REPORT OF SUMMER INTERNSHIP PROGRAM

ON
"CREDIT APPRAISAL: ASSESSING THE VIABILITY AND RISK OF
BORROWERS FOR SOUND LENDING DECISIONS"
CODE-MS3052

By
SUBHAM GHATAK
3RD SEMESTER
ROLL NO - 23MB4025

REGISTRATION - 23P40034

DEPARTMENT OF MANAGEMENT STUDIES, NIT DURGAPUR

Sign: SUBHAM GHATAK Date: 06.07.2024

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 STUDY ON
“PROCESS OF CREDIT APPRAISAL,
RISK RATING & CREDIT MONITORING SYSTEM IN INDUSTRIAL
DEVELOPMENT BANK OF INDIA”

Project Report submitted in partial fulfilment of the requirement for the

degree of

MASTER OF BUSINESS ADMINISTRATION

Under

NATIONAL INSTITUTE OF TECHNOLOGY, DURGAPUR

SUBMITTED BY: SUBHAM GHATAK

REGISTRATION NUMBER: 23P40034
ROLL NUMBER: 23MB4025

LOCATION
IDBI BANK, REGIONAL OFFICE, CITY CENTRE, DURGAPUR
INTERNSHIP PERIOD: 13.05.2024 TO 06.07.2024

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 TABLE OF CONTENTS

Particulars Page No.

Authorization 5
Acknowledgment 6
Declaration 7
List of acronyms 8-9
Executive Summary 10
IDBI BANK Limited 11-15
• History
• Operations
• Awards and Recognition
Finacle 16-18
GBM 19-20
Credit Appraisal 21-39
• SRA Loans
1. Home Loan
2. Personal Loan
3. Auto Loan
4. Education Loan
5. Mortgage Loan
• NON-SRA Loans
1. Cash Credit
2. Term Loan
3. Over Draft
4. Gold Loan
5. Auto Loan
Loan Products Offered by IDBI Bank 40-45
• Agri Products
• Personal Products
• MSME Products
• Gold Loan Products
• Auto Loan Products
• Agri Allied Products

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 • Home Loan Products
Documents Required for Sanctioning Loans 46-51
• MSME & Agri Loan
• Personal Loan
• Other Loans
Analysis of Loan Requirement 52-54
Credit Appraisal Process at IDBI Bank 55-57
Other Software Used By IDBI Bank for Credit 58-70
Appraisal Process
• CIBIL
• CERSAI
• I-ASTRA
• ARKEY
• I-ACIDS
• I-RISKS
A Comprehensive Report on My Working 71-76
Reference 77

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 AUTHORIZATION

06th July 2024

(To whomsoever It May Concern)

This is to certify, Subham Ghatak, Roll No- 23MB4025, Registration No-

23P40034 student of NIT DGP, has undertaken the Summer Internship Program

from our bank at REGIONAL OFFICE, CITY CENTRE, DURGAPUR from

13.05.2024 to 06.07.2024 for the project titled “TO STUDY THE PROCESS OF

CREDIT APPRAISAL, RISK RATING & CREDIT MONITORING SYSTEM

IN INDUSTRIAL DEVELOPMENT BANK OF INDIA” under our supervision.

Mr. Uttam Kumar Mr. Aniket Santra

Branch Manager Manager (Asset)
Purulia Branch Purulia Branch

Mr. Kamal Kishore Jha Mr. Malay Sahoo

Assistant General Manager (Asset) Regional Head
Regional Office Regional Office

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 ACKNOWLEDGEMENT

I would take this opportunity to express my sincere gratitude to all the people for
their valuable assistance and continuous support during my Summer Internship
Program.
Firstly, I would like to thank Mr. Mani Shankar Banerjee (AGM, Zonal Co-
ordination, Kolkata Region), Mr. Anjum Nishant (Manager, Zonal
Coordination, Kolkata), Mr. Rizwan Ahmed (Manager, Zonal Coordination,
Kolkata), and Mr. Anirban Biswas, (Manager, Zonal Coordination, Kolkata)
for their confidence in me and for giving me the opportunity to work in their
organization.
I am highly grateful and obliged to my bank guides, Mr. Malay Sahoo (Regional
Head), Mr. Kamal Kishore Jha (Assistant General Manager, (Asset)), Mr.
Uttam Kumar (Branch Manager), and Mr. Aniket Santra (Manager (Asset)),
IDBI Bank, Regional Office, City Centre, Durgapur for their guidance and
support at each and every stage during the development of the project. Their
guidance, input, and suggestions have played a crucial role at every stage of the
project, and I had gained a lot of knowledge from them.

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 DECLARATION

This is to certify that the project titled “TO STUDY THE PROCESS OF CREDIT
APPRAISAL, RISK RATING & CREDIT MONITORING SYSTEM IN
INDUSTRIAL DEVELOPMENT BANK OF INDIA” is a bonafide work done
by Subham Ghatak, Roll Number- 23MB4025 in partial fulfilment of the
requirements of the MBA program and submitted to NIT DURGAPUR.

I also declare that the project is a result of my own efforts and that it has not been
copied from anyone.

Place: Durgapur
Date: 06.07.2024

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 LIST OF ACRONYMS

 MSME- Micro, Small & Medium Enterprises

 CC- Cash Credit
 CMR- CIBIL MSME Rank
 CIBIL-Credit Information Bureau (India) Limited
 TNW- Total Net Worth
 NPA- Non-Performing Assets
 DER- Debt- Equity Ratio
 ITR- Income tax Return
 DPN- Demand Promissory Note
 WCTL- Working Capital Term Loan
 KYC- Know Your Customers
 RLLR- Repo Linked Lending Rate
 PSL- Priority Sector Loan
 MOA- Memorandum of Association
 DP – Drawing Power
 SRA-Structured Retail Asset
 RBI- Reserve Bank of India
 ROI- Rate of Interest
 MCLR – Marginal Cost of Funds-Based Lending Rate
 BD- Book Debt
 PRAM – Product Rating Model
 TAGIC- Tata AIG General Insurance Company Ltd.
 DAN – Detailed Appraisal Note
 LPS- Loan Processing System
 LATS- Loan Automatic Transformation System
 SMA- Special Mention Account
 SR- Short Review
 RH- Regional Head
 T.O.D- Temporary Overdraft
 O.D. – Overdraft
 DPD- Days Pass Dues
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 CIR – Credit Information Report
 MCLR – Marginal Cost of Lending Rate
 CA- Current Assets
 CL – Current Liabilities
 DSCR- Debt- Service Coverage Ratio
 ECS – Electronic Clearing Service
 ICR- Interest Coverage Ratio
 CGTMSE – Credit Guarantee Fund Trust for MSE
 i- PALS – i- PSL Automated Lending System
 KCC – Kishan Cash Credit
 MF – Marginal Farmer
 FOIR – Fixed Obligations Against Income Ratio
 RAC – Retail Asset Centre
 RTR – Repayment Track Record
 EMI – Equitated Monthly Instalments
 SI – Standing Instructions
 MOE- Memorandum of Entry
 FD- Fixed Deposit
 TIR- Title Investigation Report
 CERSAI- Central Registry of Securitisation Asset Reconstruction and
Security Interest

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 EXECUTIVE SUMMARY

This project examines the credit appraisal process within banks and financial
institutions, emphasizing its critical role in profitability and operational success.
The evaluation of creditworthiness involves analysing current assets (CA) and
current liabilities (CL), with a higher CA being favourable but potentially
indicative of stagnation if excessively high. Loans must align with the business’s
working capital cycle, avoiding the misuse of borrowed capital for fixed assets,
which could distort the current ratio.
Verification of a borrower’s credibility encompasses external reference checks,
site visits, and ensuring collateral is legally sound. Thorough inspections and
background checks, including financial history, are essential. Financial ratio
analysis, such as the debt-equity ratio, helps assess repayment capacity, with a
lower ratio indicating stronger financial health. The CIBIL score is crucial for
assessing credit history and ensuring closure of previous loans.
The Credit Monitoring Report (CMR) offers an unbiased evaluation of an
MSME’s creditworthiness, eliminating subjective biases. Personal interactions
with borrowers reveal critical information affecting loan approval, while risk
rating allows for appropriate loan pricing, balancing risk and profitability. This
structured approach aids in effective loan portfolio management, diversification
of lending activities, and minimizing risk concentration.

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 IDBI BANK LIMITED

The IDBI Bank Limited (IDBI Bank or IDBI) is a Scheduled Commercial

Bank under the ownership of Life Insurance Corporation of India (LIC)
and Government of India. It was established by Government of India as a wholly
owned subsidiary of Reserve Bank of India in 1964 as Industrial Development
Bank of India, a Development Finance Institution, which provided financial
services to industrial sector. In 2005, the institution was merged with its
subsidiary commercial division, IDBI Bank, and was categorised as "Other
Development Finance Institution" category. Later in March 2019, Government of
India asked LIC to infuse capital in the bank due to high NPA and capital
adequacy issues and also asked LIC to manage the bank to meet the regulatory
norms. Consequent upon LIC acquiring 51% of the total paid-up equity share
capital, the bank was categorised as a 'Private Sector Bank' for regulatory
purposes by Reserve Bank of India with effect from 21 January 2019. IDBI was
put under Prompt Corrective Action of the Reserve Bank of India and on 10
March 2021 IDBI came out of the same. At present direct and indirect
shareholding of Government of India in IDBI Bank is approximately 95%, which
Government of India (GoI) vide its communication F.No. 8/2/2019-BO-II dated
17 December 2019, has clarified and directed all Central/State Government
departments to consider IDBI Bank for allocation of Government
Business. Many national institutes find their roots in IDBI like SIDBI,
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EXIM, National Stock Exchange of India, SEBI, National Securities Depository
Limited. Presently, IDBI Bank is one of the largest Commercial Banks in India.
The bank has an aggregate balance sheet size of ₹3.74 trillion as of
31 March 2016. It has 2,005 Retail Banking Branches and 3,353 ATMs spreading
all over India as on 26th April 2024, including one overseas branch in Dubai, 58
e-lounges and 1,442 Centres as of 1 August 2023. As of September 2021, LIC
holds the 49.24% shareholding and the Government of India holds 45.48%, with
LIC being in control of the management of the bank.

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 HISTORY

Overview of development banking in India

Development Banking emerged after the Second World War and the Great
Depression in the 1930s. The demand for reconstruction funds for the affected
nations compelled in setting up of national institutions for reconstruction. At the
time of Independence in 1947, India had a fairly developed banking system. The
adoption of bank dominated financial development strategy was aimed at meeting
the sectoral credit needs, particularly of agriculture and industry. Towards this
end, the Reserve Bank concentrated on regulating and developing mechanisms
for institution building. The commercial banking network was expanded to cater
to the requirements of general banking and for meeting the short-term working
capital requirements of industry and agriculture. Specialized Development
Financial Institutions (DFIs) such as the IDBI, NABARD, NHB and SIDBI were
set up to meet the long-term financing requirements of industry and agriculture.

Formation of Industrial Development Bank of India (IDBI)

The Industrial Development Bank of India (IDBI) was established in 1964 under
an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India.
In 1976, the ownership of IDBI was transferred to the Union government and it
was made the principal financial institution for coordinating the activities of
institutions engaged in financing, promoting and developing industry in India.
IDBI provided financial assistance, both in rupee and foreign currencies, for
green-field projects and also for expansion, modernization, and diversification
purposes. In the wake of financial sector reforms unveiled by the government
since 1992, IDBI also provided indirect financial assistance by way of refinancing
of loans extended by State-level financial institutions and banks and by way of
rediscounting of bills of exchange arising out of the sale of indigenous machinery
on deferred payment terms.
After the public issue of IDBI in July 1995, the government shareholding in the
bank came down from 100% to 75%.
IDBI played a pioneering role, particularly in the pre-reform era (1964–91), in
catalyzing broad-based industrial development in India in keeping with its
government-ordained 'development banking' charter.

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Some of the institutions built with the support of IDBI are the Securities and
Exchange Board of India (SEBI), National Stock Exchange of India (NSE),
the National Securities Depository Limited (NSDL), the Stock Holding
Corporation of India Limited (SHCIL), the Credit Analysis & Research Ltd, the
Exim Bank (India), the Small Industries Development Bank of India (SIDBI) and
the Entrepreneurship Development Institute of India.

Conversion of IDBI into a commercial bank

A committee formed by RBI recommended the development financial institution
(IDBI) to diversify its activity and harmonize the role of development financing
and banking activities by getting away from the conventional distinction between
commercial banking and developmental banking. To keep up with reforms in
financial sector, IDBI reshaped its role from a development finance institution to
a commercial institution. With the Industrial Development Bank (Transfer of
Undertaking and Repeal) Act, 2003, IDBI attained the status of a limited
company viz., IDBI Ltd.
Subsequently, in September 2004, the Reserve Bank of India incorporated IDBI
as a 'scheduled bank' under the RBI Act, 1934. The commercial banking arm,
IDBI Bank, was merged into IDBI in 2005.
Direct government intervention
The merger was expected to streamline operations of the bank. However, IDBI
continued to base its policy towards industrial sector like the erstwhile IDBI
entity did. This resulted in the retail business of the bank to be limited to 13
percent of its total business. As of March 2018, the total Non-Performing Assets
(NPA) rose to ₹55,588 crore (equivalent to ₹740 billion or US$8.9 billion in
2023) and were about 28 percent of its total loans. This was the highest among
Indian banks. The Union government intervened, with Life Insurance
Corporation bailing out the bank with an infusion of ₹9,300 crores.
On 29 June 2018, LIC got a technical go-ahead from the Insurance Regulatory
and Development Authority of India (IRDAI) to increase stake in IDBI Bank up
to 51%. LIC completed the acquisition of 51% controlling stake on 21 January
2019, with a total investment of ₹21,624 crores.

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 OPERATIONS

Acquisition of United Western Bank

In 2006, IDBI Bank acquired United Western Bank (headquartered at Satara) in
a rescue. By acquiring UWB, IDBI Bank doubled the number of its branches from
195 to 425.

Strategic disinvestment to LIC

LIC of India completed the acquisition of 51% controlling stake in the bank in
January 2019, making it the majority shareholder. Subsequent to the enhancement
of equity stake by LIC of India, Reserve Bank of India has clarified via press
release on 14 March 2019, that IDBI Bank stands re-categorised as a private
sector bank, with retrospective effect from 21 January 2019. LIC took over the
management control of the bank while the Union government, categorised as a
promoter.

Listings and shareholding

IDBI Bank's equity shares are listed on Bombay Stock Exchange and
the National Stock Exchange of India. As of September 2021, the Union
government held 45.48% shares in IDBI Bank, while LIC held 49.24% and the
remaining is held by non-promoters.

Employees
As of 31 March 2015, the bank had 16,555 employees, out of which 197 were
employees with disabilities.] The average age of bank employees on the same
date was 34 years. The bank reported a business of ₹25.64 crores per employee
and a net profit of ₹12.17 lakhs per employee during the FY 2012–13.

AWARDS & RECOGNITIONS

• IDBI Bank ranked #1197 in the Forbes Global 2000 in May 2013.
• It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the
Dun & Bradstreet Banking Awards, 2011.
• In 2011, it received Banking Technology awards for best use of Business
Intelligence and the best Risk Management from Indian Banks Association.
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FINACLE

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 ABOUT FINACLE

Finacle is a centralized and integrated corporate, retail and trade finance

solution that is designed to extend the bank's reach to the entire enterprise in
a seamless manner - from the front office to the back office. It leverages Web
technology to enable the bank to integrate with surround Web applications,
thus creating a powerful banker's desktop. The solution is multi-currency,
multi-lingual, multi-platform, and workflow enabled.
IDBI Bank (NSE code: IDBIBANK EQ) is a leading new private sector bank
with customer assets of over Rs.3000 crores across 39 cities. The bank is
aiming to transform itself into a retail powerhouse by implementing a
customer service driven growth strategy. In its endeavor to attain leadership,
the bank is investing heavily in human and technology capital to generate
financial capital.

ABOUT INFOSYS TECHNOLOGIES

Infosys Technologies Ltd. [NASDAQ: INFY] is an IT consulting and service

provider, providing end-to- end consulting for global corporations. The
company has partnered with several Fortune 1000 companies providing a
wide range of services for technology driven business transformation
initiatives. These services include e-strategy consulting and solutions, large
application development and enterprise integration services. Infosys also has
product co-development initiatives with numerous communication and
Internet infrastructure companies that are creating the building blocks for the
digital economy.
The Global Delivery Model of the company
leverages talent and infrastructure in different parts of the world to provide
high quality, rapid time-to-market solutions. Infosys' U.S. headquarters is in
Fremont, California; the company also maintains offices throughout the
U.S., Europe, and Asia.

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 IDBI FINACLE

IDBI Finacle is a core banking solution developed by Infosys Finacle, a leading

banking software provider. IDBI Bank, a Indian bank, uses Finacle as its core
banking platform to manage its banking operations. Finacle provides a range of
features and functionalities to support various banking functions, including
account management, transaction processing, loan management, and more. It
aims to enhance customer experience, improve efficiency, and reduce costs for
the bank.
IDBI Finacle is a core banking platform used by IDBI Bank to manage its
operations. Here are some key features of the platform:
• Account Information: IDBI Finacle allows customers to access account
information, track transactions, and view statements.
• Internet Banking: The platform provides internet banking services, enabling
customers to perform transactions online.
• Security: IDBI Finacle uses 128-bit SSL encryption for secure transactions,
• Componentized Design: The platform has a componentized design for
scalability and flexibility.
• Cloud-native: IDBI Finacle is built on a cloud-native architecture for robust
security and reliability.
• Digital Transformation: The platform enables digital transformation for
banks, providing a modern core banking software.

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 GBM
(Government Business Module)

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 INTRODUCTION
Government Banking Module is a solution that enables banks to provide
services to government entities efficiently. Some of the key features of this
module include.
- Tax collections and remittances
- Online tax collection
- Ministerial accounts
- Government schemes like gold bonds and citizen savings schemes
- Pension processing solutions
- Centralized system for collection and payment requirements
The Government Business Banking Solution is an intelligent system that triggers
alerts and sends notifications. It caters to the specific requirements of government
departments and agencies, thereby streamlining their banking operations.

GBM PRODUCTS
1. GST (Goods & Service Tax)
2. CBDT (Central Board of Direct Taxes)
3. CBDT INET (Central Board of Direct Taxes Internet)
4. CBEC (Central Board of Excise & Customs)
5. CBEC INET (Central Board of Excise & Customs Internet)
6. Sales Tax
7. EXIM (Export-Import Bank of India)
8. RBI Bond
9. PPF (Public Provident Fund)
10. NPS (National Pension System)
11. ECS SI (Electronic Clearing Service)
12. SCSS (Senior Citizen Saving Scheme)
13. Pension
14. APY (Atal Pension Yojana)
15. SSA (Sukanya Samriddhi Account Scheme)
16. MSSC (Mahila Samman Savings Certificate)
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CREDIT APPRAISAL

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 INTRODUCTION

Credit appraisal is a process through which banks/financial institutions provide

loans to customers who are genuine and who provide all the documents required
for the loan to be approved. An individual or business entity's creditworthiness
and the risk involved in giving credit are assessed throughout the credit appraisal
process. To establish whether or not credit should be extended, it is necessary to
evaluate the borrower's financial situation, credit history, ability to repay the loan,
and other pertinent variables. To make educated decisions about loan approval,
loan size, interest rates, and repayment conditions, lenders must conduct a credit
appraisal. Lenders can reduce risks, assure ethical lending, and safeguard their
financial interests by performing a comprehensive credit analysis. Banks provide
credit to any business/ individual in an attempt to help the economy overcome the
credit shortfall. The Indian economy is such that there is a need for credit now
and then. On the other hand, banks grow by providing their asset to other people
so that they could grow. The credit appraisal is a tough process as mentioned
earlier as it judges the individual’s/business’s creditworthiness through various
processes. These include all types of paperwork and related documents by which
the financial institutions could judge the borrower who is applying for the loan.
One right thing is that though business and individual are different entities, then
also both their personal CIBIL and CMR are checked as they both give
clarifications. The more any case is complicated the more it becomes difficult to
judge any borrower. Any credit appraisal case goes through a lot of
documentation during its pre-sanction, post-sanction, pre-disbursement, post-
disbursement, and eventual rounds of visiting and checking for a sound
clarification of all the documents provided by the individual as well as by the
business. A lot of judgment is required for credit appraisal. Giving any loan is not
just only the document verification, it takes a lot of concentration towards the
borrower itself too.

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 SRA LOANS

IDBI provides two types of loan categories for both the individual and the
business - SRA and Non- SRA loans.
SRA loans are those which have a definite procedure and definite processing.
These types of loans have different structural formats and also have a proper
rating system. Nothing is done manually over here. These types of loans have
immovable property as collateral security and sometimes even keep financial
security. These loans consist of home, personal, mortgage, auto, and education
loans. Financial securities are kept as a matter of fact if the creditors find the
borrower not creditworthy, at that time they take another person as a financial
guarantor and check their income, and if for some reason the loan becomes NPA
and the guarantor also becomes unable to repay those, then it will have a bad hit
on the CIBIL of that guarantor. For the sanctioning of the SRA loans, the person’s
income certificate, and ITR for the past 1 year are verified first. These loans are
a lot more secure than non-SRA loans as immovable properties are taken as
collateral, but also have a level of insecurity in the case of personal loans.

HOME LOANS

One of life's greatest dreams is to own a home. At IDBI, their home loan solutions
are made to bring convenience to everyone and make the road to their dream
home enjoyable. A block of land for a new building or an acquisition for a resale
or new property could be involved or there might be a building on the site that
has already been purchased. House loans have certain features in this banking
institution, such as a maximum loan tenure of 30 years for salaried borrowers,
and 20 years for self-employed professionals and non-professional borrowers.
The value of the borrower's property determines the maximum loan amount that
can be obtained for a house loan. They have to provide 90% of the property's
value as collateral security if they want to borrow up to Rs. 30 lakhs. The property
is now valued based on its realisable worth. A residential property's worth can be
determined in three different ways. These are market value, realisable value, and
distress sale value. If the borrower requests a loan between Rs 30 lakh and Rs 75

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lakh, 80% of the property value is taken as the security, and over Rs 75 lakh, up
to 75% of the property value.
▪ Market value- The value of any property which is going on the market on
the present date. Any property which has been brought earlier, its value
goes on increasing as time goes by.
▪ Realisable value- The maximum value of any property if it is sold during
the present day.
▪ Distress sale value- The minimum value of any property of any building
if it is sold during the worst condition of the building.
Usually, the home loans in other financial institutions try to give home loans in
their market value for their profit. But, according to the product norms of IDBI
bank, it is necessary to give the property valuation upon its distress sale value,
but so much low amount would create a problem for the borrower, so the middle
realisable value is chosen.
The minimum age for a salaried applicant to apply for a home loan is 30 years,

and the maximum age during the loan's maturity is 70 years, or the borrower's
retirement age, whichever comes first (subject to the submission of
documentation demonstrating continued income). The minimum age requirement
for self-employed professionals and non-professionals is 20 years old, while the
maximum age requirement is 65 years old (subject to submission of
documentation for continuity of income). Documentation required for salaried
professionals is the requirement of their balance statement for the past 3 months,
the latest salary slip, and Form-16, KYC. For self-employed professionals and
non-professionals, the application form must include a photograph, KYC
documentation of their identity, proof of their educational background, a trade
license, ITRs for the last three years, P/L Statements for the previous three years,
a balance sheet and a bank statement from the previous six months. A high credit
score (often 750 and above) can improve the chances of getting a personal loan
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approved because it shows that the borrower is more creditworthy and have
greater repayment ability. Typically, a CIBIL score of 760 or more entails no
additional RLLR fees. The RLLR becomes the rate of interest. The RLLR is
9.10%. Beforehand, MCLR used to be considered during the rate of interest
calculation of home loans. Sometimes, in a home loan, the financial institutions
give a top-up facility. The top-up is usually given on home loans when the
situation comes that the interior is not completed still now, or furniture needs to
be brought. The top-up is given when the home is completed or when 6 EMIs are
given for the previously taken loan. As mentioned earlier home loans come under
the category of SRA loans, so it doesn’t have various ways to take loans. The
credit process for every amount of home loan is the same and the most important
is to maintain the loans taken. The borrower might have credit cards taken from
other sources, but he/she should pay the debts taken in time so that their RTR is
good.
The documentation required the sanctioning of the home loans from the borrower
and each of the co-applicant is letter of authorization, Affidavit, In matter
mortgage of title deeds, Memorandum Of Deposition Of Title Deeds, Declaration
from the Borrower/s (On ` 10/- Non Judicial Stamp Paper duly notarized),
Declaration cum Indemnity, Undertaking Cum Indemnity Bond, Letter of
Declaration & Undertaking, Loan for Insurance Premium Agreement (To be
stamped as agreement). The LAP is such a difficult loan to process and the
documents mentioned above are very important. Without these documents, the
processing could not be started.

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 PERSONAL LOANS

People can obtain personal loans, a sort of installment loan, from banks, credit
unions, or online lenders for a variety of private uses. Personal loans are often
unsecured, meaning they do not require collateral like a car or a house, unlike
specialty loans like auto loans or mortgages. Personal loans are issued with lots
of caution as it is unsecured. During the procedure, it is very important to check
the documents of the person who is borrowing. Earlier, there were many cases in
which it became NPA. Any of these justifications make the applicant eligible for
a personal loan. A medical emergency, house renovation, a family marriage,
managing margin money, travel, urgent educational demands, or an earnest
deposit for real estate are a few examples. A personal loan is given at a rate of
interest of 12.30% p.a.
There are different types of personal loans-
1. Personal Loans to Salaried Individuals- Applicants should have a salary
account in the IDBI Bank. Any permanent employee of
Government/PSUs/MNCs/listed/private limited companies (even if they
do not have any salary account in IDBI Bank) can borrow a personal loan
from IDBI. The borrower in this instance must be at least 21 years old, earn
a minimum salary of Rs. 1,80,000 a year, and not be older than 60 at the
time the loan is paid off or the retirement date, whichever comes first. They
must have a minimum loan term of 12 months and a maximum loan term
of 5 years. The minimum and maximum amounts must be equal to Rs.
25,000 and Rs. 5,00,000, respectively. The type of interest is also fixed in
this place.
2. Personal Loan to Self-Employed Professionals - With a minimum annual
income of Rs 3,60,000, the self-employed professional group must have an
asset/liability relationship with IDBI Bank. In this category, you must be
at least 25 years old to apply for a personal loan, and you cannot be older
than 65 when the loan is paid off. The loan term could be as short as a year
or as long as five years. They are eligible to borrow between Rs 25,000 and
Rs 5,00,000 at a fixed interest rate.
3. Personal Loan to Self-Employed Non- Professionals – A minimum annual
income of Rs 3,60,000 is required for this category of self-employed
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 professionals to have an asset-liability relationship with IDBI Bank. In this
case, the borrower must be at least 25 years old, and the maximum age at
loan termination is the same as for non-professionals who are self-
employed. In addition to the fixed interest rate, the loan tenure is also fixed
for a maximum of 5 years.
After the approval of the loan, the documentation in the processing of any
personal loan is a Clean Loan agreement, DPN, Letter from Borrower’s
Employer, SI mandate form, Letter from Employer to Employer (from EMI
detection), Letter from the Borrower’s Employer (For EMI deduction),
Supplemental Clean Loan Agreement, Irrevocable undertaking from the
Pensioners, Third Party Guarantee Format. A clean loan agreement for home
loans, also known as a standard loan agreement or a conventional loan agreement,
is a legal contract between a borrower and a lender outlining the terms and
conditions of a home loan. Letter from the Borrower’s employer means the letter
written to the borrower’s employer to write a report with the borrower’s full
name, date of joining, designation, salary details, and contact information, that
copy should be given to the banks as proof of the documents provided by the
borrower for further processing. Letter from Employer to Employer is a letter
written by the bank to the working place mentioned by the borrower for the
employee verification needed by the bank for the further processing of the home
loan application.

AUTO LOANS

Auto loans are a sort of financing that is specially made for buying a car, whether
it is new or second-hand. When one obtains an auto loan, a lender gives them the
money required to purchase the vehicle, and they consent to repay the loan over
a certain time with interest. Auto loans are secured loans, which means the car is
used as security. If one stops making payments, the lender may reclaim the
vehicle to recoup the unpaid balance. In IDBI Banks, the auto loans taken come
under the you-drive auto loan. For salaried applicants, the minimum age
requirement is 18 years old, and the maximum age requirement is 70 years old,
or the retirement age, whichever comes first, at the time the loan matures. The

27 | P a g e
yearly revenue must begin at Rs. 2,40,000. Before acceptance, applicants must
submit a pay stub, a Form 16, and a bank statement with salary credit.
Professionals and non-professionals who work for themselves must be at least 18
years old and no older than 70 years old. A minimum of two years in the
profession or business, a minimum annual income of Rs. 2,40,000, income
evidence for the most recent two years with computation of income or certified
financials, a balance sheet, a profit and loss account, and a bank statement are all
requirements. After the approval, the documentation required in the disbursement
and the sanctioning process is the key fact statement, deed of hypothecation of
vehicle, guarantee agreement, DPN, particulars of vehicle, the format of mandate
for ECS, format of mandate for SI, dealer authorization letter, description of the
vehicle. The rate of interest is also taken here as the RLLR without any charges
but if the CIBIL score is not good, charges might be taken. The key fact statement
contains all the information about the name, designation, and the amount of loan
approved by the banks and the auto loan facility along with the related rules. Next
is the deed of hypothecation which contains the hypothecated vehicle which has
been kept as security if the auto loan becomes NPA the bank would take away the
vehicle for the repayment of the loan. DPN is the letter saying that the bank has
sanctioned the desired auto loan with the amount requested by the borrower and
the borrower is obliged to repay the loan. The guarantee agreement poses an
agreement between the banks and the borrower about the loan facility along with
the rules indented. The particulars of the vehicle have the related information
about the new vehicle bought or any old vehicle bought second-hand. The format
of mandate for ECS is the application filed by the borrower for the acceptance of
repaying from their account whenever the amount is present. A dealer
authorization letter is a letter from the dealer with their sign that the particular
vehicle has been owned by the borrower for which they have taken an auto loan.
The description of the vehicle is also related to all the necessary information about
the vehicle. The guarantee, DPN, and Hypothecation agreement all of them are
printed on legal papers and the DPN needs a ticket of one rupee.

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Instrument Article No. Rate of Stamp Duty
Agreement Art No.5 10
Hypothecation Art 5(e) Art 48(d) 60
General PoA Art No.48(d) 50
Pledge Art 6(2)(a) Rupees Ten for every
Rs1000 of the amount of
loan i.e. 1%
Guarantee Agreement Art 5(e) 10
Indemnity Art 34 read with Art.57 50
Affidavit Art 4 10
Equitable Mortgage Nil
Registered Mortgage Art 40(b) Part thereof for the
amount secured by such
deed (i.e., 2%)

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 EDUCATION LOANS

Education loans from IDBI Bank are intended to give deserving or meritorious
students financial support so they can pursue higher education both domestically
and overseas. IDBI Bank ensures you receive total financial support by offering
a variety of services and simple repayment choices. So, education loans can take
a movable stock, immovable stocks, or hybrid stock (immovable stocks + liquid
cash). Education loans are given so that any student can improvise their career by
studying wherever they want. The repayment occurs when the student gets a job
and the money is cut from their salary account. But before giving the loan the
banks try to see the education center for which they are applying for the loan,
whether they give enough placements, and whether they are suitable for every
student studying there. The banks ask for the prospectus of the college they are
opting for. For judging the student, the banks look at the previous score obtained
by them, their educational background, and if they opt for loans above Rs 4 lakhs
then they ask for financial security and look at their parents’ condition, their
CIBIL, their credit-worthiness and their educational background. The documents
required during the processing of the education loan are the education loan
agreement, Power of attorney, General power of attorney (for NRI customers),
Guarantee, DPN, SI mandate, Agreement of pledge of securities & goods (such
gold items or shares and debentures), letter of hypothecation (for movable
stocks), letter of hypothecation (from the guardian, if the borrower is minor),
letter to the bond issuing bank, form of assignment, form of notice of assignment,
form of covering letter for registering assignment on Bank’s letterhead, Bank’s
letter to registrars of mutual fund for noting lien, Unit holder’s lien request,
transfer of shares and debentures(pledge form). The documents such as letter to
the bond issuing bank, Unit holder’s lien request, are such documents used at the
time of hybrid security. Say, for example, the borrower or the borrower’s parents
have eight FDs and for the repayment after the completion of the student, the
financial institution might need 3 of the FDs so they put a lien over them. The
education loan agreement is the agreement between the borrower and the bank
saying that a particular amount of loan has been requested by the borrower for a
specific purpose with the name, address, and educational background. The Power
of Attorney for school loans is a legal document that allows a specified individual
or institution the right to act on behalf of the borrower in situations about
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education loans. By signing a Power of Attorney, the borrower empowers the
nominated person (known as the attorney-in-fact or agent) to make decisions, sign
documents, and perform acts relevant to the school loans on their behalf. This
legal arrangement is typically utilized in cases where the borrower is unable to
physically handle the administrative chores and decision-making involved in
school loans. It enables a dependable person or organization to intervene and
effectively manage loan-related issues on the borrower's behalf. The Standing
Instruction Mandate allows a lender to automatically debit the borrower's bank
account at regular intervals to collect loan repayments for education loans. It is a
convenient and efficient method of ensuring timely and hassle-free loan
repayment. When a borrower sets up an SI Mandate for education loans, they
provide authorization to the lender to deduct the loan instalment amounts directly
from their bank account on predetermined dates. This eliminates the need for
manual payment initiation and helps ensure that the loan repayments are made on
time without the risk of missing due dates. The borrower typically provides the
necessary bank account details, including the account number and bank branch
details, to the lender when setting up the SI Mandate. The lender then coordinates
with the bank to initiate automatic deductions on the specified dates. The
borrower's bank account is debited with the agreed-upon instalment amount,
which is transferred to the lender as the loan repayment.

MORTGAGE LOANS

Mortgage loans are financial instruments that either individuals or companies

can use to buy real estate. These loans are secured by real estate, so if the borrower
defaults, the lender may take possession of the property through a procedure
called foreclosure to recoup their losses. The documentation that is required for
the approval of the mortgage loan is the MOE, Non- encumbrance certificate,
deed vetting, and TIR. These documents are required for the checking of the
property and to know whether the property whose deed has been equitably
mortgaged, is safe for further processing. Deed vetting and TIR is so essential
during the mortgage loan for loan processing. The branch officials along with the
Upper and Lower court lawyers go for the deed vetting and check the necessary
documents required for the mortgage. The property could be brought from any
31 | P a g e
other person, so there would be a sale agreement written with the property
information and the location along with the boundary, longitude, and latitude.

MAXIMUM FUNDING: -
Nature of the property The applicant is not an the applicant is an
existing Home Loan existing Home Loan
/Loan Against Property /Loan Against Property
customer customer
LTV Residential: 70 % Residential: 75 %
LTV Non-residential: 60 % Non-residential: 65 %

The mortgage loan can be taken up to a loan tenure of 15 years and a maximum
of Rs 10 crore. The mortgage loan documentation constitutes of the following
such as the Customer Profile sheet, Credit interview Sheet, Residence
verification report, office verification report, residence telephone
verification report, financial analysis, technical evaluation report, TIR,
Property visit report by Bank officers of the Bank, End-use undertaking
from the borrower, General power of attorney. This technical evaluation
report aims to provide an assessment of the property being considered as
collateral for a mortgaged loan. The report will evaluate the property's physical
condition, construction quality, and potential risks or issues that may affect its
value or suitability as security for the loan. The credit interview sheet contains all
the details starting from the borrower’s name to the financial information, the
credit card information, residential history of the previous residence to the current
residence. The residence report also contains information on all the necessary
details and contains a detailed report.

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 NON-SRA LOANS

Non- SRA loans are the second type of loan category. These loans consist of -
MSME loans, gold loans, and Agricultural loans. The primary security taken
here is the movable stocks, which needs a lot of pre-visiting, post-sanctioning
visit too. The movable stocks are hypothecated and the pledge is taken in case of
gold loans. The loans here are sanctioned in different ways the MSMEs or Agri
loans or gold loans can be taken as - Cash Credit, Term Loans, and Overdrafts.
The amount of loan sanctioned can also be differentiated into different categories
again. The categories are Samruddhi Express (Up to 5,50,00), Mudra loan (Up to
10 lacks), and Sahaj Vyapar Loan (from Rs 10 lakhs up to Rs 5 crore). Again,
Mudra loans can be differentiated into Shishu (Up to Rs 2 lakhs), Kishor (Up to
Rs 5 lakhs), and Tarun (Up to Rs 10 lakhs).
CC loans can be of two types- Mudra loan and Sahaj Vyapar loan and WTCL can
be of two types Samruddhi Express and Sahaj Vyapar loan.

Loan for MSMEs –

MSMEs can take loans in either way which is CC or TL.

CASH CREDIT
Cash credit is such type of loan that is given to the businessman for their working
capital. It is a short-term loan given to the businessman for the enhancement of
their working capital in their businesses. Suppose, let’s consider there is a tire
business and they have a building of Rs.50 lakhs, Rs. 10 lakhs of raw materials,
and inventory of another Rs 10 lakhs. Now, they have current assets in hand, but
they don’t have any cash. So, the businessman now opens a cash credit account
to take credit for the cash required. Businesses that have a short period of working
capital are not given CC loans as they don’t have to wait for months and years to
convert their finished goods into cash. These manufacturing industries and also
import and export businesses are given CC loans.
Before giving a CC loan, the bank observes its working capital cycle and tries to
make sure whether the loan is needed or not. There is also a requirement to see
33 | P a g e
certain financial ratios to finally make sure that the loan must be given or not.
These financial ratios are the Current Ratio, ICR, and Gearing ratio. These ratios
are very beneficial for the creditors of the businesses. The current ratio should
have a minimum value of 1.10 and it means that the CA and the CL should be in
such a proportionate manner. The gearing ratio indicates the total outside liability
to its total net worth. This means that if the outside liability is too much higher
than the net worth then the business/firm is running its daily operations totally on
the loan gathered from outside and it indicates the nature of the person. As
because before giving any loan scrutiny is made about their background,
educational qualifications, the location they live in, past credit information about
them and their family members, and the market strength of their firm. The past
credit information provides us with another way of assuring that the person
doesn’t become a defaulter shortly. If the current assets are much higher than the
Current liabilities then it shows that the borrower’s gearing ratio is going to be 0
or much less and it becomes more problematic to judge the person. To believe the
person and give a CC loan, judgment is very important. Moreover, a negative
credit score or low credit score of the borrower or its family members arise a
question too about the repayment of the loan after its disbursement. The ICR
minimum should be 1.5. If any firm’s ICR is less than this, the loan cannot be
sanctioned. Again, DSCR is not calculated in CC loans because if the borrower
doesn’t utilize the money that has been given to their CC account, then interest
will not be charged and to check the borrower’s net operating income doesn’t
come into the scene that whether he would be able to pay the interest or not.
As CC is granted by way of a running account, the sanctioned amount remains in
the account and drawings are to be regulated within the drawing limit permissible
which is arrived at based on the composition of current assets and current liability
based on the declaration in the stock statement in the prescribed format submitted
by the borrower. The calculation of DP is such that----
a. Total stock eligible to be financed
b. Less: Unpaid stock (Creditors)
c. Paid stock(a-b)
d. Add: Receivables
e. Total (c+d)
f. Less: Margin (25%)
34 | P a g e
 g. Drawing power (e-f)
There are three types of Cash Credit as mentioned below: Sometimes, the
borrower takes CC loans both on the hypothecation of BD and Stocks so to
increase the sanctioned amount to fulfill the needs of working capital, and as
discussed earlier the composition of its CA and CL will help the banks decide
how much amount of loan to be sanctioned.
a. CC against hypothecation of Stock- Companies that take out cash credit
loans are required to give the lender collateral. Assets like inventory, work-
in-progress goods, etc., can be hypothecated in exchange for a cash credit
loan. When a company needs working capital, it will often use funds from
a running account it has with a particular lender for cash credit loans.
b. CC against hypothecation of BD- Banks/financial institutions also give out
CC loans against the BD as sometimes it happens that the goods have
already been sold but the businesses/firms have not got the money back but
are sure they will, so sometimes they also keep that as the primary security.
c. Packing Credit- A loan or advance given to an exporter to finance the
purchase, processing, manufacturing, or packing of products before
shipment is known as a pre-shipment credit or packing credit. Exporters
can use this facility from banks to buy raw materials from local
marketplaces and prepare their products for export. To businesses involved
in export or service provision, packing credit can also be offered as
working capital support to cover costs such as salaries, utility bills, travel
expenditures, etc. A confirmed and irrevocable order for the export of
products or services from India, a letter of credit, or any other proof of an
order for export from India is used to authorize or issue a packing credit.
The repayment process of CC is to pay the amount taken on the 1st day of each
month and the interest rate offered by the lender is charged on the amount of
money utilized and not on the sanctioned amount or limit.

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 TERM LOAN
A term loan is a form of loan that has a set repayment period, or loan term, that
it must be repaid over. It is a typical type of borrowing that people, companies,
and organizations use to finance a variety of goals, including buying assets,
growing enterprises, or supporting initiatives. In a term loan, the lender gives the
borrower a lump sum of cash in exchange for their promise to pay back the loan
amount plus interest over a defined period in equal monthly payments. Depending
on the parameters of the loan arrangement, the interest rate may be either fixed
or variable. The WCTL has no ceiling limit, or drawing power as the sanctioned
amount is given altogether to the borrower at first only. This type of WCTL has
no renewal period as that of a CC loan. As there is no drawing power available,
there is no margin associated with it. WCTL has also certain conditions for the
sanctioning of it. Checking the financial conditions of the firm is important to
predict any borrower’s nature of repayment. Moreover, there is a way to calculate
how much amount must be sanctioned based on the stocks and sales. The process
is such that the banks find out which is the lowest among the stocks and sales.
They take 20% of turnover and 25% of stocks and find out the lower one. This
lower amount will be taken as the sanctioned amount. During the time of the term
loan, the ratios calculated are the interest coverage ratios, leverage ratios, current
ratio, and DSCR. Sometimes, if these ratios are not enough the Net sales growth
ratio, the activity ratios, and profitability ratios are also calculated.
Usually, DSCR is calculated at the time of the term loan only. A company's
capacity to make its minimum principal and interest payments, including sinking
fund payments, is evaluated using the DSCR. The entire principal and interest
payments necessary for a particular period to produce net operating income is
divided by EBIT to arrive at DSCR. It is a more reliable indication of a company's
financial health than interest alone because it also considers principal payments.
When evaluating the long-term financial health of a corporation, DSCR is also a
more thorough analytical method. DSCR is a more conservative, broad
calculation when compared to the interest coverage ratio. The reason behind this
is that the loan given during term loans are credited to the borrower’s account
during the first term only and thereafter the borrower pays the interest and the
principal amount. So, the term loan uses the DSCR too to find out the net
operating income of that borrower’s company/firm/MSMEs for future benefit. As
36 | P a g e
because, it is never at all satisfactory to the banks if the credited value becomes
NPA in the future.

OVERDRAFT
Banks provide their current account holders with a short-term credit option, an
overdraft facility. This allows the bearer to withdraw money from current
accounts up to the sanctioned maximum, over and above the actual available cash
balance. Based on the borrower's creditworthiness, banks offer this option. The
businessman or company is the borrower in this instance. The sum can be
withdrawn by the customer as needed. Repayment should then be completed by
making deposits to the current account. An overdraft is usually given to a person
who maintains an average balance in their current account and if for some reason
get short of funds, banks rely upon it and give them the overdraft facility. The
interest rate for overdraft facilities is much higher than compared to the CC loans.
Overdraft is a form of non-revolving credit. Security is not needed in the case of
an unsecured overdraft. However, the average balance, credit history, and prior
interactions with the bank will determine the maximum limit. On the other hand,
banks offer secured overdrafts for self-liquidating investments. Any objective,
whether personal or professional, may use an overdraft. The overdraft’s drawing
power is estimated on that particular person’s income and the security that has
been taken into account. An authorized Bank OD is an arrangement made in
advance between the account holder and the bank. Both parties mutually agree
on a limit that can be used for all the payments and a daily, monthly, or yearly
service fee that can vary from bank to bank. Unauthorized Bank O.D. occurs
when the bank account holder has spent more than his available balance without
prior authorization or any such arrangement with the bank or if there was an
arrangement done before but the limit of overdraft is exceeded.

GOLD LOANS
Assistance to farmers in exchange for a gold pledge to cover short-term needs for
cultivation, social duties, and medical emergencies, as well as assistance to small
businesses, traders, distributors, and self-employed individuals in exchange for
37 | P a g e
the provision of financing for business needs. The loan can be taken with a
minimum of Rs. 10000/- and a maximum of Rs. 50 Lakh and the loan tenure is a
minimum of 3 months and a maximum of 36 months. The documentation needed
during the processing of the loan is the loan application, Annexure,
Arrangement letter, Take Delivery letter, applicant(s) declaration on
confirming end use of the loan, certificate of the goldsmith/shroff,
nomination form, DPN, KYC. The loan application here is the basic format of
all the information collected altogether just for applying for the loan and what has
been decided. The annexure is the calculation of the gold given to the valuer for
checking the ornaments and finding out how much loan can be given based on
the jewellery given to be pledged. Take delivery letter contains the name,
location, and designation of the borrower as well as the creditors and it has been
written that the borrower is delivering the gold items and the documentation
related to it as discussed earlier to the bank for the processing of the loan. The
certificate of the goldsmith contains a signed copy from the valuer that the
pledged gold items have been checked properly by him/her and the bank could
start processing the loan. DPN contains the saying of the borrower that the loan
has been approved and sanctioned by the bank to them and he is obliged to repay
all the loan amount along with the interest rate as suggested by the bank earlier.
KYC contains the borrower’s pan card, voter id, and Aadhar card.
The calculation of how a gold item is processed is shown by an example. Let’s
say the gross weight of any gold item is 10.21 gm and the net weight is calculated
as 4.96 gm as the ornament is 22 carats, the loan takes usually 85% of the gross
weight as net weight but sometimes it happens that the valuer can detect some
more dust, wax, stones which are not considered as part of the gold as because if
any gold loan becomes NPA the bank, first of all, melt the whole item and just
take the actual gold. The equivalent net weight is taken as the (purity in carat* net
weight)/22 gm which in this case is 4.96 gm. The rate per gm as prescribed by
the Corporate Office for 22 carats is Rs 5368. The value of the gold becomes Rs
26625. 28. Now, the loan eligibility will be Rs 19968.96(value of the gold *75%).
Let, the amount requested by the applicant is Rs 22000. So, the amount which is
lower between the eligible loan amount and the amount requested will be chosen
to be sanctioned. The rate of interest is taken as RLLR (Repo rate + 3.1%), the
repo rate is 6.5% at present and the interest can be calculated on a compounding

38 | P a g e
basis of monthly/yearly/quarterly/half-yearly or on the simple basis as the
decision taken by the bank. So, in this case, the ROI becomes 9.6% which is
calculated by the bank. The repo rate can be varied from time to time as it depends
on RBI.

AGRI LOANS
Farmers have access to a hassle-free single-term loan limit for all investment loan
needs, excluding orchards and plantation crops with long gestation periods.
Examples of these investment loans include farm mechanization, land
development, minor irrigation, water conservation, horticulture, and related
activities, etc. The agriculture loan is available to individual farmers, SHGs, and
JLGs (Owner Cultivators) that are involved in agriculture and related activities
and can be granted for a minimum of Rs. 50,000 and a maximum of Rs. 20 lakhs.
Usually, the farmers opt for agricultural loans for any purpose of land-allied
activities. The rural banks only do these types of microloans. These loans give
farmers access to working cash for regular farm expenses like buying seeds,
fertilizer, and paying labour bills. They can also be used to fund the acquisition
of machinery, cars, or other equipment required for farming operations. These
loans can be used by farmers to add to or buy additional livestock, such as cattle,
poultry, or other animals and these loans aid farmers in acquiring new farmland
or increasing the size of their current landholdings. In this branch, agriculture
loans are not seen so much as it is a semi-urban branch. The case of agriculture
loan seen here is for increasing the size of their current holdings by filling up the
land with soil. The borrower is an SF who took an All-Purpose Agri Loan of Rs
1,00,000 for a hypothecated stock of Rs 190000. The approval was done after
visiting the land and geo-tagging was done. The geo-tagging is done particularly
to detect the land’s longitude and latitude for future endeavours.

39 | P a g e
LOAN PRODUCTS OFFERED BY
IDBI BANK

40 | P a g e
 AGRI PRODUCTS

AGRICULTURE
1. Kisan Credit Card
2. IDBI Gold Loan
3. Finance Against Warehouse Receipts
4. Funding To Farmers Against Hypothecation of Agricultural Produce
5. KISAN All Purpose Term Loan
6. Horticulture and Forestry Development Loan
7. Harvesting and Transport Loan
8. IDBI Bhumi Loan
9. Financing Irrigation Activities
10.Farm Mechanisation Loan
11.Loan For Construction and Running of Storage Facilities
12.IDBI Kisan Power

AGRI ALLIED ACTIVITIES

1. Poultry Farming
2. Dairy Farming
3. Financing Agri Linked Other Activities

MFI / CORPORATE TIE-UP

1. Lending to Micro Finance Institutions
2. Retail Agriculture Advances under Tie-up arrangements with Corporate

OTHER PRODUCTS
1. IDBI Kisan Mitra- Debt Swap Scheme
2. IDBI Kisan Tatkal
3. Micro Loans for Individuals and SFG/JLG members
4. IDBI Surya Shakti
5. Krishi Unnati-Financing to Farmer Producer Companies
6. Financing Under Animal Husbandry Infrastructure Development Fund
7. Financing Under Agriculture Infrastructure Fund
8. PM Formalization of Micro Food Processing Enterprises (PMFME)
41 | P a g e
 9. Farm Mechanization
10.Financing of Compressed Bio Gas (CBG)
11.IDBI Loans of Food and Agro Processing Units
12.Re-Launch of Agri Product – Post Sale Funding of Village Level Milk
Suppliers- A variant of (VBD) Post sale Funding by way of Bill
Discounting

AREA SPECIFIC SCHEME

1. Financing Broiler Poultry Farmers under Tie-up arrangement with
Corporates/ Integrators in the state of Tamil Nadu

DISCONTINUED AGRI PRODUCTS

1. Pisciculture
2. Pisciculture Plus
3. IDBI Surya Shakti- For the State of Punjab
4. Financing for Agri Clinic and Agri Business Centers (ACABC)
5. Area Specific Schemes of Ahmedabad Zonal Office

PERSONAL LOAN PRODUCTS

1. Salaried individual/pensioners
2. Self-employed professionals
3. Self-employed non-professionals
4. Salary account with in-built overdraft facility.
5. Pension account with in-built overdraft facility to pensioners of IDBI bank
ltd
MSME PRODUCTS

1. Equipment Finance
2. IDBI Commercial Vehicle Loan
3. IDBI Contactless Loans (PSB Loans in 59 Minutes)
4. Sahaj Vyapar
5. Sanjeevani

42 | P a g e
6. Sanjeevani Express
7. IDBI Loan for service Sector
8. Property Power
9. IDBI Udyami Loan
10.IDBI Cluster Loan
11.Vendor Finance Programme
12.Channel Finance for Dealers of Corporates (CBG Products)
13.IDBI GST Express
14.IDBI GST Plus

GoI SPONSORED SCHEMES / PRODUCTS

1. Samruddhi (Mudra Loan)
2. Samruddhi Express
3. IDBI Bunkar Mudra Yojana (IBMY)
4. IDBI General Credit Card Loan (GCC)
5. PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi)
6. Weavers Credit Card (WCC)
7. Artisan Credit Card (ACC)
8. TEQUP (Technology & Quality Upgradation)
9. PMEGP (Prime Minister’s Employment Generation Programme)
10.Differential Rate of Interest Scheme
11.National Handicapped Finance and Development Corporation (NHFDC)
12.CLCSS (Credit Linked Capital Subsidy Scheme)
13.LUCC (Laghu Udhyami Credit Card)
14.National Rural Livelihood Mission (NRLM)
15.National Urban Livelihood Mission (NULM)
16.Self-Employment Scheme for Rehabitation of Rural Scavengers
17.Interest Subvention Scheme for MSMEs 2018

43 | P a g e
 GoI GUARANTEED PRODUCTS

1. NCGTC Guarantee Scheme (National Credit Guarantee Trustee Company)

2. Credit Guarantee Scheme for Subordinate Debt (CGSSD)
3. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)
4. Stand up India Scheme
5. Credit Enhancement Guarantee Scheme for SC (CEGSSC)

GOLD LOAN PRODUCTS

1. Personal Gold Loan

2. AG036 – Priority Sector Loan
3. AG019 – Agri Non-Subvention
4. AG040 – Non-Priority Sector
5. AG046 – Over Draft Against Gold
6. AG053 – KCC Against Gold Security

AUTO LOAN PRODUCTS

1. IDBI Kisan Vehicle Loan

2. AG021T – Farm Mechanisation Loan – Tractor
3. New Car Loans
4. High End Bike Loan

AGRI ALLIED PRODUCTS

1. AG029 - Dairy Loan

2. AG044B – Financing Agri Linked Other Activities – Bee Keeping
3. AG013 - Financing Irrigation Activities
4. AG020P – IDBI Bhumi Loan – Land Purchase Loan
5. AG041 – IDBI Kisan Vehicle Loan
6. All-purpose – KISAN All Purpose Term Loan
7. AG018 – Loan for Construction and Running of Storage Facilities
44 | P a g e
 8. AG026 – Pisciculture
9. AG044P – Financing Agri Linked Other Activities – Pig Rearing
10. AG006 – Harvesting and Transport Loan
11. AG037 – IDBI Kisan Mitra – Debt Swap Scheme
12. AG039P – IDBI Surya Shakti – Solar Pump Set
13. AG012 – Kisan Credit Card
14. AG0341 – Micro Loans for Individual members of JLG
15. BD – Post Sale Funding of Village Level Milk Suppliers (Direct Agri)
16. AG021H – Farm Mechanisation Loan – Harvester
17. AG044R – Financing Agri Linked Other Activities – Sericulture
18. AG022 – Horticulture and Forestry Development Loans
19. AG045 – IDBI Kisan Power
20. AG039S – IDBI Surya Shakti – Solar Water Heater/ Solar Lightning System
21. AGo45 – Krishi Unnati – Financing to Farmer Producer Companies
22. AG034J – Micro Loans to JLG Groups
23. AG023 – Poultry Farming
24. AG044O – Financing Agri Linked Other Activities – Any Other Allied
Activities
25. AG044S – Financing Agri Linked Other Activities – Sheep Rearing
26. AG020D – IDBI Bhumi Loan – Land Development Loan
27. AG038 – IDBI Kisan Tatkal
28. AG002 – Lending to Micro Finance Institutions
29. AG034S – Micro Loans to SHG Groups0

HOME LOAN

1. Home Purchase Loans

2. Home Construction Loans
3. Home Improvement Loans
4. Home Extension Loans
5. Home Conversion Loans
6. Land Purchase Loans
7. Loan Against Property
8. Residential Property Loans
9. Lease Rental Discounting Loans

45 | P a g e
DOCUMENTS REQUIRED FOR THE SANCTIONING OF LOANS

46 | P a g e
 MSME LOANS & AGRI LOANS

1. Application Stage Steps

Loan
application

Financials

Project
Report

Product
checklist

Application
register
update
2. Pre-sanction Steps

original
title Valuation Report, ROC
CIBIL/CMR Search/Visit (For
search Companies)
report

credit Defaulter
CERSAI Search report as
per IBA list check

Trigger Pre-
Engineering
Valuation, Acceptance
legal and sanction
of TIR & Valuation
visit report
technical Report

47 | P a g e
3. Sanction stage

RATING

DAN APPRAISAL NOTE

SANCTION LETTER

4. Pre-Disbursement Documentation Stage Steps

a. Sanction letter Acceptance.
b. MSME/AGRI SOC/SOF acceptance
c. Loan Agreement
d. Hypothecation deed
e. Personal Guarantee/Common Guarantee
f. Certified Net worth Certificate
g. DPN
h. DPN Delivery
i. Indemnity Cum Declaration of legal heir
j. The undertaking of Negative lien
k. Undertaking for change in shareholding
l. The undertaking of no credit facility from outside agencies/Banks
m. Legal Vetting of Loan documents
n. Legal and technical report acceptance
o. Non encumbrance certificate
p. MOE
q. Mortgage deed.
r. Property Docs in original

5. Pre-Disbursement General Steps

o ROC update (For Companies)
o Pre-disbursement visit report
o CERSAI Entry
o Disbursement Note
o Disbursement request letter
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o End-use documents
o CA certificates
o Insurance
o Documents vetting-lawyer

6. Fees and Charges

Payment to vendor
Processing fee collection
Documentation charges Collection
CERSAI Charges Collection
ROC Search Charges Collection
Visit Charges Collection
CIBIL/CMR Charges

7. Checks and updates

Loan Account number
Application Register Update
Sanction letter update
Security Register Update
CERSAI Charge Creation
confirmation print/I-CERSAI
Keeping Document
Insurance Register
PDD check
All subsequent visit reports
(Quarterly or Monthly) as
applicable.
All Stock statement

49 | P a g e
 PERSONAL LOAN
1. FINANCIAL STATEMENTS: These documents provide a snapshot of the
borrower's financial position, including income statements, balance sheets, and
cash flow statements. They may be required for both personal and business credit
application.
2. TAX RETURNS: Both personal and business tax returns may be required to
provide evidence of income and financial history.
3. BANK STATEMENTS: These documents may be required to show the
borrower's current and historical banking activity, including deposits and
withdrawals.
4. CREDIT REPORTS: Credit reports may be obtained by the bank to assess
the borrower's creditworthiness and history of borrowing and repayment.
5. BUSINESS PLANS: For business credit applications, a detailed business plan
may be required to provide information on the business's operations, products or
services, market analysis, and financial projections.
6. COLLATERAL DOCUMENTATION: For secured credit, collateral
documentation may be required to provide evidence of ownership and value of
the collateral being pledged.
7. PERSONAL IDENTIFICATION: Personal identification documents, such
as driver's licenses or passports, may be required to verify the borrower's identity.

OTHER LOANS
The specific documents required for a loan can vary depending on the type of
loan, the lender's requirements, and the borrower's individual circumstances.
However, here is a list of commonly requested documents when applying for a
loan:
➢ Identification Documents: These include a valid government-issued
identification document such as a passport, driver's license, or national
identification card.

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➢ Proof of Income: Lenders typically require proof of income to assess the
borrower's ability to repay the loan. This may include recent pay stubs,
employment contracts, or income tax returns. Self-employed individuals may
need to provide business financial statements, profit and loss statements, or
bank statements.
➢ Bank Statements: Lenders may ask for several months of bank statements to
verify the borrower's financial stability, cash flow, and transaction history.
➢ Proof of Residence: This can be in the form of utility bills, rental agreements,
or other documents that confirm the borrower's current address.
➢ Credit History: Lenders often request permission to access the borrower's
credit report to assess their creditworthiness. The credit report provides
information about the borrower's credit score, payment history, and any
existing debts.
➢ Loan Application Form: Lenders typically require a completed loan
application form that captures important details such as personal information,
loan amount requested, purpose of the loan, and employment details.
➢ Collateral Documents: If the loan is secured by collateral, such as a property
or vehicle, the lender may require relevant documents such as property deeds,
vehicle titles, or valuation reports.
➢ Business Documents: For business loans, additional documents may be
necessary, such as business registration certificates, financial statements,
business plans, or proof of ownership.
➢ Legal and Regulatory Documents: Lenders may request various legal and
regulatory documents, including proof of age (if applicable), tax identification
numbers, and compliance with anti-money laundering regulations. It’s
important to note that the specific document requirements can vary depending
on the lender and the loan type. It's advisable to contact the lender or review
their loan application checklist to ensure you have all the necessary documents
for your loan application

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ANALYSIS OF LOAN REQUIREMENTS

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To analyse a loan requirement, several factors need to be considered. Here are
some key aspects that lenders typically evaluate when assessing a loan
application:

➢ Purpose of the Loan: Lenders will inquire about the specific purpose of
the loan. Whether it is for personal use, business expansion, education,
home purchase, or any other reason, the purpose helps determine the type
of loan and its associated risks.
➢ Loan Amount: The loan amount required is a crucial factor. Lenders
consider the requested amount to assess whether it aligns with the purpose
and the borrower's ability to repay. They will evaluate the borrower's
income, assets, and creditworthiness to determine the appropriate loan size.
➢ Credit History: Lenders review the borrower's credit history, including
credit scores, payment patterns, and any previous defaults. A good credit
history increases the chances of loan approval and may result in more
favourable terms, such as lower interest rates.
➢ Income and Employment Stability: Lenders assess the borrower's
income level, stability, and employment history. They look for steady
income sources and stable employment to ensure the borrower has the
means to repay the loan.
➢ Debt-to-Income Ratio: Lenders calculate the borrower's debt-to-income
ratio, which compares their monthly debt obligations to their monthly
income. A lower debt-to-income ratio demonstrates the borrower's ability
to manage existing debts and take on additional loan repayments.
➢ Collateral or Security: Depending on the loan type, lenders may require
collateral or security for the loan. Collateral provides a form of protection
for the lender in case the borrower defaults. The value and type of collateral
can affect the loan terms and interest rates.
➢ Repayment Plan: Lenders evaluate the borrower's proposed repayment
plan. They assess the duration of the loan, monthly instalment amounts,
and the feasibility of the repayment schedule. A well-thought-out plan
increases the likelihood of loan approval.
➢ Interest Rates and Terms: Lenders consider prevailing market interest
rates, the borrower's creditworthiness, and the loan type to determine the
53 | P a g e
 appropriate interest rate. The loan term, or duration, also affects the interest
rates and the overall cost of the loan.
➢ Regulatory and Legal Requirements: Lenders must adhere to various
regulations and legal requirements, such as income verification, anti-
money laundering checks, and compliance with consumer protection laws.
These factors may influence the loan approval process.
It's important to note that different lenders may have their own specific criteria
and considerations when analysing loan requirements. The weight given to each
factor can vary based on the lender's policies, the loan type, and the borrower's
individual circumstances.

54 | P a g e
CREDIT APPRAISAL PROCESS AT IDBI BANK

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The credit appraisal process at IDBI Bank is a crucial step in determining the
creditworthiness of potential borrowers. The process involves a comprehensive
evaluation of various factors that impact the borrower's ability to repay the loan.
Here are the key steps involved in IDBI Bank's credit appraisal process:

➢ APPLICATION AND DOCUMENT VERIFICATION: The borrower

submits a loan application along with the necessary documents, including
financial statements, tax returns, and other relevant documents. IDBI Bank
verifies the authenticity of the documents and ensures that all required
information is provided.
➢ FINANCIAL ANALYSIS: IDBI Bank analyses the borrower's financial
statements, including income statements, balance sheets, and cash flow
statements, to assess the borrower's financial position. This analysis helps
the bank determine the borrower's ability to generate sufficient cash flows
to repay the loan.
➢ INDUSTRY ANALYSIS: IDBI Bank evaluates the borrower's industry to
assess the overall economic environment, competitive landscape, and
regulatory framework. This analysis helps the bank understand the risks
and opportunities associated with the borrower's industry.
➢ MANAGEMENT ASSESSMENT: IDBI Bank assesses the borrower's
management team to evaluate their experience, track record, and ability to
execute the business plan. This assessment helps the bank determine the
borrower's ability to manage the business effectively and generate
sufficient cash flows.
➢ COLLATERAL EVALUATION: IDBI Bank evaluates the collateral
offered by the borrower to secure the loan. This evaluation helps the bank
determine the value of the collateral and its ability to cover potential losses
in case of default.
➢ CREDIT SCORE: IDBI Bank evaluates the borrower's credit score to
determine their creditworthiness. The credit score is based on the
borrower's credit history, repayment behaviour, and other factors.
➢ RISK ANALYSIS: IDBI Bank conducts a risk analysis to evaluate the
overall credit risk associated with the loan. This analysis considers various

56 | P a g e
 factors, such as the borrower's financial position, industry dynamics,
management quality, collateral value, and credit score.

Based on the above factors, IDBI Bank determines the borrower's

creditworthiness and decides on the loan amount, interest rate, and other loan
terms. The credit appraisal process at IDBI Bank ensures that the bank makes
informed lending decisions and manages credit risk effectively.

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OTHER SOFTWARES USED BY IDBI FOR
CREDIT APPRAISAL PROCESS

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 CIBIL
TransUnion CIBIL Limited is a credit information company operating
in India. It maintains credit files on 600 million individuals and 32 million
businesses. TransUnion is one of four credit bureaus operating in India and is
part of TransUnion, an American multinational group.

Consumer Credit Reporting

Trans Union CIBIL aggregates consumer borrowing and payment information
for the purpose of assessing loan risk and pricing credit (setting the interest
rate). It has partnered with Chicago-based TransUnion.

Consumer credit scores are also used in unemployment decisions, although

there are no studies in India showing that impaired credit leads to employee
misconduct and unemployment.

Business Credit Reporting

TransUnion CIBIL aggregates business financial and payment information for
the purpose of assessing loan risk and pricing credit (setting the interest rate. It
has partnered with New Jersey based Dun and Bradstreet. D&B maintains files
on 150 million business worldwide.

What is CIBIL Score?

CIBIL score is a bank's assessment of a client's trustworthiness based on
information from their credit history. The higher the score, the more favourable
the bank is to the client. It is a 3-digit number ranging between 300 and 900.
Ideally, 720 or above score considered as a good CIBIL score. It tells your
financial health and your previous records of loans.

CIBIL Full Form

CIBIL is fully known as Credit Information Bureau (India) Limited

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CRIF vs. CIBIL
Banks and financial organisations widely use CRIF and CIBIL. Both of them
are more or less the same. Here's a comparative analysis of CRIF and CIBIL

CRIF Credit Scores: CIBIL Credit Scores:

300–500 Very low <600 Low

500-650 Low 600-649 Difficult

650–750 Great 650-699 Possible

750-900 Excellent 700-749 Good

750-900 Excellent

Higher CIBIL scores make your loan journey easy and smooth. They also help
you secure lower interest rates on your unsecured loans. Your CIBIL score is
affected by your loan history. It is influenced by various factors such as past
settlements of loans or credit cards, delayed payments or overdue amounts, and
unpaid loans. If your CIBIL score is low, it becomes significantly harder to
obtain any type of loan. However, CIBIL scores can be improved, though this
process usually takes about 4–8 months. To achieve a good CIBIL score, it is
crucial to pay your EMIs and credit card bills on time.

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 CERSAI
Central Registry of Securitisation Asset Reconstruction and Security
Interest (CERSAI) is a central online security interest registry of India. It was
primarily created to check frauds in lending against equitable mortgages, in which
people would take multiple loans on the same asset from different banks.
It is a Government company licensed under section 8 of the Companies Act,
2013 having its Registered Office at New Delhi.

CERSAI is owned by the Indian Central Government, Public Sector Banks

and National Housing Bank for the purpose of operating a Registration System
under the provisions of Chapter IV of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002. (SARFAESI
Act).

History
In India, before the formation of CERSAI, information on the encumbrance on a
property was known only to the borrower and the lender due to fragmented
registration system. As a result, people could obtain multiple loans on the same
property. Some people used to take one loan from one bank, which would hold
the deed papers. Then they used to take several more loans from other banks
using attested copies of the deed, by claiming that they had lost the originals.
Some people also used to obtain loans using entirely fake title deeds or by using
colour photocopies of the original title deed. Properties with unpaid loans were
also being sold without informing the buyers of the existing liability on the
property.

The decision to form central registry of equitable mortgages was revealed in

the 2011 budget speech by then Finance Minister Pranab Mukherjee. It was
formed under the Chapter IV Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It was
registered as a government-licensed company, under the Section 25 of
the Companies Act, 1956. CERSAI become operational on 31 March 2011.
51% of the equity is owned by the government, and the rest is owned equally
by National Housing Bank and 10 other public sector banks. The then Chairman
of the National Housing bank, R.V. Verma, served as the first acting Registrar,
61 | P a g e
managing director and CEO of CERSAI, while continuing to hold charge at the
National Housing Bank.

Objectives and functions

CERSAI's initial mandate was to maintain a central registry of equitable
mortgages, where it contains information on the equitable mortgage taken on a
property along with details of the financial institution that has extended the loan
as well as details about the borrower. CERSAI also allowed lenders to register
transactions of securitisation and asset reconstruction.

The CERSAI registry platform can be accessed online by financial institutions

and the general public for a fee. However, the latter can only access information
related to equitable mortgages.

This allows prospective lenders to check the registry to ensure that the property
against which they are extending a loan to a borrower is not encumbered by a
pre-existing security interest created by another lender. Even if it is, with details
of the previous loan available to them, they can examine if the value of the
collateral is sufficient for them to extend another loan, given the existing
liability on the property. For the general public, especially for home buyers, it
enables them to check the registry's records to ensure that any property they are
planning to purchase, is free of any loan/security interest created by a lender.

CERSAI's mandate was extended in 2012 to start registration of security

interests created through assignment of accounts receivables or factoring,
through the passage of the Factoring Act, 2012.[4] In January 2016, the mandate
was extended even further to allow the CERSAI to start registration of security
interests created on movable and intangible assets such as accounts receivables,
book debt, and hypothecation as well as to start registration of all other types of
mortgages used in India.

According to the government's directives, financial institutions must register

details of security interests created by them with CERSAI within 30 days of its
creation.

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 I-ASTRA
IDBI Bank's IASTRA software is an internal tool used for banking operations.
However, detailed public information about proprietary software used by banks
is typically limited due to security and competitive reasons. IASTRA (Integrated
Application Software for Technology-Related Activities) is likely designed to
manage various banking functions including transactions, customer data
management, and regulatory compliance.
Potential Features of I-ASTRA Software
1. Core Banking Functions:
- Handling daily banking operations like deposits, withdrawals, account
management, and transaction processing.
- Real-time processing and updating of customer accounts.
2. Customer Relationship Management (CRM):
- Managing customer interactions and data throughout the customer lifecycle.
- Enhancing customer service through detailed customer insights.
3. Regulatory Compliance:
- Ensuring adherence to banking regulations and compliance requirements.
- Automating reporting to regulatory bodies.
4. Risk Management:
- Identifying, assessing, and mitigating various banking risks.
- Monitoring for fraud and suspicious activities.
5. Data Analytics and Reporting:
- Generating detailed financial and operational reports.
- Providing analytics for strategic decision-making.
6. Security Features:
- Implementing robust security protocols to protect sensitive data.

63 | P a g e
 - Ensuring data integrity and confidentiality.
7. Integration Capabilities:
- Integrating with other banking systems and third-party applications.
- Facilitating seamless data flow across different banking services.

For specific and detailed information, such as technical specifications or

operational details of IASTRA, consulting internal resources or directly
contacting IDBI Bank would be necessary.

ARKEY

ARKEY, in the context of IDBI Bank and Aadhaar, is a system or technology

solution used to securely link and authenticate Aadhaar numbers with bank
accounts. Here's a detailed explanation of how it might work and its benefits:
Detailed Functionality of ARKEY for Aadhaar in IDBI Bank:
1. Secure Authentication:
- User Verification: ARKEY ensures that the Aadhaar number provided by the
customer is verified securely against the UIDAI (Unique Identification Authority
of India) database.
- Biometric Authentication: In some cases, ARKEY may facilitate biometric
authentication (fingerprint or iris scan) to ensure that the individual providing the
Aadhaar number is the legitimate owner.
2. Data Encryption:
- Secure Transmission: All data transmitted between the customer, the bank,
and the UIDAI is encrypted to protect it from interception and unauthorized
access.

64 | P a g e
 - Storage Security: Aadhaar information linked to bank accounts is stored
securely within the bank’s systems, ensuring compliance with data protection
regulations.
3. Regulatory Compliance:
- KYC (Know Your Customer): Linking Aadhaar with bank accounts helps
IDBI Bank comply with KYC norms mandated by the Reserve Bank of India
(RBI) and the Government of India.
- Subsidy and Benefit Transfers: Aadhaar linking is essential for the direct
transfer of government subsidies and benefits to bank accounts under various
schemes like LPG subsidy, PM-Kisan, etc.
4. Efficient Processing:
- Automated Linking: ARKEY automates the process of linking Aadhaar with
bank accounts, reducing manual intervention, and minimizing errors.
- Customer Convenience: Customers can link their Aadhaar with their bank
accounts through multiple channels such as online banking, mobile banking,
ATMs, or visiting the branch, thanks to the streamlined process enabled by
ARKEY.
5. Fraud Prevention:
- Identity Verification: By using ARKEY to authenticate Aadhaar numbers,
IDBI Bank can prevent identity fraud and ensure that only genuine customers link
their Aadhaar to their accounts.
- Transaction Security: Enhanced security measures help in safeguarding
transactions linked to Aadhaar, reducing the risk of fraudulent activities.
Benefits for IDBI Bank and Customers:
- Enhanced Security: Ensures that the Aadhaar linking process is secure and
trustworthy.
- Regulatory Adherence: Helps the bank comply with legal requirements
efficiently.

65 | P a g e
- Customer Satisfaction: Provides a seamless and hassle-free experience for
customers linking their Aadhaar with bank accounts.
- Operational Efficiency: Reduces the manual workload for bank staff, allowing
them to focus on other critical tasks.
By utilizing ARKEY, IDBI Bank aims to provide a secure, efficient, and user-
friendly mechanism for linking Aadhaar with bank accounts, thereby enhancing
overall customer service and compliance with regulatory standards.

I-ACIDS

IACIDS (Integrated Automated Customer Identification Data System) is a

technology used by IDBI Bank to enhance its Know Your Customer (KYC) and
Anti-Money Laundering (AML) processes. It streamlines and automates
customer identification and verification, ensuring compliance with regulatory
standards. Here's a detailed look at IACIDS and its functionalities:
Detailed Functionality of IACIDS in IDBI Bank:
1. Customer Identification and Verification:
- KYC Compliance: IACIDS helps IDBI Bank collect and verify customer
information to meet KYC requirements. This includes capturing personal details,
proof of identity, and proof of address.
- Document Verification: The system verifies the authenticity of submitted
documents (such as Aadhaar, PAN card, passport) through integration with
various government databases and services.
2. Automated Data Capture:
- Digitization: Converts physical documents into digital format for easy
storage and retrieval. This minimizes errors and reduces the need for manual data
entry.
- OCR Technology: Optical Character Recognition (OCR) technology is used
to extract information from scanned documents automatically.
66 | P a g e
3. Risk Assessment and AML Compliance:
- Customer Risk Profiling: IACIDS assesses the risk profile of customers
based on their transaction patterns, background checks, and other criteria to detect
potential risks.
- Transaction Monitoring: Continuously monitors customer transactions for
suspicious activities, flagging them for further investigation as part of AML
compliance.
4. Integration with Other Systems:
- Core Banking System: IACIDS integrates seamlessly with the bank's core
banking system, ensuring real-time updating of customer data and transactions.
- Government Databases: Interfaces with government databases like UIDAI
for Aadhaar verification, PAN database for tax identification, etc.
5. Regulatory Reporting:
- Automated Reports: Generates reports required by regulatory bodies such
as the Reserve Bank of India (RBI), including Suspicious Activity Reports
(SARs) and Cash Transaction Reports (CTRs).
- Audit Trails: Maintains detailed logs of all data capture and verification
activities for audit purposes.
6. Customer Experience:
- Streamlined Onboarding: Simplifies the account opening process for
customers by reducing paperwork and processing time.
- Self-Service Options: Provides customers with self-service options for
updating their KYC information online or through bank kiosks.
Benefits for IDBI Bank and Customers:
- Enhanced Security: Ensures the integrity and security of customer data through
robust verification processes.
- Regulatory Compliance: Helps IDBI Bank stay compliant with KYC, AML,
and other regulatory requirements.

67 | P a g e
- Operational Efficiency: Reduces the time and effort required for manual data
processing, allowing bank staff to focus on customer service and other critical
tasks.
- Improved Customer Service: Offers a quicker and more efficient onboarding
process, enhancing customer satisfaction.

By implementing IACIDS, IDBI Bank aims to provide a secure, compliant, and

efficient system for managing customer identification and verification processes,
ultimately enhancing overall customer trust and operational effectiveness.

I-RISKS

IRISKS (Integrated Risk Management System) is a comprehensive framework

used by IDBI Bank to identify, assess, manage, and mitigate various types of risks
associated with its operations. This system ensures that the bank can maintain
financial stability, comply with regulatory requirements, and safeguard its assets.
Here's a detailed look at IRISKS and its functionalities:
Detailed Functionality of IRISKS in IDBI Bank:
1. Risk Identification:
- Risk Categories: Identifies various categories of risks, including credit risk,
market risk, operational risk, liquidity risk, and compliance risk.
- Data Collection: Gathers data from various sources such as financial
statements, market reports, customer transactions, and external economic
indicators to identify potential risks.
2. Risk Assessment and Measurement:
- Quantitative Analysis: Uses statistical models and quantitative techniques
to measure the potential impact of identified risks. This includes Value at Risk
(VaR), stress testing, and scenario analysis.

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 - Qualitative Analysis: Assesses risks based on expert judgment, historical
data, and qualitative factors that might affect the bank's risk profile.
3. Risk Management and Mitigation:
- Credit Risk Management: Monitors and manages the risk of default by
borrowers. This involves setting credit limits, evaluating creditworthiness, and
implementing measures to mitigate potential losses.
- Market Risk Management: Manages risks associated with fluctuations in
market prices, interest rates, and exchange rates. This includes hedging strategies
and diversification of the investment portfolio.
- Operational Risk Management: Identifies and mitigates risks arising from
internal processes, systems failures, human errors, and external events. This
includes implementing robust internal controls and risk mitigation strategies.
- Liquidity Risk Management: Ensures the bank has sufficient liquidity to
meet its obligations. This involves maintaining adequate reserves, managing cash
flows, and accessing credit lines.
- Compliance Risk Management: Ensures adherence to regulatory
requirements and internal policies to avoid legal penalties and reputational
damage.
4. Risk Monitoring and Reporting:
- Continuous Monitoring: Uses real-time data and advanced analytics to
continuously monitor risk exposure and detect early warning signals of potential
issues.
- Reporting and Dashboard: Provides comprehensive risk reports and
dashboards to senior management and the board of directors, highlighting key
risk metrics and trends.
5. Risk Governance:
- Risk Committees: Establishes various risk committees, such as the Risk
Management Committee (RMC) and the Asset-Liability Committee (ALCO), to
oversee risk management activities and make strategic decisions.

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 - Policies and Procedures: Develops and enforces risk management policies,
procedures, and guidelines to ensure a consistent and effective approach to risk
management across the organization.
Benefits for IDBI Bank and Customers:
- Financial Stability: Helps maintain the financial stability of the bank by
proactively managing and mitigating risks.
- Regulatory Compliance: Ensures compliance with regulatory requirements set
by the Reserve Bank of India (RBI) and other regulatory bodies.
- Enhanced Decision-Making: Provides valuable insights and data to support
informed decision-making by the bank’s management and board of directors.
- Customer Confidence: Enhances customer confidence by ensuring the bank’s
operations are secure and resilient against potential risks.
- Operational Efficiency: Streamlines risk management processes and reduces
the potential for operational disruptions.

By implementing IRISKS, IDBI Bank aims to create a robust and proactive risk
management framework that safeguards its operations, enhances regulatory
compliance, and supports sustainable growth.

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A COMPREHENSIVE REPORT ON MY
WORKINGS

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Case 1: Gold Loan Disbursement

A businessman took a loan on behalf of the gold he provided. He submitted a

22-carat gold item with a net weight calculated as 4.50 grams and a gross
weight of 10.00 grams. The loan typically considers 85% of the gross weight as
net weight. The Corporate Office prescribed a rate of Rs 5000 per gram for 22-
carat gold. Therefore, the value of the gold is Rs 22,500. Based on this value,
the loan eligibility is Rs 16,875 (value of the gold * 75%).
The applicant requested a loan amount of Rs 20,000. However, the sanctioned
amount will be the lower of the eligible loan amount and the requested amount.
Thus, the loan amount to be sanctioned is Rs 16,875.
The documents prepared for this person included:

- Loan Application
- Take Delivery Letter

Case 2: Fixed Deposit of Rs 4,80,000

We have made multiple fixed deposits (FDs) for the customer at a special
interest rate offer of 6.75% per annum for normal individuals and 7.25% per
annum for senior citizens for a duration of 444 days. There are also other
interest schemes available for both short-term and long-term deposits. FDs can
be booked for both existing IDBI Bank customers and new customers.

Customers can choose to receive interest on a monthly, quarterly, or cumulative

basis. Based on these FDs, customers can benefit from tax exemptions under
Form 15G for normal individuals and Form 15H for senior citizens.
Additionally, customers can avail of an overdraft facility against the FD, known
as FDOD.

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Case 3: Opening of Current Account of Rs 600,000

A businesswoman opened a current account of Rs 600,000 for her firm

operating in the Heavy Vehicle Tyre industry. This is a standard current account
intended to avail future cash credit (CC) / overdraft (OD) benefits provided by
the bank.

The documents requested by the bank included:

- Trade License
- GST Registration
- Firm Stamp
- Memorandum of Association
- Non-Individual PAN Card
- Individual PAN Card
- Aadhaar Card

After collecting all necessary documents from the customer, we verified them
through our system and with bank officials. The verification process involved:

- Bank Official Visit Report (BOVR)

- I-ACIDS
- ARKEY
- I-RISKS

Upon successful verification, the customer was provided with the following
deliverables:

- Cheque Book
- Debit cum ATM Card

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Case 4: Renewal of a CC Loan of Rs 15 lakhs
The borrower availed a cash credit (CC) loan of Rs 15 lakhs for working capital
needs, with hypothecation on a stock valued at Rs 25,00,000.00. Unfortunately,
this asset has been classified as Non-Performing Asset (NPA) this year. As a
result, the applicable rate of interest is set at 1 Year RLLR + 370 bps + 25 bps,
totaling 13.05% per annum. An additional 0.25% per annum is charged due to
non-compliance with previous terms and conditions.
Any changes in the Repo Linked Lending Rate (RLLR) due to fluctuations in
the Repo Rate will be applied to the loan account on the 12th day of every
calendar month. The borrower must reduce the limit to Rs. 2.33 lakhs in a
phased manner by the specified date in the sanction letter, or the branch may
consider terminating the relationship.
The documentation processed for this case included:
- Common Guarantee Agreement involving the borrower and two co-applicants
- Demand Promissory Note (DPN)
- DPN Delivery Letter
- Continuing Security Letter
- Hypothecation-cum-Loan Agreement
- Declaration Undertaking Mortgage

The borrower's situation is complex due to the property where the business
operates belonging to another party, with the borrower utilizing a portion for
business purposes. Additionally, the borrower has previously closed a home
loan and an education loan, though they experienced some delayed payment
days (DPD) before settlement of these loans.

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Case 5: Gold Loan Disbursed of Rs 2,00,000
A housewife took a loan of Rs 2,00,000 against the gold she provided. She
presented a 22-carat gold item with a net weight calculated as 45.5 grams and a
gross weight of 70.80 grams. Typically, the loan considers 85% of the gross
weight as net weight. The prescribed rate per gram by the Corporate Office for
22-carat gold is Rs 7,000. Therefore, the value of the gold is Rs 4,95,600.
Based on this value, the loan eligibility is Rs 3,71,700 (value of the gold *
75%). The applicant requested a loan amount of Rs 2,00,000. Hence, the
sanctioned amount will be Rs 2,00,000, as it is the lower amount between the
eligible loan amount and the requested amount.
The documents prepared for this person include:
- Loan Application
- Take Delivery Letter

Case 6: Delinquency Call for Loan Defaulters

In a recent case of loan delinquency, a borrower had taken a personal loan of Rs

5,00,000 from our bank for home renovation purposes. The loan was disbursed
at an interest rate of 11.5% per annum for a tenure of 5 years. However, the
borrower started missing payments after the third month.
Upon diligent monitoring and regular follow-ups, it was discovered that the
borrower had defaulted on three consecutive monthly installments. This
triggered the need for a delinquency call to address the overdue payments and
assess the borrower's situation.
During the delinquency call, conducted by our recovery team:
- The borrower was reminded of the outstanding payments and their impact on
credit standing.
- Detailed discussions were held regarding the borrower's current financial
challenges and constraints.
- Options for restructuring the loan repayment schedule or settlement were
explored to facilitate timely resolution.

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The objective of the call was to initiate constructive dialogue and offer viable
solutions to prevent further escalation of the loan into Non-Performing Asset
(NPA) status. The bank emphasized the importance of adhering to loan terms
and conditions while ensuring transparency and empathy in handling the
borrower's financial difficulties.
Subsequent actions included documenting the outcomes of the call, outlining
agreed-upon repayment arrangements, and setting clear expectations for future
payments to mitigate potential risks associated with continued delinquency.
This case underscores the bank's commitment to proactive loan management
and customer engagement, aiming to restore financial stability and maintain a
positive borrower-lender relationship amidst challenging circumstances.

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 REFERENCE
1. Annexure
2. Circular of the IDBI Bank regarding Retail Asset
3. www.idbibank.in
4. www.bajajfinservmarkets.in
5. www.cersai.org.in
6. www.equifax.com
7. Credit appraisal files
8. https://en.wikipedia.org/wiki/IDBI_Bank
9. https://en.wikipedia.org/wiki/TransUnion_CIBIL
10.https://en.wikipedia.org/wiki/Central_Registry_of_Securitisation_Asset_
Reconstruction_and_Security_Interest
11.IDBI BANK Circulars

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