chapter3 bank operations

7/29/2019 Chapter3 Bank Operations

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OPERATIONS OF THE BANK: Generally the bank carries itsoperations relating to various

fields. The various accounting practices, investment policies and procedures, audit practices and

maintenance of various financial statements can be explained under four main heads.

These are the four main areas in which the whole business of Mahesh Bank is structured it

includes:

Personal Banking

Open a Saving Account No Frills SB Account Money Transfer Facility Deposits Safe Deposit Lockers

Business Banking

Current Account Credit Facilities (Loans)

RTGS Foreign Exchange Facility

Deposits

Deposit Schemes Interest Rates on Deposits NRE Interest Rates

Loans

Loan Schemes Interest Rates on Loans Fair practice in lendings
http://www.apmaheshbank.com/savingsaccount.phphttp://www.apmaheshbank.com/savingsaccount.phphttp://www.apmaheshbank.com/no-frills-sb-account.phphttp://www.apmaheshbank.com/no-frills-sb-account.phphttp://www.apmaheshbank.com/money-transfer-facility.phphttp://www.apmaheshbank.com/money-transfer-facility.phphttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/safe-deposit-lockers.phphttp://www.apmaheshbank.com/safe-deposit-lockers.phphttp://www.apmaheshbank.com/currentaccount.phphttp://www.apmaheshbank.com/currentaccount.phphttp://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/rtgs-facility.phphttp://www.apmaheshbank.com/rtgs-facility.phphttp://www.apmaheshbank.com/forex.phphttp://www.apmaheshbank.com/forex.phphttp://www.apmaheshbank.com/depositscheme.phphttp://www.apmaheshbank.com/depositscheme.phphttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/deposits.php#nrehttp://www.apmaheshbank.com/deposits.php#nrehttp://www.apmaheshbank.com/loanscheme.phphttp://www.apmaheshbank.com/loanscheme.phphttp://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/http://www.apmaheshbank.com/http://www.apmaheshbank.com/http://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/loanscheme.phphttp://www.apmaheshbank.com/deposits.php#nrehttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/depositscheme.phphttp://www.apmaheshbank.com/forex.phphttp://www.apmaheshbank.com/rtgs-facility.phphttp://www.apmaheshbank.com/loans.phphttp://www.apmaheshbank.com/currentaccount.phphttp://www.apmaheshbank.com/safe-deposit-lockers.phphttp://www.apmaheshbank.com/deposits.phphttp://www.apmaheshbank.com/money-transfer-facility.phphttp://www.apmaheshbank.com/no-frills-sb-account.phphttp://www.apmaheshbank.com/savingsaccount.php


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But the Cash management is all about how well the cash inflows and cash outflows are managed.

And the Inflows would be the various deposits and investments with banks.

Outflows would be the various types of loans granted by banks.

1.Inflows with the bank: It is amount which are deposited with the bank. The various forms of

deposits and investments with bank would be:

a. Deposit Schemesb. Interest Rates on Depositsc. NRE Interest Rates

a. Deposit schemes:Mahesh Bank offers different deposit schemes with lucrative Interest Rates.

Mahesh Multiplier Deposit Scheme (MMD): A Scheme with interest on interest(compounded at quarterly rests). A wise investment scheme with multiplied benefits and

with higher returns.

Fixed Deposits:Deposits are accepted ranging from 30 days to 10 years and the interestis paid at regular intervals (monthly/quarterly/half yearly) at an attractive rate of interest.

Mahesh Lakhpati Yojana:Under this scheme, you can deposit every month a specifiedamount for a specified period in order to receive a minimum of Rs. 1.00 lakh on the date

of maturity. The following table provides the details of amounts to be deposited every

month, interest rates, maturity period under the two categories i.e., general and senior

citizen.
http://www.apmaheshbank.com/depositscheme.php?expanddiv=mmdhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=fixedhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=lakhpatihttp://www.apmaheshbank.com/depositscheme.php?expanddiv=lakhpatihttp://www.apmaheshbank.com/depositscheme.php?expanddiv=fixedhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mmd


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PERIOD GENERAL SENIOR CITIZENS

In Months Interest Rate % Deposit every month (Rs.) Maturity Value Rs.

Months Int.rate(%) D/ M (Rs.) MV % D/M M/V

15 9.50 6259 100006 10.00 6238 100002

24 9.50 3773 100002 10.00 3754 100021

36 10.25 2368 100026 10.75 2349 100009

39 9.75 2175 100005 10.25 2157 100029

48 9.75 1701 100010 10.25 1683 100006

60 9.75 1293 100062 10.25 1275 100000

72 9.50 1031 100079 10.00 1014 100041

Mahesh Automatic Renewal Scheme (MARS):Deposits are automatically renewed forevery 30 days without submitting your deposit receipt. Fetches you good returns for short

term duration.

Recurring Deposits (RD): Small regular monthly savings that grow into a lumpsumamount. Suitable to salaried employees and monthly earners.

Mahesh Tax Saver Fixed Deposit & Mahesh Tax Saver Multiplier Deposit Scheme:Invest the amount under any of these schemes which provides relief from Income-tax

payments. Schemes regulated as per Section 80C of the I.T.Act, 1961.

Mahesh Cash Certificate(MCC):A small deposit made today grows into a lumpsum onmaturity. Even an odd figures can become a sizeable amount on maturity.

Mahesh Mangal Nidhi (MMN):A rate combination with both the features of RecurringDeposit and Cash Certificate. Investing the amount at monthly intervals for a specific

period and tacit waiting will make the owner of a sizeable amount.
http://www.apmaheshbank.com/depositscheme.php?expanddiv=marshttp://www.apmaheshbank.com/depositscheme.php?expanddiv=rdhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=taxhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mcchttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mmnhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mmnhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mcchttp://www.apmaheshbank.com/depositscheme.php?expanddiv=taxhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=rdhttp://www.apmaheshbank.com/depositscheme.php?expanddiv=mars


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b. Interest Rate On Deposits:Domestic Deposits (With Effect from 10-5-2012)

S.No. Slab/Category Rate of Interest

Other than Sr. Citizens Sr. Citizens

Savings Deposits 4.00% 4.00%

TERM DEPOSITS

1. 30 Days to 90 Days 6.00% 6.50%

2. 91 Days to 180 Days 7.00% 7.50%

3. 181 Days to 1 Year 8.00% 8.50%

4. Above 1 Year & upto 2 years 9.25% 9.75%

5. Above 2 Year & upto 3 Years 9.75% 10.25%

6. Above 3 Years & upto 5 Years 9.50% 10.00%

7. Above 5 Years & upto 10 Years 9.00% 9.50%

TAX SAVER SCHEME:

8. 5 Years & Above 9.50% 10.00%

Based on market scenario, rates may be offered lesser or more than the above revised rates for

deposits of Rs.15.00 lacs and above as per the decision taken by the Competent Authority from

time to time.


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c. Interest rates on NRE deposits:With effect from 10-5-2012

S.No. Slab/Category Rate of Interest

1. Savings Bank Account 4.00%

2. Above 1 Year and to 2 Years 9.25%

3. Above 2 Years and to 3 Years 9.75%

4. Above 3 Years and to 5 years 9.50%

5. Above 5 Years 9.00%


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2.Outflows with banks: It is amount which are granted by the way of loan to the customers by

the bank. The various forms of loans which are provided by the bank would be:

a. Loan Schemesb. Interest Rates on Loansc. Fair practice in lendings

a. Loan schemes:Mahesh Bank offers various credit facilities suiting the needs of the customers under

different schemes:

o Mahesh Shiksha Loan:Mahesh Shiksha Loan for deserving/meritorious students for pursuing higher studies in India /

Abroad.

Eligibility :

Indian Nationals within the area of operation of the Bank.

Quantum :

For Studies in India : Max. Rs.10.00 Lakhs

For Studies in Abroad : Max. Rs.20.00 Lakhs

Security :

Primary : Minimum 150% of the loan

Collateral : Personal guarantee of Parent(s); Third Party; Owner of the Property.

Repayment Period :

Maximum 5 years.
http://animatedcollapse.show%28%27shiksha%27%29/http://animatedcollapse.show%28%27shiksha%27%29/


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Repayment Mode :

PDCs issued/standing instructions to debit their savings account with us, by the parent of the

applicant or Third Party.

Courses covered :

In India Professional Graduate/Post Graduate Courses Offered by prestigious/reputed

institutions.

AbroadGraduate/Post Graduate Courses.

o Gold Loan: 6 Months scheme (Repayable in Two Equis) - Rs. 1900 per gram @ 16% 12 months bullet payment (max. Rs. 1.00 lac per borrower) - Rs. 1900 per gram @ 16%

o Vehicle loan: For 2 Wheelers upto 70% of cost of Vehicle For 3 Wheelers 90% of cost of Vehicle For 4 Wheelers upto 75% of cost of Vehicleo Customer loans: For Purchase of Consumer durables & Household articles (60% of the cost) For Purchase of Computer (50% of the cost)

o Mahesh Banks NSC/KVP Loans/OD Facility: Upto 60% of face value of NSCs Upto 50% of face value of KVPs Spot Sanction (Upto 70% of Face Value) least formalities.

o Housing loans:


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1. For construction of House/Flat.2. For purchase of House/Flat.3. For renovation of House/Flat.4. For purchase of Open plot for House Construction.5. Quantum of loan-up to Rs.50 lakhs.o Loans For Business:1. Cash Credits against stocks and Book Debts.2. Key Cash Credit against pledge of Stocks / Warehouse or Cold Storage receipts.3. Overdraft against property.o Industrial Finance:

Working Capital Facility

O.C.C against stocks. O.C.C against Book Debts. Bill Discounting / Bill drawn under L.C. Discounting. Adhoc Limit for Seasonal Industries. O.D. against mortgage of property.

Term Loan

For acquisition of Machinery and Assets. For Construction of buildings.

o Mahesh Easy Loan For Professionals: For purchase of medical equipments, books etc. Modernization/ improvement of clinic/ labs/ office. Pursuing higher studies and to meet urgent contigencies. Nature of facilility OD/Loan.


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Repayment Period :a) for Loan - maximum period of 60months.

b) for OD - 1 Year renewable thereafter. Collateral:

upto 2 lakhs -NIL, above 2 lakhs - 100% of sanctioned amount.

Mode of repayment:for Loan - post dated cheques.

o GOD-Gold Overdraft: with effect from 10.11.2011 Gold Overdraft with DP of less than Rs. 25 lakhs Rs. 2000 per gram - Interest : 15% Gold overdraft with DP of Rs 25 lakhs and above Rs. 2000 per gram - Interest : 14%o CAP-Credit Against Property: Interest Rate : 16% to 18%


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b. Interest rate on loans and advances:Interest Rates on Loans & Advances

LOANS & ADVANCES with effect from 1-08-2011

Category Rate of Interest* p.a.

Educational Loans

Upto Rs. 5.00 lacs

Above Rs. 5.00 lacs to 20.00 lacs

12.00%

13.50%

Gold Loans (w.e.f. 10-11-2011)

6 Months Scheme (repayable in two Equal installments)

12 months (Bullet payment)

Gold Overdraft with DP of less than Rs. 25.00 lakhs

Gold Overdraft with DP of Rs. 25.00 lakhs & above

16.00%

16.00%

15.00%

14.00%

KCC against Warehouse Receipts14.00%

Against RBI Relief Bonds14.50%

Against NSC'S , KVPs 14.50%

Advances against Rent Receivables 14.50%

Housing Loans 15.00%


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Advances to Flour Mills 15.00%

Mahesh Easy Loan for Professionals 15.00%

Advances against Shares 12.50%

Vehicle Loans

(Against Corporate Guarantee 14.00%)15.00%

Mortgage Loans / Overdraft against immovable properties

for Business Development

16.50%

T/L & W/C for Industries and W/C for Traders

Below Rs. 5.00 lacs

Rs. 5.00 lacs & above

15.50%

14.50%

c. Fair practice in lending:The Fair Practices Code covers the following areas:

Application for loans and their processing. Loan appraisal and terms/conditions. Disbursement of loans including changes in terms and conditions. Post disbursement supervision. Other general provisions.

The guidelines are applicable in respect of all the borrowers, irrespective of the quantum of

credit facility being enjoyed by them.


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A. Application for loans and their processing

a. The applicant will be given, along with loan application, an annexure containing a list of

various charges/fee viz. processing fee and the period for which it is levied (in case of limits),

valuation charges, legal opinion fee, stamping charges, insurance, penalty for prepayment,

foreclosure charges, commitment charges (i.e. minimum level of limit utilisation, applicable rate

of interest and period for which the limit utilisation is reckoned etc.), penal interest, share linking

etc., expenses/fee that are refundable (alongwith a note that all or any of the above charges are

liable to change with/without priornotice).

b. An acknowledgement for receipt of loan applications will be given and the time within which

the loan application is disposed off, will be mentioned as under:

(Rs. In lakhs)

Quantum of loan applied Time limit for sanctioning/ rejecting the proposal

< & = 0.50 1 Week

>0.50&2.00 to 5.00 2 Weeks

>5.00to 10.00 3 Weeks

>10.00to 200.00 6 Weeks

>200.00 to 500.00 6 Weeks

The above time frame is subject to

i. Submission of all relevant information & enclosures by the applicant

ii. Obtention of legal opinion & valuation reports.


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iii. Administrative exigencies

c. The loan application will be verified within a reasonable time and the applicant will be

informed about the additional requirements for processing the loan application either by the

branch and/or Head Office as the case may be.

d. The reasons for rejecting the loan application will be communicated to the borrower in writing

within the time stipulated for disposal of application.

B. Loan appraisal and terms/conditions:

a. The credit assessment will be proper as based on the guidelines laid down in the credit policy

as well as sound lending principles. Margin and security stipulation will not be used as a

substitute for due diligence on creditworthiness of the borrower.

b. A copy of the terms and conditions to the sanction will be given to the borrower(s) and

guarantor(s) and an acknowledgement, followed by signature, will be obtained as under:

I have gone through the terms and conditions to the sanction and hav ing fully understood and/

being explained about the same, I hereby accept the terms and conditions to the credit facility

sanctioned to me/us.

c. All the terms and conditions and other caveats governing the credit facilities sanctioned will be

put in writing and given to the borrower after duly signed by the authorized official of the

branch.

d. A copy of loan agreement along with copies of enclosures will be furnished to the borrower

and/or guarantor on specific request of the borrower.

e. The terms and conditions to the sanction will contain the under mentioned aspects.

o Drawings beyond sanctioned limits/DP fixed will not be permitted without priorsanction.


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o Cheques issued for purposes other than specifically agreed to, are liable to be returnedunpaid irrespective of balance available in the account.

o The borrower will submit renewal proposal with required information atleast one monthbefore the due date.

o If limits are not renewed before due date, penal interest will be charged @ 2% over andabove the applicable rate of interest.

o After expiry of three months from due date of renewal, issue of cheque books will bestopped immediately.

o Operations will not be allowed in the account after expiry of 6 months from the date ofvalidity and necessary action will be initiated to recover our dues, unless otherwise

permitted by Head Office.

o Growth in business etc. will not automatically put the Bank under an obligation to meetfurther requirement of the borrower without proper review/assessment of credit limits.

f. In case of lending under consortium arrangement, if the bank is participating then appraisal of

proposal will be done within the time frame stipulated at Sno. Ab above.

C. Disbursement of loans including changes in terms and conditions.

a. All the loans and advances will be disbursed in time, subject to compliance of terms andconditions to the sanction.

b. The information regarding change in terms and conditions including interest rates, service

charges etc. will be placed in the notice board in the main banking hall and also in the web-site.

If the change is likely to affect few borrowers or specific category of borrowers then they will be

informed in writing.

c. Interest rate changes will be effected prospectively.


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D. Post disbursement supervision:

a. The post disbursement supervision will take into account the genuine difficulties that the

borrower might be facing in utilizing the funds for the purpose he borrowed.

b. Before taking decision to recall/accelerate payment under the agreement, procedure laid down

in the Credit/Recovery policy will be followed.

c. All the securities will be released on receiving payment/ realization of loan subject to any

legitimate right of lien/set-off that the bank may have against the borrower for any other claim.

d. In the event bank intends to exercise bankers right of lien or set -off then the borrower will be

informed in writing detailing the remaining claims and the documents under which the bank isentitled to retain the securities till the relevant claim(s) is/are settled.

E. General :

a. The bank will restrain from interfering in the affairs of the borrower excluding to the extent

provided in the terms and conditions to the sanction and to the extent of safeguarding its

exposure.

b. Bank will not discriminate on the grounds of sex, caste and religion in the matter of lending

except to the extent laid down by the RBI for priority and weaker section lending.

c. For recoveries bank will follow the procedure laid down in the Credit/Recovery policy.

d. In case of receipt of a request for transfer of loan a/c either from the borrower or from another

bank, by way of take-over, the consent or objections of the bank, if any, will be conveyed within

a reasonable time and in any case not later than 21 days from the date of receipt of request,

unless the matter requires to be placed before the Loans Committee/Board in which case, the

responding time depends upon the date of the meeting.


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chapter3 bank operations

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