1

A
TPP Report
On
Gold Loan at SBOP Bank
For the training undergone at
State Bank Of Patiala
Pehowa Branch
Under the Supervision of
RAKESH GARG
For the partial fulfillment of the award of degree of MBA
Subject : TPP (IMS-903)
Submitted to:

Submitted by:

The Director

Lovely Kumar Verma

MBA 9th Sem.
Roll. No. 20
Regn. No. 11-UD-3043

Submitted to
INSTITUTE OF MANAGEMENT STUDIES
KURUKSHETRA UNIVERSITY KURUKSHETRA
December 2015

DECLARATION

I LOVELY KUMAR VERMA, Roll No. 20, Class MBA - 9th Semester of
KURUKSHETRA

UNIVERSITY

KURUKSHETRA

OF

INSTITUTE

OF

MANAGEMANT STUDIES, hereby declare that the summer TRAINING PROFILE

PRESENATATION entitled STATE BANK OF PATIALA Ltd. BRANCH PEHOWA
is an original work done by me and the information provided in the study is authentic to
the best of my knowledge and belief.
This study has not been submitted to any other institute or university for the award of any
degree or for any purpose.

(Lovely Kumar Verma)

Roll No. 20
Semester 9th

Acknowledgement
First of all I thank my department who provided me this opportunity. I

want

to

thanks to all those who guided me to move on the track. I am gratefully indebted to
the Director for providing me all the necessary help and requirement guidelines for
the completion of my report and also for the valuable time that he gave me from his
schedule.

(Lovely kumar verma)

Roll No. 20
Semester 9th

4
CONTENTS
Chapter

Title of the chapter

Page no.

No.
1.

Introduction
A. Banking in India
B. Meaning
C. Definition
D. Features

2.

State Bank Of Patiala

A. Introduction
B. Organisational Structures

3.

C. Product and Services

Analysis & Discussion
Gold Loan at SBOP

4.

SWOT Analysis

47

5.

Conclusion

48

5
6.

Learning

50

7.

References

51

Chapter 1

6
INTRODUCTION
A. Banking in India
Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector
acts as the backbone of modern business. Development of any country mainly depends
upon the banking system. An organization, usually a corporation, chartered by a state
or federal government, which does most or all of the following:
Receive demand deposit and time deposits, honors instruments drawn on them,
and pays interest on

them; notes,

collects checks, drafts,

and

makes loans,

and invests insecurities;

notes; certifies depositor's checks;

and issues drafts

and cashier's checks.

The term bank is derived from the French word Banco which means a Bench or Money
exchange table. In olden days, European money lenders or money changers used to
display (show) coins of different countries in big heaps (quantity) on benches of tables
for the purpose of lending or exchanging. A bank is a financial institution which deals
with deposits and advances and other related services. It receives money from those who
want to save in the form of deposits and it lends money to those who need it.
(b) Meaning of bank
The term bank is derived from the French word Banco which means a Bench or Money
exchange table. In olden days, European money lenders or money changers used to
display (show) coins of different countries in big heaps (quantity) on benches or tables
for the purpose of lending or exchanging.

(c)

Definition of bank

7
Oxford Dictionary defines a bank as "an establishment for custody of money, which it
pays out on customer's order."
(d)

Features of bank

1. Dealing in Money
Bank is a financial institution which deals with other people's money i.e. money given by
depositors.
2. Individual / Firm / Company
A bank may be a person, firm or a company. A banking company means a company
which is in the business of banking.
3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period. It gives safety to the deposits
of its customers. It also acts as a custodian of funds of its customers.
4. Giving Advances
A bank lends out money in the form of loans to those who require it for different
purposes.
5. Payment and Withdrawal
A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts; it also brings bank money in circulation. This money is in the form of
cheques, drafts, etc.

6. Agency and Utility Services

8
A bank provides various banking facilities to its customers. They include general utility
services and agency services.
7. Profit and Service Orientation
A bank is a profit seeking institution having service oriented approach.
8. Ever increasing Functions
Banking is an evolutionary concept. There is continuous expansion and diversification as
regards the functions, services and activities of a bank.
9. Connecting Link
A bank acts as a connecting link between borrowers and lenders of money. Banks collect
money from those who have surplus money and give the same to those who are in need
of money.
10. Banking Business
A bank's main activity should be to do business of banking which should not be
subsidiary to any other business.
11. Name Identity
A bank should always add the word "bank" to its name to enable people to know that it is
a bank and that it is dealing in money.

E. Types of banks

9
Type 1. Saving Banks
Saving banks are established to create saving habit among the people. These banks are
helpful for salaried people and low income groups. The deposits collected from
customers are invested in bonds, securities, etc. At present most of the commercial banks
carry the functions of savings banks. Postal department also performs the functions of
saving bank.
Type 2. Commercial Banks
Commercial banks are established with an objective to help businessmen. These banks
collect money from general public and give short-term loans to businessmen by way of
cash credits, overdrafts, etc. Commercial banks provide various services like collecting
cheques, bill of exchange, and remittance money from one place to another place.
In India, commercial banks are established under Companies Act, 1956. In 1969, 14
commercial banks were nationalized by Government of India. The policies regarding
deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.
Type 3. Industrial Banks / Development Banks
Industrial / Development banks collect cash by issuing shares & debentures and
providing long-term loans to industries. The main objective of these banks is to provide
long-term loans for expansion and modernization of industries.
In India such banks are established on a large scale after independence. They are
Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment
Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).

Type 4. Land Mortgage / Land Development Banks

10

Land Mortgage or Land Development banks are also known as Agricultural Banks
because these are formed to finance agricultural sector. They also help in land
development.
In India, Government has come forward to assist these banks. The Government has
guaranteed the debentures issued by such banks. There is a great risk involved in the
financing of agriculture and generally commercial banks do not take much interest in
financing agricultural sector.

Type 5. Indigenous Banks

Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general
public and grant loans to the needy persons out of their own funds as well as from
deposits. These indigenous banks are popular in villages and small towns. They perform
combined functions of trading and banking activities. Certain well-known Indian
communities like Marwaris and Multan even today run specialized indigenous banks.
Type 6. Central / Federal / National Bank
Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A,
Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the
other banks. They provide specialized functions i.e. issue of paper currency, working as
bankers of government, supervising and controlling foreign exchange. A central bank is a
non-profit making institution. It does not deal with the public but it deals with other
banks. The principal responsibility of Central Bank is thorough control on currency of a
country.

Type 7. Co-operative Banks

11

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.
They generally give credit facilities to small farmers, salaried employees, small-scale
industries, etc. Co-operative Banks are available in rural as well as in urban areas. The
functions of these banks are just similar to commercial banks.
Type 8. Exchange Banks
Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks
working in India. These banks are mainly concerned with financing foreign trade.
Following are the various functions of Exchange Banks:Remitting money from one country to another country,
Discounting of foreign bills,
Buying and Selling Gold and Silver, and
Helping Import and Export Trade.
Type 9. Consumers Banks
Consumers bank is a new addition to the existing type of banks. Such banks are usually
found only in advanced countries like U.S.A. and Germany. The main objective of this
bank is to give loans to consumers for purchase of the durables like Motor car, television
set, washing machine, furniture, etc. The consumers have to repay the loans in easy
installments.

12

Chapter 2

INTRODUCTION
ON
STATE BANK OF PATIALA

13

14
A.Introduction
The rich heritage of State Bank of Patiala dates back to the year 1917, when it was
founded by Late His Highness Bhupinder Singh, Maharaja of erstwhile Patiala state,
with one branch by the name of 'Chowk Fort, Patiala' to begin with. The Bank, then
known as the 'Patiala State Bank' was state owned and setup for the explicit purpose
of fostering growth of agriculture, trade and industry. The constitution, scope and
operations of the Bank underwent a sea change with the formation of the Patiala and
east Punjab States Union (PEPSU) in 1948.The Bank was then reorganized and
brought under the control of Reserve Bank of India.
It was christened as the Bank of Patiala. Another milestone in history of the Bank was
its becoming a subsidiary of the State Bank of India on 1st April,1960 when it was
named as the State Bank of Patiala and since then it has grown significantly both in
size and volume of business. During these glorious years, the Bank has been playing
an important role in Banking sphere.
Our Bank has now added a golden chapter to its history by fully networking all its
brances on Core Banking Solutions on 08.08.2005 and become the first fully
networked Public Sector Bank in the country.
Logo and slogan

The logo of the State Bank of Patiala is a blue circle with a small cut in the
bottom that depicts perfection and the small man the common man - being the
center of the bank's business. The logo came from National Institute of
Design(NID), Ahmedabad and it was inspired by Kankaria Lake, Ahmedabad.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY
INDIAN", "THE NATION BANKS ON US"

15

Branches And ATM Services

The State Bank of Patiala has more than 1000 branches, spread across the major cities of
India. The majority ofits branches are located in Punjab, Haryana, Himachal Pradesh,
Rajasthan, Jammu & Kashmir, Delhi, and Chandigarh. The Bank provides easy access to
money to its customers through its ATMs spread over 16 states of India.
It was the first bank in India to go on CORE 100%.

16

B.PRODUCTS AND SERVICES

DIFFERENT PRODUCTS OF SBOP:
DEPOSIT

LOANS

CARDS

DIFFERENT CREDIT CARDS

Savings
Account

Home
Loans

Consumer
Cards

SBOP International cards

Life Plus
Senior
Citizens
Savings
Account

Loan
Against
Property

Credit Card

SBOP Gold cards

Fixed
Deposits

Personal
Loans

Travel Card

SBOP Gold Master cards

Security

Car Loan

Debit Cards

Your City Your Cards

Recurring
Deposits

Loans
against
Securities

Commercial
Cards

Tax-Saver
Fixed Deposit

Two
Wheeler

Corporate
Cards

Partnership Cards

Salary
Account

Preapproved
Loans

Prepaid Card

Advantage
Woman
Savings
Account

Retail Asset

Purchase Card

SBOP Employee Cards

Rural
Savings
Account

Farmer
Finance

Distribution
Cards

People's
Savings
Account

Business
Installment
Loans

Business Card

SBOP Advantage Cards

Deposits

17

Introduction to Advance Product:

Now a day not all the people have the capacity to fulfill their requirement by their own
earning, thats why they need help from others. For this so many government & private
sector bank provide them money to fulfill their requirement, thats call the Advance
Product (loan product) of the bank. All the banks have so many different types of advance
product as per the requirement of the people or customers. In Bhubaneswar also there are
so many banks those provide loan to the people for different causes.
Types of Advance Product

Home Loan

Educational Loan

Car Loan

Personal Loan

Property Loan

Loan Against Shares\Debentures

Etc.

Now a day a large no. of people are taking loan form different banks. It helps people to
fulfill their need and it really easy to repayment the loan amount with a longer repayment
period.

18

SBOP Advance Product

SBOP Home Loans:
Purpose
Purchase/ Construction of House/ Flat
Purchase of a plot of land for construction of House
Extension/ repair/ renovation/ alteration of an existing House/ FlaT
Purchase of Furnishings and Consumer Durables as a part of the project cost.
Takeover of an existing loan from other Banks/ Housing Finance Companies.
Eligibility
Minimum age 18 years as on the date of sanction
Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which
the loan should be fully repaid.
Availability of sufficient, regular and continuous source of income for servicing the loan
repayment.
Loan Amount
40 to 60 times of NMI, depending on repayment capacity as % of NMI as under
Net Annual Income
Upto Rs.2 lacs
Above Rs.2 lac to Rs. 5 lacs
Above Rs. 5 lacs

EMI/NMI Ratio
40%
50%
55%

To enhance loan eligibility you have option to add:

19
1. Income of your spouse/ your son/ daughter living with you, provided they have a
steady

income

and

his/

her

salary

account

is

maintained

with

SBOP.

2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is
proposed to be rented out.
3. Depreciation, subject to some conditions.
4. Regular income from all sources
Margin (Special Festival Season Offer)
.Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr.,
20% for loans above Rs. 1 cr.
.Repairs/ Renovation of an existing House/ Flat: 15%
Interest Rates w.e.f 27.2.2015
Floating interest rates
(linked to State Bank Advance Rate - SBAR
(SBAR: 12.25% p.a.)
Loan

Tenor

->
Upto

Rs.30 2.25%

Above

Upto 5 years

years

and upto 15 years

below 2.00%

Above 15 years and

upto 25 years
below 1.75%

below

Lacs
SBAR, 10.00% p.a.
SBAR, 10.25% p.a.
SBAR, 10.50% p.a.
Above Rs.30 2.00%
below 1.75%
below 1.50%
below
Lacs

SBAR, 10.25% p.a.

SBAR, 10.50% p.a.

Fixed interest rates

Tenure
(p.a.)*Upto 10 years

Rate of Interest
12.75%

SBAR, 10.75% p.a.

20
* Fixed rate loans will be subject to: 'force maejure' clause and interest reset at the end
of every two years on the basis of fixed interest rates prevailing then.
CAR LOAN:
Purpose You can take finance for:
A new car, jeep or Multi Utility Vehicles (MUVs)
A used car / jeep (not more than 5 years old). (Any make or model).
Take over of existing loan from other Bank/Financial institution (Conditions apply)
Eligibility
To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age.

A Permanent employee of State / Central Government, Public Sector Undertaking,

Private company or a reputed establishment or

A Professionals or self-employed individual who is an income tax assessee or

A Person engaged in agriculture and allied activities.

Net Annual Income Rs. 100,000/- and above.

Salient Features

Loan Amount
There is no upper limit for the amount of a car loan. A maximum loan amount of
2.5 times the net annual income can be sanctioned. If married, your spouse's
income could also be considered provided the spouse becomes a co-borrower
in the loan. The loan amount includes finance for one-time road tax, registration
and insurance!
No ceiling on the loan amount for new cars.

Loan amount for used car is subject to a maximum limit of Rs. 15 Lacs
1. Term Loan
2. Overdraft

21
a) For New vehicles only
b) Minimum loan amount: Rs. 3 lacs.
Documents required
you would need to submit the following documents along with the completed application
form if you are an existing SBOP account holder:

Statement of Bank account of the borrower for last 12 months.

2 passport size photographs of borrower(s).

Signature identification from bankers of borrower(s).

A copy of passport /voters ID card/PAN card.

Proof of residence.

Latest salary-slip showing all deductions

I.T. Returns/Form 16: 2 years for salaried employees and 3 years for
professional/self-employed/businessmen duly accepted by the ITO wherever
applicable to be submitted.

Proof of official address for non-salaried individuals.

If you are not an account holder with SBOP you would also need to furnish documents
that establish your identity and give proof of residence.
Margin
New / Used vehicles: 15% of the on the road price.
Repayment
You

enjoy

the

longest

repayment

period

in

the

industry

with

us.

Repayment period:
For Salaried:

Maximum of 84 month

For Self-employed & Professionals: Maximum 60 months

Repayment period for used vehicles :Up to 84 months from the date of original purchase
of the vehicle (subject to maximum tenure as above).

22

Prepayment Penalty:
Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain
conditions
FLOATING RATES:
A. for Term Loans

EDUCATION LOAN:
A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.
Eligible Courses

23
All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees

for the entire course)

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.
Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

Interest Rates
(with effect from 1st June 2008)

For loans up to Rs.4 lacs - 11.75 % p.a. Floating

For loans above Rs. 4 lacs and upto Rs.7.50 lacs - 13.25 % Floating
For loans above Rs.7.50 lacs - 12.25% p.a. Floating
Processing Fees

No processing fee/ upfront charges

24

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted
in the margin money

Repayment Tenure
Repayment will commence one year after completion of course or 6 months after
securing a job, whichever is earlier.

Place of Study

Loan Amount

Repayment in Period
Years

Studies in India

Rs. 10.0 lacs

5-7

Studies Abroad

Rs. 20.0 lacs

5-7

Security
Amount

For loans upto Rs. 10.00 lacs for Studies in

India and upto Rs. 20.00 lacs for studies abroad

Upto Rs. 4 lacs

No Security
Collateral security in the form of suitable third party
Guarantee. The bank may, at its discretion, in
exceptional cases, weive third party guarantee if
satisfied with the net-worth/means of parent/s who
would be executing the documents as "joint
borrower"

25
Tangible collateral security of suitable value, along
with the assignment of future income of the student
For payment of installments.

All loans should be secured by parent(s)/guardian of the student borrower. In case

of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law
Margin

For loans up to Rs.4.0 lacs : No Margin

For loans above Rs.4.0 lacs:

Studies in India: 5%

Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

SBOP SARAL PERSONAL LOAN:

26
Purpose
The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for
domestic or foreign travel, medical treatment of self or a family member, meeting any
financial liability, such as marriage of son/daughter, defraying educational expenses
onwards, meeting margins for purchase of assets etc.).
Eligibility
You are eligible if you are a Salaried individual of good quality corporate, self employed
engineer, doctor, architect, chartered accountant, MBA with minimum 2 years
standing.
Salient Features
Loan Amount
Your personal loan limit would be determined by your income and repayment capacity.
Minimum: Rs.24,000/- in metro and urban centres
Rs.10, 000/- in rural/semi-urban centres
Maximum: 12 times Net Monthly Income for salaried individuals and pensioners
subject to a ceiling of Rs.10 lacs in all centres
Documents Required
Important documents to be furnished while opening a Personal Loan Account:
For existing bank customers
Passport size photograph
From salaried individuals
Latest salary slip and Form 16
Margin
We do not insist on any margin amount.
Interest Rates
3.25% above SBAR floating i.e. 15.50% p.a.
Repayment
The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish
to, without attracting any prepayment penalty.

27
Security
NIL

Processing Fee
Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in the
industry. Processing fees have to be paid upfront. There are no hidden costs or other
administrative charges.

PROPERTY LOAN:
Purpose
This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If
amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified
along with an undertaking that loan will not be used for any speculative purpose whatever
including speculation on real estate and equity shares.

Eligibility
You are eligible if you are:
A. An individual who is;
a. An Employee or
b. A Professional, self-employed or an income tax assesse or
c. Engaged in agricultural and allied activities.
B. Your Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual Income
(others) is in excess of Rs.1,50,000/-.
The income of the spouse may be added if he/she is a co-borrower or a guarantor.
C. Maximum age limit: 60 years.

28
Salient Features
Loan Amount
Minimum: Rs.25, 000/Maximum: Rs.1 crore. The amount is decided by the following calculation:
.24 times the net monthly income of salaried persons (Net of all deductions including
TDS) OR
.2 times the net annual income of others (income as per latest IT return less taxes
payable)
Margin
We will finance upto 75% of the market value of your property.
Interest
Term Loan 0.75% above SBAR. i.e.13.00% p.a. Floating
Repayment
Maximum of 60 equated monthly installments, upto 120 months for salaried individuals
with check-off facility. You could opt to divert any surplus funds towards prepayment of
the loan without attracting any penalty.
Security
As per banks extant instructions.

LOAN AGAINST SHARES \ DEBENTURES:

Eligibility
This facility is available to our existing individual customers enjoying a strong
relationship with SBOP. This loan could be availed either singly or as a joint account with
spouse in 'Either or Survivor'/ 'Former or Survivor' mode. It is offered as an Overdraft or
Demand Loan.
The facility is available at 50 select centers.

29

Salient Features:
Purpose
For meeting contingencies and needs of personal nature. Loan will be permitted for
subscribing to rights or new issue of shares / debentures against the security of existing
shares / debentures. Loan will not be sanctioned for (i) speculative purposes (ii) intercorporate investments or (iii) acquiring controlling interest in company / companies.
Loan Amount
You can avail of loans up to Rs 20.00 lacs against your shares/debentures.
Documents Required
You will be required to submit a declaration indicating:

Details of loans availed from other banks/ branches for acquiring shares/
debentures.

Details of loans availed from other banks/ branches against security of shares/
debentures

Margin
You will need to provide a margin amount of 50% of the prevailing market prices of the
shares/ non-convertible debentures being offered as security. (The market prices refer to
the prices in the Stock Exchanges as reported in the Economic Times.)
Interest
At SBAR Floating i.e. 12.25% p.a.
Repayment Schedule
To be liquidated in maximum period of 30 months through a suitable reducing DP
programme.

30
In case of a default or if the outstanding is over Rs.20.00 lacs, the shares/debentures will
be transferred in the name of the Bank.
Security:
Pledge of the demat shares/debentures against which overdraft is granted.
C. ORGANISATIONAL STRUCTURE

31

32

BOARD OF DIRECTORS
Shri Pratip
Chaudhuri,
Chairman,
State Bank of India,
Corporate Centre,
MUMBAI

Shri R.Sridharan
Managing Director&
Group Executive
(Associates &
Subsidiaries)
State Bank of India
Corporate Centre
Mumbai
Shri B.S.
Gopalakrishna,
General Manager
(Associate Banks),
State Bank of India,
Corporate Centre,
MUMBAI 400021

Shri Ashok Nayar,

Managing Director,
State Bank of Patiala,
Head Office,
The Mall,
PATIALA 147001

Shri Ashwani Kumar

Gupta,
85, Green Park,
Cool Road,
JALANDHAR CITY

Shri Swarn Singh

Boparai,
67, Sector 9 A,
CHANDIGARH

Dr. Abhijit
Mukherjee,
Director,
Thapar University,
PATIALA

Shri R.K. Sood,

Under Secretary,
Government of India,
Ministry of Finance,
Department of Financial
Services,
Jeevan Deep Building,
Sansad Marg,
NEW DELHI 110001
Dr. Amarendra Sahoo,
Regional Director,
Reserve Bank of India,
LUCKNOW

Shri Jagdish Sharma

Workmen Director,
State Bank of Patiala,
Shastri Bhawan
NEW DELHI

Shri Verjinder
Kumar Gupta,
261, Dalima Vihar,
RAJPURA 140401

Shri B. Ramesh Babu,

Dy. General Manager
(Associates &
Subsidiaries),
State Bank of India,
Corporate Centre,
MUMBAI

Shri Rakesh
Chander Jasra,
Non-Workmen
Director,
State Bank of Patiala,
Zonal Office,
NEW DELHI

33

34

Chapter 3

ANALYSIS & DISCUSSION

ON
GOLD LOAN

35

36

37

38

39

SBP - Liquid Gold Scheme

40

41

Procedure for Gold loan

.First the temporary receipt is given to the customer this receipt contains only the
number of items given by the customer.

.Then these ornaments are sent to the jeweler for verification.

.After verification the jeweler gives a receipt which contains the weight of the jewelry,
price per 10gms of gold, and the total value of the gold jewelry.

.Once this verification receipt is received banks manager decides the amount that can
given to the customer for loan.

Detailed procedure for gold loan:

.Temporary receipt:
Three copies of this receipt are made.

First copy is given to the customer.

Second copy is placed inside the bag (in which jewelries are placed) and is send

to the jeweler.

Third copy is kept with the bank for further reference.

How gold is taken to the jeweler:

After the jewelry along with the temporary receipt is placed inside the bag, the

bag is sealed.

This sealed bag is then sent to the jewelers shop.

For security of this gold ornament one person from the bank and two security

guards goes to jewelers shop along with the bag containing gold ornaments.

42

Once the verification is over jeweler puts the verification reports copy inside the

bag along with temporary receipt and ornaments.

After this the bag is again sealed by the jeweler and a tag is attached along with

the bag which includes name of the customer, and the banks branch name.

This bag is then again sent back to the bank.

After receiving of this valuation receipt all other formalities are done and the loan

is disbursed.

This loan amount disbursed is not given completely to the customer a small

amount is deducted from it as charges for the following thing:

Stamp paper (for every Rs.1 lakhs, stamp paper charge is Rs.100)

Commission (Rs.10)

Nominal membership fees (it is Rs.25)

Valuation fees (this is charged by the jeweler as his fees for valuing the gold).

After this loan is given to the customer.

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Some important points to be remembered:

1 .Generally valuation price is kept less then that of the current market price of the gold.
Reason:
If the customer doesnt repay the loan within the given period of time then auction of this
gold is done at the HEAD OFFICE of the bank. And the amount obtained will be used for
recovery of the loan and the extra amount is debited to account of the borrower.
But in case during the auction the gold does not get sold then the jeweler will have to
purchase the gold at the value valued by him.
2. Manager permits loan of amount 70%of the valuation made by the jeweler.
Reason:
This is done so that after the loan period the amount to be paid by the customer should
not go beyond the value of gold.
3. Auction is done generally in the month of September and March.
Procedure:

First notice is sent to the customer and 10-15 days time is given to the customer to

repay his/her loan.

If no response comes from customers side then an advertisement is published in

the newspaper regarding the auction.

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Reasons why people go for gold loan:

They can get loan immediately within 5-6 hours

No need for any guarantor.

Easy procedure.

No documents needed.(only in case of mangalsutra NOC has to signed by wife).

Full loan can be paid at a time only 1 months interest is compulsory.

Security of gold as it is now the responsibility of the bank to safeguard the gold.

Last resource.

Reason for taking the loan need not to be mentioned.

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CHAPTER 4

SWOT ANALYSIS
AND
CONCLUSION

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CONCLUSION

Most of the companies which are offering gold loan in India are still at growth stage and
hence there are ample of opportunities for all the companies which are offering gold
loan to tap customer. The perception of customer is yet to be changed because still they
dont feel comfortable in taking gold loan because of traditional approach hence there is
a lot of education has to be provided to make people aware of gold loan. To achieve
sustainable growth in this sector India info line finance limited needs to endeavour with
maximum efforts the company can achieve several milestones in future while
maintaining the existing customer relationship.

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LEARNING FROM TRAINING

Account opening
Cash withdrawal
Cash deposit
Loans

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REFERENCES
Banking Awareness by Upendra Rai
www.harcobank.com
Annual report ob kccb.