Project Report on ING Vysya Bank (3)

8/2/2019 Project Report on ING Vysya Bank (3)

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A PROJECT REPORT

ON

Under the guidance Of

Prof. Pragna Kaul

Submitted by

Nikita Arora

(5310900399)

in partial fulfillment of the requirement

for the award of the degree

Of

MBA

IN

Banking & Finance

April 2011


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ACKNOWLEDGEMENT

I am very much thankful to Prof. Jogen Tripathi (PROJECT GUIDE) for giving

us opportunity and her guidance help us through out preparing this report. She

has also provided us a valuable suggestions and excellence guidance about this

project which proved very helpful to us to utilize my theoretical knowledge inpractical field.

At last I am also thankful to my friends, to all known and unknown individuals

who have given me their constructive advise, educative suggestion,

encouragement, co-operation and motivation to prepare this report.

Nikita Arora (5310900399)


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BONAFIDE CERTIFICATE

Certified that this project report titled Project report on ING Vysya Bank Ltd.

is the bonafide work of Nikita Arora who carried out the project work

under my supervision.

SIGNATURE SIGNATURE

Prof. Pragna Kaul Prof. Jogen Tripathi

Academic Head Project Guide

ISBM, ISBM,

Nr. Swastik Cross Roads, Nr. Swastik Cross Rd,

Navrangpura, Navrangpura,

Ahmedabad. Ahmedabad.


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Executive Summary

Project has been a great learning experience for me; at the same time

it gave me enough scope to implement my analytical ability. This

project as a whole can be divided into different parts:

Each part gives an insight about the Banking Sector and its variousaspects. It is purely based on whatever I learned at ING Vysya Bank

Ltd. One can have a brief knowledge about Banking Industry and all

its basics through the project. Other than that the real servings come

when one moves ahead.

All the topics have been covered in a very systematic way. Thelanguage has been kept simple so that even a layman could

understand. All the datas have been well analyzed well.

Hope the research findings and conclusions will be of use.


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INDEX

SR. No. Subject Page No.

Chapter : 1 Overview 6

Chapter : 2 Banking 6

Chapter : 3 Its History 6

Chapter : 4 Major Players 7

Chapter : 5 Banking In India 7

Chapter : 6 ING Vysya Bank Ltd. 15

Chapter : 7 Profile 17

Chapter : 8 Business Strategy 25

Chapter : 9 Technology Used in

ING Vysya Bank Ltd.

26

Chapter : 10 Achievements &

Milestones

27

Chapter : 11 My Learning 28

Chapter : 12 SWOT Analysis 46

Bibliograpyhy


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1. Overview

ING is a diversified financial services Group that provides a range of banking

and financial services to customers, including

retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking, and treasury products and services.

The company operates in, India, the UK, Canada, Russia and in 60 other

countries. It is headquartered in Amsterdam, Netherlands and employs about

1,10,000 people worldwide.

2. BANKING

A bank is a financial institution whose primary activity is to act as a payment

agent for customers and to borrow and lend money. Banks are important players

in financial markets and offer financial services such as investment funds. In

some countries such as GERMANY, banks are the primary owners of industrial

corporations. While in other countries such as the UNITED STATES banks are

prohibited from owning non-financial companies.

3. HISTORY OF BANKING

The first banks The Bankre probably the religious temples of the ancient world.

It was probably established sometime during the third millennium B.C. Banks

probably predated the invention of money. There are extant records of loans


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from the 18th century BC in Babylon that The Bankre made by temple priests or

monks to merchants.

4. MAJOR PLAYERS IN INDIA

0 State Bank of India

o HDFC Bank

o ICICI Bank

o HSBC Bank

o IDBI Bank

o Citi Bank

o Axis Banko Punjab national Bank

o ING Vysya Bank

o Union Bank of India

5. INDIAN BANKING INDUSTRY

BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The first

banks The Bankre THE GENERAL BANK OF INDIA, which started in 1786,

and BANK OF HINDUSTAN, both of which are now defunct. The oldest bank

in existence in India is the STATE BANK OF INDIA, which originated in the

BANK OF CALCUTTA in June 1806. The first fully Indian owned bank wasthe ALLAHABAD BANK, established in 1865.

Until the early 1990s, the Indian financial system was strictly controlled.

Interest rates were administered, formal and informal parameters governed asset

allocation, and strict controls limited entry into and expansion within the

financial sector. The Governments economic reform program, which began in

1991, encompassed the financial sector. The first phase of the reform process


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began with the implementation of the recommendations of the Committee on

the Financial System, the Narasimham Committee I. The second phase of the

reform process began in 1999.

Reserve Bank of India

RBI, established in 1935, is the central regulatory and supervisory authority for

the Indian financial system. RBI manages Indias money supply and foreign

exchange and also serves as a bank for the Government and for Indias

commercial banks.

RBI issues guidelines on various areas including exposure standards, income

recognition, asset classification, provisioning for non-performing and

restructured assets, investment valuation and capital adequacy standards forcommercial banks, long-term lending institutions and non-bank finance

companies. RBI requires these institutions to furnish information relating to

their businesses to RBI on a regular basis.

Commercial Banks

Commercial banks in India have traditionally focused only on meeting the

short-term financial needs of industry, trade and agriculture. Commercial banks

can be classified into two categories namely Scheduled Commercial Banks and

Non-Scheduled Commercial Banks (Local Area Banks). Scheduled Commercial

Banks are banks that are listed in the schedule to the Reserve Bank of India Act,

1934, and may further be classified as public sector banks, private sector banks,

correspondent banks, foreign banks and regional rural banks.

Scheduled commercial banks have a presence throughout India, with

approximately 70% of bank branches belonging to the public sector banks arelocated in rural or semi-urban areas of the country.

Public Sector Banks

Public sector banks constitute the largest category in the Indian banking system.

They include the State Bank of India and its 7 associate banks, 19 nationalised

banks and 196 regional rural banks. As of June 30, 2004, apart from theregional rural banks, the other public sector banks have over 46,500 branches.


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Public Sector Banks collectively account for approximately 73.2% of the

outstanding gross bank credit and 77.9% of the aggregate deposits of the

scheduled commercial banks. The large network of public sector bank branches

enables them to fund themselves out of low cost deposits. The State Bank of

India is the largest public sector bank in India.

Private Sector Banks

After the first phase of bank nationalization was completed in 1969, public

sector banks made up the largest portion of Indian banking. In July 1993, as part

of the banking reform process and as a measure to induce competition in the

banking sector, RBI permitted entry by the private sector into the bankingsystem. This resulted in the introduction of nine private sector banks. These

banks are collectively known as the new private sector banks. There are ten

new private sector banks at present. In addition, 20 private sector banks

existing prior to July 1993 are currently operating as on June 2004.

Foreign banks

As of June 30, 2004, there were 32 foreign banks with 215 branches operating

in India. As part of the liberalization process, RBI has permitted foreign banks

to operate more freely, subject to requirements largely similar to those imposed

on domestic banks. Foreign banks operate in India through branches of their

parent banks. In fiscal 2003, the Government announced that foreign banks

would be permitted to incorporate subsidiaries in India. Subsidiaries of foreign

banks will have to adhere to all banking regulations, including priority sector

lending norms, applicable to domestic banks.

The primary activity of most foreign banks in India has been in the corporate

segment. However, in recent years, some of the larger foreign banks have

started to make consumer financing a larger part of their portfolios based on the

growth opportunities in this area in India. These banks offer products such as

automobile, finance, home loans, credit cards and household consumer finance.

The government has also announced that foreign banks having branch presence

in India will be permitted subject to certain conditions to acquire up to 74.0%

shareholding in private sector banks in India.


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Cooperative Banks

Cooperative banks cater to the financing needs of agriculture, small industry

and self-employed businessmen in urban and semi-urban areas of India. The

state land development banks and the primary land development banks providelong-term credit for agriculture. In the light of liquidity and insolvency

problems experienced by some cooperative banks in fiscal 2001, RBI undertook

several interim measures, pending formal legislative changes, including

measures related to lending against shares, borrowings in the call market and

term deposits placed with other urban cooperative banks. Presently, RBI is

responsible for supervision and regulation of urban co-operative societies, and

the National Bank for Agriculture and Rural Development (NABARD) for State

Co-operative Banks and District Central Co-operative Banks.

Non-Bank Finance Companies

There are over 13,671 non-bank finance companies in India as at end-June

2004, mostly in the private sector. All non-bank finance companies are required

to register with RBI in terms of the Reserve Bank of India (Amendment) Act,

1997. The nonbank finance companies, on the basis of their principal activities

are broadly classified into four categories namely Equipment Leasing, Hire

Purchase , Loan and Investment Companies and deposits and business activities

of Residuary Non-Banking Companies (RNBCs). The Reserve Bank has put in

place a set of directions to regulate the activities of NBFCs under its

jurisdiction. The directions are aimed at controlling the deposit acceptance

activity of NBFCs. The NBFCs which accept public deposits are subject to

strict supervision and capital adequacy requirements of RBI. Out of 13,671

NBFCs registered with RBI as at end-June 2004, 584 NBFCs accept Public

Deposits. The scope and activities of non-bank finance companies have grown

significantly over the years. The primary activities of the non-bank finance

companies are consumer credit including automobile finance, home finance and

consumer durable products finance, wholesale finance products such as bill

discounting for small and medium-sized companies, and fee-based services such

as investment banking and underwriting. In 2003, Kotak Mahindra Finance

Limited, a large non-bank finance company was granted a banking license by

RBI and converted itself into Kotak Mahindra Bank.


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Housing Finance Companies

Housing finance companies form a distinct sub-group of the non-bank finance

companies and are regulated by National Housing Bank (NHB). As a result of

the various incentives given by the Government for investing in the housingsector in recent years, the scope of their business has grown substantially. Until

recently, Housing Development Finance Corporation Limited was the premier

institution providing housing finance in India. In recent years, several other

players including public and private sector banks have entered the housing

finance industry. The National Housing Bank and the Housing and Urban

Development Corporation Limited are the two Government-controlled financial

institutions created to improve the availability of housing finance in India. The

National Housing Bank Act provides for refinancing and securitization ofhousing loans, foreclosure of mortgages and setting up of the Mortgage Credit

Guarantee Scheme.

Specialized Financial Institutions

In addition to the long-term lending institutions, there are various specialized

financial institutions that cater to the specific needs of different sectors. They

include the National Bank for Agricultural and Rural Development, Export

Import Bank of India, Small Industries Development Bank of India, Risk

Capital and Technology Finance Corporation Limited, Tourism Finance

Corporation of India Limited, National Housing Bank, Power Finance

Corporation Limited and the Infrastructure Development Finance Corporation

Limited.

Insurance Companies

Currently, there are 27 insurance companies in India, of which 13 are life

insurance companies, 13 are general insurance companies and one is a

reinsurance company. Of the 13 life insurance companies, 12 are in the private

sector and one is in the public sector. Among the general insurance companies,

eight are in the private sector and five are in the public sector. The reinsurance

company, General Insurance Corporation of India, is in the public sector. Life

Insurance Corporation of India, General Insurance Corporation of India and


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public sector general insurance companies also provide long-term financial

assistance to the industrial sector.

In December 1999, the Insurance Regulatory and Development Authority Act

1999 was passed. The insurance sector in India is regulated by the InsuranceRegulatory and Development Authority, which was established to protect the

interests of holders of insurance policies, to regulate promote and ensure orderly

growth of the insurance industry and for related matters. The IRDA Act opened

up the Indian insurance sector for foreign and private investors. The Act allows

foreign equity participation in new insurance companies of up to 26.0%. A new

insurance company is required to have a minimum paid up equity capital of Rs.

1.0 crore to carry out the business of life insurance or general insurance or Rs.

2.0 crore to carry out exclusively the business of reinsurance.

Mutual Funds

From 1963 to 1987, Unit Trust of India was the only mutual fund operating in

India. It was set up in 1963 at the initiative of the Government and RBI. From

1987 onwards; several other public sector mutual funds entered this sector.

These mutual funds were established by public sector banks, the Life Insurance

Corporation of India and General Insurance Corporation of India. The mutual

funds industry was opened up to the private sector in 1993. The industry is

regulated by the SEBI (Mutual Fund) Regulation 1996.

Impact Of Liberalization On The Indian Financial Sector

Until 1991, the financial sector in India was heavily controlled and commercial

banks and long-term lending institutions, the two dominant financial

intermediaries, had mutually exclusive roles and objectives and operated in a

largely stable environment, with little or no competition. Long-term lending

institutions were focused on the achievement of the Governments various

socio-economic objectives, including balanced industrial growth and

employment creation, especially in areas requiring development. Long-term

lending institutions were extended access to long-term funds at subsidized rates

through loans and equity from the Government and from funds guaranteed by


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the Government originating from commercial banks in India and foreign

currency resources originating from multilateral and bilateral agencies.

The focus of the commercial banks was primarily to mobilize household

savings through demand and time deposits and to use these deposits to meet theshort-term financial needs of borrowers in industry, trade and agriculture. In

addition, the commercial banks provided a range of banking services to

individuals and business entities. Since 1991, various financial sector reforms

have transformed the operating environment of the banks and long-term lending

institutions. In particular, the deregulation of interest rates, emergence of a

liberalized domestic capital market, and entry of new private sector banks,

along with the broadening of long-term lending institutions product portfolios,

have progressively intensified the competition between banks and long-termlending institutions. RBI has permitted the transformation of long term lending

institutions into banks subject to compliance with the prudential norms

applicable to banks.

Banking Sector Reform

Most large banks in India were nationalized in 1969 and thereafter were subject

to a high degree of control until reform began in 1991. In addition to controlling

interest rates and entry into the banking sector, these regulations also channelled

lending into priority sectors. Banks were required to fund the public sector

through the mandatory acquisition of low interest-bearing Government

securities or statutory liquidity ratio bonds to fulfil statutory liquidity

requirements. As a result, bank profitability was low, non-performing assets

were comparatively high, capital adequacy was diminished, and operational

flexibility was hindered.

Committee on the Financial System (Narasimham Committee I)

The Committee on the Financial System (The Narasimham Committee I) was

set up in August 1991 to recommend measures for reforming the financial

sector. Many of the recommendations made by the committee, which addressed

organisational


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issues, accounting practices and operating procedures, were implemented by the

Government. The major recommendations that were implemented included the

following:

With fiscal stabilization and the Government increasingly resorting tomarket borrowing to raise resources, the statutory liquidity ratio or the

proportion of a banks net demand and time liabilities that were required

to be invested in Government securities was reduced from 38.5% in thepre-reform period to 25.0% in October 1997. This meant that the

significance of the statutory liquidity ratio shifted from being a majorinstrument for financing the public sector in the pre-reform era to

becoming a prudential requirement;

similarly, the cash reserve ratio or the proportion of a banks net demandand time liabilities that were required to be deposited with RBI was

reduced from 15.0% in the pre-reform period to 4.5% currently;

special tribunals were created to resolve bad debt problems; Most of the restrictions on interest rates for deposits were removed.

Commercial banks were allowed to set their own level of interest rates for

all deposits except savings bank deposits;

Substantial capital infusion to several state-owned banks was approved inorder to bring their capital adequacy closer to internationally accepted

standards. By the end of fiscal 2002, aggregate recapitalisation amounted

to Rs. 217.5 crore. The stronger public sector banks were given

permission to issue equity to further increase capital; and

banks were granted the freedom to open or close branches.Committee on Banking Sector Reform (Narasimham Committee II)

The second Committee on Banking Sector Reform (Narasimham Committee II)

submitted its report in April 1998. The major recommendations of the


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committee were in respect of capital adequacy requirements, asset classification

and provisioning, risk management and merger policies. RBI accepted and

began implementing many of these recommendations in October 1998.

6. ING Bank

The ING Vysya Bank Ltd is one of the well known financial organizations in

India. It is applicable for both short term and long term financial solutions. It is

mainly an entity or a venture which has been formed with the global financial

giant ING of Netherlands. The ING Vysya Bank Ltd is a trusted name in the

banking and commercial sector of the country.

The ING Vysya Bank Ltd was established in the month of October in the year

2002. The bank came into existence when the Vysya Bank Ltd went into a

venture with global financial giant ING. Vysya Bank Ltd was one of the first

private sector banks in the country and was set up in the year 1930. The main

objective of setting up the bank was to provide financial support to the various

sectors of the economy. In the year 1948, the Vysya Bank was listed among the

Scheduled Banks.

In order to increase its profit and add to its operations, the Vysya Bank Ltdmerged with ING. The headquarters of the bank is located in the city of

Bangalore. Among the total number of branches, there are 468 regular branches,

28 satellite offices, 13 extension counters. The number of ATMs is around 357

which are expected to increase within the next few years. The deposit of the

bank amounts to around Rs. 25,865 crore while the net worth is around Rs

14260.00 millions. The profits of the bank amount to around Rs. 242.2 crore.

With 74 years of experience in the Indian banking segment and with ING

Groups active participation in managing the affairs of the Bank, the Bank is

uniquely positioned as an Indian made Foreign Bank.

Being a well known name in the domain of financial and banking services in the

country, the ING Vysya Bank Ltd has come up with a number of financial

solutions and services in a number of areas. Some of the well known segmentsin which the bank offers customized and specialized services are:

Accounts and deposits Short and long term loans Private banking


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NRI servicesPersonal Banking: The personal banking department of ING Vysya Bank Ltd

offers high quality services and solutions to cater to the financial needs and

preferences. The high end solutions make them a one stop organization to fulfillthe needs and requirements of the customers. Some of the well known services

offered in the segment of personal banking are:

Mutual Funds Tax Savings Bonds Savings Account NRI Services Credit & Debit Card Internet Banking Phone Banking Mobile Banking Self Banking Term deposits Demat accounting Wealth management Debit and credit card accounting Payment services

Wealth Management services: The wealth management services of the ING

Vysya Bank Ltd offers the best services in order to take care of the needs and

preferences of the consumers in various wealth management sectors. The secure

services offered by the bank also minimize the risk processes and also offer the

best of returns. In addition to these, ING Vysya Bank Ltd also offers business

banking facilities and services of high standards. The services are meant to take

care of the business needs and also provide high degree of financial stability to

the various corporate organizations and business sectors. Some of the well

known services that are offered include:

Long and term loans in the agro based sector SME- Power Business account and loans Financial market analysis Market trading Asset liability management services Financial market sales Cash management services Corporate and investment banking services


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Off shore borrowing services Trade and community finance services

7. PROFILE

As of March 31, 2004, The Bank was the seventh largest private sector bank in

India in terms of assets with total assets of Rs. 13198 crore.

Our business has been organized into RETAIL BANKING and

WHOLESALE BANKING.

Our RETAIL BANKING business comprises four business units namely

1. Consumer Banking,2. Small and Medium Enterprises (SME)3. Agriculture and Social Banking Unit (ASBU) and4. Private Banking.

1. Consumer Banking

The Consumer Banking business consists of Consumer Lending and Consumer

Liabilities, which offers to retail consumer both asset based products such as

home loans, personal loans, credit cards and liability products, such as savings

accounts, salary accounts and term deposits. The Bank have focused our efforts,

resources and talent to ensure that The Bank capitalize fully on the opportunities

available to us.

(a)Consumer LendingConsumer lending deals with granting secured loans to individuals,

partnership firms, and companies, as well as unsecured loans toindividuals for various purposes. Our business is primarily driven through

19 Asset Booking Centres spread over the country, where consumer

finance loans are disbursed.

The Bank have following consumer lending products in our portfolio.

Home Loans: In the year 2003, The Bank introduced customized homeloans with built in free life insurance for the full loan term and amountand a floating rate based on market determined rate (MIBOR). The Bank


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believe that compared to our competitors, this is a uniquely featured

product, which has already resulted in volumes of Rs. 77.74 crores

covering 884 accounts, as of September 30, 2004. Additionally, the Bank

is planning to add further features and flexibility to meet the demands of

the customer.

Credit Cards: Our credit card charges a relatively low nominal rate of1.5% on cash withdrawals. The Bank do not charge any transaction fee on

fuel purchased and also enables global access to over 30 million merchantestablishments worldwide. The card is issued in partnership with

Citibank, which allows the bank and its customers to benefit from the

Citibanks experience in processing credit cards.

Auto loans: The Bank introduced auto loans in 2000 to provide financeto individuals and corporates for purchase of new and used cars. The

average tenor of auto loan is between three to five years. Auto loans are

secured by a charge on the purchased automobile. This business ismanaged by our distribution system supported with Credit and Risk

Management Teams, which has been instrumental in achieving targeted

volumes.The Bank have strong relationships with certain automobile

manufacturers and are the preferred financiers to 3 automobile

manufacturers, in India.

Two Wheeler loans: Two-wheeler loans were introduced in 2001primarily to facilitate purchase of two-wheelers for individual and

corporate customers. Two wheeler loans are secured by a charge on the

moveable asset. The average tenure of loan is between one to three years.Our business has recorded growth ever since its inception owing to our

distribution system, customer oriented schemes and fast turnaround time.

Personal Loans: These are unsecured loans provided to customers forvarious purposes such as higher education, medical expenses, social

events and holidays. Introduced in 2002, this product has witnessed

growth owing to our customer programs and distribution team.

Advances against Demat securities: The Bank introduced Advanceagainst Demat Securities in 2003, which has resulted in volumes of Rs.

1.88 crores, covering 58 accounts, as of September 30, 2004.


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Loans for subscribing to IPOs: The loans for subscribing to IPOs camein 2003, which has resulted in volumes of Rs. 0.05 crores as of September

30, 2004.

Commercial Vehicle Loans: The Commercial Vehicle Loans wasintroduced in 2001. The Bank extend loans for purchase of new and used

Commercial Vehicles - MAVs (Multi Axle Vehicles), HCVs (Heavy

Commercial Vehicles), MCVs (Medium Commercial Vehicles) and

LCVs (Light Commercial Vehicles), which include Buses, Trucks, Fully

built vehicles & Tippers. The loan is generally granted for a maximumterm of 48 months.

(b)Consumer LiabilitiesResource mobilization in Retail Banking is a core activity of our bank. Our

Bank has a customer base, of nearly one million with over Rs.10, 000 crores of

deposits, with a mix of Savings, Current and Term deposits.

The Bank have the following consumer liability products in our portfolio

Orange Savings Account: The Orange Savings Account was introducedin August 2003. It has secured more than 125,000 new customers. The

key features of Orange Savings Account are free personal accident

insurance cover including medical expenses for three years, free

unlimited ATM transactions in over 9,000 MasterCard networked ATMs

in India and overseas, free membership to Smartserv (Personal assistance

service) and other facilities like Internet Banking, Tele banking,

Anywhere Banking and other privileges.

Orange Current Account: The Orange Current Account was launchedin December 2003. Some of the distinct features of the account are free

personal accident insurance cover, free cash in transit insurance, free

ATM transactions in MasterCard network, free DDs/PO/PAP cheques

upto Rs 1.5 crore per month and many other facilities. Since December2003, this product has secured more than 2,500 customer accounts and

mobilized over Rs 150 crores.


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Mpower Salary Account: Introduction of the Mpower Salary Accountcame in November 2002, which expedites the process of salary

payments, facilitating both employer and employees.

Advantage Savings: In September 2004, the Bank launched a schemeexclusively for the customers of nonnetworked branches with accident

Insurance as the key feature. The scheme envisages coverage of savings

bank account holders under personal accident insurance to a maximum of

Rs.0.03 crores.

Term Deposits: The Bank offers fixed, reinvestment and recurringdeposits with all the facilities for easy transferability, different modes of

interest payments, advance against deposit, premature withdrawal facility,acceptance in units and nomination facility. A sizeable portion of the

portfolio is skewed towards reinvestment deposits amounting to over Rs.7,300 crores.

Debit Cards: The Bank have tied-up with Master Card Internationals toissue the International Debit Card with Maestro/Cirrus connectivity. Thisenables our debit card holders to access over 9000 ATMs of

Maestro/Cirrus member banks and over 70,000 merchant establishmentsover India.

2. Small and Medium Enterprises (SME)

Traditionally our focus has been on the Small and Medium Enterprises business,

which has accounted for a sizeable proportion of our total advances. This

segment focuses on the needs of all business enterprises in trading of

goods/services with annual sales turnover up to Rs. 75 crores for both domestic

& export credit requirements. The Bank have a large number of relationships

which is a core strength enabling us to cross sell other products like

Savings/Current/Term deposits, Insurance and Mutual Fund investments, Credit

Card, Vys-DP etc.


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3. Agriculture & Social Banking Unit (ASBU)

ASBU deals with all banking business in rural branches and business related to

Agricultural activities and lending to government sponsored schemes in other

non-rural branches.

4. Private Banking

In India, the erstwhile ING Bank was one among the firsts to offer private

banking services. After ING Group invested in the Bank, the private banking

arm of ING Bank was integrated into ING Vysya Bank. The client managementteam is supported by a product development team, and a research team headed

by the Chief Investment Officer.

The following key products and services are in the domain of our private

banking:

Investment Solutions: The Bank has portfolio management services arenondiscretionary in nature and include construction/ restructuring of the

portfolios, monitoring them and executing clients requests. Ourinvestment products include debt, equity, mutual funds and insurance.

The Bank Structuring for Diverse Needs: The Bank structuringservices embrace wills, trusts and other The Bank has established means

of protecting and distributing assets. The Bank also provide real-estateadvisory services that focus on broad- basing the clients The Bank hasallocation and income streams, as the Bank provides tax and legal

planning services through specialized partners.

The Bank offers customers a choice ofDELIVERY CHANNELS including:

physical branches, Automated Teller Machine (ATMs),


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telephone banking, SMS and the Internet.

In recent years, the Bank have expanded our physical delivery channels,

including bank branches and ATMs, to currently cover a total of 866 outlets in

298 locations throughout India.

The WHOLESALE BANKING is organized into three groups:

Client Coverage, Products and Services and Financial Markets.

While the Client Coverage group is responsible for managing relationships with

identified client sub-groups, the Products and Services and Financial Markets

groups are responsible for product and service delivery to the entire Wholesale

Banking client base.

Wholesale Banking Products and Services

The Bank provides a range of commercial banking products and services to

Indias leading corporations and growth-oriented middle market businesses. Our

key commercial banking products and services to corporate customers include

(a) Credit Products and Structured Finance; (b) Cash Management; (c) Trade

and Commodity Finance; (d) Investment Banking, Local Debt Syndication and

Securitisations, (e) Financial Markets and (f) Corporate Deposits.

(a) Credit Products and Structured Finance

Credit Products of the Bank include products like Working Capital Finance,

Term Finance and Structured Finance. Our corporate loan portfolio primarily

consists of term loans for project and corporate finance, and working capital

credit facilities.

(i) Working Capital Finance: Under working capital finance, The Bank offersthe following products and services to our customers.


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Cash Credit / Overdraft Facilities: Cash credit facilities are the mostcommon form of working capital financing in India. Under the cash credit

facility, a line of credit is provided up to a pre-established amount basedon the borrowers creditability and projected level of inventories,receivables and cash deficits. Up to this pre-established amount,

disbursements are made based on the actual level of inventories and

receivables. Cash credit / Overdraft facilities are running account

facilities where the borrower may remit and draw funds freely. These aretypically given to companies in the manufacturing, trading and service

sectors on a floating interest rate basis. Interest is earned on this facility

on a monthly basis, based on the daily outstanding amounts. The facility

is generally given for a period of up to 12 months, with a review after that

period. Our cash credit facility is generally fully secured with full

recourse to the borrower. In most cases, the Bank has a first charge on the

borrowers current assets, which normally are inventory and receivables.Additionally, in some cases, the Bank may take further security of a first

or second lien on fixed assets including real estate, a pledge of financial

assets like marketable securities, corporate guarantees and personal

guarantees. Cash credit facilities are extended to borrower by a singlebank, multiple banks or a consortium of banks with a lead bank. The

nature of the arrangement is usually agreed between the bank and the

borrowers and depends upon the amount of working capital financingrequired by the borrower, the risk profile of the borrower and the amount

of loan exposure a single bank can take on the borrower. Regardless of

the arrangement, the Bank undertake our own due-diligence and followour credit risk policy to determine whether the Bank should lend money

to the borrower and, if so, the amount to be lent to the borrower and the

rate of interest to be charged.

Commercial paper: A commercial paper is an unsecured, short-termcorporate paper in the nature of a usance promissory note with fixed

maturities and is negotiable by endorsement and delivery. Under current

guidelines, commercial paper can be issued for a minimum tenor of 15

days and a maximum tenor of 365 days. Commercial papers are generally

issued by highly rated borrower and since they are tradeable, they offer us

a liquid investment opportunity.

Bill Discounting: Bill discounting involves the financing of short-termtrade receivables through negotiable instruments. These negotiable


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instruments can then be discounted with other banks if required,

providing us with liquidity. In addition to traditional bill discounting, the

Bank also provides customised solutions to our corporate customers

having large dealer networks. Loans are approved to dealers in the form

of working capital lines of credit, based on analysis of credit risk profilesof dealers.

Short-term loan: Short-term loans are demand loans with a maturity ofthree to six months provided by us to corporate borrowers to meet theirtemporary cash flow mismatches or to avail of interest rate arbitrage.

They can be denominated 43 in either rupee or foreign currency and can

be disbursed as fixed rate loans or floating rate loans linked to our Banksreference rate called IVRR or money market benchmark rates. Short term

loans are usually provided to highly rated corporates and may be

unsecured.

Export Credit: The RBI requires banks to make loans to exporters atconcessional rates of interest. The Bank provides export credit for pre-

shipment and post-shipment requirements of exporter borrowers in rupees

and foreign currencies. The RBI provides export credit refinancing for an

eligible portion of total outstanding export loans at the bank rate

prevailing from time to time. The interest income earned on export creditsis supplemented through fees and commissions earned from these

exporter customers from other fee-based products and services availed by

them from us, such as foreign exchange products.

Letters of Credit: Letter of credit facilities are being provided to ourworking capital loan customers both for meeting their working capital

needs as the Bank for capital equipment purchases. For working capital

purposes, the Bank issue letters of credits on behalf of our borrowers forthe sourcing of their raw materials and stock inputs. Lines of credit for

letters of credit are approved as part of a working capital loan package

provided to borrowers. These facilities, like cash credit facilities, are

generally given for a period up to 12 months, with review after that

period. Typically, the line is drawn down on a revolving basis over the

term of the facility, resulting in a fee payable to us at the time of eachdrawdown, based on the amount and term of the drawdown. The Bank

issue letters of credit on behalf of borrowers both for domestic and

foreign purchases. Borrowers pay a fee to us based on the amount drawn


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down from the facility and the term of the facility. This facility is

generally secured by the same collateral available for cash credit

facilities. The Bank may also take collateral in the form of cash deposits,

in the range of 5.0% to 20.0% of the drawdown amount, from our

borrowers before each drawdown of the facility.

Guarantees: Guarantees are being provided, which can be drawn downany number of times up to the committed amount of the facility. The

Bank issue guarantees on behalf of our borrowers in favour ofcorporations and government authorities. Guarantees are generally issued

for the purpose of bid bonds, guaranteeing the performance of our

borrowers under a contract as security for advance payments made to our

borrowers by project authorities and for deferral of and exemption from

the payment of import duties granted to our borrowers by the government

against fulfilment of certain export obligations by our borrowers. Theterm of these guarantees is generally up to 36 months though in specific

cases, the term could be higher. This facility is generally secured by

collateral similar to that of letters of credit. In addition, as a part of our

project financing activity, The Bank issue guarantees to foreign lenders,

export credit agencies and domestic lenders on behalf of our clients.

The Bank has one wholly owned subsidiary, being IVFSL and twoaffiliate/associate companies being IIML and IVL. IIML is an Asset

Management Company which manages the ING Vysya Mutual Fund and IVL is

a life insurance company which provides a range of individual and group life

insurance solutions, pension products, employee benefits; IVFSL distributes life

insurance policies of IVL, mutual funds from ING Vysya Mutual Fund and

third party investment products apart from distributing our own products.

8. BUSINESS STRATEGY

The objective is to build a recognizable position as a premier banking and other

financial services products provider to retail and wholesale customers.

The key elements of our business strategy are to:


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Fully leverage the synergies (including support and commitment)available from ING

Focus on growth opportunities in the Retail banking business; Strengthen Wholesale Banking operations; Expand retail distribution capabilities; and Use of technology for competitive advantage

9. TECHNOLOGY USED IN ING Vysya Bank

The Bank seeks to be at the forefront of technology usage in the financial

services sector. Information technology is a strategic tool for our businessoperations to gain competitive advantage and to improve overall productivity

and efficiency of the organization. All of our technology initiatives are aimed at

enhancing value, offering customer convenience and improved service while

optimizing costs.

The Bank expects to continue with our strategy of leveraging technology to

achieve a significant competitive advantage. This will be done by ING Vysya

Bank leveraging on the systems and processes that have already been developed

by ING worldwide.

These cover many functions in the bank, including risk management (credit,

market, operational), financial markets, MIS, etc.

The key objectives behind our information technology strategy include:

building a cost-efficient distribution network in India to accelerate thedevelopment of our retail distribution capability

enhancing cross selling and client segmentation.

improving credit and market risk management. Introduction of customer centric products providing added value services to Tier 1 corporate clients by also

leveraging on the global product and service delivery capabilities of ING

capitalising on the banks legacy in the SME business.

10. ACHIEVEMENTS AND MILESTONES

Details of key milestones achieved by us so far are as follows:


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Year Key Events, Milestones and Achievements

March 1930 Incorporation of The Vysya Bank Limited, Bangalore February 1948 Became a scheduled bank in terms of the RBI Act September 1985 Achieved the no. one position among private sector

banks as on December 31, 1985 March 1987 Incorporation of The Vysya Bank Leasing Limited (now

known as ING Vysya Financial Services Limited) for leasing and

merchant banking activities along with Karur Vysya Bank Limited

January 1988 Introduced co-branded credit cards by way of an affiliationwith Central Bank of India.

November 1990 Incorporation of Vysya Bank Housing Finance Limitedfor housing finance activities

March 1991 Total deposits in the Bank crossed Rs.1000 crores.Financial Markets / Treasury

Treasury is the Banks interface to all Financial Markets. The Bank has a well -

equipped Integrated Dealing Room at its Corporate Office in Bangalore. The

latest technology, information systems and risk management systems have been

deployed, manned by experienced market professionals.

The Bank has an experienced team of money market dealers who ensure thatour Bank is compliant with the Cash Reserve Ratio (currently at 5%) and

Statutory Liquidity Ratio (currently at 25%) stipulations of the RBI. Funds

inflows and outflows of the Bank are carefully monitored to ensure that funds

are available to meet the Banks requirements at all times.


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11. MY LEARNING

1.) CASH MANAGEMENT PROCESS

INTRODUCTION

1. Handling of cash is one of the primary functions of a banker and Cash on

Hand is the most liquid asset of the bank.

2. The transactions where cash is received into the bank are called Receiptsand where cash goes out of the bank are called Payments.

Joint Custody

Joint custody means having control over access to any item/asset by two or

more individuals through a system which prevents independent access to the

item /asset by any one of them without the knowledge of the other or by

anyone else.

In banks, this will be ensured by having double locking arrangement to the iron

safe/strong room/almirah and other places where the items/assets are stored

which does not allow access to the item/asset by operating any one of the

keys singly.

The keys of the double locking arrangement will be in the joint custody of two

employees designated for the purpose. These two employees holding joint

custody are called Joint Custodians.

In a branch, Cash, all security items, gold ornaments pledged to the bank,articles under safe custody, loan documents, title deeds of properties

mortgaged to the bank etc., shall always be under joint custody only.

ATM RELATED KEYS

1. All ATMs will have the following keys:

a. Hood Keys or Bonnet Keys

b. Keys of the safe containing Cash Cassettes and Cash Deposit Covers

c. Number code for ATM safe

2. The details of all the keys should be recorded in the Key movement registerand signature of the concerned employee obtained for taking possession ofthe keys.


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Cash Movement within the Branch

At branches cash will be taken out of the strong room / safe at the beginning of

the day, for the days operation.At the end of the day, the entire cash of the branch shall have to be amalgamated

at one point and tallied to arrive at the days closing cash balance

Cash Officer shall prepare slips for the following entries for the actual cash

taken out (including the Shroff's Cash) from the cash safe and also key-in in

the system under his User ID.

a. Debit - Teller Out (TO)

b. Credit - Cash Out (CO)

Cashier shall append his signature on reverse of the debit slip while receiving

the cash from the Cash Officer. The slip shall be in the custody of the Cash

Officer.

Cashier shall prepare corresponding slips as advised hereunder for the actual

amount of cash handed over to him (including the Shroff's Cash) and also key-in in the system under his User ID

a. Debit - Teller In (TI)b. Credit - Cash In (CI)

General Guidelines on Cash

Cash being the most liquid of assets has to be handled carefully.

Cashier must be ready with the following to commence the business at the

scheduled time:

a. Cash Received and Cash Paid rubber stamps.b. Stamp pad with sufficient ink.

c. Shroffs Scroll.d. List of missing tokens.

e. Other stationery items necessary to discharge their duties effectively.

f. Any other matter, prescribed by the appropriate authorities from time totime.

Clean Note Policy

The currency note being made of paper shall wear and tear with usage.


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Banks have been authorised by Reserve Bank of India to accept such notes and

provide exchange of issuable notes to customers and get reimbursement from

Reserve Bank of India.

CLEAN NOTE POLICY OF RBI

Currency notes should not be stapled (fresh / re-issuable / non-issuable).

Nothing should be written on the currency notes especially in the watermark

window.

Branches should not accept soiled/defective notes for the purpose of issuing

Demand Drafts, Pay Orders etc., or while accepting Inter Bank Deposits

Cashier should not accept mutilated/defective notes from Customers for

immediate credit of their accounts.

CUPRO-NICKEL & ALUMINUM COINS

Government has withdrawn old coins of value up to Re.1/- made from Cupro-

Nickel alloy and Aluminum

FORGED NOTES

Counterfeiting of currency notes is an offence under Sec.489 (A) to (E) of theIndian Penal Code and therefore, these cases are to be investigated by the

State Police Authorities.

Branches must equip themselves with Ultra Violet Lamps which must be inworking condition at all times and made use of for detection of forged notes.

When a note which is suspected to be forged / is found to be forged, the amount

of the same should not be credited to the account of the party nor the forged

note be returned to the tenderer.

The forged notes shall be forwarded to the local police for investigation by

filing FIR

CASH RECEIPTS

Customers remit cash for credit of their account or for any approved bankingtransactions. Non-customers also remit cash for certain specific banking

transactions.

Any person remitting cash into the bank must fill in a form called Pay-in-Slip.

A member of clerical staff entrusted with the duties of cash is called Cash Teller.


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CASH TELLER

Cash Teller should receive cash from the remitter alongwith the Pay-in-Slip,

verify whether the prescribed Pay-in-Slip is submitted and that the same along

with counterfoil are properly and correctly filled up.

He should verify whether the currency/coins remitted are legal tender.

In respect of transactions where PAN is to be quoted he has to ensure that the

same is quoted at the space provided or at a prominent place on the pay-in-

slip. He should verify the PAN on the pay-in-slip with the PAN recorded at

the CIF level and ensure that both are the same.

The cash received shall be counted and verified in presence of the remitter

denomination wise with that written in the Pay-in-Slip/voucher.Cash counting machines wherever provided are meant for second

verification/counting of cash but not for the first counting by the Cash Teller.

The Pay-in-Slip should be stamped twice with the Cash Received stamp withdate. The stamping of one seal should be done in such a way that a major

portion of it on the counterfoil and the remaining on the main challan.Another seal should appear in full on the Pay-in-Slip. It should be ensured

that the seals affixed do not render the contents on the Pay-in-Slip illegible.

Cash Teller should sign in full both on the Pay-in-Slip/Voucher and counterfoiland on copies of the same.

In case of transactions like issue of DDs where the amount of Pay-in-Slip

includes commission to be credited to Profit and Loss Account, the credit toProfit and Loss shall be entered in an inner column drawn for the purpose

and only the amount for which the DD is to be issued should be shown in the

receipts column.

SUBMISSION OF ANNUAL INFORMATION RETURN (FORM No. 65)

1. The Income Tax Department has introduced a new Annual Information

Return (Form No. 65) to be submitted by banks containing information in

respect of the following transactions entertained by them during a financial

year w.e.f. 01.04.2004.

2. Cash deposits aggregating to Rs.10.00 lakhs or more in a financial year inany savings bank account.

3. Payment made by any person against bills raised in respect of credit card

aggregating to Rs. 2.00 lakhs or more in a financial year.

4. Certain other types of transactions


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CASH PAYMENTS

The paying Cash Teller shall have sufficient cash for payments before the

commencement of business everyday .

The loose cash received is to be properly segregated denomination wise andkept in separate bins in the table draw.

Non-issuables should not be included either in loose cash or in packets and

should always be kept separate.

Cash Teller should make payment to the payee only on the vouchers received by

him with the proper authorization.

The Cash Teller/Cash Teller receives for payment the cheques / withdrawals

directly from the customers. He should scrutinize the cheques/withdrawals

and pass the cheques/withdrawals by following the normal procedure for

payment

On being satisfied, the Cash Teller should take out the amount of the

voucher/cheque etc., from the cash, write the denominations on the back ofthe voucher, recount, and handover to the presenter.

On making payment, the Cash Teller should affix the Cash Paid stamp on thevoucher and subscribe signature on the voucher/cheque etc.

CLOSING OF CASH

After close of business hours, the cashier should count and sort the cashavailable with him into issuables and non-issuables.

Each Section of 100 pieces should be covered with a denomination slip as

specified hereunder:

a. Form 191 for issuables

b. Form 191A for non-issuables

While doing so:

a. The Section should not be stapled.

b. The Section should be bound only with rubber bands or twine thread.

c. Stickers or gummed labels should not be used.

d. A combination of vertical and horizontal banding with banks stickersshould be used.

e. Cashier should secure the Sections with twine thread vertically on the

left side of the Section and affix his signature with date on the

denomination slip.

The Joint Custodian Officer / Authorised Officer should affix his signature with


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date on the denomination slips after ensuring the correctness of the Sections

as to the number of notes.

All currency notes that cannot be issued to public are to be remitted to our

Currency Chest/local branch of RBI/SBI or any other Nationalised Bank at theearliest.

After tallied pass TO & CO entries under his ID.

After the entries are passed, he should verify his Teller Proof to ensure that the

cash as per the same is appearing as 0.After ensuring this, he has to handover the physical cash to the Main Cashier

and obtain his signature on reverse of the debit slip (TO).

Main Cashier on verification of the physical cash received and the Teller Proof

of the Second Cashier should pass TI, CI entries under his ID. He should

prepare respective debit and credit slips.

Hard copy of the Cash Count should be signed by both the Joint Custodians and

filed in the file maintained for the purpose.Cash should be carried to the Cash Safe under the supervision of the Joint

Custodians.

Cash (including box containing Shroffs Cash) along with the Cash Count Fileand Double Lock Register should be kept inside the Cash Safe and the safe is

to be locked by both the Joint Custodians.At the beginning of the next day, Joint Custodian Officer should verify to ensure

that the Cash Balance as per the previous days General Ledger

(2601010001) and Cash Count are tallying.

SURPRISE VERIFICATION OF CASH by RO

Once a quarter the RH OPS & IT shall arrange for surprise verification ofcash by designating an officer from some other on behalf of RO nearby

branch to verify the cash and submit the report. The report shall be the Cash

count report printed from the system and duly signed by the Joint custodians

and countersigned by the visiting officer certifying the correctness of

physical cash with that in the report. The visiting officer shall also submit aseparate report for any discrepancy or other deviations that requires the

attention of the controlling authorities.

CASH REMITTANCES

Carrying of cash from one branch to another branch / another bank or whereverprior approval is there, carrying of cash by the branch staff from the branch


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to a customers business place/office and vice versa, is known as CashRemittance.

Generally, the need for cash remittance arises when:

a. A branch is having cash in excess of its normal day to day

requirements and beyond the Cash Retention Limit fixed for the

branch

b. A branch is in need of cash

c. A customer requests for the same as per the previous arrangement

d. It is a security threat to maintain huge cash balances at the branch

The branch intending to dispose surplus cash / supplying the cash is called as

Remitting Branch and the branch or other bank receiving the cash is calledas Receiving Branch/Bank.

In centres where more than one branch of our bank is functioning, the

controlling Regional HeadOPS & IT shall identify one of the branches forthe purpose of cash maintenance called Cash Pooling Centre (Branch). All

other branches shall normally either remit or receive cash only from the Cash

Pooling Centre (Branch)

BAIT OR DECOY MONEY

Branches should keep a certain sum of money of used, old and issuables notes

(but not soiled) of higher denomination both in the cash safe and with thecashier in the drawer of the cash counter during counter hours. The

distinctive numbers of these notes should be noted down separately on a

sheet of paper in duplicate, duly signed by the Cashier, Cash Officer and

Branch Head. One copy of it will be with the Cash Officer and the other with

the Branch Head.

This money should not be used in the regular course so that in case of hold-up /

dacoity / robbery / theft, the stolen money includes this money also.

The serial numbers of these Currency Notes should be mentioned in the report

to be submitted to the Police whereby they will be in a position to trackdown the culprits who try to put this money into circulation.

This bait money should be changed once in three months.

This money should not be kept in envelope or displayed prominently or

conspicuously. It should be kept as normal issuing cash lying with thecashier


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2.) CLIENT AND CIF

Standard Operative Procedures (SOP) for Know Your Customer (KYC)

norms

DOCUMENTATION

The key requirements under documentation are obtaining a duly completed

account opening form, customer information form, standard documents for

individual/non-individual accounts and necessary supporting documents for

Proof of Identity, Proof of Address and Signature Proof.

The procedures to be followed are as follows:

Step 11. The customer is required to complete the Account Opening form (AOF) and

the Customer Information Form (CIF) wherein details on the customersbackground and facilities opted by the customer are recorded. All fields in

the AOF and CIF are mandatory and should be completed in all respects.

Step 21. The details furnished in the AOF and CIF has to be supported by the Proof of

Identity (POI), Proof of Address (POA) and Signature Proofs (SP) of theaccount holders.

Step 31. The customers photographs should be affixed on the AOF and CIF. The

customer should sign across his photograph whereby a part of the signature

is on the photograph and a part on the AOF / CIF.

2. Branches should obtain latest photographs of the depositors / all account

holders at the time of opening of new accounts under all categories of

deposits, including term deposits.3. The Branch Head/Authorised Officer should attest the photograph under his

official seal/branch round seal near the place where the same is affixed, duly

mentioning his specimen signature number.

Step 41. The initial deposit should be collected from the customer either in the form

of cash or cheque.


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PAN Verification:

The PAN number provided by the customer has to be checked from the Income

Tax ,the website for correctness and authenticity by the branch sourcing the

account.

CUSTOMER DUE DILIGENCE

On satisfactory completion of the documentation, the SM /DE of the branch

should perform due diligence on the customer .

The due diligence may be performed in the form of a personal interview, visit to

customers address, conducting enquiries over telephone or any otherappropriate method to verify the background of the customer and

UBO/representatives.

SOLE PROPRIETARY CONCERNS

A sole proprietorship is an unincorporated business that is owned by one

individual.

The person owning the business is called the Proprietor / Sole ProprietorThe liabilities of the business are also the personal liability of the owner.

In case the firm has not obtained PAN, the PAN of the Sole Proprietor must be

indicated in the relevant columns in CIF.

PARTENERSHIP FIRMS

Partnership is the result of an agreement between persons and its partners

represent the firm. All partners are jointly and severally liable for the dues

of the firm and the liability of each partner is unlimited. The personal

assets of partners can be utilized / attached for recovery of dues of thepartnership firm.

A partner cannot endorse a cheque favouring the firm in his own name for

credit to his personal account.


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LIMITED COMPANIES

The Company is separate from its members and shareholders. The existence

of a company is not affected by the death, insolvency, lunacy etc. of its

members or shareholders.

Precautions to be taken:

Cash withdrawals should be allowed against bearer cheque drawn in favour

of Ourselves and the authorized signatory should attest the signature ofthe company representative on the back of the cheque to receive cash on

behalf of the company. In case of huge cash withdrawals, branch officials

should ascertain the reason and satisfy themselves of the reason.

Cash should not be paid against cheques drawn in favour of the Company.CIF of the company and also directors and authorized signatories should be

obtained for opening of account in Profile.

INTRODUCTION

1. Customer Information Form (CIF) is a document that provides the details

of the prospective customer who is entering into a banking relationshipwith the bank.

2. Each CIF shall have distinct bar code number that shall be Customer

identity number for all banking relationship of the prospective customer.3. Bar code is only for a/c processing and does not relate to customer identity

number for banking relationship.

Guidelines

1. CIF is a common form for all types of customers and the same has to beobtained for all types of customers who prefer to have bankingrelationship with the bank either for a liability product or an asset

product.

2. It should be ensured that all relevant data for the customer as required areproperly filled in by the customer.

3. CIF is the primary document that provides customer information to thebank and the documents required is obtained for the specific customer.

4. In case of joint accounts, CIF has to be obtained for all the joint accountholders.

5. In addition to the CIF for the firm, in case of Partnership firms, CIF of allpartners whether authorised to operate or not should be obtained.


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6. In addition to the CIF for the firm, in case of non- individual accountsother than partnership accounts, CIF has to be obtained for all persons

who are authorised to operate the account.

7. Ensure that the customer enters the data in capital letters only and blackink is used to fill in the details.

8. Once the duly completed CIF is received, it should be checked forcompleteness and signature of the prospective customer.

9. Branch should ensure to make enquiries and complete the portion of theCIF that are meant to completed by the branch.

10. The branch should call for any additional details required from the

customer and provide proper assessment of customers standing.

11.Branch should ensure to conduct due diligence and confirm the same.

12.Once the due diligence is completed the officials conducting the duediligence and enquiry should sign confirming the same.

13.COPS shall categorise the account based on the available information andactivate the account.

14.An unique identification number is allotted to each customer in theProfile System.

15.CIF is for the customer. The CIF number is common to each customer forvarious accounts in his name either singly or jointly with another person.Hence, any number of accounts for the same customer can be linked to

the CIF and there is no necessary for obtaining CIF from the customer for

opening subsequent accounts once the relationship is established.16.In Profile system, the customer information is held as a separate file in

the system, which is utilized by the Branches for opening accounts of

different types for the same customer at any of the Branches.17. Opening of a CIF is a prerequisite for opening a customer account in the

Profile System.

Customer identification

In Profile system, customer is identified by the CIF number generated by the

system. This number is unique across the bank and any branch can accessthe customer information by using the CIF number.

Details available in CIF

The new Customer Information File (CIF) is a numbered document, which isalso bar coded. This is done for easy retrieval at COPS and for trackingpurposes only.

The new Customer Information File is to be used for all products in the Bank,including loan products except Consumer finance loans booked in Lend

sphere application. The new CIF has been bar-coded and numbered


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If the customer is an individual, the first section with the sub headingCustomer Details Individual needs to be completed and the second

portion Customer Details Non Individuals needs to be struck off. Where the Customer is not an individual, The second section with the sub

heading Customer Details Non Individuals to be completed and the firstsection Customer Details Individual must be struck off.

Photograph of the Customer to be affixed and the Customer has to sign acrossthe photograph and the form.

Customer has to sign a second time in the box provided for signature justbelow Photograph.

If the Customer does not wish to be disturbed by the bank for productpromotions, please ensure that the customer selects the Do not Call option.

In the address field, for NRIs, one address provided must be that of theforeign address.

Mandatory for Individual Borrowal Accounts All the individual borrowersneed to provide the information required in this section. The GRID ID needsto be mentioned for all Nucleus application customers.

Declaration by the Customer All customers should sign the declaration forhaving provided the correct data.

Under section 9 For Office Use only (Branch use) this information should becompleted based on the personal interaction with the customer.

Under section 10 For Back Office use only COPS / CAPU will completethis section.

Discrepancy Handling:

The discrepancies if any, will be hosted on Intranet for the branches to takerectification steps and resubmit to RDIO within 7 days. In case, branches do not

attend to such discrepancies in CRFs within 7 days, RDIO will not effect the

changes. Branches have to submit a fresh CRF.

3.) Loans and Advances

Business Banking is the core activity of any bank. Here, at ING the Business

Banking was further bifurcated in two divisions 1.) BLT and 2.) Emerging

Corporate. The bifurcation was on the basis of amount of loan granted to the

borrowers. The BLT division had a sanction limit from 20 lacs to 2 Cr. And

above 2 Cr. Sanction, it was Emerging Corporate. My learning wasconstrained to BLT.

SOD - BLT (Secured Over-draft Bank Loan and Trade) providesnecessary Working Capital and Term loans / Composite loans to the Small

and Medium Enterprises engaged in Trading, Small Businesses and Serviceactivities with simplified procedures / processes / appraisal and at


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concessional pricing. This product does not cover manufacturing activities

including SSI units. The maximum exposure under this product is capped at

INR 200 lakhs per borrower.

The key factors considered for the credit decision under this product will be

a. Track RecordPromoter should have background experience of atleast 3 years to consider the exposure. However, splitting of

accounts among family members or starting of new units in same

line of business to avail loans under the scheme is not permissible.

b. Acceptable level of trade activity and its consistency,

c. Market reputation of the borrower,

d. Borrowers stake in the business,

e. Banking transactions in the past,

f. Adequate securities for the proposed exposure

The main objective of the product is to enable the Bank to build a qualitative

asset book and provide the customer finance with attractive rate of interest

and timely finance with minimum difficulty.

Acceptable age group

The age of the individuals / proprietors / partners / directors should not be

below 21 years and above 65 years. In case of partnerships / companies, the

loan can be considered if any one of the main partners / directors is above 21

years or below 65 years.

Due Diligence

1. The due diligence of the new clients should be conducted to establish the

genuineness of customers background, business, identity etc. by collecting

a. CIBIL report on the proprietor, partner, director,

b. PAN copy of partner / firm / company


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c. ITR of firm / company

d. Service tax registration certificate of firm / company if applicable

e. Sales tax / VAT registration certificate

f. VAT return copies / assessment orders

g. KYC of the third party where third party property is mortgaged

Purpose of the Loan

1. The purpose of the loan should be strictly for business purposes for working

capital or acquiring assets and not to be utilized for unproductive /speculative purposes.

2. The facilities are to be directly made available to the business unit and not to

the proprietor / partners / directors for the purpose of investing elsewhere.

3. As such, facilities sanctioned should be reflected in the Balance Sheet of the

borrowing entity.

4. Under no circumstances, personal loans of any kind should be considered

under this scheme.

5. While following BLT norms scrupulously, the normal credit prudence has to

be exercised while considering the limits besides ensuring that the capital in

the business and the limits approved are utilized for approved business

purpose only.

Limits are to be considered in tune with the relative level of activity and

transactions and not on the basis of collaterals.


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NATURE OF FACILITIES

Fund Based Limits

1. Term Loans

2. Composite Loans covering both Working Capital as well as Term Loan.

Existing Overdraft Accounts may also be considered for conversion as Term

Loans

3. Cheque purchase / Bill purchase limits

Non Fund Limits

1. Bank Guarantees favoring Govt. / Quasi Govt. bodies, Public SectorUndertakings / reputed Public Limited Companies who supply goods to our

borrowers

2. Performance as well as Financial Guarantees are permitted.

3. Guarantees are to be issued in approved BG formats only.

4. Maximum period of BG is 2 years including the claim period.

5. Inland Letter of Credit (DA-90 days / DP) facility can be sanctioned within

the overall limit, subject to 20% margin.

6. Solvency Certificates to the Contractors who have availed credit facilities

under BLT to the extent of 100% net worth as per the latest financial

statements can be issued by following the extant guidelines. Issuing such

certificates, however does not add to the credit exposure.

QUANTUM OF LOAN

For Secured Overdrafts, the exposure should be lower of the following

[except for Gold & Jewellery traders]:

1. 20% of Gross Projected Sales other than Commission Agents [or]

2. 3 times of the promoters Net Owned Funds in the business.


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3. For computation of Net Owned Funds (NOF), eligible Quasi Capital

component deployed in the business on a long term basis can be included.

4. NOF = TNW + Subordinated debt [USL of promoters] Non-business

related investments, loans & advances and miscellaneous items

5. Out of promoters Net owned funds, at least 35% should be by way of TNW.

Direct enquiries should also be made with the suppliers of the equipments /

machineries / materials regarding the costs of various inputs, to ensure their

correctness.

(2) Other Issues:

1. Borrower should deal exclusively with our Bank, as their SOLE BANKERS,and route their transactions through us. However, in exceptional cases,

sanctioning authority may permit to maintain current accounts with other

Banks.

3. Borrower should have necessary licenses on hand to run the business.

4. Stocks and Book Debts to be hypothecated to the Bank.

5. Insurance of the properties offered as security.

6. Stocks to be insured

7. Branch should get the securities valued from the Banks approved valuer andalso obtain legal opinion and ascertain their genuineness. Branches should

satisfy about their marketability.

8. In case of take over accounts branch should ensure that the account has no

overdues and the operations in the account are satisfactory and is a standard

account. Branch should obtain P&C opinion from the existing banker before

releasing the limits. In case where The Bank are not able to obtain P&C

opinion, the sanctioning authority could waive the same.

9. Interest on the limits to be collected on monthly basis and in case of Term

Loans recovery through EMIs.


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11. AODs to be obtained once in 2 years (first AOD to be within 2 years from

the date of disbursal).

12. Compulsory registration of partnership firm is waived for loans sanctioned

upto INR 25 lakhs backed by collateral securities of not less than 125%,subject to other sanction conditions being complied with.

(4) Other papers required from the customers:

1. Copy of the latest Partnership Deed / Memorandum of Asso. and Articles of

Association.

2. Smaller Units to submit their financial statements / projections duly signed by

the promoters

3. Certified copies Accounts and Projected Financials in respect of business

units

4. Form No.479/480 Assets and Liabilities statements of the Promoters and

Guarantors.

5. Form No.311 for the Properties offered as security.

6. Other Banks sanction copies in case of take over accounts.

7. Latest Available Income Tax / Sales Tax Returns of the unit and promoterswherever applicable.

SECURITY

Primary:

Hypothecation of the Stocks / Book Debts / Assets financedCollateral:

Equitable Mortgage

1. Equitable Mortgage of the Immovable Landed Properties, (other thanAgriculturalProperties), situated in Metro / Urban / Semi Urban areas, in such a way

that

125% of the limit sanctioned is covered.


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Realizable [highly liquid] securities

1. If easily realizable [highly liquid] securities like Deposits of our bank, NSCs which have come out of the lock-in-period (Paid up Value +Accrued Interest only should be considered), Life Insurance Policies

(Surrender Value) and Government Securities are offered as collateral,

then the collateral cover could be 100% of the credit exposure. These

securities are to be charged to the bank as per the prescribed

documentation procedures.

GUARANTORS/GUARANTEES:

1. Personal Guarantee of all the promoters viz., Partners / Directors / Members,etc.

2. Personal Guarantee of all the Property Owners taken as security as per norms

of the Bank.

The clients have to exclusively bank with us. However, permitted to maintain

account with other banks for the reasons such as suppliers need, IVBL nothaving branch at some centers, term loans have been availed and PDCs must

have been issued, credit card sales, traders with huge cash receipts

(especially small denomination currency) may be strain on the Branch etc. Inview of the above, sanctioning authority may permit to maintain current

accounts with other Banks.

Application Cum Process Note and Score Card are to be used as per the

prescribed formats designed exclusively for this product. While the same canbe used for the limits up to INR 200 lakhs, for proposals above INR 100

lakhs, the Financial Spreads i.e. Basic data and Common size / Summary,

Financial ratios have to be filled, analysed and enclosed to the regular BLT

appraisal note in place of financial performance in the enclosed Appraisal

Note.

In case of takeover of existing facilities from other bank, the repayment track

record has to be verified by collecting the statement of account for a

minimum period of six months.


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12. SWOT ANALYSISi

SWOT analysis is a simple framework for generating strategic alternatives from

a situation analysis. The SWOT analysis is useful when a very limited amount

of time is available to address a complex strategic situation.

The SWOT analysis classifies the internal aspects of the company as strengths

or the weaknesses and the external situational factors as opportunities or threats.

Strengths can serve as a foundation for building a competitive advantage, and

the weaknesses may hinder it. By understanding these four aspects of its

situation, a firm can better leverage its strengths, correct its The weaknesses,

capitalize on golden opportunities, and deter potentially devastating threats.

SWOT helps a company to set itself for better and for worse. SWOTs are a

means by which a company can better understand what it does very well and

where its shortcomings are.

STRENGTHS

1. Instant Pre-generated Kit (includes Debit card, cheque book and NetBanking PIN)

2. ATM pin number security3. Co- operative Staff4. Personalized Services / Door step facilities5. Cash access services till 5:30pm6. Locker facility7. ING Life Foundation (Social Responsibility)8. ING Life Insurance9. Experienced Management Team10.On-spot solution for any grievances of employees


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WEAKNESS

1. Branch is in residential area and hence not-so-easy access to corporate,whereas the same is turned into an opportunity by providing the door step

services to the corporate like check pick up/cash pick up and dedicated

relationship managers.

2. More trained sales executives3. Less promotional Activities/Advertising4. Parking Inconvenience

OPPORTUNITIES

1. Grow our consumer base2. Offer home loans and other consumer asset products to make it a

complete product offering.

3. Acquisition of accounts of existing employees of our competitors (same aspoint 1)

4. To come up with any USP product.5. Designating (Teller counter, Customer Care .)6. The weekend Training in terms of analysis (causes of unclosed calls) and

future plans.

7. Survey8. to leverage wide network of branches, that are increasingly sales and

service oriented

THREAT

1. High level of competition2. A competitor has a new innovative product or service


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BIBLIOGRAPHY:-

Websites:

www.wikipedia.com www.ingvysyabank.com

Special Thanks to :

Mr. Gagandeep Ahuja Mr. Jithesh Martis(Cluster Head) (HR Manager)(ING Vysya Bank Ltd.) (ING Vysya Bank Ltd.)

Mr. Vijay Ramsinghani(Branch Head)(ING Vysya Bank Ltd.)
http://www.wikipedia.com/http://www.ingvysyabank.com/http://www.ingvysyabank.com/http://www.wikipedia.com/

Documents

Project Report on ING Vysya Bank (3)