1. BANK PRODUCTS 2. Bank Products Banking products have evolved from the traditional loans& deposits to a large variety of offerings. Bank products range from wholesale or corporate products to retail products from fund based to fee-based from domestic to foreign 3. Commercial/ Wholesale Credit 4. Commercial Credit The credit granted by a bank can be funded or non fundedcredit. Funded credit involves a flow of funds from the bank to theborrower ex: cash credit, demand loans, overdraft, billpurchased and discounted While non funded credit doesnt not Ex: guarantees andletter of credit Cash credit is provided with limit no maturity and can bedrawn at will by the borrower but demand loan has grantedwith maturity & lump sum amount is paid & repayable inlump sum at maturity or installment 5. Cash Credit & Working Capital DemandLoansWorking Capital Finance Working Capital facilities are provided to finance the day-to-daybusiness requirements. Funding requirements arestructured to finance procurement of raw materials/storesand payment towards manufacturing costs and otheroverheads.The Bank offers a combination of operative cash credit andworking capital demand loan to meet the domestic workingcapital requirements of our clients.Short Term Finance The Bank offers short-term loans for a period ranging from 3months to 12 months to sound corporate for meeting theirspecific short-term working capital requirements. The fundsare provided with interest rates either linked to ourBPLR(Benchmark Prime Lending Rate-14.5%) or at a base 6. Bill Purchase & Discounting Discounting bill :Letter of credit is an instrument issued in thefavor of the seller by the buyer bank assuring that payment will bemade after certain timer frame depending upon the terms andconditions agreed, ranging from 30-120 days Now when the seller receives the letter of credit through bank,seller prepares the documents and presents the same to the bank.The most important element in the same is the bill of exchangewhich is used to negotiate a letter of credit. Seller discounts thatbill of exchange with the bank and gets money. Now it is seller's bank responsibility to send documents and bill ofexchange to buyer's bank for onward forwarding to the buyer forthe acceptance and the buyer finally, accepts bill of exchangedrawn by the seller on buyer's bank because he has opened thatLC. Buyers bank than get that signed bill of exchange from thebuyer as guarantee and release payment to the sellers bank and 7. Bill Purchase & Discounting Bill Discounting is a process in which you can get instant cash onthe purchases or credit sales made by you. If you have madepurchase with your suppliers you can pay them instantly by gettingdiscounted your purchase bill, for which you need to show thedocuments which authenticates the transaction done by you liketrade invoices challans, truck receipts/railway receipts, bill of ladingetc. Similarly if you have made any credit sales you can get instantmoney by getting discounted your sales bill. BILLS PURCHASED, in trade finance, allows a seller to obtainfinancing and receive immediate funds in exchange for a salesdocument not drawn under a letter of credit. The bank will send thesales documents to the buyers bank on behalf of the seller.In case of the bill purchase, the bill is purchased and that in case ofbill discounting the bank is only financing against the said bill 8. Overdraft This facility is basically for Current Account holder in a bankcan be sanctioned an overdraft facility. An overdraft occurs when money is withdrawn froma bank account and the available balance goes below zero. Inthis situation the account is said to be "overdrawn". If thereis a prior agreement with the account provider for anoverdraft, and the amount overdrawn is within the authorizedoverdraft limit, then interest is normally charged at theagreed rate. If the negative balance exceeds the agreedterms, then additional fees may be charged and higherinterest rates may apply. 9. Term Loans A loan from a bank for a specific amount that has a specifiedrepayment schedule and a floating interest rate. Term loansalmost always mature between one and 10. For example many banks have term-loan programs that canoffer small businesses the cash they need to operate frommonth to month. Often a small business will use the cashfrom a term loan to purchase fixed assets such asequipment used in its production process. Base Rate is 10-10.5% Lending Rate: Base Rate+ spread(2% approx depend uponcustomer credit worthiness) 10. Benchmark Prime Lending Rates (New): PublicSector BanksSr.NoName of the Bank As on BPLR1 Allahabad Bank1/7 /200814.502 Andhra Bank31/8 /200912.253 Bank of Baroda1/7 /200912.254 Bank of India1/7 /200911.755 Bank of Maharashtra31/3 /200813.006 Canara Bank1/7 /200611.57 Central Bank of India1/4 /200912.508 Corporation Bank1/8 /200813.509 Dena Bank1/7 /200912.0010IDBI Bank Limited1/7 /200912.0011Indian Bank8/8 /200816.0012Indian Overseas Bank15/9 /20031113Oriental Bank of Commerce14/6 /200611.514Punjab & Sind Bank1/1 /20041215Punjab National Bank22/12 /200816.7516State Bank of India15/5 /200611.517Syndicate Bank6/7 /200912.2518UCO Bank6/7 /200912.2519Union Bank of India12/6 /200915.2520United Bank of India1/7 /200912.0021/5 /Benchmark Prime Lending Rates (New): Private Banks ofIndiaSr.NoName of the Bank As on BPLR1 AXIS Bank Ltd. 1/5 / 2006 102 City Union Bank Ltd. 1/5 / 2006 11.253 Development Credit Bank Ltd. 31/5 / 2009 12.004 ICICI Bank Limited 1/4 / 2009 12.005 IndusInd Bank Limited 6/11 / 2008 15.006 ING Vysya Bank Ltd. 1/8 / 2008 14.507 Karnataka Bank Ltd. 31/3 / 2008 14.508 Tamilnad Mercantile Bank Ltd. 1/7 / 2008 15.009The Dhanalakshmi Bank Limited. 13/9 / 2009 14.0010The Federal Bank Ltd. 5/6 / 2009 15.7511The HDFC Bank Ltd. 15/5 / 2007 15.5012The Jammu & Kashmir Bank Ltd. 31/3 / 2008 12.0013The Karur Vysya Bank Ltd. 31/3 / 2008 11.5014The Lakshmi Vilas Bank Ltd. 31/3 / 2008 11.0015The Nainital Bank Ltd. 13/8 / 2008 15.5016The Ratnakar Bank Ltd. 31/3 / 2008 12.7517The South Indian Bank Ltd. 9/7 / 2008 15.00Benchmark Prime Lending Rates (New):Foreign BanksSr.NoName of the Bank As on BPLR1 AB Bank Limited1/5 /2006112Abu Dhabi CommercialBank Ltd.5/8 /200814.003 Bank of America N.A.4/8 /200814.254Bank of Bahrain & KuwaitBSC1/7 /200912.755 Barclays Bank Plc31/3 /200811.006 BNP PARIBAS1/1 /200412.57 Citibank N.A.1/5 /200612.58Credit Agricole CorporateAnd Investment Bank1/1 /200915.509 Deutsche Bank AG20/7 /200915.7510Krung Thai Bank PublicCompany31/8 /200912.7511Mashreqbank psc1/1 /20041112Oman International Bank SA O1/5 /20061213Societe Generale31/3 /200813.5014The Royal Bank ofScotland N V1/7 /200813.7515UBS AG1/8 /200816.00 11. Retail Credit 12. Retail Credit Credit given to a customer by a retailer for the payment ofpurchases. Retail credit can be granted either through outside creditcards such as Visa, MasterCard, and American Express or throughretailer-generated credit cards. In-house credit cards encouragestore loyalty. Retail credit facilities lend funds to consumers wishing topurchase high ticket items but are short on capital. Thus, retailcredit facilities may enable a greater number of consumers accessto a retailer's goods. Retail credit facilities give the option ofconsuming now or consuming in the future. Higher interest ratesmay be acceptable to some consumers, depending on theconsumers' unique consumption utilities. The risk of default is afactor that determines the interest rate that retail credit facilitiescharge. 13. Credit Cards & HousingFinanceBanks with a net worth of 100 crore can undertake credit cardbusiness A credit card is a payment card issued to users as a systemof payment. It allows the cardholder to pay for goods and servicesbased on the holder's promise to pay for them. The issuer of thecard creates a revolving account and grants a line of credit tothe consumer from which the user can borrow money for paymentto a merchant or as a cash advance to the user. The purpose of a housing finance (10% )system is to provide thefunds which home-buyers need to purchase their homes and alsofor repairs to existing properties. Loan upto 15 lakh forconstruction, loan upto 1 lakh in rural & semi urban areas, 2lakh inurban for repair 14. Deposits 15. Current Accounts Current bank account is opened by businessmen who havea number of regular transactions with the bank, bothdeposits and withdrawals. It is also known as DemandDeposit. No interest is given on current account balance Current account can be opened in co-operative bankand commercial bank. Incurrent account, amount can bedeposited and withdrawn at any time without giving anynotice. It is also suitable for making payments to creditors byusing cheques. Cheques received from customers can bedeposited in this account for collection. 16. Saving Account Savings accounts are accounts maintained byretail financial institutions that pay interest (saving depositrate: 4% approx). The withdrawal from a saving account arelimited in number and amount. These accounts let customers set aside a portion of theirliquid assets while earning a monetary return. For the bank,money in a savings account may not be callableimmediately and the interest on a saving account balance iscalculated on the minimum balance in the account between10th and last day of month again as per RBI guidelines 17. Deposits Term Deposit(8-9.25%): A deposit held at a financialinstitution that has a fixed term. These are generally short-termwith maturities ranging anywhere from a month to afew years. Minimum maturity 7days. When a term deposit ispurchased, the lender (the customer) understands that themoney can only be withdrawn after the term has ended orby giving a predetermined number of days notice. Certificate of Deposits: A savings certificate entitling thebearer to receive interest. A CD bears a maturity date, aspecified fixed interest rate and can be issued in anydenomination. CDs are generally issued by commercialbanks and are insured by the FDIC(Federal DepositInsurance Corporation). The term of a CD generally rangesfrom one month to five years. Minimum amount of CD is1lakh & in multiple of 1lakh thereafter 18. Non Resident Deposits Types of accounts which can be maintained by anNRI / PIO in India: Non-Resident Ordinary Rupee Account (NRO Account) Non-Resident (External) Rupee Account (NRE Account) Foreign Currency Non Resident (Bank) Account FCNR(B) Account. It covers term deposits in pound sterling,US dollar, Canadian Dollar, Euros. Maturity of FCNR is 5years and interest is paid within the ceiling rate ofLIBOR or SWAP rates of respective currencyFCNR_Deposit_Rates_August_2012.xls 19. Fee Based Products 20. Letter of Credit A letter of credit is a document that a financial institution or similar partyissues to a seller of goods or services which provides that the issuer willpay the seller for goods or services the seller delivers to a third-partybuyer. The issuer then seeks reimbursement from the buyer or from thebuyer's bank. The document serves essentially as a guarantee tothe seller that it will be paid by the issuer of the letter of creditregardless of whether the buyer ultimately fails to pay. In this way,the risk that the buyer will fail to pay is transferred from the seller to theletter of credit's issuer. 21. Bank Guarantees A guarantee from a lending institution ensuring that the liabilitiesof a debtor will be met. In other words, if the debtor fails to settlea debt, the bank will cover it. A bank guarantee enables the customer (debtor) to acquiregoods, buy equipment, or draw down loans, and thereby expandbusiness activity. This facility is basically for existing customerusing credit facilities with bank & supported by cash margins While issuing financial guarantee, bank ensure that the customeris in a position to reimburse the bank, in case bank is required tomake the payment under the guarantee. 22. Thanks