1st Issue E-gyan, July-2013

State Bank Learning Centre Masulipatnam

e-gyan (Solutions to- Knowledge Help Line queries)

Vol -1

20.07.2013

DISCLAIMER “We have made every effort to provide best solutions for the queries raised by the operating staff in KHL. However, the readers of this magazine are advised to go through the Bank’s Circulars, publications and seek advice from the Controllers or experts before taking any action or decision based on the information, material contained in this e-magazine. SBI/SBLC do not accept any liability for any damage or loss of any kind, howsoever caused or of any nature whatsoever as a result (direct or indirect) of the use of the information, material contained in this e-magazine.” We solicit suggestions/ feedback to [email protected] for improvement of this magazine, e-gyan.

01.What is the process of ATL Loan Documentation & Review ? Prescribed formats for loan documentation and Review under specific schemes are readily available in branches and the procedure is available on SBI TImes - Manuals - Codified Cir - Book of Instructions. Kindly go through it. AGRICULTURAL ADVANCES- DOCUMENTATION The documents to be obtained at the time of fresh sanction of advances or renewal of credit facilities are given below: D.P.Note (COS 229) & D.P. Note Take Delivery Letter For Crop Loans / Term Loans up to Rs.1,000/(where movable assets are created), and For Term Loans upto Rs.10,000/- (where movable assets are not created) Form III Revival letter for D.P Note AB 1 e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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Hypothecation Agreement to be used for all loans where hypothecation charge over the securities financed by the Bank is created. AB-1 (Sim) Hypothecation Agreement to be used for all loans up to Rs.1.00 Lac where hypothecation charge over the securities financed by the Bank is created. Arrangement Letter Arrangement Letter Format AB 2 Deed of Guarantee to be executed by the guarantor to a loan, wherever such guarantees are obtained. AB 3 Deed of mortgage to be obtained wherever it is considered necessary. ($) AB 4 Revival letter for AB - 1 AB 5 Revival letter for AB 2 AB 6 Letter to the borrower demanding repayment of crop loan. AB7 Letter to be addressed to the Bank by the borrower and the guarantor for conversion of Crop Loan to Term Loan or re-scheduling repayment of existing Term Loans. AB 1 A Supplemental Hypothecation Agreement to be used for extension of the hypothecation charge over all the securities (existing as well as new) to cover aggregate limits sanctioned by the Bank. AB-2-A Supplemental Deed of Guarantee to be obtained from the guarantors, if any, to cover the aggregate limits, i.e. the existing as well as new credit limits granted by the Bank. AB 3 A Deed of Extension of Mortgage for extension of the mortgage to cover the aggregate limits ($) AB 4 A Revival letter for AB-1 and AB 1 A. (to be used only in cases where supplementary documents have been obtained). AB 5 A Revival letter for AB-2 and AB 2 A. (to be used only in cases where supplementary documents have been obtained). Mortgage Deed (Guarantors) To be executed by guarantors whose land is to be mortgaged as a collateral security for agri. loans ($) As regards creation of mortgage, the practices prevailing vary from State to State depending upon the farm legislation in force in a particular State. In most of the States legislation has been enacted as per Talwar Committee recommendations, which has simplified the creation of charge over land without execution of any mortgage deed. However, as some States have still not enacted the said legislation, no uniform format can be devised for adoption by banks throughout the country. It is, therefore, suggested that banks operating in different states conform to the prevalent laws of the respective States. The 'Deed of Mortgage' (AB-3 / AB-3A) may be used by the branches wherever applicable. Ref: CHAPTER II; GENERAL GUIDELINES FOR AGRICULTURAL ADVANCES ***** Review Renewals: KCC limits are normally valid for 3 years but will be subject to annual review. The review may result in continuation of the facility, enhancement/ reduction of their limit or withdrawal of the facility depending upon the performance / conduct of the account by the borrower. When a crop loan is to be renewed, the farmer borrower should furnish the necessary particulars in respect of agricultural operations in the prescribed Application Form for Renewal and enclosure thereto. The branch field officer should submit verification report at the bottom of the Renewal Application form. If borrowers and guarantors liabilities continue to subsist by virtue of documents executed by them, no additional document is called for at the time of renewal of crop loan limits. All renewal should be reported to the controlling authority in the same manner as new sanction.

e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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02.Customers complain of deduction of tax even after submitting form. Why does this happen ?

15 G & 15 H

1. Please verify whether pan number was available in the "income tax pan" field of the CIF availability of income tax pan at cif is mandatory for form 15G&H to be operationalized. 2. If the above position is free of problem, then enquire (TDS details menu in CBS) whether form 15g/h was created for all STDRs/TDRs under the same CIF. Normally 15g/h will be created in CBS for one STDR only as the same will be mapped at CIF level and applicable for remaining STDRs. but in some cases it is not getting mapped. For such cases choosing the amend option, you can create 15g/h for all the STDRs under the CIF using the reference no for 15G/H. 3. If the aggregate interest earned from all deposits under the CIF exceeds the income tax threshold limit (rs.200,000/ for male/female citizen or the respective exemption limits set for senior/very senior citizens), then creation of 15g/h will be overlooked by the system and TDS will be deducted. Kindly verify your position.

03.Please explain in detail about the credit risks and capitals Tier I & II & III and Differences between them. Tier I capital: For Indian banks, Tier I capital would include the following elements: i) Paid-up equity capital, statutory reserves, and other disclosed free reserves, if any; ii) Capital reserves representing surplus arising out of sale proceeds of assets; iii) Innovative perpetual debt instruments eligible for inclusion in Tier I capital, which comply with the regulatory requirements iv) Perpetual Non-Cumulative Preference Shares (PNCPS), which comply with the regulatory requirements and v) Any other type of instrument generally notified by the Reserve Bank from time to time for inclusion in Tier I capital. For foreign banks in India, Tier I capital would include the following elements: (i) Interest-free funds from Head Office kept in a separate account in Indian, Total Tier I capital funds, subject to prudential limits for Innovative Perpetual Debt Instruments minus deductions from Tier I capital. Total of eligible Tier I capital funds and eligible Tier II capital funds, subject to prudential limits for Innovative Tier I instruments, Upper Tier II instruments and subordinated debt instruments minus deductions from Tier I and Tier II capital. Notes: (i) Foreign banks are required to furnish to Reserve Bank, an undertaking to the effect that the e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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bank will not remit abroad the 'capital reserve' and `remittable surplus retained in India as long as they function in India to be eligible for including this item under Tier I capital. (ii) These funds may be retained in a separate account titled as 'Amount Retained in India for Meeting Capital to Risk-weighted Asset Ratio (CRAR) Requirements' under 'Capital Funds'. (iii) An auditor's certificate to the effect that these funds represent surplus remittable to Head Office once tax assessments are completed or tax appeals are decided and do not include funds in the nature of provisions towards tax or for any other contingency may also be furnished to Reserve Bank. (iv) The net credit balance, if any, in the inter-office account with Head Office / overseas branches will not be reckoned as capital funds. However, any debit balance in the Head Office account will have to be set-off against capital. (v) Banks may include quarterly/half yearly profits for computation of Tier I capital only if the quarterly/half yearly results are audited by statutory auditors and not when the results are subjected to limited review. Limits on eligible Tier I Capital: (i) The Innovative Perpetual Debt Instruments, eligible to be reckoned as Tier I capital, will be limited to 15 per cent of total Tier I capital as on March 31 of the previous financial year. The above limit will be based on the amount of Tier I capital as on March 31 of the previous financial year, after deduction of goodwill, DTA and other intangible assets but before the deduction of investments. (ii) The outstanding amount of Tier I preference shares i.e. Perpetual Non- Cumulative Preference Shares along with Innovative Tier I instruments shall not exceed 40 per cent of total Tier I capital at any point of time. The above limit will be based on the amount of Tier I capital after deduction of goodwill and other intangible assets but before the deduction of investments. Tier I preference shares issued in excess of the overall ceiling of 40 per cent, shall be eligible for inclusion under Upper Tier II capital, subject to limits prescribed for Tier II capital. However, investors' rights and obligations would remain unchanged. (iii) Innovative instruments / PNCPS, in excess of the limit shall be eligible for inclusion under Tier II, subject to limits prescribed for Tier II capital. Elements of Tier II Capital Revaluation Reserves These reserves often serve as a cushion against unexpected losses, but they are less permanent in nature and cannot be considered as `Core Capital. Revaluation reserves arise from revaluation of assets that are undervalued on the banks books, typically bank premises.


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04.When we try to issue Second ATM Card after blockage of First ATM card by using 1. New, it shows “Record already exists” 2. Replace, it shows “such card has not been issued to the customer”. Kindly look in to the matter As early as possible and oblige. Verify the status of ATM Card before going for ATM card issue request. Menu navigation: State Bank Time/useful links1/ABOSS/Card status/by account no or card no. The status of the old card should be "BLOCKED" Please go for "New" only. 05.How can I resolve error: 943 in Mobile Banking. Customer A/c No.20054452739 Name Shri Mukesh Kumar Choudhary? Registration is complete in respect of the above account and it is ready to use. You can enquire the status of registration in State Bank Times/Useful links2/Mobile banking/search by account no or user id. 943 error description: Please complete registration process before using any service. But MBS registration is complete in respect of the above account and ready to use. 06.Regarding Draft exchange for amount Rs.5000/- below should we collect cash handling charges i.e., Rs.25/-+Rs.10/- Total Rs.35/- or only Rs.25/In terms of e-Circular of Banking Operations Department Sl. No. : 995/2012 13, Circular No. : NBG/BOD-GB/93/2012 - 13 dated the January 1,2013, Master Circular on Service Charges, Sl.No.33 under Issue of demand drafts (a) By transfer of funds from any other account at home branch/ non home branch -Upto Rs.5,000/- Rs.25/(b) By deposit of cash, in addition to above charges, cash handling charges or Rs. 10/- per draft, whichever is higher to be recovered (i.e. Rs 35/-) 07.A Central Government employee (Multi Tasking Staff- Scale 5200-20200) wants to take a two-wheeler loan. His total service period is 5 months still. His salary account is in SBI. Is he eligible for the loan

What are the documents required this

? Please refer to Manual on Loans and Advances Part-8 Para 4.7 Page no. 340 in SBI Times>Home » Credit Policy & Procedures Department » E-Manual on Loans and Advances.


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08.Respected Sir, I have given the transaction rights to the OD account of a customer for internet banking.

In how many days would it be reflected in the

international banking portal? Normally it should get reflected the next day. If you however do not see this reflected, please login in as INB Officer, go for Rectify Mapping Issues - Update Account Details have to be invoked - give the account number and fill the other details sought. It will then be available on the next day. 09.Is it sufficient to enter form 15 G / H in a single account when there are more than one accounts under one common CIF

If customer had already submitted the

form 15 G/H and he then made a fixed deposit account, then does he again required to submit the form 15 G/H for that particular account Kindly guide me. The Form 15G/H can be taken for any deposit account of the customer. This takes care of other accounts in the same branch under the same CIF. There is no need to take the form for each account in the branch. 10.A customer has submitted a Succession Certificate willingly for claiming the final amount lying in a Deceased SB account.

The amount involved in Rs.521400/-.

Kindly inform me what more documents to be taken along with the Succession Certification i.e. what documents are required if a customer gives Succession Certificate and what extra formalities to be carried out in case of Succession Certificate (if any) ? SETTLEMENT WITH LEGAL REPRESENTATION: A legal representation is one that is granted by a Court of Law entitling the legal heirs of the deceased to collect the debts/securities or assets of the deceased. Bank may opt for settling the matter through legal representation. The following documents represent different forms of legal representation: Succession Certificate, Probated Will, Letter of Administration, Order of the Administrative General attached to the High Court. Scope of a Succession Certificate:- A Succession Certificate is a legal representation, which is granted only in respect of debts and securities, and when the deceased has not left any Will (INTESTATE).

It does not cover gold loan ornaments, articles in safe

custody and safe deposit lockers. It is valid throughout India even if granted by a District Court. The Certificate specifies: Debts and Securities The person to whom e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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it is granted.

Any payment to the grantee/s on the strength of a Succession

Certificate affords a valid discharge to the person making the payment. Where a Succession Certificate is in favour of two or more persons, the payment of the deposits should be made jointly in favour of all of them. In addition, Death Certificate to be obtained and Succession Certificate (genuineness of succession certificate to be verified) . we have to ensure KYC of claimants. Sanction should be obtained from the appropriate authority and control form must be sent. A receipt from the claimants to be obtained and kept on record. All documents must be entered in Branch Document Register. 11.Sir, Please guide me, navigation menu in service desk to unblock ATM Card. On the home page of State Bank group Service Desk go to "CREATE A NEW REQUEST" under "REQUEST SUPPORT" menu. Then click on hyper link "CLICK HERE TO SELECT REQUEST CATEGORY (REQUIRED)". You will get a screen containing list of "REQUEST AREAS" including ATM. Select ATM and go to desired operation. IMPORTANT: PLEASE MAKE SURE THAT THE ABOVE PROCESS IS DONE BY A USER WITH CAPABILITY LEVEL OF 9 OR USER TYPE OF 50. 12.When do we use the different Minor Heads of 100,102,200,300,400 in CBDT Receipts ? When a customer approaches the CBS branch with a challan to deposit Direct Tax to Central Government, the Single Window Operator (SWO) has to first of all ensure that the following precautions are taken: Income Tax Challan (ITNS 280) should be filled up clearly with Assessment Year, Minor Head, PAN number, Name, address, Phone number, Penalty code.

PAN number (has 5 alphabets + 4 numeric +1

alphabet) Tax Deposit Date, Minor Head, Related Fin Year(FY) Assessment Year(AY) ------------------18-04-12 100 (Advance Tax)

2012-13

18-04-12 300(Self Assessment Tax) 2012-13

2013-14 12-13 or 11-12 or 10-11(i.e.

<=Fin.year) 18-04-12 400(Regular Assessment Tax)2012-13 12-13 or 11-12 or 2010-11 (i.e. <=Financial year) e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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Tax Deducted at Source (TDS) is deducted on payment of salary, pension, rent commission etc. and deposited into Govt Account through challan number ITNS 81. It should clearly indicate Assessment Year, TAN number, Minor head, Name, address, phone number and Nature/type of payment. TAN contains 4 alphabets+5 digits+1 alphabet Normal TDS is deposited under minor head 200 and in case of demand raised by IT department, it is 400. Nature of payment is mandatory for TDS challan, e.g. 92A, 92B, 94C, and 94I etc, all valid codes are given at the back of ITNS 281. There are 32 codes for Nature of Payment. Nature of Payment indicates the type of payment for which TDS has been deducted. Therefore separate challan has to be prepared for each nature of payment. Minor head 200 can be for current AY as well as for previous AY, whereas 400 canbe used only for previous AYs. 13.Is Form 15 G/H need to be fed for all accounts of one CIF or only in one account sufficient. Form 15 (G)/(H)(whichever is applicable) which is fed in CBS, for any one STDR account shall take care of all other Fixed deposit accounts under the same CIF at that particular Branch. However the same shall not take care of the deposits accounts opened at Non Home Branches & Other Deposit accounts of the customer under different CIF, if any. For example, a depositor has 5 STDR accounts, out of which three are opened at Home Branch and 2 are of some other Branch. At Home Branch, if we feed the Particulars of Form 15(G) or (H) for any one account, it will take care of all three, but not all Five accounts. 14.What is the maximum loan amount under SBI Student Loan for studies in India. The Maximum cap for loan under SBI Student Loan Scheme for studies in India is Rs.10.00 Lakhs. The maximum limit under SBI Student Loan Scheme for studies abroad is Rs.30.00 Lakhs. 15.What are the role wise registered to be maintained by different officials of the bank. Rationalisation of Registers maintained at Branches/CPCs, post migration to CBS has been advised vide E-circular No. Circular No. : NBG/S&P-SP/8/2011 - 12 February 29,2012. Please be guided accordingly. e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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16.Customer already submitted Form 15G, inspite of this, TDS deducted from customer’s account. Customer has more than one STDR in same CIF. Please give me proper guidance about TDS deduction process and how to avoid it after submitting form 15 G. Please verify and ensure that the following details are properly entered in CIF: 1. PAN Number is recorded in CIF 2. CIS ORG CODE: MALE OR FEMALE (41 OR 42) 3. CUSTOMER CATEGORY: PERSONAL-INDIVIDUAL 4. DEPOSIT IS OPENED IN CORRECT PRODUCT TYPE CATEGORY I.E., PER DOMESTIC INDIVIDUAL Enquire TDS details in the system and see that whether form 15 G is submitted and status is "y" or not. Verify that whether interest during financial year is crossed Rs.2.00 lacs. If crossed that amount, tds will be deducted. Form 15(G)/(H) if fed for any one STDR a/c shall take care of all other Home Branch STDR accounts in the same CIF. 17.Sir, Is there any restriction to finance against STDR in some cases viz., If customer opened STDR and wants to take loan against same STDR on the same day. What are Bank’s extant instructions regarding this ? Will this lead to Window Dressing and ALM (Assets Liability) Mismatch ? As per Bank's instructions, a demand loan to be entertained prefarably against a STDR/TDR which completed 50% of the contracted period.If any depositor approaches the Branch immediately after opening the deposit account can be persuaded to withdraw the same. It forms part of window dressing. 18.Eligibility age for Car Loan is 21-65 years but in case of Housing Loans it is 18-65 years. What is the Rationale for higher minimum age in car loans ? The rationale for lower/higher age for Housing loan/Car loan respectively is not provided in any circular including master circulars. The reason for lower age (i.e. 18 years) to be eligible to avail housing loan may be to promote housing activity which contributes to Economy / national income and also Priority sector. Further it enables the borrowers to make thier major children co-borrowers in order to avail required loan to complete the project. The Age Limits are decided by the Bank.


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19.Respected Sir, one of our customer has savings bank account with another branch, but he wants to open new saving bank account in our branch with same ID. I want to know that he is eligible to open account or not. Please guide in this regard. Savings Bank Master Circular issued by our organization didn't speak anything about opening of multiple SB Accounts for the same person. It has spoken only about the possibility of avoiding opening of multiple CIFs for the same person. hence it can be ineferred that Branches can open multiple SB Accounts, perhaps for different purposes of the customer, under the same CIF.The SB Rules, also contained in the same circular, didn't bar the customer from having multiple SB Accounts. But multiple CIFs for the same customer to be avoided. 20.Are multicity cheques issued previously complied with CTS 2010 standards? The following are the important features of CTS 2010 standards: 1. Printers name alongwith printing CTS 2010 compliance should be available on the cheque 2. VOID pantograph 3. Standard bank's logo. If any MCC is not having any of the above, then it is not a CTS 2010 Compliant. please be guided accordingly. 21.Can a person have a different CIFs in a branch and different CIFs in different branches ? One individual should have only one CIF in the Bank. We are not supposed to open two separate CIFs for an individual. However one can have sevaral deposit accounts with our different Branches (all opened with the unique and same CIF.) 22.Sir, Please help me to know that how much amount we can accept in a current account o non-home customer. Is any circular available about the limit of non-home customer’s cash acceptance in current and saving account ? As per the recent instructions of the bank, non-home Branch cash deposit in personal segment accounts is up to Rs.25,000/- per day. However non-home Branch cash deposit in SME segment is up to Rs.200,000/- per day with a charge of 0.20%, the minimum being Rs.25/-. Different Power series (SME) current accounts, have different salient features with regard to Charges, Acceptance of Cash per day etc. The circular reference is given hereunder. e-gyan by SBLC, Masulipatnam, Dt. 20.07.2013

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Circular

No.NBG/BOD-SC/42/2012-13

dated

19.07.2012.

&

Circular

No.

:

NBG/SMEBU-POWER CA/33/2010 - 11 23.Sir, can I know how to issue a Duplicate Demand Draft in CBS if the customer has lost his original DD. A decision for issuance of duplicate IOI must be taken by a suitable officer in the Branch. The process of issuing IOI in CBS is as under: Issue of Duplicate IOI: Preconditions/ Notes: 1. All formalities like obtention of indemnity and/or nonpayment advice whereever applicable etc., should be completed before issuing a duplicate. 2. Duplicate will be issued on continuous stationery only. 3. System will print the duplicate IOI with original number and original date. 4. System will print legend DUPLICATE. 5. Duplicate flag and Indemnity received flag should be changed to Yes before clicking on Print/Transmit button. Menu Navigation: 1. Click on: Inland (Rupee) Remittance Issue Remittance Issue: Prompt Screen 2. You will be taken to Screen No 021019 Remittance Prompt Screen. 3. In the Field Journal number, enter the Journal Number that was generated while receiving the funds, which you have noted on the voucher. 4. Select the IOI Flag as Y:Yes. 5. Select the instrument type as 1. IOI- Bankers Cheque or 2. IOI - Demand Draft from the Drop Down Menu. This should be the same type for which funds have been received through earlier process viz., Receipt of Funds. 6. Click on Transmit button. 7. You will be taken to Screen 021018 Remittance Issue : DD/BC 8. All relevant values will be picked up by the system in the respective fields. 9. Verify the number in the Field Original Instrument No. should be the same as that of the old Instrument for which we are going to take a duplicate. 10.In the Field Instrument No. from, enter the 12 digit Instrument No. of the new Instrument used for printing the duplicate of old Instrument. 11.Select the field Duplicate : as Y:Yes. 225 12.Select the field Indemnity Rec. as Y:Yes. 13.Click on Transmit. 14. After ensuring that the printer is on and the correct stationery forms have been loaded to the printer, click the Print/Transmit button. The DD/BC will be printed in the selected Printer as continuous stationery, with the details of duplicate Instrument having the legend as DUPLICATE. 15.O.K. Issued Successfully. Document has been sent to printer, Please verify. message is displayed in the message bar, if the transaction amount is within the passing powers of the User.


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24.How to Activate a ECS in CBS. You have to receive the ECS debit mandate submitted by the customer to Axis Bank. On receiving the ECS debit mandate, you have to verify whether the customer's signature is tallying with the records available with you and then you go to CBS menu as mentioned below. CC/OD/Depsoits ----> Create-----> ECS Mandate. There you create the details of the ECS debit mandate and also fill in the User No furnished in the covering letter of the ECS Debit Mandate.After creation, you can as well enquire the same in CBS towards confirmation of having created it using enquiry menu. 25.What are all the documents required to open NRE Account and other formalities to be followed? For the required documents you may also visit our Banks exclusive Website on NRI Products

-->

https://www.onlinesbi.com/nri/

Extracts

from

the

website

is

reproduced for quick reference. Fill up the account opening form and send it to the branch of your choice with the following documents: Two passport size photographs attested by you. Passport & Residence Visa / ID Card Copies duly attested by Banker / Notary Public / Indian Embassy / A person known to the Bank. Initial remittance. Signature in the account opening form verified by any one of the following : Indian Embassy / Consulate / High Commissione. Your bank abroad. A person known to the Bank. Notary Public. Enclosures (any two of the following): Cheque drawn on bank account abroad. Latest Overseas Bank statement in original. Copy of Telephone / Electricity Bill. Cancelled paid cheque of your Overseas Bank A/c. Copy of Proof of Drawing Income / Employee ID / Labour Card.


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1st Issue E-gyan, July-2013

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