/3 Financial Years

3.

Others i.e. Proprietorship/ Partnership

•

Firm/Company etc.

For Loans / Reducible Overdraft: 4 times of average net annual income of last 2/3 years based on IT Returns for last 2/3 Financial Years.

•

For Overdraft (Non Reducible): 20% of annual turnover based Page | 46

on last (F.Y) audited balance sheet of the proponent. Audited Balance sheet to be obtained for last 2/3 Years.-based on its number of years existence.

7. MARGIN (ON VALUE OF PROPERTY): i. Nil Margin for loan limit provided on the basis of Circle Rate/Registration value of the property (100% Loan amount); ii. 60 % of Market value (40 % Loan amount); iii. 50% of Distress Sale Value (50% Loan amount); whichever is lowest of i, ii iii.*Value of property for calculation of quantum of advance/determining margin will be lowest of Market value, Distress Sale value and Registration of value of property/similar property as on date of valuation. 8. REQUIREMENT OF NET TAKE HOME PAY /DSCR- FOR LOANS : a. For individuals: Gross Monthly Income

% of NTHP

Upto Rs.1.00 lacs

40 %

Rs. 1.00 lacs & above upto Rs.5.00 lacs 30 % Above Rs.5.00 lacs

25%

b. For Prop. Firm/Partnership Firm/Company(Loan /Reducible OD) : DSCR: Min.1.5; c. For Overdraft facility(Non-reducible ) : ISCR Min.1.5

Page | 47

9. RATE OF INTEREST : Nature of facility

Revised Rate of Interest for new loans w.e.f. 01.04.2016

Loan/ Overdraft

1.50% + BSS (0.30%) above 1 Year MCLR

Reducible (Monthly Reducible Limit) Overdraft (Non-

2.00% + BSS (0.30%) above 1 Year MCLR

Reducible)

10. REPAYMENT TERMS: For loans ( Repayable by EMI)

Max. 12 years by way of equated monthly installments (EMIs)

Overdraft : (Reducible Limit)

Drawing Limit to be reduced on monthly basis as per sanction terms to bring down the balance to zero at the end of repayment period. Total Repayment period of max. 12 years. ( Interest to be serviced on monthly basis)

Overdraft: (Non-reducible)

Interest to be serviced on monthly basis, as per sanction terms.

11. In case of individuals Loan/Overdraft to be closed within the age limit as prescribed. 12. SECURITY :Equitable / Legal mortgage charge over the property and obtaining personal guarantee of additional individual(s) 13.CHARGES : a. PROCESSING CHARGE (Exclusive of Service Tax):

Page | 48

For Loan (Repayable by installments)

One time @ 1% of sanctioned loan amount Min. Rs.5, 000/- and Max. Rs.50, 000/-.Plus S.T.

For Mortgage OD (Not reducible )

0.50% of the Sanctioned/Reviewed limit min.Rs.5,000/- and max. Rs.30, 000/- on annual basis. Plus S.T.

For Mortgage OD (Reducible)

a) 0.50% of the Sanctioned limit Min.Rs.5,000/- and max. Rs.30, 000/for 1st year at the time of original sanction. . Plus S.T. b) 0.25% of the Reviewed limit Min.Rs.2,500/- and max. Rs.15, 000/for subsequent years. . Plus S.T.

b. EQUITABLE MORTGAGE FEE : Limits upto Rs.10.00 lac

Rs.5,000/-

Limits exceeding Rs.10.00 lac &upto

Rs.10,000/-

Rs.1.00 crore Limits exceeding Rs.1.00 crore& up to Rs Rs.20,000/5.00 crore

14. INSURANCE: The property mortgaged should be kept insured for full value against the risks of fire, natural calamities, riots, civil commotion, earthquake, etc. with the usual bank clause during the period ofadvance. 4. BOI STAR PERSONAL LOAN •

Star Personal Loan Scheme provides loan to meet various Personal requirements of customers and their family.

•

Bank offers loans for marriage expenses, medical expenses, educational expenses, purchase of consumer durables etc. Maximum quantum of advance

Page | 49

is Rs.10.00 lakhs, depending upon the income, with very attractive interest rate and easy repayment plan Eligibility

Salaried employees, Professionals and individuals with high net worth, regular pensioners or family pensioners drawing regular monthly pension through Branch, Staff members, retired employees (other than dismissed/compulsorily retired) of our Bank.

Types of

Demand/Term Loan/Overdraft (reducible as per repayment

advance

schedule) Overdraft limit (not reducible as per repayment schedule) maximum up to Rs.1 lac to confirmed permanent employees of Central/State Govt. /Reputed Corporates and PSU's.

Purpose

Clean/Unsecured loans •

•

Marriage expenses of

Repayment of existing housing loans from

dependent near relative.

other banks/Financial

Medical Expenses

Institutions, etc. •

Repairs/ Renovation/

for self, spouse,

Extension of House

children, dependent near

property. Education of

relative.

self, spouse, children,

For education of

near dependent relatives.

self/spouse/ children/

•

•

self, son, daughter or a

incurred/to be incurred

•

Secured loans

•

Purchase of consumer

near dependent relatives.

durables, computers,

For repairs/ renovation/

professional

extension of existing

equipment’s etc.

house/flat. •

Any other personal expenses of bonafide nature as approved by the Bank

Page | 50

Max. Loan

Rs.5.00 lacs

Rs.10.00 lacs

Min. Size of

Minimum size of loan: - At

Minimum size of loan: At

loan

Metro and Urban Centres:

Metro and Urban Centres:

Rs.10, 000/-

Rs.10, 000/-

At Rural and Semi Urban

At Rural and Semi Urban

centres: No minimum size of

centres: No minimum size of

loan.

loan.

•

Quantum of Advance

•

10 times of monthly net

•

20 times of monthly

Emoluments in case of

Gross Emoluments in

salaried Employees

case of salaried

50 % of Gross Annual

Employees

Income as per last

•

100 % of Gross Average

Income Tax Returns for

Annual Income as per

professionals/individuals

last three years Income

of high net worth

Tax Returns for professionals/individuals of high net worth

•

Repayment Clean/Unsecured loans

Secured

36 Equated monthly instalments w.e.f. one month after first

loans

disbursement. Exceptional cases up to 60 months

Maximum 60 Equated monthly instalments w.e.f. one month after first disbursement from loan account. Page | 51

Security

Equitable/Legal Mortgage of commercial or residential properties. Hypothecation charge on assets acquired. Collateral security in the form of pledge of gold/gold ornaments, NSC/Indira VikasPatra, Bonds, Assignment of LIC policies, Relief Bonds etc.

Rate of

i.

Fully Secured

Interest (Floating

4.00% + BSS (0.30%) above 1 Year MCLR

ii.

Clean/Unsecured

Rate of

5.00% + BSS (0.30%) above 1 Year MCLR

Interest p.a. at

iii.

monthly rests)

iv.

For Senior Citizens aged 60 years &

3.00% + BSS (0.30%) above 1

above for loans upto Rs.50,000/-

Year MCLR

Financing Secured under tie-up

4.00% + BSS (0.30%) above 1

arrangements

Year MCLR

Page | 52

Net Banking at Bank of India Bank of India has devised a user-friendly net banking system that enables its customers to carry out financial transactions with the bank or through the bank from the remotest areas with complete ease. This specifically customised web portal of Bank of India provides a virtual bank experience to its users. A user can visit the bank's site and register on it, creating a user ID and a password for customer verification. Features of Net Banking with Bank of India The official website of Bank of India is laden with the latest technological options through which a customer can avail and utilise various online banking facilities. Some of the prime features of Bank of India’s Net Banking facilities are as follows:

• • • • •

Corporate Cash Management Services – This online product is specifically meant for corporate customers. Quick cheque collections, faster fund release and profitable funds management services are offered to all the corporate customers at reasonable costs. Project Finance & Syndication Services – This facility is for those corporate customers who are engaged in infrastructure development sector or are manufacturers. Syndication services that are provided by Bank of India are as follows: Long Term Loan Working Capital: Fund & Non-Fund based Bridge Finance Acquisition Finance Refinancing. Loans – The bank provides loans for Bullion Banking, Export Finance, Channel Credit, Discount Future Cash Flows, Foreign Currency Swing Limit, Exporters Gold Card, Traders, Dual Currency and Swing Limit. Traders Finance – The services provided under this product category are Bill Finance and Bank Guarantee. Rural Cards – Kisan Credit Card, BOI Shatabdi Krishi Vikas Card, Kisan Samadhan Card and Star Bhumiheen Kisan Card. Services – Agri Clinics, Cold Storage, Composite Cash Credit, Crop Finance, Farm Mechanisation, Financing for Drought Animals and Carts, Land Development, Minor Irrigation, Poultry Development, Purchase of Land, Rural Godowns and Dairy Development. Financial Inclusion – Benefits of Pradhan Mantri Jan-Dhan Yojana to rural poor are offered under this service.

Page | 53

MSME Facilities for SME borrower – Star Laghu Udyami Samekat Loan, Star SME Liquid Plus, Star SME Auto Express, Star SME Contractor line of Credit, Star SME Education Plus, Star SME Term Loan, web-based dealers’ application, Code of Commitment to MSME, BOI Star Doctor Plus and BOI Star Vyapar. RETAIL Saving Deposits – BOI Star Yuva Account (for young students and professionals), BOI Star Mahila SB Account (for women aged 18 and above), BOI Star Senior Citizen SB Account (for people aged 57 and above as well as pension beneficiaries), BOI Star Gurukul SB Account (for teaching and non-teaching staff of schools/colleges, etc.), BOI Salary Plus Account Scheme, Star Suraksha SB Plus Account and Saving Bank Ordinary Account. Current Deposits – Normal Current Account, Silver Current Account, Gold Current Account, Gold Plus Current Account, Diamond Current Account, Diamond Plus Current Account, Platinum Account and Platinum Plus Current Account. Term Deposits – Double Benefit Deposit, Fixed Deposit, Short Deposit, Quarterly Deposit, Monthly Deposit, Recurring Deposit and Star Flexi Recurring Deposit. Tax Saving – Star Sunidhi Tax-Saving Deposit Scheme and Capital Gain Tax-Saving Scheme. Cards Debit Cards – Master Card, VISA Card, RuPay Card and Proprietary Card. Credit Cards – Master Card and VISA Card. Prepaid Cards – VISA Gift Card, VISA International Travel Card Apart from these facilities, there are a number of other options available for a Bank of India customer such as opening a new account or applying for loans online or availing other similar benefits via net banking. Moreover, one can track the status of the loan applied for or availed online. All this can be done through the 'Apply and Track Online' option provided on the homepage of the website. The 'Locate Us' search option allows users to track a Bank of India branch or ATM nearest to him/her.

Page | 54

Mobile Banking with Bank of India

Bank of India also provides its customers with the facility of Mobile Banking. One does not need to have a computer all the time for doing bank-related transactions. A cellular phone is enough to make full use of the options available for smooth banking. Various services provided under the Mobile Banking mode are Star Connect Mobile Banking (a year-round service), Gift Card Balance Inquiry, IMT – Instant Money Transfer (money is send to the receiver only by using the receiver’s mobile number through Bank of India’s ATM or retail internet banking facility), Online Registration for Internet Banking and BOI Star Easy Pay.

Page | 55

CASA TERM INSURANCE Group Term Life Insurance Scheme for CASA Customers of Bank of India Our CASA Customers can now get ‘More Benefit’ from their account. Their account will not only ‘Save’ their hard earned money to fulfill their family’s dream, but also ‘Protect’ these dreams from any unforeseen event. This is now possible with ‘Star Union Dai-ichi Life’s Group Term Life Insurance’ cover offered specially for Bank of India’s CASA Customers at a very nominal premium rate.No Medicals or Documents’. Just give consent in a simple one page form and instantly get insured. Key Features: • • • • •

Affordable Premium starting at just ` 125/- p.a. only + service tax Hassle-free procedure with No Medicals/ Documentation required Choice of Sum Assured ranging from ` Rs. 1-5 lakhs in multiples of ` Rs. 1 lakh Auto Renewal option to avail the benefits of this plan year after year Income Tax Benefits under section 80(C) & 10(10D)

Eligibility Criteria: Resident Indians aged between 18-64 years (maturity upto 65 years) having Bank account (single/ joint) are eligible for cover under this scheme./ Pre-Existing Diseases: This scheme covers death due to any cause with an exclusion of below mentioned pre-existing diseases* only – Heart Conditions

Kidney Failure

Paralysis

Mental Illness

A Stroke

Liver Failure

Cancer

HIV Infection or Aids

Premium Mode & Calculation: It is a yearly renewable policy where the customer pays the prorate premium as per age at the time of joining. Premium Table Age Band

Premium Rate per Annum For 1 Lac Sum Assured (Exclusive of Service Tax)

18-35

Rs 125/-

36 – 50

Rs 259/-

51 – 60

Rs 695/-

61 – 64

Rs 1,190/-

Company is eligible to claim income tax rebate as per instant rules. Where the insurance is offered by the company the individual staff may request for higher sum assured by contributing additional premium. Total insurance premium paid by the company is eligible for tax rebate.

Page | 56

LITERATURE REVIEW Indian Banking industry is one of the most technologically advanced industries with vast networks of branches empowered by strong banking systems, their wide range of product and effective distribution channel capabilities. However, regulatory, structural and technological factors are significantly changing the banking environment throughout the world. One of the most important factors that is motivating the growth of the Indian banking institutions is the liberalization. The financial sector reforms in India were designed to infuse greater competitive vitality in the banking system. To achieve this objective, the “Narsimhan Committee” was formed. The Narsimhan Committee report suggested wide ranging reforms for the Indian banking sector in 1992, including the important one to introduce internationally accepted banking practices so as to enable Indian banks to achieve service excellence. The Committee recommended a liberal policy towards the entry norms of private sector banks and foreign banks into the Indian banking sector. The Interest rate structure has been deregulated to a great extent and banks have been given a great degree of freedom in determining their rate structure for deposits and advances, as well as their other product range. Banking has also become more competitive in respect of branch network. The end result is that market power is getting shifted from banks to their customers. Financial liberalization has led to intense competitive pressures, and retail banks are consequently directing their strategies towards increasing customer satisfaction and loyalty through improved service quality. With such a high potential in the Indian banking industry, all leading banks are looking ahead to establish themselves as the most preferred bank by the customers and this can only happen when they are able to differentiate themselves on the basis of service quality being offered by their competitors. Retail Banking has immense opportunities in a growing economy like India. As the growth story further unfolds in India, retail banking is going to emerge a major driver of economic growth. A.T. Kearney, a global management consulting firm, recently identified India as the second most attractive retail distribution centre of 30 emergent markets.

Page | 57

RESEARCH METHODOLOGY STATEMENT OF THE PROBLEM As there is immense opportunities of the retail banking in India. This Dissertation 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 1. To study the issues and challenges in retail banking 2. To study the recent trends in retail banking 3. To ensure high satisfaction level and reduce percentage of complaints of customers in retail banking. 4. To estimate the future growth of Indian retail banking. 5. To understand Optimization of retail banking channels. 6. 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 Approach of data collection. The primary sources of data collection are done through – 1. Observation 2. Questionnaire Page | 58

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: 1. Magazines 2. Company Website SAMPLING TECHINIQUE (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 and also managers and employees were not available all the time. Area of Study- Bank of India, Borivali West, Mumbai Duration- 3 months

Page | 59

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 BANK OF INDIA were approached to fill up these questionnaires. The filled up information was later analyzed 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, Magazines, and Newspaper etc were used.

Page | 60

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, ratios etc. which was then used for analyzing the acquired data.

Page | 61

DATA ANALYSIS AND INTERPRETATION Profile of Respondents Respondents were the customers BANK OF INDIA BORIVALI WEST LINK ROAD of age group 25-65 years 1.The Branch timings (9:30 am to 2:15 pm from Monday to Saturday) are convenient Parameter

In numbers

In percentage

Very Good

45

90

Good

5

10

Satisfactory

0

0

Could be better

0

0

Total

50

100

BRANCH TIMINGS Branch Timings

C O U L D B E B E T T E R 0%

S A T I S F A C T O R Y 0%

GOOD

VERY GOOD

10%

90%

Interpretation The purpose of this question is to know the whether the bank timings are convenient for the customer, 90% of respondents opinioned that bank timings are Page | 62

very good and 10% of respondent opinioned that timings are good. None of the customers have any problem with respect to timings. Inference: As 90% responded very good, it seems high number are happy with bank timings.

2. Which type of retail loans products does customer prefers?

Retail Loans Types Customers Preferences Home loan 30%(15) Education loan 40%(20) Loan against property 26%(13) Vehicle loan 4% (2) Total 100% (50)

Retail Loans 40% 35% 30% 25% 20% 15% 10% 5% 0% Home loan

Education Loan

Loan against property

Vehicle loan

Retail Loans

Interpretation: Consumer prefer more of education loans for higher studies, then home loans for future gains, then loan against property for emergence need and then finally for vehicle loans.

3. Which type of retail deposits products does customer prefers? Page | 63

Types Salary Savings Current Terms Total

Retail Deposits % Customer preferences 15 8 30 15 45 23 10 4 100 50

Retail Deposits

10%

15% Salary Savings Current

30%

45%

Terms

Interpretation: 45% of the customers prefer to current retail deposits for daily business and transaction i.e. receipt and payment so that can whenever they want they can withdraw and deposits during working day, 30% of customer prefer saving retail deposits for gaining some return on their deposits, 15% prefer salary and 10%prefer terms deposits to gain some benefits after 3 to 5 years for future needs and requirements.

4. Which type of payment methods prefer most by customer?

Payment Methods

Customer preferences

RTGS / NEFT Cheques E- Banking

18 25 7

% 35 50 15

Page | 64

Payment Methods 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% RTGS/NEFT

Cheques

E-Banking

Interpretation: It is found that consumers mainly prefer cheques as means for payment then after RTGS / NEFT on request of other parties and finally E banking for purchase of products but less for any payment transaction.

5. Other than deposits and loans services which other ancillary services does customer prefers the most? Ancillary Services Public Provident Fund Locker Mutual Funds Share trading Bill Payments Insurance

Respondents ( numbers ) 18 10 4 15 1 2

Respondents (%) 35 20 7 30 3 5

Page | 65

Ancillary Services Public Provident Fund

Locker

Mutual Funds

Share trading

Bill Payments

Insurance

3% 5% 35% 30%

7%

20%

Interpretation : 35% of respondents favour public provident fund as investment as it provide a tax benefit and provide a huge lump sum amount after long maturity, 30% prefer share trading, 20% prefer locker facilities as safeguard of documents, gold and some cash,7% prefer for mutual funds, 5% for Life Insurance products and 3% for various bill payments like electricity bill, telephone and mobile bills, etc.

6. Which of the following benefits accrue to you, while using banking services? In

Benefits

%

Time Saving Easy Processing Products offered Easy Fund Transfer

40 5 30 25

20 3 15 12

Total

100

50

numbers

Page | 66

BENEFITS Benefits 25

20

15

10

5

0 Time Saving

Easy Processing

Products offered

Easy Fund transfer

Interpretation: Most of the respondents think that the major benefit from banking services is time saving facility. Because the major problem which the respondents faced is time problem so banking eases their lives and save their time by providing various services.

7. Is Branch Personnel were aware of Products and Services and responded to your queries? Parameter Very good Good Satisfactory

In numbers

% 38 10

75 20

2

5

Page | 67

Products and services SATISFACTORY

GOOD

VERY GOOD

0%

10%

20%

30%

40%

50%

60%

70%

80%

Products and services

Interpretation: 75 % respondents says that branch personnel responded to their queries and is very good, 20 % says to be good and rest 5% says satisfactory. So 75 % of respondents says that branch personnel were aware with products and services offered and so respondents were satisfied.

8. Is the branch personnel have done a “Need analysis” and “Risk assessment” before recommending any investment option?

Parameter Very good Good Satisfactory Could be better

In Numbers

% 34 11 3 2

68 22 6 4

Page | 68

Branch Personnel Could be better

4

Satisfactory

6 %

Good

22

Very good

68

0

10

20

30

40

50

60

70

80

Interpretation : 68% of the respondents says the risk assessment before recommending any investment is very good, 22% of respondents replied that it is good, 6% of respondents says that it is satisfactory and only 4% replied it could be better. So from above interpretation it says that 68% of respondents says that branch personnel does a need analysis and risk assessment before recommending any investment option, so too many respondents have positive response.

9. Is the branch personnel have been very helpful and courteous?

Parameter Very good Good Satisfactory

Numbers

% 43 5 2

85 10 5

Page | 69

Parameter 90 80 70 60 50

%

40 30 20 10 0 Very good

Good

Satisfactory

Interpretation: 85% of respondents says that branch personnel have been very helpful and courteous, 10% of respondents replied that it is good and only 5% respondents says that it is satisfactory. As 85% of respondents says that branch personnel were helpful and courteous, so too many of respondents are satisfied.

10. To what extent is you satisfied with your banks’ customer services? Banking services Highly satisfied (1) satisfied (2) Neutral (3) Dissatisfied (4) Highly dissatisfied (5) TOTAL

TOTAL NO. 25 15 5 4 1 50

Page | 70

Banking Services 30 25 20 15 10 5 0 Highly Satisfied

Satisfied

Neutral

Dissatisfied

Highly Dissatisfied

Interpretation: The most of the customers are really liked the facilities provided by banks as they strongly agree that the facilities are good for them so they like to avail the bank customer services provided by the different banks and the result shows that 50% respondents are highly satisfied with the bank customer services provided by their bank and 30% respondents are satisfied with the bank customer services provided by their bank and 7% respondents are dissatisfied with the bank customer services by their bank.

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

Page | 71

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 universalbanks 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.

What are the 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, 5percent 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 neighborhood 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. Illustratively, ensuring that all bank products and services are available, at all times, and across the entire organization is essential for today’s retail banks to generate revenue and remain competitive. Besides, there are network management challenges, Page | 72

whereby keeping this complex, distributed networks and applications operating properly in support of business objectives becomes essential. Specific challenges include ensuring that account transaction applications run efficiently between the branch offices and data centers. 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 banks’ net interest margin. Competition is intensifying, as new, nontraditional 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, Installment 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: In the last 25 years, the range of payment methods available in the market has exploded. In addition to cash, checks, and credit cards, Page | 73

consumers can now use one of an expanding array of electronic payment options that includes debit cards, prepaid cards, online bill payment, automatic bill payment, and P2P services. 4. Increasing demand for ATM access Strategies for Ensuring high Customer Satisfaction •

Set service expectations and standards of behavior- this means that managers must set clear service expectations and standards of behavior, 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 and going

FUTURE OF RETAIL BANKING How do we see the future of retail banking? What are the major attributes of the shape of things to come in this sector? First, customer service should be the be-all and end-all of retail banking. The other day a document released by the British Bankers Association, entitled UK Retail Banking Manifesto: addressing the challenges that lie ahead for the industry and its stakeholders on September 29, 2004 came to my notice. This document analysed the key policy issues relevant to the retail banking sector and highlighted the role of financial inclusion, responsible lending, access to finance, and consumer protection. It is in this context that that one is reminded of the needs to develop the standards and codes for banking.

The contribution of the Committee on Procedure & Performance Audit on Public Services (CPPAPS) (Chairman: Shri S.S. Tarapore) has been invaluable and has provided great insight. Based on the recommendation of the CPPAPS, the Annual Policy Statement for 2005-06 announced the decision to set up an independent Banking Codes & Standards Board of India Page | 74

on the model of the mechanism in the UK in order to ensure that comprehensive code of conduct for fair treatment of customers is evolved and adhered to. The codes and standards, together with the institutional mechanism to monitor them, are expected to enhance the quality of customer service, to the individual customer in particular. The codes will bring about greater transparency in the system and also tackle the issue of information asymmetry. The Board would function as an industry-wide watchdog of the banking code and ensure that the banks comply with the banking codes. The codes would establish the banking industry’s key commitments and obligations to customers on standards of practice, disclosure and principles of conduct for their banking services. The Board will monitor compliance with the Codes by the affiliated banks.. Second, sharing of information about the credit history of households is extremely important as far retail banking is concerned. Perhaps due the confidential nature of banker-customer, banks have a traditional resistance to share credit information on the client, not only with one another, but also across sectors. Globally, Credit Information Bureaus have, therefore, been set up to function as a repository of credit information - both current and historical data on existing and potential borrowers. The database maintained by these institutions can be accessed by the lending institutions. Credit Bureaus have been established not only in countries with developed financial systems but also in countries with relatively less developed financial markets, such as, Sri Lanka, Mexico, Bangladesh and the Philippines. In Indian case, the Credit Information Bureau (India) Limited (CIBIL), incorporated in 2000, aims at fulfilling the need of credit granting institutions for comprehensive credit information by collecting, collating and disseminating credit information pertaining to both commercial and consumer borrowers. At the same time banks must exercise due diligence before declaring a borrower as defaulter. Third, outsourcing has become an important issue in the recent past. With the increasing market orientation of the financial system and to cope with the competition as also to benefit from the technological innovations such as, e-banking, the banks are making increasing use of "outsourcing" as a means of both reducing costs and achieving better efficiency. While outsourcing does have various cost advantages, it has the potential to transfer risk, management and compliance to third parties who may not be regulated. A recent BIS Report on “Outsourcing in Financial Services” developed some high-level principles. A basic requirement in this context is that a regulated entity seeking to outsource activities should have in place a comprehensive policy on outsourcing including a comprehensive outsourcing risk Page | 75

management programme to address the outsourced activities and the relationship with the service provider. Application of these principles in the Indian context is under consideration. Finally, retail banking does not refer to lending only. In the whole story of retailing one should not forget the role played by retail depositors. The homemaker, the retail shop keeper, the pensioners, self-employed and those employed in unorganized sector - all need to get a place in the banks. It is in this backdrop that the Annual Policy for 2005-06 pointed out issues relating to financial exclusion and had announced that the RBI would implement policies to encourage banks which provide extensive services while disincentivising those which are not responsive to the banking needs of the community, including the underprivileged.

Furthermore, the nature, scope and cost of services need to be monitored to assess whether there is any denial, implicit or explicit, of basic banking services to the common person and banks have been urged to review their existing practices to align them with the objective of financial inclusion.

Page | 76

SWOT ANALYSIS STRENGHTS : •

It has an extensive distribution network comprising of 5100 branches.

•

The Bank has a strong retail depository base & has good number customers.

•

Bank boasts of a strong brand equity.

•

ISO 9001 certification for its depository & custody operations & for its backend processing of retail operation & direct banking operation.

•

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.

•

BANK OF INDIA is one of the largest public sector bank working 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 Advantage scheme, NRI services.

WEAKNESS : •

Some time acount opening and delivery of cheque book take comparatively more time.

•

Lack of availability of different credit products like CC Limit, Bill discounting facilities.

OPPORTUNITY : •

Branch expansion

•

Door step services

•

Greater liberalization in foreign ownership via FDI in Indian Pvt. Sector Banks. Page | 77

•

CC/ OF Facilities.

•

Infrastructure improvements & better systems for trading & settlement in the govt. securities & foreign exchange markets.

THREATS: •

The bank has started facing competition from players like SBI, ICICI Bank in the finance market itself. This reduce the profit margins in the future.

•

Some Pvt. Banks have 7 days banking.

Page | 78

SUGGESTIONS AND RECOMMENDATIONS 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 to question no. 8, larger number of branch personnel should do ‘Need Analyses’ & ‘Risk Assessment’ before recommending any investment option to customer.

•

With reference to table no.9, more branch personnel should be aware of Product and Services and responded to customer’s queries.

•

BANK OF INDIA should look into the feedback provided by customer and takes necessary action wherever required.

•

With reference to question no. 4, bank should focus on Instant FD facility &E-cheques as small 10% of customer likes this.

•

Some time the customer has to wait at the Teller Counter, the service should be improve 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 they’ll 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. Page | 79

•

The YES 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, with reference to table no.4

•

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, reference to table no. 9

•

Their should 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, with reference to table no.13

•

Communication with the customer should improve and increase so bank can easily response towards them and in result the customer would be satisfy and no question that they will recommend the YES Bank to their friends and relatives because 2% customer are no responding it in a positive manner.

Page | 80

SUMMARY OF THE PROJECT ❖ Retail Banking deals with lending money to consumers which include a wide variety of loans, including credit cards, mortgage loans and auto loans. ❖ Retail Banking refers to banking in which banking institution execute transactions directly with consumers, rather than corporations or other entities. ❖ It is generally conceived to be the provision of mass market banking services to private individuals. ❖ The aim of retail banking industry is to satisfy customers and deepen their relationships. ❖ This can be achieved by taking the benefits of every cross-selling and upselling opportunity. ❖ The availability of advanced technologies will help in boosting the cross-selling, increase customer retention and differentiate the brands in the retail banking sector. ❖ The retail banking industry is facing stiff competition and the current scenario is that of the survival of the fittest. ❖ To improve the customer services and relationship management many of the retail banks adapt information technology that has helped in integrating and consolidating banking operation. ❖ Retail banks are increasing their cross-selling and up-scaling activities for private banking clients with the intention of increasing their customer base and improve their customer relation.

❖ 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. ❖ Bank personnel also do not get involved in any aspect of running a business to which a bank grants a loan.

Page | 81

CONCLUSION- THE FUTURE GROWTH The project aims to study the retail banking operations of BANK OF INDIA. 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 nonblank 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.

BANK OF INDIA has a great opportunity to increase their market potential in the present market situation.

Page | 82

LIMITATIONS OF PROJECT ➢ As a research is based on a sample, therefore, the findings may not reveal the factual information about the research problem, though an utmost care will be taken to select a truly representative sample. ➢ There may be some bias in the responses of the respondents which cannot be ruled out fully. ➢ The sample size of only 100 was taken from the large population for the purpose of study, so there can be difference between results of sample from total population ➢ Bank of India officers were reluctant to go in to details because of their busy schedules. ➢ All the information in the bank was confidential, so we were not allowed to go some important files like NPA files. ➢ All work was on PC and we were not allowed to operate it. ➢ Only some data was provided by bank. ➢ Dependence mainly on circulars. ➢ Less of practical work.

Page | 83

BIBLIOGRAPHY Websites www.bankofindia.com www.smera.com www.smeworld.org http://economics.about.com/cs/finance/a/india_banking_2.htm

Manuals Retail banking manual - BANK OF INDIA Instructions for advances - BANK OF INDIA

Page | 84

ANNEXURE 1.Is the Branch timings (9:30 am to 2:15 pm from Monday to Saturday) are convenient? a. Very Good b. Good c. Satisfactory d. Could be better 2.Which type of retail loans products do you prefer?

a. b. c. d.

Home Loan Education Loan Loan against property Vehicle loan

3. Which type of retail deposits products do you prefer? a. Salary b. Savings c. Current d. Terms 4.Which type of payment methods prefer most by you?

a. RTGS/NEFT b. Cheques c. E-Banking 5. Other than deposits and loans services which other ancillary services do you prefer the most? a. b. c. d. e. f.

Public Provident Fund Locker Mutual Fund Share trading Bill payments Insurance

6. Which of the following benefits accrue to you, while using banking services? a. Time Saving b. Easy Processing c. Products offered Page | 85

d. Easy Fund Transfer 7.Is Branch Personnel were aware of Products and Services and responded to your queries? a. Very Good b. Good c. Satisfactory 8. Is the branch personnel have done a “Need analysis” and “Risk assessment” before recommending any investment option? a. b. c. d.

Very Good Good Satisfactory Could be better

9.Is the branch personnel have been very helpful and courteous? a. Very Good b. Good c. Satisfactory 10. To what extent is you satisfied with your banks’ customer services? a. b. c. d. e.

Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied

Page | 86