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PROJECT REPORT ON
“CREDIT ANALYSIS OF PERSONAL LOAN”
OF
BY
He has worked under our guidance and directions. His work is found to be
good and complete in all respects .during the period we found him hard
working, sincere and loyal.
I would also like to thank Staff of ABN AMRO BANK who has been backbone
of our project & for being “Friend, Philosopher & Guide” at every stage of the project.
There valuable suggestions, encouragement & patience are only responsible for seeing
this project through to completion.
I am proudly indebted to my project guide prof smita sovani mam for all her support and
It was their vision, my hard work & blessings of my parents, which made me
capable to complete this project successfully.
Above all, I thank ‘God ‘for making this mortal venture possible.
Thanking All,
Siddharth Raut
TABLE OF CONTENTS
CHAPTER 1 : INTRODUCTION
P.NO
EXECUTIVE SUMMARY....................................................................... 2
OBJECTIVE OF THE PROJECT ……………………………………… 3
SALARIED
SURROGATE
BALANCE TRANSFER
RELATIONSHIP REWARDS
Co – Borrowers
Guarantors
INTREST RATES ………………………………………………………… 46
PERSONAL LOAN APPROVAL STAGES ……………………………… 47
GUIDELINENOTE ON NORMS ………………………………………… 49
CONTACT POINT VERIFICATION POLICY ………………………….. 50
LIST OF APPROVED COMPANIES …………………………………….. 52
CHAPTER 5:
CHAPTER 6:
CONCLUSION ……………………………………………………………. 59
CHAPTER 7:
BIBLIOGRAPHY …………………………………………………………. 61
CHAPTER 1
INTRODUCTION
EXECUTIVE SUMMARY
ABN AMRO BANK is one of the fast growing foreign banks in India. It has got very
important presence in the consumer as well as corporate sectors. I have undertaken a
Project titled “CREDIT ANALYSIS OF PERSONAL LOAN “
The main objective of the project was to know the loan proposal system of ABN AMRO
BANK. The analysis of any proposal consists of two parts
• Internal
• External
How it is to be done?
To find out what is the criteria to be considered by the banks to give loan for
various purposes.
How the processing is done on the applicant’s loan request & how it is to be
accepter or rejected.
How the eligibility for granting for granting the loan is calculated.
CHAPTER 2
COMPANY
PROFILE
ABN AMRO Bank
ABN AMRO Bank ranks 10th in Europe and 22nd in the world based
on tier 1 capital, with over 3,500 branches in more than 70 countries, a
staff of 110,000 full-time equivalents and total assets of EUR 597 billion
(as per end March 2003). The Bank is listed on several exchanges,
including the Amsterdam, London and New York Stock Exchanges.
Our Corporate Values provide the foundation for the bank's newly
introduced business principles. The bank formulated these Corporate
Values in 1997.
Integrity: Above al, we are committed to integrity in all that we do, always,
everywhere.
• Banking
• Investment advisory
• Discretionary portfolio management
• Investment funds
• Trust
• International estate planning
3. Wholesale Clients (WCS)
• Sector Expertise
• Integrated Product Offering
• Local Presence
• Financial strength
ABN AMRO Bank in India
ABN AMRO Bank started its operations in India in 1920. till the early
1990's it was largely a bank catering to the diamond trade. It started
wholesale banking in 1995, the securities business and corporate finance
services soon after, and consumer banking in 1999. ABN AMRO Bank
took over the consumer banking business of Bank of America in 1999 as
part of a purchase agreement covering acquisition of this line of business
in India, Taiwan and Singapore. The consumer banking business of Bank
of America acquired by ABN AMRO Bank included consumer lending,
deposit mobilization, auto finance and mortgage activities. The acquisition
was in part of US$ 200 million deal signed between the two banks for
purchasing the consumer banking business by ABN AMRO Bank in these
three countries.
The bank took off in a big way in 1991, after the merger of ABN and
AMRO worldwide. The Delhi branch was functional in the very same year.
ABN AMRO Bank was launched in other cities throughout India between
1994 and 1999. They were Chennai in 1994, Pune in 1997 and Baroda in
1999, while the Hyderabad and Bangalore branches were opened in 2001.
The year 2002 saw the opening of the Noida office. AA Securities (I) Pvt.
Ltd. formed in September 1998.
Achievements
7th most admired commercial bank in the world fortune magazine 2000
Top foreign bank in India The Economic Times – CMIE Survey 1999
DEPOSIT PRODUCTS
• Savings Accounts
• Current Accounts
• Fixed Deposits
INVESTMENT SERVICES
• Mutual Funds
SERVICES
• Debit Card
• Net Banking
• Express Cash
• ATM Services
• 24 Hour Bank by Phone
• Bill Payment
• Doorstep Banking
• Depository Services
• National Access
• 365 Days Banking
• Extended Banking Hours
Wholesale Banking
• Structured Products
• Trade Services
• Cash Management
• Correspondent Banking
• Precious Metals
• Electronic Banking
• Custodial & Security
Private Banking
• Portfolio Advisory
Value Added Services
CHAPTER 3
PERSONAL LOAN
PERSONAL LOAN
.
ABN AMRO Personal Loans are completely flexible - you can take your
loan for purchase of assets and consumer durables, home improvements,
tax saving investments, higher education, holidays and travel, emergency
medical needs, marriage in family … in short, for any declared legal use
without pledging any security.
You may also avail of our "Balance Transfer Program" to retire any
high cost loans that you may have taken, including your credit card dues
by simply opting for an ABN AMRO Personal Loan.
There are no hidden charges - our Personal Loans come to you with
minimum formalities, at attractive interest rates and only a one time non-
refundable processing fee. If you are an existing ABN AMRO customer,
you could be eligible for special discounts on the interest rates and
simplified application formalities under our "Relationship Rewards
Program".
Loan with Income Statements / Salaried Employees
ABN AMRO Bank gives loan to the officers and management cadres
only. They don't give loans to the employees below the officers grade i.e.
to the supervisor, the workers etc. The applicant should be earning a
Gross annual salary of minimum Rs. 1, 00,000/- per annum. The
conditions are as follows.
Conditions
• Officer or management cadre
• Working in the current employment for at least 1 year or
overall 3 years work experience
• Age between 23 to 60 years
• Gross annual salary more than Rs. 1, 00,000/- per annum.
Document Required:
1. Application form
2. Latest 2 months salary slip
3. Bank statement
4. Photograph (signed on back side)
5. Identity proof
• PAN Card
• Driving License
• Passport
• (if the above documents are not available then LIC premium
receipt/SSC Certificate with Photo and sign verification is
required)
6. Employment proof (Form 16 H or appointment letter)
Self Employed Professionals
Doctors (BDS, MBBS, MD, MS only)
Conditions:
• Net Annual Income should be Rs. 1,00,000/- per annum
(at least Rs. 75,000/- from profession)
• Overall 3 years in the business or profession
• Age between 23 to 65 years.
The maximum amount that the bank can give is subject to the Net
adjusted salary of the applicant. The calculation for the same is done in the
following manner.
NAS (P) = Net Income (ITR) - (EMI * 12) - (IT paid in a particular year)
Degree Max Loan Amount
MBBS & BDS 4 times net adjusted salary
MD & MS 5 times net adjusted salary
Self Employed Businessmen
Conditions
• Net Annual Income should be Rs. 1,00,000/- per annum
• Overall 3 years in the business
• Age between 23 to 65 years
Document Required:
1. Application form
2. Latest 2 years ITR with Balances sheet and P & L statement
3. Bank statement
4. Photograph (signed on back side)
5. Identity proof
a. PAN Card
b. Driving License
c. Passport
d. (if the above documents are not available then LIC premium
receipt/SSC Certificate with Photo and sign verification is
required)
6. Establishment proof
7. Telephone connection is a must in the office sand residence both.
Loan without Income Statements
Credit Cards
In this program the loan is offered against the credit card limit. ABN
AMRO Bank gives loan to applicants having the credit cards of all MNC's,
SBI, ICICI, HDFC except to the employees of Private Limited Companies.
Conditions:
• Rate of interest 21.5% if loan amount <=50000 otherwise
21%.
• Tenure 1 to 3 years
• Multiplier : 1.2 times credit limit for salaried
1 for other i.e. SEPs and SEBs.
• Maximum loan limit Rs. 3,00,000/- (in case of charge card/
diners club limit is Rs. 1,00,000/-)
Documents Required:
• Application form
• Latest 2 months billing for Credit Card (No late charges
allowed)
• Photocopies of both sides of credit card
• Identity proof
• PAN Card
• Driving License
• Passport
• (if above documents are not available then LIC premium
receipt/SSC certificate with photo and sign verification is
required)
• Photograph (signed on both sides)
• Employment / Establishment proof (Form 16H or appointment
letter/shop license)
• Card must be at least 1 year old
Surrogate Loan (Track Record of Previous PL/Auto/Housing Loan)
In this program the loan is offered on the track record of the previous
Personal Loan, Car loan and Housing loan. Track record on the loan taken
from the following companies will make the applicant eligible for the loan
offered by ABN AMRO Bank.
• State Bank of India (SBI
• ICICI
• HDFC
• Kotak Mahindra
• Amex
• HSBC
• Sundaram Fin.
• Tata Fin.
• IDBI
• ING Vyshya
• UTI
• DCB
• Centurain Bank of Punjab
• GE Money/ Countrywide
• Citi Fin.
Conditions
• Previous loan should be matured at least for 12 months for the
salaried class and 18 months for businessmen.
• Loan limit will be Rs. 25,000/- to Rs. 3,00,000/-
• Interest will be 20% for car/housing loan
• Interest 1% less than previous personal loan (should not be
less than 17.5%)
• Tenure 1 to 5 years
• Multiplier is 15 times of EMI for salaried
• For Businessmen and others
If loan seasoning is done between
12 - 18 months 12 times of EMI
18 months and above 15 times of EMI
Documents Required
• Application form
• Identity proof
• PAN Card
• Driving License
• Passport
• (if above documents are not available then LIC premium
receipt/SSC certificate with photo and sign verification is
required)
• Photograph (signed on both sides)
• Track record of last 12 months/ 15 months bank statement
• Employment / Establishment proof (Form 16H or appointment
letter/shop license)
Relationship Rewards for Existing ABN AMRO Customers
Under this program, any applicant can go for the top up scheme. Here after the
completion of six months, the applicant can get an additional loan amount to the
EMI of the loan and the completed tenure of the loan.
CHAPTER 4
CREDIT LINE
CONCEPT OF “CREDIT”
1. It is the idea that if you build up a reputation for paying bills and debts on
time you will be able to borrow money in the future.
2. Credit is important because it enables you to borrow money when you need
it. In addition, the better your creditworthiness the more cheaply you will
be able to borrow money whether for a car, education, home or some other
large expenses.
3. On the other hand, if you are not a good credit risk, you may not be able to
borrow when you need to, or you might be able to borrow but only at a high
interest rate.
SIGNIFICANCE OF CREDIT
• Credit is used primarily in order to obtain loans. Loans can be
excellent way to be fund large purchases and business initiative
,but managing debt can be complicated process
• It can take just few months to get into financial trouble and years
to get out.
• Although debt is some time useful, there is diff between good debt
and bad debt the two most important characteristics are how you
borrow the money and what you do it .HOW FRUITFULLY YOU
USE IT.
• Even though debt is a part of life, the key to preventing it from
becoming destructive is knowing its benefits and risks.
REASONS FOR CREDIT ANALYSIS
“CREDIT ANALYSIS”DEFINATION:
“The process of evaluating an
obligations.”
SALARIED
Min Age - 23
Max Age (on loan maturity) - 60
Residence Stability - 2 yrs in Pune or in Current Emp>3 yrs or Self-
Owned resi or Gross Sal> 3.6L
Job Stability - 1 yr at current job or 3 yrs total work experience
Basic Documents - (1) photo with sign on back side (2) ID proof (3)
Job/Business Stability proof
Salaried
Min Income - Gross 1 Lac
Max loan amt - 3 lacs
Max Tenor - 4 yrs
Emp Continuity Req -
Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4
2 yrs - NAS x 8
3 yrs - NAS x 9
4 yrs - NAS x 11
Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting
3 Salary Credits.
Additional Qualifying requirements -
NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC
Salaried
Min Income - Gross 1 Lac
Max loan amt - 1.25 lacs
Max Tenor - 3 yrs
Emp Continuity Req -
Maximum Loan eligibility-Multiplier - 1 yr - NAS x 4
2 yrs - NAS x 8
3 yrs - NAS x 9
Documents - (1) Latest 2 payslips (2) 6 months bank statements reflecting
3 Salary Credits.
Additional Qualifying requirements -
NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC
Software Professionals
Min Income - Net 1.5 Lacs
Max loan amt - 5 lacs
Max Tenor -
EMP Continuity Req -
Maximum Loan eligibility-Multiplier - 1 yr - NAS x 3.5
2 yrs - NAS x 7.5
3 yrs - NAS x 9
4 yrs - NAS x 11.25
5 yrs - NAS x 13.5
Documents - (1) Latest 2 payslips (2) 3 months bank statements reflecting
3 Salary Credits (3) must
Additional Qualifying requirements -
- Must have 12 months old loan with approved financier ( lac AL/HL or
75,000 PL) OR CC with min 40,000 limit.
NAS (Net Adjustable Salary) = Net Salary - Obligation - 5% of AAB CC
Surrogate Program
Loan track record NRR
Max loan - 7.5 lacs
Min vintage - 8 months
Max tenor - 5 yrs
Program requirement - Min 10 EMI's paid and Min loan taken Rs.
50,000/-
Max Loan eligibility -
10-12 EMI's x EMI x No. of EMI's paid x 1.25
>12-18 EMI's - EMI x No. of EMI's paid x 1.45 (subj to Max of 30 EMI's) >
18-24 1.5
Eligibility -
Citibank, StanC, AmEx, HSBC, ICICI, HDFC, Sundaram Fin. Kotak Mah,
Tata Fin, IDBI, ING Vysya, UTI, KOTAK, DCB, Centurian Bank of Punjab,
GE Money/Countrywide**, Citi Fin**, Maruti Countrywide**
Documentation - (1) Repayment track, (2) 3 months bank statements OR
(1) Amortization schedule & 8 months banking.
Surrogate Program
Mobile Phone
Max loan - 1.25 lacs
Min vintage - 3 months
Max tenor - 3 yrs
Program requirement - Min Avg Billing of Rs. 1500/- for last 3 months
Max Loan eligibility -
* Rs. 1500 - Rs. 2500 - 75,000 > Rs. 2500 - 1, 25,000
Eligibility -
Aritel, Reliance, Idea, Hutch, BSNL, Tata Mobile & BPL
Documentation - Latest 3 months mobile bill statements showing min
billing of Rs. 1,500/-
Surrogate Program
Other Bank Deposit
Max loan - 3 lacs
Min vintage - 6 months
Max tenor - 3 yrs
Program requirement - Saving Bank A/c with 6 months relationship
Max Loan eligibility -
* 6-12 months - ADB x 1
* 12-18 months - ADB x 2
*> 18 months - ADB x 3
Eligibility -
ICICI, HDFC, StanChart, Citibank, HSBC, AmEx, UTI, IDBI & SBI
Documentation - Latest 6 months bank statements from S/B a/c with last
days avg balance >/= Rs. 25,000/-
Documentation - (1) Repayment track for the last 12 months (2) 3 months
bank Statement OR (1) 12 months bank statements (2) amortization
schedule & (3) Resi. & DOB Proof.
ROI - Personal Loan: 1% less than competition subject to min of 16%
RR Program
C A/c
Min vintage - 6 months
Max loan - 6 lacs
Max tenor - 5 yrs
MUE -
Program eligibility -
6 months ADB 40,000/-
Loan eligibility -
* 6 to 12 months - ADB x 3
* 12 to 18 months - ADB x 5
* > 18 months - ADB x 6
RR Program
SB A/c
Min vintage - 6 months
Max loan - 6 lacs
Max tenor - 5 yrs
MUE -
Program eligibility -
6 months ADB 20,000/-
Loan eligibility -
* 6 to 12 months - ADB x 3
* 12 to 18 months - ADB x 5
* > 18 months - ADB x 6
RR Program
Cards
Min vintage - 8 months
Max loan - 4 lacs
Max tenor - 4 yrs
MUE - 8.5 Iacs
Program eligibility -
Min Credit Limit - 25,000/-
Loan eligibility -
* 8 -12 months - Cr limit x 2
* > 12 months - Cr limit x 3
RR Program
Auto Loan
Min vintage - 8 months
Max loan - 7.5 lacs
Max tenor - 4 yrs
MUE - 8.5 Iscs
Program eligibility -
8 EMI's paid
Loan eligibility -
* 8 -12 MOB - EMI x No. of EMI's paid x 1.5
* > 12-18 MOB - EMI x No. of EMI's paid x 1.75
* > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)
RR Program
Mortgage
Min vintage - 8 months
Max loan - 7.5 lacs
Max tenor - 5 yrs
MUE - 8.5 Iscs
Program eligibility -
Loan eligibility -
EMI x No. of EMI's paid x 1.5
* Subj to a Max of 18 EMI's & LTV of HI < 80%
Top Up Program
Min loan enhancement - Rs. 50,000/-
Max loan - For Salaried, loan amount caps as per present employer
category (Cat A/B) AND for SE as per program
Min vintage - 8 months
Max tenor - New loan tenor either same as earlier loan of higher subject to
program caps (depending on whether existing loan is RR/VI/SI etc).
Program requirement -
# Any applicant who has availed a loyalty/special loyalty auto loan from the
bank in the last 3 months will not be eligible for a loan under the Top Up
program.
# If existing PL has already closed/run off, then the loan multipliers will
apply ONLY if the last payment is not more than 12 months old. if last
payment is 12-24 months old, the PL can be processed as Override-
however multipliers will not apply.
# Max 4 Top up loans allowed.
# The EMI's for the top up loan should be from the same account as that of
the existing loan and the existing business/employer (entity only) and
residence addresses should be unchanged, failing which, a full verification
will be done i.e., residence and/or business/employer.
# The new loan may be approved for either the same tenor as the earlier
tenor or a higher tenor subject to the maximum tenor allowed for the
specific program.
# The applicant category must be unchanged from the original application
i.e. if the applicant was earlier salaried and now self employed he will not
be eligible under the
Loan eligibility -
If, 8 -12 EMI's paid then EMI's paid x 1.2 & If, > 12 months then EMI's paid
x 1.3
* > 12-18 MOB - EMI x No. of EMI's paid x 1.75
* > 18 MOB - EMI x No. of EMI's paid x 2 (subj to a Max of 36 EMI's)
Co-borrowers
This program is only for the salaried applicants. In this program the spouse can
be the co-borrower for the loan amount.
The income of the spouse can be added in the gross income for the multiplier,
to find the maximum loan that can be given to the applicants. Here 60% of the
spouse’s gross income can be added for eligibility.
Guarantors
Although ABN AMRO BANK does not require guarantors for personal loans, but
there are some exceptions where there is need for the guarantors. The following
are the conditions when there is need for guarantors.
PERSONAL LOANS
Salaried Individuals 16% - 23%
Relationship Rewards
16% - 22%
Programs
Track Record/Special
18% - 26%
Surrogate Programs
Processing fee for Regular
2.25%
Programs
Processing Fee for
Relationship Reward 2%
Programs
Processing Fee for loan
Rs. 20
amount less than Rs. 100000
Disclaimer - The rate of interest mentioned above are the standard and average
rates under standard income criteria for each class of borrowers and shall be
higher/lower depending on the parameters which are met by the customers. They
would also vary by tenor. These rates are currently applicable and can be changed
any time from time to time, at the sole discretion of ABN AMRO Bank and
without any prior or post notice to the customer and such changes shall be final
and binding on all customers of ABN AMRO Bank
Personal Loan Approval Stages
Marketing Executive
File
Checking Documents
Coordinator
Initiating Verification
{Crystal Info Services (P) Ltd.
Credit Department
Approval / Decline
Delhi Disbursement
After a file is logged in by the Marketing Executive, the Coordinator checks
the documents and also initiates the Verification. Verification is done by an
external agency 'Crystal Info Services Pvt. Ltd." The Verification is done by
a surprise visit to the applicant’s residence and office premises, subject to
a maximum of 3 times. Once the verification is done by the agency the
report is submitted to the credit department.
Eligibility Criteria:
Purpose:
• To establish identity of the borrower, ascertain and reconfirm his
residential and office address, length of stay and stability, and match
them with the information given by the applicant in the application
form.
• The office verification will reconfirm the name and address of his
employer and his designation in the company. In case of self
employed Professional/Businessman, the office CPV will provide
data on number of years of business, employees in the company,
size and location of the office etc.
35
30
25
No. of Files
20 Series1
Series2
15 Series3
10
0
Relationship Top Up Balance SEVI Self Salaried Surrogate
Rew ards Scheme Transfer Employed Program Program
Professional
Programs
List of approved companies
ABN AMRO BANK has 7500 companies listed with them for the personal
loan scheme. We can give loan only to the employees who are working in
these companies. These companies are listed according to their past
performance, track record, profit earned in the past years, number of
employees working there etc.
The new company that has to be listed should first give the details of
the requirements. Once the company is listed, the employees can apply for
personal loan.
CHAPTER 5
CASE STUDY
CASE STUDY
Gender: Male
Existing Relationship: NO
Detail of Spouse:
Name: Yogini
Occupation: House Wife
Number of Dependant: 2
No of EMI Paid: 15
Processing Fee: 2%
Tenure: 60 Months
Advance EMI: 0
CHAPTER 6
CONCLUSION
CONCLUSION
ABN AMRO BANK has successful lead on personal loan market .Moreover they
working for customer satisfaction .Bank very much stuck to the policy , the policy
is not flexible to everyone it mainly concentrate on Higher middle class group and
Mass public. Bank mainly deal with surrogate program it will go through the
process very soon as compare to other.
BIBLIOGRAPHY
BIBLIOGRAPHY
SITE:
WWW.ABNAMRO.CO.IN
BOOKS:
RISK MANAGEMENT
INDIAN FINANCIAL SYSTEM: M Y Khan