101729156 project report on ing vysya bank

8/12/2019 101729156 Project Report on ING Vysya Bank

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A PROJECT REPORT

ON

Under the guidance Of

Asst. Prof.:- Pragyan Pushpanjali

Submitted by: - Jami Amaresh


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ACKNOWLEDGEMENT

I am very much thankful to asst. Prof.Pragyan Pushpanjali(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 in practical 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.

Jami Amresh

(CUJ/1/2009/MBA/07)


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BONAFIDE CERTIFICATE

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

bonafide work of Jami Amareshwho carried out the project work under my supervision.

SIGNATURE SIGNATURE

Prof. Taposh Ghoshal Asst.Prof.-PragyanPushpanjali

Academic Head Project Guide

IMBA, IMBA,

Central University of Jharkhand Central University of Jharkhand


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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 various aspects. 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. The language has been kept

simple so that even a layman could understand. All the datas havebeen 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

Chapter: 13 STP Analysis

Chapter: 13 Financial Analysis

Bibliography


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Company Overview

ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank

Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of

Dutch origin, during Oct 2002.

The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a

team of visionaries came together to form a bank that would extend a helping hand to those

who weren't privileged enough to enjoy banking services.

It's been a long journey since then and the Bank has grown in size and stature to encompass

every area of present-day banking activity and has carved a distinct identity of being India's

Premier Private Sector Bank.

In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank

made rapid strides to reach the coveted position of being the number one private sector bank.

In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations,

the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank

Stupendous. The 75th anniversary, the Platinum Jubilee of the bank was celebrated during

2005.

The long journey of seventy-five years has had several milestones

1930 Set up in Bangalore

1948 Scheduled Bank

1985 Largest Private Sector Bank

1987 The Vysya Bank Leasing Ltd. Commenced

1988 Pioneered the concept of Co branding of Credit Cards

1990 Promoted Vysya Bank Housing Finance Ltd.

1992 Deposits cross Rs.1000 crores

1993 Number of Branches crossed 300

1996 Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem &

Jewellery Export Promotion Council for excellent performance in Export Promotion

1998 Cash Management Services, & commissioning of VSAT. Golden Peacock Award -

for the best HR Practices by Institute of Directors. Rated as Best Domestic Bank in India by

Global Finance (International Financial Journal - June 1998)


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2000 State -of - the -art Date Centre at ITPL, Bangalore. RBI clears setting up of ING

Vysya Life Insurance Company

2001 ING-Vysya commenced life insurance business.

2002 The Bank launched a range of products & services like the Vys Vyapar Plus, therange of loan schemes for traders, ATM services, Smart services, personal assistant service,

Save & Secure, an account that provides accident hospitalization and insurance cover,

Sambandh, the International Debit Card and the mi-b@nk net banking service.

2002 ING takes over the Management of the Bank from October 7th , 2002

2002 RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter of

17.12.02

2003 Introduced customer friendly products like Orange Savings, Orange Current and

Protected Home Loans

2004 Introduced Protected Home Loans - a housing loan product

2005 Introduced Solo - My Own Account for youth and Customer Service LinePhone

Banking Service

2006 Bank has networked all the branches to facilitate AAA transactions i.e. Anywhere,

Anytime & Anyhow Banking

Later years up to 2011 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, and Russia and in 60 other countries. It is

headquartered in Amsterdam, Netherlands and employs about 1, 10,000 people worldwide.


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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 marketsand 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 wasprobably established sometime during the third millennium B.C. Banks probably predated the

invention of money. There are extant records of loans 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 Bank

o Punjab national Bank

o ING Vysya Banko Union Bank of India


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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 was the 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 ofthe reform process 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 for commercial 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 are located in rural or semi-urban areas of

the country.


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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 the regional rural banks, the other public sector banks

have over 46,500 branches. 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 theprivate sector into the banking system. 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 banksoperate 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.

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 provide long-term credit for agriculture. In


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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 forAgriculture 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. In2003, Kotak Mahindra Finance Limited, a large non-bank finance company was granted a

banking license by RBI and converted itself into Kotak Mahindra Bank.

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 housing sector in recent years, the scope of theirbusiness 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 of housing loans, foreclosure of mortgages and

setting up of the Mortgage Credit Guarantee Scheme.


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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. Amongthe 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

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 Insurance Regulatory 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 forrelated 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.


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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 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 the short-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-term lending 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.


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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

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 to marketborrowing 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 the pre-reform period to 25.0% in October

1997. This meant that the

significance of the statutory liquidity ratio shifted from being a major instrument forfinancing 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 demand and timeliabilities 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. Commercialbanks 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 in order tobring their capital adequacy closer to internationally accepted standards. By the end of

fiscal 2002, aggregate recapitalisation amounted to Rs. 217.5 crore. The strongerpublic 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 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.


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6. ING VYSYA 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 aventure 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. Thebank 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 Ltd merged 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 segments in which the bank offers customized and

specialized services are:

Accounts and deposits

Short and long term loans

Private banking

NRI services

Personal 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 fulfill the 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


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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 financialstability 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

Off shore borrowing services

Trade and community finance services


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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 RETAILBANKING and WHOLESALE BANKING.

Our RETAIL BANKINGbusiness 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 Lending

Consumer lending deals with granting secured loans to individuals, partnership firms,

and companies, as well as unsecured loans to individuals for various purposes. Ourbusiness is primarily driven through 19 Asset Booking Centres spread over the

country, where consumer finance loans are disbursed.

The Bank has following consumer lending products in our portfolio.

Home Loans: In the year 2003, The Bank introduced customized home loans withbuilt in free life insurance for the full loan term and amount and a floating rate based

on market determined rate (MIBOR).

The bank Believe that compared to our competitors, this is a uniquely featured

product, which has already resulted in volumes of Rs. 77.74 crorescovering 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 of 1.5% on cashwithdrawals. The Bank do not charge any transaction fee on fuel purchased and also

enables global access to over 30 million merchant establishments 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.


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Auto loans:The Bank introduced auto loans in 2000 to provide finance to individualsand 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 is managed 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 automobilemanufacturers and are the preferred financiers to 3 automobile manufacturers, in

India.

Two Wheeler loans: Two-wheeler loans were introduced in 2001 primarily tofacilitate 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 for variouspurposes 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 Advance against DematSecurities in 2003, which has resulted in volumes of Rs. 1.88 crores, covering 58

accounts, as of September 30, 2004.

Loans for subscribing to IPOs: The loans for subscribing to IPOs came in 2003,which has resulted in volumes of Rs. 0.05 crores as of September 30, 2004.

Commercial Vehicle Loans: The Commercial Vehicle Loans was introduced in2001. 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 maximum

term of 48 months.


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(b)Consumer Liabilities

Resource 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 introduced in August2003. 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 launched in December2003. 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,

and free DDs/PO/PAP cheques up to Rs 1.5 crore per month and many other facilities.

Since December

2003, this product has secured more than 2,500 customer accounts and

mobilized over Rs 150 crores

Mpower Salary Account: Introduction of the Mpower Salary Account came inNovember 2002, which expedites the process of salary payments, facilitating both

employer and employees.

Advantage Savings: In September 2004, the Bank launched a scheme exclusivelyfor the customers of no networked 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 recurring deposits with allthe 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 depositsamounting to over Rs. 7,300 crores.

Debit Cards: The Bank have tied-up with Master Card Internationals to issue theInternational Debit Card with Maestro/Cirrus connectivity. This enables our debit

card holders to access over 9000 ATMs of Maestro/Cirrus member banks and over

70,000 merchant establishments over India.


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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, Vysya-

DP etc.

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 management team 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. Our investment products include

debt, equity, mutual funds and insurance.

The Bank Structuring for Diverse Needs:The Bank structuring services embracewills, trusts and other The Bank has established means of protecting and distributing

assets. The Bank also provide real-estate advisory services that focus on broad-basing

the clients The Bank has allocation and income streams, as the Bank provides tax and

legal planning services through specialized partners.

The Bank offers customers a choice of DELIVERY CHANNELSincluding:

physical branches,

Automated Teller Machine (ATMs),

telephone banking,

SMS

and the Internet.


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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 BANKINGis 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 Financeand 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 offers the following

products and services to our customers.

Cash Credit / Overdraft Facilities: Cash credit facilities are the most common formof working capital financing in India. Under the cash credit facility, a line of credit is

provided up to a pre-established amount based on 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 are typically 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


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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 single bank,

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 financing required by the borrower, the risk profile ofthe 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 follow

our 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-term corporate paperin 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. Commercialpapers are generally

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

a liquid investment opportunity.

Bill Discounting: Bill discounting involves the financing of short-term tradereceivables through negotiable instruments. These negotiable 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 profiles ofdealers.

Short-term loan:Short-term loans are demand loans with a maturity of three to sixmonths provided by us to corporate borrowers to meet their temporary 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 Banks reference 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 at concessionalrates 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 credits is 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.


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Letters of Credit:Letter of credit facilities are being provided to our working capitalloan 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 for the 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, aregenerally 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 each drawdown, 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 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 down any numberof times up to the committed amount of the facility. The Bank issue guarantees on

behalf of our borrowers in favour of corporations 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. The term of theseguarantees 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 two affiliate/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.


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10. ACHIEVEMENTS AND MILESTONES

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

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 onDecember 31, 1985

March 1987 Incorporation of The Vysya Bank Leasing Limited (now known as INGVysya 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 affiliation with CentralBank of India.

November 1990 Incorporation of Vysya Bank Housing Finance Limited for housingfinance 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 that our 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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12. SWOT ANALYSISi

SWOT analysis is a simple framework for generating strategic alternatives from a situationanalysis. 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 Net Banking PIN)

2. ATM pin number security

3. Co- operative Staff4. Personalized Services / Door step facilities

5. Cash access services till 5:30pm

6. Locker facility

7. ING Life Foundation (Social Responsibility)

8. ING Life Insurance

9. Experienced Management Team

10.On-spot solution for any grievances of employees

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 executives

3. Less promotional Activities/Advertising

4. Parking Inconvenience


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OPPORTUNITIES

1. Grow our consumer base

2. 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 as point 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. Survey

8. to leverage wide network of branches, that are increasingly sales and service oriented

THREAT:

1. High level of competition

2. A competitor has a new innovative product or service.

STP ANALYSIS:

SEDMENT: Enterprise and individuals who are seeking financial help and advice

TARGETGROUP: Large enterprises and rich individual investors

POSITIONING: A place which gives safety to investors money


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KEY INDICATORS OF SCHEDULE COMMERCIAL BANKS

Overall position under key business parameters as on 31stmarch 2011 is as under:-

(Rs. In Crores)

Sl.

No.

Items ING

Vysya

SBI ICICI Bench

Mark

1 Deposit

2 Credit

3 Credit(As per place of utilization +

RIDF)

4 CD Ratio (%)

5 Priority Sector Advances (PSA)

6 Share of PSA to total advances

7 Agricultural Advances8 Share of Agricultural Advances to

Total Advances (%)

9 Micro and Small Enterprises

Advances (%)

10 Share of Micro & Small

Enterprises to Total Advances

11 Advances to Weaker Sections

12 Share of Weaker Section Advances

to Total Advances (%)

13 DRI Advances14 Share of DRI Advances to Total

Advances of last March

15 Advances to Women

16 Share of Advances to Women in

Total Advances

17 Advances to Minorities (Amount)

18 Share of Advances to Minorities of

PSA (%)

19 Branch Net-Work (in no.)*

(a)Rural

(b)Semi-Urban(c)Urban(d)Total Branches


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BALANCE SHEET ANALYSIS:-

Balance sheet as at 31stmarch 2011

schedule

31 March

2011

31

March 2010

CAPITAL AND LIABILITIES

CapitalEmployees Stock OperationsOutstanding(Net)Reserves and SurplusDeposits

BorrowingsOther liabilities and provisions

1

2

3

4

5

1,209,867

18,796

25,014,163

301,942,493

41,469,113

20,485,271

1,199,665

29,875

22,079,611

258,653,007

36,713,880

20,126,365

Total 390,139,703

338,802,403

ASSETS

Cash and balance with reserve bank of

indiaBalance with banks and money at call

and short notice

Investments

Advances

Fixed assets

Other assets

6

7

8

9

10

11

21,837,810

3,376,433

110,206,653

236,021,355

5,028,353

13,669,099

23,295,871

6,974,573

104,729,191

185,071,895

4,959,331

13,771,542

Total 390,139,703

338,802,403

Contingent liabilities

Bills for collection

Significant accounting policies

Notes on accounts

12

17

18

584,086,884

39,555,957 741,337,962

32,880,705


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CS Analysis of ING Vyshya Bank as compare to other Banks

Balance Sheet

CAPITAL & LIABILITIES

ING Vyshya

bank CSA ICICI BANK CSA SBI CSA

Capital 12,09,867 0.33 55090.64 13.56 64986.04 5.31

Deposits 30,19,42,493

82.7

0 225602.11 55.54 933932.8 76.32

Borrowings 4,14,69,113

11.3

6 109554.28 26.97 119569 9.77

Other Liabilities &

Provision 2,04,85,271 5.61 15986.35 3.94 105248.4 8.6

Total 36,51,06,744 100 406233.38 100 1223736 100ASSETS

Cash & Balance with

RBI 2,18,37,810 5.60 20906.97 5.15 94395.5 7.71

Balance with

bank,Money at call 33,76,433 0.87 13183.11 3.25 28478.65 2.33

Investments 11,02,06,653

28.2

5 134685.96 33.15 295600.6 24.16

Advances 23,60,21,355

60.5

0 216365.9 53.26 756719.5 61.84

Fixed Assets 50,28,353 1.29 4744.26 1.17 4764.18 0.39Other Assets 1,36,69,099 3.50 16347.47 4.02 43777.85 3.58

Total 39,01,39,703 100 406233.67 100 1223736 100

Contingent Liabilities 58,40,86,884 883774.77 585294.5

Bill for Collection 3,95,55,957 47864.06 205092.3


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Profit and Loss Account

INGVyshya

bankCSA ICICI CSA SBI CSA

INCOME

Interest Earned 2,69,40,641 80.44 25974.05 78.51 81394.36 84.5

Other Income 65,49,570 19.56 7108.91 21.49 14935.09 15.5

Total 3,34,90,211 100 33082.96 100 96329.45 100

Expenditure

Interest expended 1,68,75,372 55.69 16957.15 60.71 48867.96 54.93

Operating expenses 1,02,60,179 33.86 8594.16 30.77 31430.88 35.33

Provision &

Contingencies31,68,170 10.45 2380.27 8.52 8660.28 9.74

Total 3,03,03,721 100 27931.58 100 88959.12 100

PROFIT

Net Profit for the

year31,86,490 49.11 5151.38 59.81 7370.35 99.99

Profit brought

forward33,02,156 50.89 3464.38 40.22 0.34 0.01

Total 64,88,646 100 8613.59 100 7370.69 100

APPROPRIATIONSTransfer to capital

reserve75,566 1.20 - - - -

Transfer to other

reserve0.00 0.26 0.003 2729.87 37.01

Transfer to statutory

reserve796622 12.65 1780.29 20.67 2488.96 33.77

Transfer to

investment reserve-1,09,952 -1.75 - - - -

Proposed Dividend 3,62,960 5.76 1814.86 21.07 2151.52 29.19

Balance carried overto balance sheet

51,74,569 82.14 5018.18 58.26 0.34 0.001

Total 62,99,765 100 8613.59 100 7370.69 100


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ING VYSYA BANK Q2 NET PROFIT UP 53% AT RS.115.4 CRORES

ING Vysya Bank announced its unaudited financial results for the quarter and half-year

ended 30

September 2011 following the approval by its Board of Directors at their meeting held in

Mumbai today.

Performance at a Glance

Q2 FY 12 v Q2 FY 11_ Net Profit up 53% to Rs. 115.4 crores

_ Net Interest Income up 19% to Rs. 303.6 crores

_ Net Interest Margin at 3.35%

_ Risk cost down 75% to Rs 17.5 crores.

_ Gross Advances up 22% to Rs. 25,289 crores

_ Deposits up 18% to Rs. 30,712 crores

_ CASA Ratio at 32.6%_ Provision cover up from 72.8% to 84.8%

_ Net NPA improves from 0.81% to 0.31% & Gross NPA improves from

2.91% to 2.02%

_ Return on Assets improves from 0.86% to 1.12%

H1 FY 12 v H1 FY 11

_ Net Profit up 45% to Rs. 209.4 crores.

_ Net Interest Income up 15% to Rs. 565.6 crores

_ Return on Assets improves from 0.84% to 1.04%.


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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 Receipts and wherecash 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 themwithout 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 register and signatureof the concerned employee obtained for taking possession of the keys.

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


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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 to time.

Clean Note Policy

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

Banks have been authorized 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


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FORGED NOTES

Counterfeiting of currency notes is an offence under Sec.489 (A) to (E) of the Indian

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 in workingcondition 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 tendered.

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 banking transactions.

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.

CASH TELLERCash Teller should receive cash from the remitter along with the Pay-in-Slip, verify

Whether the prescribed Pay-in-Slip is submitted and that the same along with counter

foil 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 with date. Thestamping 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 counterfoil and 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 to Profit 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.


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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 / Authorized Officer should affix his signature with 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 Nationalized Bank at the earliest.

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

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 theSecond 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 File and

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 of cash 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 a separate report for any discrepancy or other deviations that requires theattention of the controlling authorities.

CASH REMITTANCES

Carrying of cash from one branch to another branch / another bank or wherever prior

approval is there, carrying of cash by the branch staff from the branch to a customers

business place/office and vice versa, is known as Cash Remittance.

Generally, the need for cash remittance arises when:


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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 called as Receiving

Branch/Bank.

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

Regional Head OPS & IT shall identify one of the branches for the 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 the cashier 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 track down 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 the cashier

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.


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The procedures to be followed are as follows:

Step 1

1. The customer is required to complete the Account Opening form (AOF) and the Customer

Information Form (CIF) wherein details on the customers background 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 2

1. 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 the account holders.

Step 3

1. 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/Authorized 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 4

1. The initial deposit should be collected from the customer either in the form of cash orcheque.

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 tocustomers address, conducting enquiries over telephone or any other appropriate 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 Proprietor

The 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.


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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 ofdues of the partnership firm.

A partner cannot endorse a cheque favoring the firm in his own name for credit to his personal

account.

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 of the 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 relationship with 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.

Guidelines1. CIF is a common form for all types of customers and the same has to be obtained for

all types of customers who prefer to have banking relationship 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 are properlyfilled in by the customer.

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

4. In case of joint accounts, CIF has to be obtained for all the joint account holders.5. In addition to the CIF for the firm, in case of Partnership firms, CIF of all partners

whether authorized 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 accounts other thanpartnership accounts, CIF has to be obtained for all persons who are authorized to

operate the account.

7. Ensure that the customer enters the data in capital letters only and black ink is used tofill in the details.

8. Once the duly completed CIF is received, it should be checked for completeness andsignature of the prospective customer.

9. Branch should ensure to make enquiries and complete the portion of the CIF that aremeant 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 due diligence andenquiry should sign confirming the same.

13.COPS shall categorize the account based on the available information and activate the

account.14.A unique identification number is allotted to each customer in the Profile System.15.CIF is for the customer. The CIF number is common to each customer for various

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 access the customer

information by using the CIF number.

Details available in CIF

The new Customer Information File (CIF) is a numbered document, which is also barcoded. This is done for easy retrieval at COPS and for tracking purposes 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

If the customer is an individual, the first section with the sub heading Customer Details

Individual needs to be completed and the second portion Customer Details Non

Individuals needs to be struck off.

Photograph of the Customer to be affixed and the Customer has to sign across the

photograph and the form.

Customer has to sign a second time in the box provided for signature just below


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Photograph.

If the Customer does not wish to be disturbed by the bank for product promotions, please

ensure that the customer selects the Do not Call option.

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

Mandatory for Individual Borrowal Accounts All the individual borrowers need to provide

the information required in this section. The GRID ID needs to be mentioned for allNucleus application customers.

Declaration by the Customer All customers should sign the declaration for having

provided the correct data.

Under section 9 For Office Use only (Branch use) this information should be completed

based on the personal interaction with the customer.

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

Discrepancy Handling:The discrepancies if any will be hosted on Intranet for the branches to take rectification steps

and resubmit to RDIO within 7 days. In case, branches do not attend to such discrepancies inCRFs within 7 days, RDIO will not affect 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 lacks to 2 Cr. And above 2 Cr. Sanction, it was Emerging

Corporate. My learning was constrained to BLT.

SOD - BLT (Secured Over-draft Bank Loan and Trade) provides necessary Working

Capital and Term loans / Composite loans to the Small and Medium Enterprises engaged

in Trading, Small Businesses and Service activities with simplified procedures / processes

/ appraisal and at 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 at least 3 yearsto consider the exposure. However, splitting of accounts among family

members or starting of new units in same line of business to avail loans underthe 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


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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

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.


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Limits are to be considered in tune with the relative level of activity and transactions and not

on the basis of collaterals.

NATURE OF FACILITIESFund 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 Sector Undertakings /

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 exposureshould 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.

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-businessrelated investments, loans & advances and miscellaneous items


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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.

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

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

4. Insurance of the properties offered as security.

5. Stocks to be insured

6. Branch should get the securities valued from the Banks approved valuer and also obtain

legal opinion and ascertain their genuineness. Branches should satisfy about their

marketability.

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

8. Interest on the limits to be collected on monthly basis and in case of Term Loans recovery

through EMIs.

9. AODs to be obtained once in 2 years (first AOD to be within 2 years from the date of

disbursal).

10. Compulsory registration of partnership firm is waived for loans sanctioned up to 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.


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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 promoters wherever

applicable.

SECURITY

Primary:Hypothecation of the Stocks / Book Debts / Assets financed

Collateral:

Equitable Mortgage

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

125% of the limit sanctioned is covered.

Realizable [highly liquid] securities

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

considered), Life Insurance Po

101729156 project report on ing vysya bank

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