Customer Satisfaction Towards Retail Lending of UCO Bank in Chandigarh

Customer Satisfaction towards Retail Lending of UCO Bank in Chandigarh

Prepared by: Harvendra Singh Katiyar MBA IB

Roll No.- 17 University Business School

University Business School

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Table of Contents S. No.

Topic

Page No.

1.

Acknowledgement

3

2.

Executive summary

4

3.

Introduction

5

Objective of study Industry overview Retail lending UCO Bank

4.

Loan schemes at UCO bank

26

5.

Research Methodology Methodology

63

6.

Data Analysis

64

7.

Conclusion and Market implementation

70

8. 9.

Bibliography Annexure

70 71


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Table of Contents S. No.

Topic

Page No.

1.

Acknowledgement

3

2.

Executive summary

4

3.

Introduction

5

Objective of study Industry overview Retail lending UCO Bank

4.

Loan schemes at UCO bank

26

5.

Research Methodology Methodology

63

6.

Data Analysis

64

7.

Conclusion and Market implementation

70

8. 9.

Bibliography Annexure

70 71


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1. Ackn Acknow owle ledg dgem emen entt

The project “Customer satisfaction towards retail lending of UCO bank in Chandigarh” has provided me an opportunity to gain useful insights into the banking industry and the same would not have been possible had it not been for the trust placed by UCO bank and University Business School, Chandigarh. A deep sense of gratitude is owed to Mr. Alok K. Rajput (Chief manager) and Ms. Kusum whose constant guidance of ensuring a balance between hand- holding and freedom of responsible action has allowed an enriching experience during my summer internship and project work. I am immensely immensely thankful thankful to all the employees employees at UCO bank bank Sector 17 17 & 38, Chandigarh Chandigarh who gave me their precious precious time in providing providing me with valuable informat information ion and patiently patiently replying to all my queries.


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2. Executive Summary

There has been a major upsurge in the quantum of mass influence offerings and premier banking services being offered by the large flock of global banks in the country and all over the world. At a global level, banks tend to pick and choose the markets in which their mass affluent service is launched, depending upon the profile of that country. For example UCO bank claims to be having a big market share in retail lending. Banks play an important role to manage the earnings and savings of their customers. Customer’s satisfaction is the key for the bank to survive such a competitive market. The clients should be able to rely on their ultimate offering relationship manager to fulfill two main ongoing functions1. To continuously monitor the state of their finances 2. Reporting regularly to the client and to take a proactive role in improving their client’s financial health.

The project involved customer satisfaction towards UCO Bank’s retail lending in Chandigarh by taking their responses because the key factor of success is the customer satisfaction therefore a company should always have a regular check on it.


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3. Introduction Objective of Study The mail objectives of the study are as follows1. To measure the satisfaction level of existing customers towards retail lending of UCO bank in Chandigarh 2. To monitor the state of finances of the clients.

Industry overview The banking industry in India is fairly mature in terms of supply, product range and reach. Although reach to rural India is still a challenge for the banks, especially for the private and foreign banks. The high growth in the service sector will ensure that the demand of banking services, with a focus on retail banking and investment services will become strong. Currently, India has 88 scheduled commercial banks- 28 in public sector, 29 private banks and 31 foreign banks. They have a combined network of over 53000 branches and 17000 ATMs. According to a report of ICRA Ltd. The public sector banks hold over 75% of total assets of the banking industry, with private and foreign banks holding 18.2% and 6.5% respectively.


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Retail Lending Retail lending is the practice of loaning money to individuals rather than institutions. Retail lending is done by banks, credit unions, and savings and loan associations. These institutions make loans for automobile purchases, home purchases, medical care, home repair, vacations, and other consumer uses. Retail lending has taken a prominent role in the lending activities of banks, as the availability of credit and the number of produc ts offered for retail lending has grown. The amounts loaned through retail lending are usually smaller than those loaned to businesses. Retail lending may take the form of installment loans, which must be paid off little by little over the course of years, or non-installment loans, which are paid off in one lump sum. Retail lenders are either federally or state chartered and regulated as such. Retail lending sometimes comes under increased scrutiny during periods of increased borrower defaults. Some think that retail lenders should have a fiduciary responsibility to the individuals that they lend to. Others believe that borrowers should be financially educated enough to make wise borrowing decisions.


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UCO Bank UCO Bank is a commercial bank established in 1943. The idea to establish the bank was first conceived by G.D. Birla, the famous industrialist, after the historic 'Quit India Movement' in 1942. The idea was culminated on the 6th of January 1943, when The United Commercial Bank Ltd. was born with its Registered and Head Office at Kolkata. A commercial bank and a Government of India Undertaking, it comprises of government representatives as well as renowned professionals, management experts, economists, rapidly. To keep pace with the developing scenario and expansion of business, the Bank undertook an exercise in organizational restructuring in the year 1972. Under the act of Indian Parliament, in 1985, its name changed from United Commercial Bank to the present name, UCO Bank. As of 2005, the bank has 2000 Service Units spread all over India. A distinctive feature of UCO bank is its introduction of 'NO HOLIDAY' branches. These bank branches work on all the 365 days of a year. With the age of global banking, UCO bank has also changed to be adept with the newest technology, boasting of specialized computerized branches in both India and overseas.

Bank’s loan products include housing loan, education loan, personal loan, car loan, trade loan, cash rental loan, working capital financing and term loans for agriculture and other loan schemes. In addition the bank offers various international banking services, which comprise foreign currency loans, finance/services to exporters and importers, remittances, forex and treasury services, resident foreign currency deposits, correspondent banking services, and various general banking services. It provides international banking services for customers including corporate, nonresident Indians, overseas corporate bodies and foreign company individuals

Introduction Heritage

Having traversed periods of expansion and consolidation, the Bank was nationalized by the Government of India on the July 1969 whereupon 100 per cent ownership was taken over by the government in UNITED COMMERCIAL BANK. This historic event brought about a sea-change in the entire fabric of the bank's thinking and activities, commensurate with the government's socio-political approach of mass banking as against class banking hitherto University Business School

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practiced. Branch expansion started at a fast pace, particularly in rural areas, and the bank achieved several unique distinctions in Priority Sector lending and other social upliftment activities. To keep pace with the developing scenario and expansion of business, the Bank undertook an exercise in organizational restructuring in the year 1972. This resulted into more functional specialization, decentralization of administration and emphasis on development of personnel skill and attitude. Side by side, whole hearted commitment into the government's poverty alleviation programmes continued and the convenorship of State Level Bankers' Committee (SLBC) was entrusted on the Bank for Orissa and Himachal Pradesh in 1983 The year 1985 opened a new chapter for the Bank as the name of the Bank changed to UCO BANK by an Act of Parliament. The customer friendly and socially committed character, however, remained even with this change in name which has, over the years, been regarded as one of the well known and vibrant banks in the country. Today, with all its inner strengths, UCO Bank has come a long way to symbolize friendliness for customers and efficiency in its banking business. Truly, UCO Bank HONOURS YOUR TRUST.

Vision Statement

To emerge as the most trusted, admired and sought-after world class financial institution and to be the most preferred destination for every customer and investor and a place of pride for its employees. Mission Statement

To be a Top-class Bank to achieve sustained growth of business and profitability, fulfilling socio-economic obligations, excellence in customer service; through up gradation of skills of staff and their effective participation making use of state-of-the-art technology. Global banking has changed rapidly and UCO Bank has worked hard to adapt to these changes. The bank looks forward to the future with excitement and a commitment to bring greater benefits to you. UCO Bank, with years of dedicated service to the Nation through active financial participation in all segments of the economy - Agriculture, Industry, Trade & Commerce, Service Sector, Infrastructure Sector etc., is keeping pace with the changing environment. With a countrywide network of more than 2000 service units which includes specialized and computerised branches in India and overseas, UCO Bank has marched into the 21st Century matched with dynamism and growth


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Strengths 

Country-wide presence

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Overseas Presence with Profitable Overseas Operations

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Strong Capital Base

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High Proportion of Long Term Liabilities

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A Well Diversified Asset Portfolio

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A Large and Diversified Client Base

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Fully Computerized Branches at Major Centers

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Branch representation in Top 100 Centers (as per deposits) in the country

Organization Structure

Headquartered in Kolkata, the Bank has 35 Regional Offices spread all over India. Branches located in a geographical area report to the Regional Office having jurisdiction over that area. These Regional Offices are headed by Senior Executives ranging up to the rank of General Manager, depending on size of business and importance of location. The Regional Offices report to General Managers functioning at Head Office in Kolkata.

Key Highlights Broad scale of operations

UCO bank had an asset base of Rs.1373.5 bn as on March 31, 2010 which accounted for 2.7% and 2.4% of total deposits and advances respectively in India. The bank’s deposits and advances registered a CAGR of 23.6% and 20.6% respectively over the past three years. As on March 31, 2010 it had deposits of Rs.1224 bn and advances of Rs.825 bn. The bank has a pan‐India presence with a healthy network of 2202 domestic and 4 overseas branches with 608 ATM’s facilitating 1.55mn card holders as on March 31, 2011. The bank’s entire branch network has now been covered under core banking solutions (CBS) which puts the bank in a position to compete with other larger banks. Moderate capitalization with modest resource profile

UCO bank has moderate capitalization supported by capital infusion aggregating to Rs.15.73 bn by Government of India (GoI) through perpetual non cumulative preference shares in the past two‐and ‐half years. The bank’s Tier ‐I Capital Adequacy Ratio (CAR) under Basel‐II University Business School

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stood at 7.5% as on December 31, 2010. The bank’s modest resource profile is marked by lower ‐than‐industry average share of current account and savings account (CASA) deposits in its total deposits. The bank continues to face challenges in improving the proportion of retail deposits (savings account and term deposits) in total deposits and is therefore highly dependent on bulk deposits and certificates of deposits (CDs) for its growth. The bank’s CASA deposits, at 24.8% as on December 31, 2010 was lower than the industry average of 35% on the same date. The bulk deposits and CDs constituted 45% of the total deposits. Government ownership provides stability

GoI is the majority shareholder in UCO bank with shareholding of 63.59% as on December 31, 2010. This gives stability to the bank both on an on‐going basis and in the event of distress. In 2010‐11, GoI has committed infusion of Rs.201.57 bn in PSBs as additional capital to help the banks maintain Tier I CAR of 8% and to increase its stake in a few PSBs to at least 58%. The government has stated it will maintain overall CAR of PSBs at ~12%, so that the banks can grow their balance sheets and remain competitive.

Key Risks •

Risk of nonpayment by customers

•

Average asset quality

•

Credit risk on account of slowdown in economy

UCO Bank Loan Policy Overview Scope of the Policy

The Loan Policy Document provides necessary directives covering all loans and advances to borrowers/proposed borrowers but does not cover loans and advances to •

•

Bank's own staff Bank's Directors

•

Relatives of Directors

•

Directors and their relatives on reciprocal basis.

Loans and advances to Bank's own staff would be governed by schemes approved by the University Business School

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Board of Directors in terms of guidelines on the matter received from Govt. of India. Loans and advances to Bank's Directors, Relatives of Directors, Directors and their relatives on reciprocal basis would be based on specific approval of Board of Directors and should conform to the statutory and Regulatory directives in force. Objectives of Loan Policy

The Loan Policy Document-2010 seeks to respond to the present requirements in the light of expected environment. Its objectives are: 1. Incremental credit deployment as per the Bank's business plan. 2. Create requisite capacity in the Credit Administration structure for credit dispensation and monitoring. 3. A well diversified fully rated credit portfolio. 4. Control credit quality such that default rate over the year is contained within 5. 2% so as to achieve reduction in provision requirements. 6. Optimize profit from the portfolio.

Policy directives on strategies to achieve the target

The Bank would seek to achieve the target set for credit expansion through emphasis on thrust areas as per Bank's business plan, distribution of targets across its branches based on credit deployment/ absorption capacity of branches and their command areas and delegation of discretionary powers across field functionaries. Additionally, the Bank would provide marketing support, products aligned with market demand, and competitive pricing. Effective client contact on a regular basis would be encouraged. The Bank would also seek to standardize its products, as far as possible, for ease of handling and to reduce operational costs. Monitoring of credit accounts will receive priority at all levels. Bank will take effective steps to constantly improve credit appraisal and account maintenance skills of its personnel. These steps would help the Bank to achieve its objective of minimizing slippage. Segment- Wise Target Allocation Across Zones

The Bank has allocated segment wise targets to the Zones taking into account their capacity for credit expansion. The Zones further have distributed these targets amongst the branches under their control, keeping in view the potential of the branches. Quarterly review of the performance vis-a-vis targets allocated would be carried out and necessary follow up would University Business School

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be carried out to achieve over all target set for credit expansion. Delegation of Discretionary Powers

Suitable discretionary powers have been delegated to the field functionaries to enable them to accord sanctions on credit proposals without delay. However, suitable flexibility in the existing structure may be carried out to reflect the requirements specific to a scheme or product. This may be based on lower risk perception associated with products/ schemes or competitive requirements. Alignment of Products and Pricing With Market Demand

The Bank has adopted a strategy to design and market standardized credit products for various segments in the credit market. Additionally, Bank would also, based on its experience and feed-back received on market and demand, modify its products with a view to improve its market share. Bank would also recognize price competition and align its pricing, subject to other relevant factors, with the market. In case of credit proposals specific to a unit, the Bank would continue to take into account their specific needs keeping in view Bank's profitability, Loan Policy and other directives/ guidelines.

Product Development

Banking product is a package of deliverables/services, which is specifically designed by the bank for a set of target customers with a purpose that customer and the bank are mutually benefited from it, on an ongoing basis. Bank from time to time develops various products relating to its different business dimensions and can broadly be classified into the following categories: 1) Loan products which are designed as tailor made schemes targeting a particular segment of clients/borrowers e. g. UCO Shelter, UCO Traders, UCO Car, UCO Mahajan etc. 2) Deposit products which are designed in a manner to impart maximum value to the depositors and to garner deposits for the Bank e.g. UCO Premium, UCO Star etc. 3) Technology based products rendered to supplement the existing products/services for the customers like VISA Card, RTGS, Multicity Cheque Facility, E-Banking etc. 4) Hybrid Products: a single product carrying features of more than one product e.g. friend-in-need scheme etc. 5) Any Other A product in its process of development undergoes various stages viz. conceptualization, University Business School

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development of modalities, cost-benefit analysis, risk perception, approval, implementation, review and monitoring etc. therefore needs to go through a structured process of development. Marketing Support

The Bank will undertake product publicity through various modes available keeping in view the cost-benefit aspect, coverage and other relevant factors. This would be carried out to popularize our products and to convey information content. Bank has added officers with specialization in marketing to its resources. They would form the nucleus around which client contact strategy would be developed. Client contact would serve the objective of maintaining close liaison with existing and potential major customers for the purpose of business and feedback. Standardization in Credit Dispensation

Retail / SE Departments at Head Office will take steps to standardize respective credit products to the extent possible. Standardization of various schemes incorporating process note, documentation, monitoring and follow up will be carried out to simplify credit dispensation process. This will also help in handling volumes by field functionaries and reducing costs. Zonal Offices would also be encouraged to develop schemes suitable to various groups of borrowers within their command area subject to approval by HO Retail/ SE Department as the case may be. Credit Appraisal & Account Maintenance Skills

As a long-term measure, the Bank would continue to recruit/identify officers for specialization in credit dispensation. Identified officers would receive exposure in credit processes at branches, controlling offices and Head office. They would also be imparted onthe-job training and classroom trainings at Bank's Staff Training College, B.T.C., and NIBM etc. Short-term measures would include deputing officers from Head Office and controlling offices to assist branch level functionaries in credit dispensation. Further, thrust branches shall be identified based on business potential for maintaining large borrower accounts. These branches would be provided with officers possessing required credit dispensation skills.


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Marketing for High Value Corporate Accounts

Considering the fact that a fair share of Credit Expansion has to come from Corporate Sector, marketing efforts in this segment will be intensified at all levels. Policy Directives on Portfolio Exposure

The Bank would adhere to the following guidelines in achieving its objective of portfolio diversification. The guidelines restrict Bank's exposure on single borrower, group borrower, counter-parties (i.e. commercial banks, Regional rural banks (RRB’s) etc.) and foreign countries. It also restricts overall unsecured exposure, exposure on capital market and provides for monitoring aggregate exposure on high value individuals/groups. It seeks to avoid industry concentration and limits further exposure in specified industries. Definitions Exposure

Exposure shall include credit exposure (funded and non-funded credit limits), investment exposure (including underwriting and similar commitments) as well as certain types of investments in companies, in Indio or abroad and credit exposure of derivative products. The sanctioned limit or outstanding, whichever is higher, shall be reckoned for arriving at exposure limit. However, in case of fully drawn term loans, where there is no scope for redrawal of any portion of the sanctioned limit, the outstanding would be reckoned as exposure. Capital Funds

Capital funds will comprise of Tier-I & Tier-II capital as defined under capital adequacy standards and as per the published accounts as on March 31 of the previous year. The infusion of Capital under Tier-I and Tier-II, either through domestic or overseas issue after the published balance sheet date, will also be taken into account for determining the exposure ceilings. Other accretions to Capital Funds by way of quarterly profits etc. would not be eligible to be reckoned for determining the exposure ceiling. The Bank is prohibited from taking exposure in excess of the ceilings in anticipation of infusion of Capital at a future date. 2.3.1 Prudential Exposure ceilings

The Bank shall limit its Exposure on a single borrower and borrowers belonging to a group to the following limits. 1. Single Borrower 2. Group Borrower University Business School

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Single Borrower

15% of Bank's Capital Funds 40% of Bank's Capital Funds Single borrower would imply individual borrower that may be an individual, a HUF, a proprietorship/partnership/private or public limited concern, trust etc., but should be a single unit. Borrowers belonging to a Group

a) Business entities, whether proprietorship or partnership or private limited company or public limited companies having one or more common Partner /Director. However, in case of Public Limited Companies, the group approach will be based on the concept of commonality of management and effective control on the basis of relevant information available with the Bank. In other words, if a professional (i.e. non-promoter) Director is common between two Public Limited Companies, who does not have substantial share holding / management control, such companies will not be treated as group companies merely on this ground, OR b) A limited Company, which is subsidiary of another limited company or closely held company with substantial interest Prudential Exposure norms for NBFC:

• Single borrower NBFC 10% of Bank's Capital Funds • Single Borrower NBFC 15% of bank's Capital Funds (In case additional 5% is on lent to Infrastructure)

Exemptions

Single/Group Exposure limit will not be applicable on the following types of exposures: •

•

Limits allocated directly by the Reserve Bank of Indio for food credit. Existing/additional credit facilities (including funding of interest and irregularities) granted to weak/sick industrial units under rehabilitation packages.

•

•

Exposures where principal and interest are fully guaranteed by Government of India. Loans and advances granted against security of Bank's own term deposits.

The indicative list of various forms of exposure: •

All types of funded and non-funded credit limits.

•

Facilities extended by way of equipment leasing, hire purchase finance and factoring University Business School

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services. •

Advances against shares, debentures, bonds, units of mutual funds etc.

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Bank loan for financing promoter's contributions.

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Bridge loans.

•

Financing of Initial Public Offerings (IPOs) / Employee stock Options (ESOPs).

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Underwriting obligations.

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Buy bock Commitments.

•

•

Investment in shares and debentures/bonds of companies acquired through direct subscription, devolvement arising out of underwriting obligations or purchased from secondary markets or on conversion of debt into equity. Investment in PSU bonds through direct subscription, devolvement’s arising out of underwriting obligations or purchase mode in the secondary market.

•

Investment in Commercial Papers (CPs) issued by Corporate Bodies/PSUs.

•

Investment in debentures /bonds /security receipts /pass through certificates (PTCs) issued by a Securitization Company (SC)/ Reconstruction Company(RC).

•

Credit exposure equivalent of derivative products

Measurement of Credit Exposure of Derivative Products

For the purpose of computing credit exposure of all derivative products Current Exposure Method as given below should be followed.

Current Exposure Method: Chapter -2 Loan Policy Overview

Under Current Exposure Method, credit exposure equivalent of off-balance sheet interest rate and exchange rate instruments shall be the sum of: 1. The total of replacement cost (obtained by "marked to market") of all contracts with positive value (i.e. when the Bank has to receive money from the counter party). 2. An amount for potential future changes in credit exposure calculated on the basis of the total notional principal amount of the contract multiplied by the following credit conversion factors according to the residual maturity:


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Residual Maturity

Conversion factor to be

Interest Rate

Less than one year

Exchange Rate

Contract Contract 0.50%

2.00%

One year and over to l ess than 5 yrs

1.00%

10.00%

The derivative products shall be marked to market at least on a monthly basis. The Bank would follow the internal methods of determining the marked to market value of the derivative products. The credit exposure for single currency floating / floating interest rate swaps would be evaluated solely on the basis of their mark-to-market value. Infrastructure Lending

According to RBI master circular on Exposure Norms Infrastructure lending would include all credit facilities extended in any form to a borrower entity engaged in: 1. Developing. 2. Operating and maintaining. 3. Developing, operating and maintaining any infrastructure facility that is a project in any of the following sectors, or any infrastructure facility of a similar nature.     



A road, including toll road, a bridge or a rail system. A highway project including other activities being an integral part of the highway project. A port, airport, inland waterway or inland port. A water supply project, irrigation project, water treatment system, sanitation and sewerage system or solid waste management system. Telecommunication services, weather basic or cellular including radio paging, domestic satellite service (a satellite owned and operated by an Indian company for providing telecommunication service), network of trunking, broadband network and Internet services. An industrial park or special economic zone.



Generation or generation and distribution of power.

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Transmission or distribution of power by laying a network of new transmission or distribution lines. Construction relating to projects involving agro processing and supply of inputs t Construction for preservation and storage of processed agro products, perishable goods such as fruits, vegetables and flowers including testing facilities for quality. Construction of educational institutions and hospitals.






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Laying down and/ or maintenance of gas, crude oil and petroleum pipelines.

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Any other infrastructure facility of similar nature.

Substantial Exposure

Sum total of exposures assumed in respect of single borrowers enjoying credit facilities in excess of a threshold (10% say) of Capital Funds was stipulated at 400% of Capital Funds in the Loan Policy Document approved by the Board for the year 2001-2002. However, a report on accounts, where the exposure has crossed threshold limit of 1 0%, shall continue to be placed before the Board every six months for review. Unsecured Exposure

Unsecured exposure is an exposure comprising all funded and non-funded exposures (including underwriting and similar commitments) where the realizable value of security, as assessed by the Bank/ approved valuers/ Reserve Bank's Inspecting Officers, is not more than 10 percent, ab-initio, of the outstanding exposure. But the classification of advances as secured or unsecured would be revisited at the time of review of advances and also as part of preparation of final statements. Security will mean tangible security properly charged to the Bank and will not include intangible securities like guarantees, comfort letters, charge on rights, licenses, authorizations etc. Capital Market Exposure

Following exposures shall qualify as Capital Market Exposure: i) Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt. ii) Advances against shares/bonds/debentures or other securities or on clean basis to individuals for investment in shares (including IPOs /ESOPs), convertible bonds, convertible debentures or units of equity-oriented mutual funds etc. iii) Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security. iv) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares/convertible bonds/convertible debentures/units of equity oriented mutual funds does not fully cover the advances. v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers. University Business School

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vi) Loans sanctioned to corporates against security of shares /bonds/debentures or other securities or on clean basis for meeting promoter's contribution to the equity of new companies in anticipation of raising resources. vii) Bridge loans to companies against expected equity flows/issues. oan Policy Overview

viii) Underwriting commitments taken by the Bank in respect of primary issue of shares of convertible bonds or convertible debentures or units of equity oriented mutual funds. However, with effect from April 16, 2008, Bank may exclude its own underwriting commitments, also the underwriting commitments of its subsidiaries, if any, through the book running process for the purpose of arriving at the capital market exposure of the solo bank as well as well the consolidated Bank. ix) Financing to stockbrokers for margin trading. x) All exposures to Venture Capital Funds (both registered and unregistered). This exposure will be deemed to be at par with equity. All Such Exposures, as mentioned above, shall be governed in terms of Policy Guidelines on Capital Market Exposure

Country Exposure

Bank's funded and non-funded exposure on different countries would form country exposure. Such exposures shall be governed in terms of the Policy Guidelines on Country Risk Management. The Bank takes both funded and non-funded exposure of different maturities on different countries worldwide during the course of its operations. These exposures are generally of the following types: 1) Funded Exposures 2) Non-funded Exposures

While taking such exposures the bank is required to consider the risk associated with the country where the underlying assets are created over and above the counter party risk. Country exposures for the domestic operations are taken by the designated branches in India. The overseas centres, Singapore and Hong Kong also take country exposures. RBI's guidelines on Country Risk Management are applicable to the bank as a whole. However, for Singapore and Hong Kong the stricter of the provisions for country risk management as prescribed hereunder or that prescribed by the respective monetary authorities of those countries shall apply. University Business School

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Country Risk Defined Direct country risk:

Direct country risk will imply the risk associated with the country where the underlying assets are created out of the exposure taken. Indirect country risk: Indirect country risk shall arise in cases where a domestic commercial borrower has large economic dependence on a certain country. Large economic dependence for this purpose shall mean economic dependence of more than 50% on a particular country. Risk wise Classification of Countries: The bank will use the seven-category classification followed by Export Credit Guarantee Corporation of India Ltd (ECGC) for the purpose of classification of country risk exposures as given hereunder:

Risk Category

ECGC Classification

Insignificant A1 Low A2 Moderate B1 High Very High Restricted Off-credit

B2 C1 C2 D

Such classification shall be updated with quarterly updates to be obtained from ECGC by Head Office. Any sudden change in classification of a country in the interim period as advised by ECGC shall also be reckoned. Computation of Exposure

Exposures will be computed on a net basis i.e. gross exposure 'minus' collaterals, guarantee, insurance etc. Netting may be permitted for cash collaterals, bank guarantees and credit insurance available in/ issued by countries in a lower risk category than the country on which exposure is assumed. Indirect exposures shall be reckoned at 50% of the exposure for the purpose of these guidelines. For the present, only in respect of the country, where a bank's net funded exposure is 1 per cent or more of its total assets, indirect country risk shall be reckoned for measuring, monitoring and controlling. University Business School

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Counter Party Exposure

Bank's exposure on Clearing Corporation of Indio Limited (CCll), Scheduled Commercial Banks, Regional Rural Banks, Co-operative Banks, Mutual funds and Primary Dealers shall form counter party exposure. Industry/Sectoral Exposure

The Bank has undertaken a study on industry/sector correlation and the policy for allocation of credit exposure on various industries/sectors in the portfolio has been adopted with due approval of Risk Management Committee of the Board (RMCB) as under: I. Where industry specific exposure is less than 1 % of total credit exposure, the exposure limit would be 1 % of the total projected credit exposure. II. Where industry specific exposure is above 1 % but up to 2% of total credit exposure, the exposure limit would be 2.5% of the total projected credit exposure. III. Where industry specific exposure is above 2% but up to 4% of total credit exposure, the exposure limit would be 5% of the total projected credit exposure IV. Where industry specific exposure is above 4% but up to 6% of total credit exposure, the exposure limit would be 7.5% of the total projected credit exposure. V. Where industry specific exposure is above 6% of total credit exposure, the exposure limit would be 10% of the total projected credit exposure. Tenor Based Exposure

Asset Liability Management Committee (ALCO) shall decide, every year, the incremental level of long-term exposure having tenor of 3 - 5 years and above 5 years considering structural liquidity position of the Bank and shall allocate the same across various authorities engaged in sanctioning credit proposals. Further, industries/sectors would be identified where the Bank would take medium/long term exposure and such level of exposure would be quantified. In doing so, the ALCO would take into account industry outlook provided by reputed agencies. This would be an annual exercise but may be reviewed from time to time. Further, the ALCO would also crystallize critical success factors in such identified industries and borrower's strength vis-a-vis crystallized critical success factors would be assessed in taking exposure on borrowers. Similarly Commercial Papers (CPs), because of their short-term nature and having impact on Asset Liability Management (ALM), total exposure & tenure and its allocation across various authorities engaged in sanctioning CPs would be determined by the ALCO from time to time.


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Proposals Prohibited

This lending policy prohibits loans & advances (including non-fund based facilities) for the following purposes or to the following categories of borrowers. 1. Loans & advances for speculative purposes. 2. Proposals from defaulters of our Bank (excluding exempted categories). 3. Loans and advances to borrowers dealing in sensitive commodities as notified by RBI from time to time, which directly or indirectly violate the spirit of the Selective Credit Control directives (presently applies to buffer stock of sugar with Sugar Mills and unrealized stocks of sugar with Sugar Mills representing levy sugar and free sale sugar). 4. Loans against commodities, possession/ production of which are prohibited by the law of the land. 5. Sanction of fresh loans to clear the NPA accounts in the group/ associates. 6. Loans and advances against company shares to promoters of such companies (however, promoters holding given as additional collateral for specific approved purposes may not come under such prohibition). 7. Purchase and discount of bills, which are accommodative in nature. 8. Loans and advances to industries consuming/ producing ODS (Ozone Depleting Substance). 9. Loans and advances to industries, whose application for clearance from Pollution Control Board/s have been turned down or are under dispute/litigation. 10. Credit proposals from companies/borrowers whose name(s) appear in defaulters/ suit filed accounts lists published by the Reserve Bank of India from time to time and whose names appear in the ECGC caution list for exporters. 11. Loans and advances on the security of UCO Bank's shares and for the purpose of purchase/subscription to public issues of UCO Bank's shares. STATUTORY AND REGULATORY RESTRICTIONS

Statutory restrictions, regulatory restrictions, restrictions on other loans & advances have been advised by RBI. Statutory restrictions: a) Advances against Bank's own shares. b) Advances to Bank's Directors. c) Restrictions on holding shares in Companies. d) Restrictions on Credit to Companies for Buy-back of their securities.


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Regulatory Regulatory Restrictio Restrictions: ns: a) Granti Granting ng Loans Loans and Advance Advancess to relati relatives ves of Direct Directors ors.. b) Restrictions on Grant of Loans and Advances to the relatives of senior Officers of Banks. c) Rest Restri rict ctio ions ns on gran grantt of fina financ ncia iall assi assist stan ance ce to Indus ndustr trie iess prod produc ucin ing/ g/ Cons Consum umin ing g Ozon Ozonee Depleti Depleting ng Substan Substances ces (ODS). (ODS). d) Rest Restri rict ctio ions ns on Adva Advanc nces es agai agains nstt Sens Sensit itiv ivee Comm Commod odit itie iess unde underr Sele Select ctiv ivee Cred Credit it Cont Contro roll (SCC) e) Restrictio Restriction n on payment payment of commission commission to staff staff members members including including officer officers. s.

Restrictio Restrictions ns on other Loans and advances: advances: a) Loans and advances advances against Shares, Shares, Debentures Debentures & Bonds. b) Advances against Money Market Mutual Funds. c) Advances Advances against against Fixed Deposit Deposit Receipts Receipts issued issued by other Banks. Banks. d) Advances to Agents/ Intermedi Intermediaries aries for Deposit Deposit Mobilisatio Mobilisation. n. e) Loans against against Certific Certificate ate of Deposits Deposits (CDs). (CDs). f) Bank Finance to Non-bank financial Companies (NBFCs). g) Financing Financing of Infrastruc Infrastructure/ ture/ Housing Housing Projects Projects.. h) Issue Issue of of Bank Bank Guaran Guarantee teess in favou favourr of financi financial al insti institut tution ions. s. i) Discounting /rediscounting of Bills by banks. j) Advances against bullion/primary gold. k) Advances Advances against against Gold Gold Ornaments Ornaments & Jewell Jewellery ery l) Gold (Metal) Loans m) Loans and and advances to Real Estate Estate Sector n) Loans and advances advances to smallsmall-scale scale industries. industries. o) Loan system system for deliver delivery y of Bank Credit. Credit. p) Lending under Consortium Arrangement/ Multiple Banking Arrangement q) Working Capital Finance to Information Information technology & Software Industry. r) Guideline Guideliness for Bank Bank Finance for PSU Disinvestm Disinvestments ents of of Govt. of of Indio. s) Grant Grant of Loans Loans for for acquis acquisiti ition on of Kisan Kisan Vikas Vikas Patras Patras (KVPs) (KVPs) t) 7% Savings Bonds 2002, 6.5% Savings Bonds 2003 (Non-taxable) & 8% Savings (Taxable) Bonds 2003-Collateral facility u) Guidelines Guidelines on Settlement Settlement of Non Performi Performing ng Assets Assets Obtaining Obtaining Consent Consent Decree from Court v) Project Finance w) Bridge Bridge Loans Loans against against receiv receivabl ables es from from Govern Governmen mentt


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In addition, addition, the followi following ng direct directives ives may be adhered adhered to: 1) Loan Loanss & adva advanc nces es to bank bank's 's dire direct ctor orss/Rel /Relat ativ ives es of dir direct ectors ors/Le /Lendin nding g to dire direct ctor orss and and thei their r relatives relatives on reciprocal reciprocal basis. basis. Every Every borrower borrower should should furnish furnish a declaration declaration  Whe re the borrower is an individual) he is not a director or specified near relation of direct director or of a banking banking compa company; ny;  (where the borrower is a partnership firm) none of its partners is a director or specified specified near near relatio relation n of a director director of a banking banking company; company; and  (where the borrower is a joint stock company) none of its directors is a director or specified specified near near relatio relation n of a director director of a banking banking company. company. Where the declaration in respect of the above is in affirmative, the proposals along with details of relationship should be sent to the Secretary to Board and Chairman & Managing Director, for necessary clearance before taking up the proposal. Such proposals have a reporting/clearance requirement either from Reserve Bank of India or from Board of Directors. 2) Loans ans & Adva dvances ces to Bank' nk's Sen Senior Officers and their relatives Every Borrower shou hould furnish a declaration  (where ere the borrower is an indi ndivid vidual ual) he is not a spec pecified nea near relation of any senior officer officer of the Bank; Bank;  (where the borrower is a partnership firm or HUF firm) none of partners or none of the members members of of HUF is a specified specified near near relatio relation n of any senior senior officer officer of the Bank; Bank; and ower is a joint stock company) ny) none of its directors is a specified near  (where the borrower relation relation of any senior senior officer officer of the Bank. Bank. 3. The Bank will will not give give any advance advance in respect respect of the Following Following Categorie Categories: s: 

Advances against Bank's own shares.



Credit Credit to companies companies for buy bock of their securit securities. ies.



Fina Financ ncee for for sett settin ing g up new new unit unitss cons consum umin ing g/pro /produ duci cing ng ozon ozonee depl deplet etiing subs ubstanc tances es listed below.

4. The following categories of advances shall have special stipulations/Guidelines: a. Advances against money market mutual funds. Banks are to be guided by SEBI Regulations ons in this regard. Guid uideli elines issued ued by Reserve Bank ank of Indio have since been withdrawn. b. Advances against sensitive commodities co mmodities under Selective Credit Control. c. Loans and advances against shares, debentures and bonds. University Business School

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d. Bank Bank's 's fina financ ncee to nonnon-ba bank nkiing fina financ ncee com compani panies es incl ncludi uding Bank Bank fina financ ncee to equi equipm pmen entt leas leasin ing g comp compan anie iess and and Bank Bank fina financ ncee for for purc purcha hase sed d leas leasee of exist existin ing g e. Financing Financing infrastruc infrastructure/ ture/housin housing g projects. projects. f. Issu Issuee of Bank Bank guar guaran ante teee agai agains nstt finan financi cial al inst instit itut utio ions ns.. g. Discounting/rediscounting of bills by banks. h. Advances Advances against against Fixed Fixed Deposit Deposit Receipts Receipts issued issued by other other Banks. Banks.


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4. Loan Schemes at UCO Bank Being a Commercial Bank, giving Loans and Advances is among primary activities of UCO bank. Apart from its participation in meeting both Term Loan and Working Capital requirements of Agriculture sector, Trade and Service sector, Large/Medium and Small Scale Industries sector, Infrastructure sector etc. including taking care of their Export/Import and non-fund based needs like Letter of Credit, Bank Guarantee etc., we have a fairly large basket of loan products specially designed to suit personal needs of customers. Salient features of some of the more attractive Personal Loan Schemes are described below.

UCO Home

UCO Car

UCO Trader

UCO Education Loan

UCO Cash

UCO Rent

UCO Mortgage

UCO Securities

UCO Real Estate

UCO Pensioner

UCO Two Wheeler

UCO Emd Loan

UCO Swabhiman – Reverse Mortgage Loan Scheme for Senior Citizen

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)

UCO Education Loan Scheme for Vocational Education and Training

UCO Gold

Kisan Credit Card (KCC)

UCO KISAN BHOOMI VRIDHI (UKBV )

UCO KISAN TATKAL SCHEME

UCO ESTATE PURCHASE LOAN SCHEME

UCO KISAN ALL PURPOSE TERM LOAN SCHEME

Scheme for financing farmers for Marketing Agriculture Produce i.e. against Warehouse / Cold Storage Receipt

UCO Mahila Utthan(UMU)

UCO General Credit Card(UGCC)

Gold Loan Scheme

Scheme for Solar Irrigation Pumpset


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UCO HOME This housing finance scheme brings to you an excellent opportunity to have your own house or flat. The scheme has been carefully tailored to suit your requirements. The reasonable rate of interest that you pay will be calculated on reducing balance, i.e. you do not have to pay interest on the loan installments actually repaid from the date of such repayment. Eligibility Individual having minimum 21 years of age and maximum 60 years of age (salaried person) and 65 years of age (non-salaried person) inclusive of repayment period. Purpose 

   

Purchase and construction of independent house/ready built flat for residential purpose. Extension/Repair/Renovation of existing house/flat not more than 50 y ears old. Takeover of home loans availed from other banks/FIs. Loan is also available for furnishing of house property. Purchase of old house/flat not more than 30 years old.

Quantum of loan The area-specific maximum limits for construction/purchase are as under : Location/Centre

For Construction/ Purchase/ Takeover A/Cs

For Repair/ Extension/ Renovation

Metro/Urban/Semiurban

No upper limit

Rs.25 lac

Rural

No upper limit

Rs.7.5 lac

Loan Entitlement Least of the Following: i. ii.

80% of the project cost upto Rs. 30 lac/75% of the project cost for loan above Rs. 30 lac. On the basis of monthly incomeThe total deductions existing plus the EMI of the proposed loan would be linked to Gross Monthly Income (GMI) of the borrower as under University Business School

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GMI upto Rs.50,000/- - 60% GMI above Rs.50,000/- and upto Rs.1,00,000/- - 70% (subject to minimum o monthly take home pay of Rs.20,000/-) GMI above Rs.1,00,000/- -75% (subject to minimum monthly take home pay o of Rs.30,000/-) 60 times of net monthly income. o

iii.

Processing Fee 0.5% of the loan amount, minimum Rs.1500/- & maximum Rs. 15000/Repayment The maximum period of repayment is 25 years/300 EMI but should not be beyond retirement age, in case of salaried class and 65 years in case of non-salaried class. Security & Guarantee  

EMTD of property financed. No third party guarantee

Prepayment charge Waived for floating rate Home Loan Tax Benefits Tax relief on principal and interest components of this loan would be available as per provisions prevailing under Income Tax Act. Insurance Insurance cover on house property under Uco Griha Raksha Yojana scheme to cover the risk of damage to home by natural calamities. Uco Griha Lakshmi Yojana to cover the outstanding loan in case of accidental or natural death of borrower.


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UCO CAR This is an easy finance scheme for purchase of a new car as well as second hand vehicle not older than 5 years. Target Group 1. Salaried Group Regular Employee with minimum 6 months completed service. o 2. Non-salaried Group Established professionals & Self Employed, Businessmen o Farmers and Agriculturists. o 3. Business Concerns (Corporates & Non Corporates) 4. Ex-staff and Pensioners Income Criteria 1. Salaried Group Minimum monthly take-home pay would be Rs.10000/- + EMI of the proposed o loan. Maximum loan limit 36 times of Gross Monthly Income, in case of salaried o employees. 2. Non-salaried Borrower Minimum income should be Rs.2.40 lacs per annum during the preceding o year. Maximum loan limit three times of average gross annual income for the last 2 o years as per I.T Returns. 3. Farmers & Agriculturists Minimum Gross Income of Rs. 2.40 lacs p.a. duri ng the Previous financial o year. Farmers having land holding in their own name. o Maximum loan limit: Three times of Annual Income of the previous financial o year. * Clubbing of income of spouse, major children for ascertainment of loan limit is allowed. * Likewise clubbing of income of regular earning parents is allowed for loan to major children. 4. Business Concerns (Corporates & Non Corporates) Business concern must be in profit for last 2 years and cash flow during the o currency of loan must be sufficient enough to repay the p roposed loan after satisfying all existing liabilities if any. Age 

Minimum age 21 years & No maximum age stipulation


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Margin Requirements  

15% for new vehicle 30% for used vehicle upto 4 years old & 40% for more than 4 years.

Quantum of loan 



For New Car: Maximum finance would be 85% of the on Road price i.e. Ex Show Room o Price + Cost of Registration + One time Road Tax with no ceiling on maximum loan amount. For Pre-used Car: Maximum loan amount Rs.3.50 lac o

Repayment  

New Car: Maximum 84 EMI Pre-used Car: Maximum 36 EMI

Processing Charge 1% of the loan amount maximum Rs.1500/Prepayment Charges : NIL

UCO TRADER It is a loan for financing working capital and Term Loan needs of Retail and Wholesale traders. Eligibility

Existing enterprises engaged in business for at least 2 years and earning profit during the last 2 years. New trading units as well as units which have not completed two years can be financed maximum upto Rs.10 lacs.


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Borrower Individual, Proprietorship, Limited Company (public/private) , HUF,Borrowing concern should deal exclusively with the Bank only. Quantum of loan Any Amount from Rs. 1 Lac to Maximum Rs 200 Lacs. Credit Facilities Fund Based:-Term loan upto Rs. 25 lacs for acqui sition of Fixed Assets. Non-Fund Based:-inland L/C-DP or DA with usance period not exceeding 90 days. INLAND BG:-validity period upto 1 yr. including claim. Margin 

 

No margin is required for Cash Credit in case of existing units & 20/25% for new units while computing drawing power Margin for Term Loan, LC & BG i s 25% Application is simple; Balance Sheet is not required for limit up to Rs 10 lac and not compulsory for limit below Rs 50 l ac subject to certain conditions.

Limits(Least of the followings)   

60% on realizable market value of immovable property, and/or 90% on FDR (if limit is sought above 60% of project value, 85% on surrender value of LIC Policies, NSCs & Govt. Bonds(if it is sought as additional limit), OR

20% of gross Annual sales(existing units) as reflected in last Sales Tax Assessment order/Sales Tax return/VAT Assessment Order or Return/Service Tax Assessment Order or Return/Declaration given by borrower, whichever is less. Security 



Primary-Hypothecation of stocks, book debts & Fixed Assets for existing units making profit at least for last two years. Collateral Equitable Mortgage of Land & Building, Assignment of LIC policy, Lien ,Pledge/Assignment of KVP,NSC,Bank’s own FDR,Govt/RBI Bonds. Guarantee



By owners of immovable properties offered as collateral security, University Business School

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  

By Karta & all major coparceners of HUF, By all partners of the firm(in case of partnership firm), By all Directors of the company (in case of Limited company)

Processing Charges- 0.50% of fund based limit, 0.25% of Non-Fund based limit. Maximum-Rs.20000/-

Education Loan

Scope: The scheme extends a helping hand to meritorious students desirous of pursuing higher study either in India or abroad. Eligibility Studies in India Graduation courses leading to degrees like B.A., B.Sc., B.Com. etc.Post Graduate courses leading to Masters degrees as also Ph.D Professional courses in Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, etc. Computer Certificate courses of reputed institutes accredited to Universities or DoE.Courses like ICWA, CA, CFA, etc. Studies Abroad Graduation : Job oriented professional / technical courses offered by reputed Universities. Post Graduation : MCA, MBA, MS, etc. Courses conducted by CIMA – London, CPA in U.S.A., etc. Age limit For Graduation: between 18 & 25 years For Post Graduation: between 21& 28 years For SC/ST students: upto 30 years Eligibility  

should be Indian National Must have secured admission in Regular/ Technical course through selection process.


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Quantum of loan Studies in India : Maximum Rs. 10.00 Lac Studies Abroad : Maximum Rs. 20.00 Lac. Security Upto Rs.4.00 lacs – No security Above Rs. 4.00 lacs & upto Rs. 7.50 lacs: collateral security in the form of a suitable 3rd party guarantee Above Rs. 7.50 lacs : collateral securities of suitable value. Margin Upto Rs. 4 Lac - Nil Above Rs. 4 Lac Studies in India - 5% Studies Abroad - 15% Service Charge : There is no processing fee /no service charge Disbursement Disbursement in stages as per the requirement directly to i nstitutions. Repayment Period The loan shall be repaid in 5-7 years after moratorium. Repayment Holiday Course period+ 1year or 6 months after getting job whi chever is earlier. 1% interest concession may be provided, if the i nterest is serviced during moratorium period.

UCO CASH To extend financial assistance to certain segment to meet unforeseen


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domestic expenses like marriage, education, social obligation etc. Eligibility A confirmed employee in Govt. / Semi-Govt. / Reputed Public / Private Ltd. Co. /College / Universities / other recognized institutions / Public Sector Undertaking and have completed minimum 3 years in the same organization having salary ti e-up arrangement with branches of the bank. Income Criteria Net take home pay should not be less than 40% of gross salary after deduction of PF, IT and other statutory deductions including proposed EMI of UCO Cash Loan and any other loans. Other regular income like rent, interest, dividend etc. may be taken into account for reckoning the eligible quantum of loan subject to documentary evidence. Quantum of loan Maximum loan amount Rs.10 lacs. Security  

Loans upto Rs.2 lacs without collateral security For loans above Rs.2 lacs collateral security to be taken to the extent of 40% of the loan amount.

Repayment The loan amount with interest is repayable in 48 EMIs for men and 60 EMIs for women through salary deduction of employee borrower, but one year before retirement. Processing Charge : 1% (minimum Rs.750/-)

UCO RENT This is a loan against the security of fut ure receivables i.e. assignment of future rent receivable, for productive purposes e.g. augmenting earnings like investing in securities, undertaking repairs & renovation of the property, etc. Eligibility University Business School

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Owners i.e. lessors of houses/flats/godowns/warehouses etc. only are eligible under the scheme. The owner may be an individual, a firm or a company. Properties belonging to cooperative societies are not considered for sanction of loan under the scheme. Quantum of loan Maximum 80% of the total rent receivable duri ng the unexpired period of lease less tax deduction at source. Minimum Rs. 1 Lac Repayment The repayment period can be extended upto a maximum period of 84 months. Processing fee 1. Fresh Sanctions : 1% of the sanctioned loan amount. 2. Review on run down Balance: Rs.225.00 per l ac, Min.Rs.250.00, Max. Rs.56000.00

UCO MORTGAGE Under the scheme credit facilities are considered upto 60% value of the property located in metro/urban/semi-urban centers to meet financial needs of government employees, employees of schools, colleges, PSU, reputed corporate business enterprises, professionals and businessmen with regular source of income and filing IT return against mortgage of their immovable property with clear Title. Eligibility 

Maximum age limit of the borrower should be 65 years on the date of application.

Quantum of loan Maximum (Rs)

Minimum (Rs)

50 Lac

2 Lac

Nature of Facility Facility provided only as Term Loan Repayment period - Maximum 84 E.M.I.


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Salient Features





 

Processing Fee

1% of loan amount

Prepayment Charges

1% of amount prepaid

While determining repayment capacity, income of spouse can also be taken. In that case loan should be in joint names. In case of salaried persons, take-home pay after all deductions including monthly instalment of the proposed loan should not be less than 40% of GMI. For non salaried, GMI may be computed as yearly income divided by 12. If credit facility is granted against buildin g/flat/apartment, the same should not be more than 30 years old.

UCO SECURITIES Under the scheme credit facilities are extended to borrowers against financial securities issued by Central Govt./State Govt./RBI in the form of National Savings Certificates, Kisan Vikas Patra, Govt. Securities and Relief Bonds. Loans are also sanctioned against Life Insurance Policies of Life Insurance Corporation of India and bonds/debentures issued by specific Public Financial Institutions. Eligibility 



The securities should be in the name of the borrower or any one of the joint borrowers. The securities should be transferable and can be assigned/pledged in favour of the Bank.

Quantum of loan 

No Ceiling

Security & Margin 

Loan amount will be determined on th e basis of present value of securities offered with margin of 2 to 5%.

Nature of Facility 

Demand Loan, Overdraft, Cash Credit University Business School

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Repayment 

Remaining period of maturity (maximum 5 years).

UCO REAL ESTATE Under the scheme advances are extended to the Promoters/Developers of real estate who should be well established and experienced in their line of activities at least for a period of three years. Cooperative Societies are not eligible to be borrowers under the Scheme. Eligibility Only builders of repute, integrity and excellent track record and professionally managed are eligible for such finance. They must have at l east 3 years experience in the line and must have successfully completed 2-3 projects. The financial position of the builders/developers as per last audited balance sheet must be satisfactory. Financing would be subject to commercial viability and sufficient cash generation to repay the loan. Pre-requisites a. Details of the project cost and means of finance b. Profitability statement c. Annual Cash Budget for the duration of the loan showing monthly/quarterly cash inflows of the specific project along with repayment schedule d. Audited financial statements for the last 3 years, the current year's estimate and projections for next 3 years or till the completion of the project e. Original Title Deed of the land, detailed estimate of the pr oposed construction from a Chartered Engineer/Architect and permission from the competent authority of the property in case it is falling under Urban Land Ceiling Act f. Documents like non-encumbrance certificate, certified copy of R.S. Parcha, current, renew/Municipal receipts, Lawyer's opinion on ownership and marketable title and sanctioned plan. g. The Bank should enter in to a legally vetted tripartite agreement with promoter and buyer that should ensure among other covenants adherence to National Building Code (NBC).


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Quantum of Loan The quantum of advance will be assessed on the basis of peak level deficit projected in the Cash Flow Statement in the Budget, as submitted by the borrower applicant. Security: (a) Primary: The land and building to be constructed on the land shall form the primary security. The value of primary security should be adequate to cover the Bank finance. (b) Collateral: Collateral in the form of equitable/registered mortgage of other land and building of adequate value of promoter/ guarantor may be taken. Margin- 25% (minimum) Insurance-Building to be comprehensively insured against fire, riot and other damages with Bank's clause. Processing & Up-Front Fees a. Processing fees 1. Fresh Sanctions : 0.80% on the amount of l oan applied for along with the application. 1.20% processing fee of the sanctioned loan amount. 2. Review of TL on run down Balance : Rs.125.00 per lac, Min. Rs.250.00, Max. Rs.56000.00 3. Renewal of CC/WC : Rs.395.00 per lac or part thereof Min.Rs.700.00 b. Upfront fee will be 1% of loan amount sanctioned Delivery of Credit The credit /quasi credit requirement of the Construction company by way of cash credit/overdraft/short term loans linked to each specific project fo r a maximum period covering the period of construction plus 12 months will be considered on merit. Bid bond, Bank Guarantee for raising mobilization of advance, performance guarantee and guarantee for release of retention money etc. will also be considered on merit. Disbursement will be in phases depending upon the progress of work as certified by Chartered Engineer/Architects. Repayment Repayment is to be made in one or two installments after completion of the pr oject and sale of the flats. Sales realizations in one Project should not be diverted to another Project.


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UCO PENSIONER Short Term loan is extended through this scheme to P ensioners who receive pension through our Branches. War widows drawing family Pension are also eligible. Purpose      

For meeting medical expenses for self/spouse and dependants. Payment of mediclaim premium for self & dependent. Meeting marriage expenses. Educational and traveling expenses. Repairs/renovation of dwelling house. Funeral expenses.

Quantum of loan 1. Without Family Pension 10 times of monthly pension subject to maximum of Rs. 1,00,000/- . o 2. With Family Pension 10 times of monthly pension subject to maximum of Rs.150000 o Processing Charges 

There is no processing charge or service charge.

Rate of Interest 

Base Rate + 4.20%

Repayment 



In 12 to 24 monthly installments after one month from the disbursement, may be extended to 36 months. Repayment should be so fixed that the l oan is fully repaid before the p ensioner reaches 70 years of age.

Prepayment Charge 

No pre-payment charge is levied.

Guarantee 



Personal Guarantee of spouse eligible to receive family pension i n the event of death of the pensioner. Where spouse is predeceased, guarantee of sons/daughters or a third party.


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UCO TWO WHEELER SCHEME This is an easy finance for purchase of a new two wheeler. Income Criteria 





Salaried borrower Minimum gross salary of Rs.8000/-p.m o Minimum take home income of 40% p.m. after taking into account the EMI of o the proposed loan. Non-salaried borrower Minimum income of Rs. 1.00lac p.a(Rs. 1.50 lacs p.a for purchase of feature o rich vehicles) 40% take home pay shall be ascertained. o Non-salaried class of borrowers shall have to provide minimum 40% liquid collateral security, in addition to minimum 10% margin.

Age Criteria  

Salaried Borrower : 21 to 55 years Non-Salaried Borrower : 21 to 60 years

Amount of Loan 

Maximum Loan Amount Rs.60000/-(May be enhanced to Rs.1.00 lac for feature rich vehicles).

Processing Charge 

1.00% of the loan amount with Minimum Rs.500/-

Margin – 10% Repayment 

Maximum 48 Equated Monthly Installments.

Rate of Interest   

For General category - Base rate + 4.25% A/C with full liquid security – Base Rate +3.25% A/C with 50% liquid collateral security – Base Rate + 3.75%

Accounts with full liquid collateral security


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1.00% interest Rebate Accounts with 50% liquid collateral security 0.50% interest Rebate Prepayment Charges 

No pre-payment charges.

UCO EARNEST MONEY DEPOSIT LOAN SCHEME Loan scheme for financing for Earnest Money Deposit for booking housing pl ots/flats offered by various Urban/Metropolitan Development Authorities & Housing Boards. Eligibility Indian residents having regular documented source of income. Minimum 21 years of age Singly/Jointly as permitted by State Housing Boards/Urban Development Authority/Metropolitan Development Authority. The facility is to be allowed to only those applicants who fulfill all the eligi bility criteria under UCO Shelter Scheme. Amount of Loan Maximum not to exceed 80% of the EMD. Processing Charge Rs. 300.00 upfront per application Margin - 20% Interest Rates - 9.00% (Fixed) Prerequisites



Letter of undertaking to be obtained from SHB/UDA/MDA of having noted Bank's lien and refund the amount through UCO Bank in case of un successful applicants In case of allotment of plot, housing loan under UCO Shelter can be availed by the applicants. In such case the loan for EMD shall be adjusted against the loan granted for purchase of land and construction of house thereon.

Repayment- 24 monthly installments


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UCO SWABHIMAN - REVERSE MORTGAGE LOAN MORTGAGE LOAN SCHEME FOR SENIOR CITIZEN Bank introduces UCO Reverse Mortgage Loan Scheme for Senior Citizens, under Reverse Mortgage a Senior Citizen, owning a house/flat, can avail of a monthly stream of Income against the mortgage of his/her property while remaining the owner and occupying the house throughout his/her lifetime, without repayment or servicing of the loan. Eligible Borrowers

Senior Citizens of India.

Purpose

Supplementing Senior Citizen’s Income

Loan Amount

Based on valuation of the property and age of the borrower – Maximum Rs.50 lacs

Period of Loan

Minimum 5 years and maximum 15 years.

Mode of Disbursement

Monthly/Quarterly with fixed/increasing Equated monthly Disbursement with an option to avail Onetime lump sum payment after 12 months from the first disbursement during entire tenure of 15 years as per choice of the borrower.

Security

Equitable Mortgage of the residential property owned & self occupied by the Senior Citizen borrower.

Rate of Interest

10.50% (fixed) with reset clause after 3 years.

Repayment

The outstanding loan will be due when the last borrower dies/permanently moves out of the house/would like to sell the home. Loan will be liquidated by sale of property. Option available with the legal hei r(s) to repay the loan and redeem, the house property.

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) Affordable Housing for All' is an important policy agenda of the Government of India. Accordingly The Cabinet Committee for Economic Affairs has approved an Interest Subsidy Scheme for Housing the Urban Poor in order to ameliorate the living conditions of University Business School

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Economically Weaker Section/LIG population in urban areas. Primary objective of the scheme is to provide interest subsidy support. Objective: The key objective of the scheme is to enable Economically Weaker Sections (EWS) and Low Income Group (LIG) households to avail affordable housing loans for purchase of house/construction of new house. Definition: a) EWS- Economically Weaker Sections are those households having monthly income upto Rs.3300/b) LIG- Low Income Groups are those households having monthly income between Rs.3301/- to Rs. 7300/Target Group: Individuals /NGOs for on lending to their group members. Preference will be given to SCs, STs, Minorities, Person with disabilities and Women beneficiaries in accordance with their proportion in the total population of city/urban agglomerate during the 2001 census. Applicants planning to form cooperative group housing societies or organizations like Employees Welfare Housing, Labour Housing, etc. should be given preference and whenever possible construction of houses by such cooperatives by way of 1+3 storied buildings should be promoted so that cost of land is shared among beneficiaries. However, this is not a mandatory requirement. Both individuals as well as group Housing borrowers are equally eligible under the scheme. Target Borrower: Identification of beneficiaries will be undertaken by Urban Local Bodies or Local Nodal Agencies and they will assist the borrowers in paper works and procedure of bank loan. However the borrower would be free to approach and negotiate a loan under the scheme directly with the bank branch. Preference: Preference will be given to Scheduled Caste, Scheduled Tribe, Minorities, Person with disabilities and Women beneficiaries in accordance with their proportion in the total population of the city/urban agglomerate during the 2001 census Stipulations: The ultimate beneficiaries s h o u l d n o t o w n a h o u s e i n h i s / h e r n a m e or in the name of his/her spouse or any dependent child. But such beneficiaries s h o u l d o w n l a n d i n h i s n a m e in case of application for construction of new house. Area of operation: University Business School

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Urban area. Zonal Offices will be advised to su bmit us a list of branches at urban area for implementation of the scheme. Nodal Agency: NHB and HUDCO were selected by the Government of India to act as intermediary financial institutions that would be responsible for administering the subsidy. Before implementation the Bank has to sign a MOU with any of the two organizations. W e h a v e s i g n e d M O U w i t h N H B . Loan amount: a) EWS- Maximum loan of Rs.1 lac ( Rs one Lac Only) for a house of at least 25 sq mts. b) LIG- Maximum loan of Rs.1.60 lac( Rs one Lac sixty thousand Only) for a house of at least 40 sq mts. However subsidy will be available for loan upto Rs. 1 lac only. Disbursement: Disbursement will be made on a phased manner depending upon the progress of construction. Branch will monitor the construction of the dwelling units financed under the scheme, including the approvals for the building design, infrastructure facilities etc. as also the quality of the construction and verify through site visits etc. the expenditure incurred upto different stages of construction. In case of construction disbursement may be done by debiting the respective loan account and crediting the savings bank account of the borrower. However in case of purchase of a ready built house the payment should be made directly to the vendor by issuing Demand Draft/ Pay Order as the case may be by debiting the loan account of the borrower. Rate of Interest: Interest @8.50% p.a. for first 5 years with a provision to reset after 5 years from the date of drawal of first installment for all loan under the scheme. Sanctioning Authority: All the loan applications under the scheme will be processed and sanctioned at the Retail Processing Centres at Zonal Offices and in case there is no Retail Processing Centres at any Zonal Office, at the branches identified by the respective Zonal Office. On receipt of the sanctioned proposals the branch will disbursed the loan following all the stipulation noted by the Retail Processing Centres at Zonal Office/Processing Cell. However before sanctioning any loan it should be ensured that the borrower have sufficient repaying capacity based on the average monthly income of the applicant for last three years and monthly family expenditure depending upon the size of family. Pre-payment charges: There will be no pre-payment charges for any loan sanctioned under the scheme. University Business School

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Subsidy: The subsidy will be 5% p.a. on interest charged on the admissible loan amount for both EWS and LIG, over the full period of the loan for construction or acquisition of a new house. The Net Present Value (NPV) of the subsidy will be arrived at on the basis of notional discount rate of 9% p.a. (equivalent to Government Security rate) for the period of the loan and on the interest chargeable at the ti me the loan is contracted. The subsidy will be credited upfront to the borrowers account and interest will be calculated on the net amount of loan at the agreed rate of i nterest. Procedure for claiming Subsidy: Participating branches will claim interest subsidy for the entire period of any loan disbursed during the quarter to Head Office, Priority Sector Department through their respective Zonal Offices. Branches should submit their claim within 3 days of close of a quarter to their respective Zonal Offices and the Zonal Offices in turn will submit it to Head Office, Priority Sector Department within 7 days of close of a quarter. Repayment: Loan will be repaid in 180 to 240 EMI depending upon the income of the borrower. However branches may prefer for 20 years repayment, to get full benefits of Interest Subsidy and lower EMI. Equated Monthly Installments (EMI ) Loan will be repaid as per foll owing EMI Chart Particulars Loan Amount Rate of Interest

Table-1

Table-2

Rs.1,00,000=00

Rs.1,60,000=00

@8.50% ( Fixed )

@8.50% (Fixed )

Terms of Repayment

180 months

240 months

Subsidy per borrower

Rs. 45,443=00

Rs.63,693=00 Rs. 45,443=00

NPV of Subsidy

Rs.29,112=00 Rs.35,458=00 Rs.29,112=00 Rs.35,458=00

EMI

Rs. 698=00

Rs. 560=00

180 months

Rs.1,289=00

240 months Rs.63,693=00

Rs.1,081=00

Security: a) Primary- Mortgage of the dwelling house


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b) Collateral/Third Party Guarantee: NIL Documents: Loan Application form duly vetted by urban local bodies along with the following;    

Income certificate issued from the ULB Copy of the land Records Copy of updated payment receipt of Government revenues Non-encumbrance Search Certificate.

Process Note A declaration from the borrower having been understood the impact of Fi xed/Floating Rate of Interest. Supervision: I t s h o u l d b e e n su r e d t h a t t h e h o u s i n g u n i t i s co m p l et e d w i t h i n o n e y e a r p e r io d from the start of construction . On a half yearly basis a certificate of utilization of subsidy

and also a certificate in relation to the progress of the construction leading up to the completion of the housing unit have to be submitted. Branch will have to submit a certificate on completion of the housing unit. Processing Charges: There will be no processing charges for any loan sanctioned under the s cheme. Classification: All loans sanctioned under the scheme will be classified as Priority Sector Advance under Sub category – Housing

UCO Education Loan Scheme for Vocational Education and Training Objective Providing financial support to the students who have minimum educational qualification but desire to pursue vocational & skill development courses. Courses Eligible


46

Vocational / Skill development courses of duration from 2 months to 3 years run or supported by a Ministry / Dept. / Organisation of the Govt. or a company / society / organization supported by National Skill Development Corporation or State Skill Missions / State Skill Corporations, preferably leading to a certificate / diploma / degree, etc. issued by a Govt. organization or an organization recognized/authorized by the Govt. Minimum Age No minimum age Quantum of Finance    

For For For For

courses of courses of courses of courses of

duration duration duration duration

upto 3 months - Rs. 20,000/3 to 6 months - Rs. 50,000/6 months to 1 year - Rs. 75,000/above 1 year - Rs.1,50,000/-

Margin - NIL Moratorium Period  

For courses of duration upto 1 year - 6 months from the completion of the course. For courses of durationabove1 year - 12 months from the completion of the course.

Rate of Interest ROI at Base Rate +3%, presently 13.50% p.a. (simple interest during moratorium period) 



Servicing of interest during study period and the moratorium period till commencement of repayment is optional for students. 1% interest concession may be provided by the Bank, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.

Processing Charges - NIL Security No collateral or third party guarantee will be taken. However, the parent will execute loan document along with the student borrower as joint borrower. Repayment  

Courses upto 1 year - In 2 to 5 years Courses above 1 year - In 3 to 7 years.

Prepayment - No pre-payment Charges.


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UCO GOLD LOAN SCHEME Purpose 

To provide loan against pledge of gold ornaments and coins for Agriculture, Allied purpose and personal loan for meeting personal requirement.

Eligibility 

The loan against gold ornaments and coins would be purpose oriented and shall be granted based on a declaration from the eli gible borrowers specifying the purposes of such loan in rural, semi-urban and urban centres.

Quantum of loan 

No Upper limit

Margin 

25% shall be maintained on the market price of the gold.

Rate of Interest a. Gold loan upto Rs.300000/- for (Agriculture purpose) -7% b. Gold loan under NPS - Base Rate + 3% (13.50%) Service Charge  

For priority Sector- Upto 10 lac Rs.250/- & above Rs.10 lac Rs.500/For Non Priority Sector – Upto Rs.5 lac Rs,.500/Above Rs.5 lac to Rs.10 lac Rs.1000/Above Rs.10 lac 0.20% of loan amount, maximum Rs.5000/-

Repayment 



Short Term Loans (Crop Loans-Agriculture) A bullet repayment of principal and interest which will be linked to the harvest season or for a maximum tenure of 1 year. Interest to be charged on half yearly rests. Short Term Loans ( Agriculture & Allied activities) Bullet repayment of principal which will be linked to the harvest season or for a University Business School

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





maximum period of 2 years. Interest to be charged on half yearly rests and serviced on half yearly basis. Short Term Loans (Other priority Sector Advances) Bullet repayment of principal in l ump sum at the end of 2nd Year. Interest to be charged on monthly rests and serviced at half yearly basis. Non-Priority Sector Advances: Bullet repayment of principal in l ump sum at the end of 2nd Year. Interest to be charged on monthly basis and serviced at half-yearly rests. Prepayment Charges No prepayment charges.

Kisan Credit Card (KCC) Type of Facility Cash Credit (Direct Agriculture) Scope of Finance All Rural and Semi-Urban Branches and i n some selected Urban Branches where vi llages are allocated under Annual Credit Plan(ACP) Purpose/Objective     



To meet the short term credit requirements for cultivation of crops Post Harvest Expenses Produce Marketing loan Consumption requirement of farmer household Working capital for maintenance of farm assets and activities allied to agriculture , like dairy animals, inland fishery etc. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.

Eligibility   

All Farmers- Individuals/Joint borrowers who are owner cultivators Tenant Farmers, Oral lessees & Share Croppers SHGs or Joint Liability Groups of Farmers including tenant farmers, share croppers etc.

Salient Features of the Revised KCC Scheme 

Assessment of crop loan component based on the scale of finance for the crop(as decided by DLTC) plus insurance premium X Extent of area cultivated + 10% of the University Business School

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

  





 



limit towards post-harvest / household / consumption requirements + 20% of limit towards maintenance expenses of farm assets. Assessment of limit for second & subsequent year :- first year limit for crop cultivation purpose arrived at as above plus 10% of the limit towards cost escalation/increase in scale of finance for every successive year (2nd, 3rd, 4th & 5th year ) and estimated Term loan component for the tenure of Kisan Credit Card, i.e., five years. Flexi KCC with simple assessment prescribed for marginal farmers. Validity of KCC for 5 years. For crop loans, no separate margin need to be insisted as the margin is inbuilt in scale of finance.

No withdrawal in the account to remain outstanding for more th an 12 months; no need to bring the debit balance in the account to zero at any point of time. Interest subvention / incentive for prompt repayment to be available as per the Government of India and / or State Government norms. No processing fee upto a limit of Rs. 3.00lakh. One time documentation at the time of first availment and thereafter simple declaration (about crops raised/proposed) by farmer. Disbursement through various channels, including ICT driven channels like ATM/PoS/Mobile handsets .

Interest Rates Item

Rate of Interest

Interest Subvention

Incentive Subvention

Agril Crop Loan up to Rs. 3.00 lakh.

7.00%

2.00% upto Rs. 3 lakh

3.00% for Prompt paying farmers upto Rs.3.00lakh

Above Rs. 3.00 lakh and upto Rs. 25 lakh

Base Rate +1.00%

Not applicable

Not applicable

Above Rs. 25.00 lakh and upto Rs. 1.00 crore

Base Rate +2.00%

Not applicable

Not applicable





Upto Rs 3 lacs interest in borrower account is 7% for rest 2% Debit Govt. receivables and Credit interest & discount on loan. Presently Base Rate (BR) is 10.20%

Interest Subvention 



Upto Rs 3 lacs interest subvention upto 2% , prompt repayment further 3% is available. If the customer does not repay within the due date or maximum within one year the interest should be charged from due date at the normal rate i.e. Base Rate+1%

Security Security requirement may be as under:


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Hypothecation of crops up to card limit of Rs. 1.00 lakh as per the extant RBI guidelines. 



With tie-up for recovery: Branch may consider sanctioning loans on hypothecation of crops upto card limit of Rs.3.00 lakh without insisting on collateral security. Collateral security may be obtained at the discretion of Branch for loan limits above Rs.1.00 lakh in case of non tie-up and above Rs.3.00 lakh in case of tie-up advances.

RUPAY KISAN CARD : OBJECTIVE & FEATURES 



  





Existing operative accounts as well as all new KCC holder be issued with RUPAY enabled KCC Cards Empowering the farmers to withdraw their drawing limit for the current season through ATM at different times in the same cropping season instead of withdrawals at one go. Reducing the transaction cost of the branches in securing the customers. To enable farmers to make cash less transactions. Rupay Kisan Card can be accepted at ATMs of Our Bank, ATMs of other Banks and PoS. Rupay Kisan card supports following transaction types Purchase with cash back o Cash at PoS o ATM Cash Withdrawal o ATM PIN Change/Balance inquiry/Mini Statement. o Rupay Kisan Card can be linked for EBTs & Govt. subsidy.

UCO KISAN BHOOMI VRIDHI (UKBV ) Type of Facility Term Loan for (7-10) Years(Direct Agriculture) Scope of Finance All Rural and Semi-Urban Branches Objective    

To make the small and marginal holdings economically viable To bring fallow lands and waste lands under cultivation. To step up agricultural production and productivity To finance the share croppers/tenant farmers to purchase land to enable them to increase their income.

Eligibility University Business School

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i) Small and marginal farmers i.e. those who own maximum of 5 acres of non-irrigated land or 2.5 acres of irrigated land including purchase of land under the scheme. ii) Share croppers/ Tenant farmers . Purpose 



The objective of the Scheme is to finance the farmers to purchase, develop and cultivate agricultural as well as fallow and waste lands. Branches may consider financing maximum amount of Rs. 10.00 lacs for purchase of land for establishing or diversifying into other allied activities. Complete details of the project proposal of the farmer should be obtained by the bank while considering finance for purchase of land

Quantum of Loan Quantum of loan will depend upon – 1. Valuation as assessed by the Branch. 2. Bench Mark Rate fixed by the State. 3. The registration value. Out of the three above whichever is less. Plus value of Stamp duty, registration charges for sale/ mortgage (Maximum amount of Rs. 10 lacs. ) Margin The margin will be minimum of 15 %. Rate of Interest Base Rate, i.e 10.20% from 11th February 2013. Simple rate at half yearly rest. Processing / Inspection Charges : Up to Rs.3.00 lac - Nil Above Rs. 3.00 lac as per extant guidelin es


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UCO KISAN TATKAL SCHEME Type of Facility/Sector Single transaction Term loan limit Loan repayable within 3 years (Priority Sector- Direct Agriculture) Scope of Finance All Rural and Semi-Urban Branches Purpose An instant credit for farming community to meet the emergency requirements for Agriculture and Domestic purposes for tiding over temporary financial difficulties. Eligibility Individual farmers / joint borrowers (not exceeding 4 farmers) who are existing Kisan Credit Card (KCC) holders having satisfactory track record of at least two years. Quantum of Loan Minimum limit: Rs.1000/ ; Maximum limit: Rs.50000/(Subject to ceiling at 50% of KCCS limit / 25% of annual income) Rate of Interest At Base Rate (without interest subvention). i.e. 10.20 % at p resently Processing and other charges: Upto Rs. 25000.00 : Nil Above Rs. 25000.00 : As applicable to agriculture term loan Security:  

Existing security /ies obtained for KCC to be continued. No additional securities to be obtained even i f the combined exposure (KCC plus proposed Kisan Tatkal Scheme) exceeds the present cut-off ceiling of Rs.1 lakh.

Repayment 

3-5 years in half yearly / annual installments. University Business School

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

The loan is to be cleared in full if a fresh / enhanced limit is sought during the subsequent year based on revised KCCS limit.

UCO ESTATE PURCHASE LOAN SCHEME Type of Facility/ Sector Term Loan/Over Draft Facility Direct Agriculture under Priority Sector upto Rs.2.00 crore beyond Rs.2.00 crore under Indirect Agriculture. Scope of Finance All Branches Purpose/Objective To purchase estates growing traditional plantation crops viz. coffee, tea, rubber and cardamom, cashew, pepper, coconut and other perennial orchard crops. Eligibility 









The Purchaser should have yielding estates and should be in a position to rejuvenate the Estate proposed to be purchased. The intending borrowers should have with satisfactory past dealings with the Bank. The intending buyer should qualify the respective State Government norms of being an agriculturist / satisfy the income criteria stipulated by the State Government. The estate should preferably be a neglected one. The estate should have potential for realizing higher yields. The estate should have the potential to absorb substantial credit for developmental activities. The total land holding including the land to be acquired should be within the land ceiling norms of respective State. The Purchaser should be experienced in the line, financially sound and should be in a position to bring in margin and service the debt.

Quantum of Loan 

 

Quantum of Loan shall be based on the lowest of (i) Market value (ii) Guidance value/Circle rate fixed by the State or (iii) purchase consideration, after retaining the necessary margin. The stamp duty and registration charges may also be considered. For the purpose of the valuation of land to be purchased, price indicated may be cross checked with the last five years average registration value available with the


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

registrar/sub registrar of the area and a view is taken by the bank for fixing the quantum of finance. There will be no ceiling for the quantum of loan. However, the finance beyond Rs.2 crore be covered under Indirect Agriculture category.

Rate of Interest   

Upto Rs.25.00 lac – Base Rate + 1.00% i.e. 11.20% p.a More than Rs.25.00 lac and upto 1.00 Crore – Base Rate +2.00% i.e. 12.20% p.a. Above Rs. 1.00 Crore – As per rating communicated by Head Office

Margin 



The margin shall be normally 50% on purchase consideration or value of the estate whichever is lower. However in deserving cases, the same may be relaxed up to 25%. The cost of registration/stamp duty may be considered in project cost.

Penal Interest  

No penal interest shall be charged for loans up to Rs.25,000/In case of loans above Rs.25,000/ penal interest shall be charged 2.00% p. a. over and above the normal applicable rate of interest on the

Repayment Period  

The loan should normally be repayable within 7 to 9 years. In some specific cases, depending on the status of th e Estate and rejuvenation period required, it may be extended up to 20 years.

Security 





Mortgage of property to be purchased. Hypothecation of Plantation crops raised on the land/Estate. Also, collateral security of mortgage of existing landed properties/ including preferably residential property is to be obtained. In any case, the value of the security should not be less than 200% of the loan amount


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UCO KISAN ALL PURPOSE TERM LOAN SCHEME Type of Facility/ Sector Single transaction loan limit loan repayable within 9 years Direct Agriculture –Priority Sector Objective/Purpose 



To create a hassle free single term loan li mit to farmers for all term loan requirements like Farm Mechanization, Land Development, Minor Irrigation, Water Conservation, Horticulture, Allied Activities and Other Agri culture related activities etc. However, development projects with a long gestation period (say more than 3-4 years) may not be considered in view of the specific tenor of this credit product (eg). Mango Planation – requiring gestation of 6-7 years).

Eligibility Individual, Joint / Group of Farmers-owner cultivators and JLGs, SHGs etc. engaged in Agriculture and related activities Quantum of Loan 





To be based on the investment plan given by the farmer to be undertaken in the next 2-3 years. The plan can be a combination of investment/development activities relating to agriculture and allied activities. It shall be subject to 5 times of Annual income (current-pre development stage) of the farmer including allied activities or 50% of the value of land mortgaged whichever is lower, with a maximum Rs.25 lakhs.

Margin a) Small and Marginal Farmers : 5% b) Other Farmers : 15%  

The entire margin need not be brought in upfront for the entire limit. The required margin may be brought at the time of creation of asset only.

Security:  

Upto Rs.1 lakh - Hypothecation of Assets created out of the loans. Above Rs.1 lakh (aggregate loan) – Mortgage of land(it shall be at least 200% of the limit sanctioned).


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Processing and Other Charges  

Upto Rs.25,000/- - NIL Above Rs.25,000/- - As applicable to Agricultural Term Loans as devised by the Bank.

Scheme for financing farmers for Marketing Agriculture Produce i.e. against Warehouse / Cold Storage Receipt Type of Facility Short Term Loan for maximum 12 months Level of Implementation All Branches Scope , Objective & Eligibility  





Warehouses / cold storage units owned by Central and State Government entities. Approved warehouses/cold storage units owned/managed by National Bulk Handling Corporation Ltd. (NBHC) and National Collateral Management Services Limited (NCMSL). Cold storage / warehouse units financed by our Bank, whose accounts are running regular. Cold Storage / Warehouses built owned or managed by Central or State Government entities including National Bulk Handling Corporation Ltd. (NBHC) and National Collateral Management Services Limited (NCMSL).

Nature of Receipt The warehouse receipt is in accordance and as prescribed under the provision of the Warehousing (Development and Regulation) Act, 2007 Quantum of Loan 75% of the value of the stock stored Rate of Interest As per quantum of Loan University Business School

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Security 



Pledge of Warehouse receipts. The warehouse receipt is in accordance and as prescribed under the provisions of the Warehousing (Development and Regulation) Act 2007. In case of Firms and companies personal guarantee of Promoters/Directors to be obtained.

Insurance Before release of fund, confirmation of Banks’ interest marked on the Insurance policy to be obtained against the bank’s pledge stock.

UCO Mahila Utthan(UMU) Type of Loan Both For Farm and Non-Farm activities. Scope of Finance All Branches (Rural, Semi urba, Urban & Metropolitan) Objective: The scheme is specially designed to encourage and empower women beneficiary by offering hassle free financial assistance at li beral and concessional terms. Eligibility Criteria for borrower Self Help Group which have been in existence at least for six months. Assessment of Loan After completion of six months, the SHG will be graded by the bank as per Format (page 495 of Manual of instruction, Volume VII) Quantum of Finance Minimum Rs. 1.00 lacs and Maximum Rs. 5.00 lacs. Margin University Business School

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Upto 5 lacs – no margin Service Charge Upto 3 lacs – no service charge. Above 3 lacs as per Bank’s Policy Rate of Interest Base Rate (i.e. 10.20% presently) Security Upto Rs 5.00 lacs- Primary Security only (No collateral security) Insurance Members of Credit Linked Women SHG to b e covered under Janashree Bima Yojana (JBY).

UCO General Credit Card(UGCC) Field of Operation: Rural and Semi Urban Branches Nature of Financial accommodation: Cash-Credit Facility/ Overdraft Objective: The objective of the scheme is to provide hassle-free credit to banks’ customers based on assessment of cash flow of the entire house-hold without any insistence on security , purpose or end-use of fund stipulation. Borrower  

 

Existing depositor/borrower having relationship with Bank/Branch Small Businessmen/Retail Traders/ Self-employed persons / pensioners /servicemen /Artisans /Salaried Persons/Agriculture labourers and other daily wages earners. Borrower be resident of rural/semi-urban areas Borrower should not be defaulter loanee to any lendi ng institution. University Business School

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Quantum of Loan Maximum of Rs 25,000/- per borrower per family. In addition , UGCC-holder is also eli gible for loan for his/her viable/bankable vocational/economic activity on merit basis. KCC holders are not eligible for loan under GCC scheme Rate of Interest: Base Rate (i.e. 10.20% presently

Gold Loan Scheme Type of Loan Term Loan Objective/Purpose To enable Borrowers in Rural/ Semi-urban/Urban/Metropolitan areas to avail of easy and instant credit facilities for the purpose which are categorized as Priority Sector Activities li ke Agriculture, Retail Trade, Small Business, Micro & Small Enterprises, Education , Housing etc. Eligibility 



Loan against security of gold ornaments can be made to all Borrowers who would avail such loan for Agriculture & Allied Activities, Activities related to Micro & Small Enterprises, Retail Trade, Housing, Education etc. Necessary declaration from the eligible borrowers will be required to be obtained specifying the purpose of such loan at the time of sanction.

Margin 



Loan against security of gold ornaments can be made to all Borrowers who would avail such loan for Agriculture & Allied Activities, Activities related to Micro & Small Enterprises, Retail Trade, Housing, Education etc. Necessary declaration from the eligible borrowers will be required to be obtained specifying the purpose of such loan at the time of sanction.

Margin A margin of 25% is to be maintained on the market price of the gold. University Business School

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Amount of loan to be sanctioned per Gram of Gold Maximum amount that can be sanctioned per gram of standard gold will be decided by Head Office fortnightly and will be dully communicated to the Zones/Branches . Assesse/Testing of Gold Ornaments 



All gold ornaments before being accepted as security should be apprised by an experienced Gold Smith for its weight, purity and fineness. For this purpose a Gold smith having good reputation for his professional skill and undoubted integrity should be identified by conducting discreet enquiries.

Rate of Interest Sl. No

Purpose

Rate of Interest

1

Gold Loan(PS) for short term crop Loan upto 3 lacs where interest subvention is avilable

7% per annum

2

Gold Loan(PS) for Agriculture & Allied Activities other than short term crop loans mentioned in Sl. No.1 above

3

Gold Loans(PS) for Retail Assets Products

Base Rate+0.05% i.e. effective rate of 10.25% at present

Service Charges (A) For Priority Sector  

Upto Rs. 10 Lac : Rs. 250/Above Rs. 10 Lac : Rs. 500/-

(B) For Non Priority Sector   

Upto Rs. 5 Lac : Rs.500/Above Rs. 5 Lac to Rs. 10 Lac: Rs.1000/Above Rs.10 Lac @0.20% on quantum of loan subject to a maximum of Rs.5000/-.

Scheme for Solar Irrigation Pumpset Type of Loan/Category Term Loan/Direct Agriculture under Priority Sector Scope of Finance University Business School

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Rural and Semi-Urban Branches Objectives: The objective of the scheme is to help farmers to extend grid power to remote areas especially to meet agriculture loads. The demand for electric energy i s far outstripping supply, especially in the agriculture sector. It is al so becoming increasingly difficult to meet the exponential growth in demand of Agriculture productivity which is closely associated to direct and indirect energy inputs. It is cost-prohibitive for the Government to extend grid power to remote areas especially to meet agriculture loads . Purpose Loan will be granted for installation of Solar Water pumping system. The proposed scheme will help in harnessing the solar energy for pum ping water by water pumps Eligibility: 







The farmers’ land should have adequate source of water. In case any Public/Government source is being used, water right certificate from the concerned authority should be produced. In case of wells they should have sufficient recouping capacity to irrigate area proposed to be brought under irrigation. Farmer should have own an economic land holding with a minimum of 10 acres. However, loan can be considered even if the benefiting area is less than 10 acres provided the farmer is able to sell surplus water. Farmers are required to satisfy the bank officials regarding their repayment capacity of the loan . They should not be defaulters to any bank.

Quantum of Loan : Maximum 75% of the cost of the pumpset including accessories. Rate of Interest: Base Rate + 1.00% i.e. 11.20% p.a. Margin It may provide finance taking a margin of 25% of the total cost to b e paid by beneficiary. If subsidy is available, the same can be considered as Margin and the Branches should not insist the borrower for margin separately. Capital Subsidy: 40% capital subsidy will be available under Jawaharlal Nehru National Solar Mission (JNNSM) for installation of solar Pumpsets for those farmers who have not installed any pump set. University Business School

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5. Research Methodology

Scale Used Likert Scale has been used to get the questionnaires filled. It is a psychometric scale. When responding to a Likert questionnaire item, respondents specify their level of agreement or disagreement on a symmetric agree-disagree scale for a series of statements. The Likert scale is the sum of responses on several Likert items. The format of a typical five-level Likert item:

1. 2. 3. 4. 5.

Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree

Selecting Sample Non probability sampling has been used and judgmental sampling has been used to be precise. The primary source of selecting data for the research is Questionnaire and that have been filled by UCO bank customers residing in Chandigarh.

Sample Size The sample size for the research was 60 that means questionnaires have been filled by 60 respondents.

Analysis of Data To arrive at pertinent analysis, the collected data has been put to a planned statistical analysis using SPSS package. After scoring the questionnaires, the data of all the respondents has been pooled and tabulated. To arrive at certain conclusion regarding the hypothesis advanced in the process investigation, the description of the statistical tools which we intend to apply for the analysis of data, is as follows:


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a. Mann Whitney

Mann-Whitney is a non- parametric test that shows the variance among two variables. This tells whether there is any difference between the variables . b. Anova

Anova is used when there are more than two variables. This is used in place of Mann Whitney when variables are more than two.

Limitations of the study The study is merely on the basis of comments and opinions provided by customers of Chandigarh only. For further studies a wide area to be covered for selecting samples and have broader perspective.

6. Data Analysis 6.1 Exploratory Data Analysis S No. 1.

Demographic variable Age

2.

Gender

3.

Marital Status

4.

Occupation

5.

Income

Frequency

18-24 24-30 Male Female Married Single Student

30 30 30 30 6 54 39

Engineer

21

Doctor

-

Business Up to 3 3-7

16 25


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7-10 Above 10 lakhs UG Graduate Masters

Qualification

6.

10 9 4 32 24

6.2 Reliability Reliability Statistics

Cronbach's

N of Items

Alpha .641

6

In the above table the value of Cronbach’s Alpha is .641 that shows that the data collected is reliable. 6.3 Normality Tests of Normality

Kolmogorov-Smirnov Statistic avg

df

.187

a

Shapiro-Wilk

Sig. 60

.000

Statistic .942

df

Sig. 60

.007

a. Lilliefors Significance Correction

In the above table P-value of both Shapiro-Wilk & Kolmogorov is less than .05 that implies that the data is not normally distributed. Therefore non- parametric tests have been used further.

6.4 Two Independent Sample Test


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University Busines School

66

University Busines School

67

Interpretation From the above tables it can be inferred that there is no variance among the demographic variables cause the distribution of median is the same across all the demographic categories. 6.5 Mann- Whitney Test Test Statistic s

a

median Mann-Whitney U

361.000

Wilcoxon W

826.000

Z

-1.496

Asymp. Sig. (2-tailed)

.135

a. Grouping Variable: Age

Interpretation- there is no variance between the category of this demographic variable.

Test Statistic s

a


364.500

Wilcoxon W

829.500

Z

-1.438


.151

a. Grouping Variable: Gender

Interpretation- there is no variance between the category of this demographic variable. Test Statistic s

a


150.500

Wilcoxon W

171.500

Z Asymp. Sig. (2-tailed) Exact Sig. [2*(1-tailed Sig.)]

-.322 .747 b

.782


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a. Grouping Variable: Marital Status

Interpretation- there is no variance between the category of this demographic variable. Test Statistic s

a


343.500

Wilcoxon W

1123.500

Z

-1.163


.245

a. Grouping Variable: Occupation

Interpretation- there is no variance between the category of this demographic variable. 6.6 Anova

ANOVA

avg Sum of Squares Between Groups Within Groups Total

df

Mean Square

.172

3

.057

7.333

56

.131

7.505

59

F

Sig. .438

.727

Interpretation- there is no variance between the category of this demographic variable. ANOVA

avg Sum of Squares Between Groups Within Groups Total

df

Mean Square

.101

2

.050

7.404

57

.130

7.505

59

F

Sig. .388

.680

Interpretation- there is no variance between the categories of this demographic variable.


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7. Conclusion &Market Implementation As per the data analysis, it is obvious that there is no significant difference among the entire categories of all the demographic variables in terms of retail lending at UCO bank. So it is not necessary to put the effort to impress the customer’s demographic wise but they should be targeted as a whole. The other thing that has been observed is that there are less no. of ATMs and branches of UCO bank. Less no. of ATMs is one of the major reasons that people do not want to become a customer of UCO bank as they believe UCO bank lacks grand presence. So UCO bank should increase the number of ATMs and branches as well to attract more and more customers.

8. Bibliography

Kumar V., “Impact of SBI Retail banking on customer satisfaction” (2008-10) Indian Banking Industry: Rising Above the Waves (2013) Investopedia Bakshi V., “Credit appraisal on Sugar industry” (2012)


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9. Annexure The following questionnaire was used to collect the required data-

Dear Respondent, I am doing a research project on “Customer Satisfaction towards Retail Lending of UCO Bank in Chandigarh”. I request you to kindly cooperate in filling up the questionnaire. I assure you that your information and feedback will remain confidential. Thank you very much for participating. Answer the questionnaire on the basis of Likert Scale given below.

SECTION 1 1. Age(Years)

1. 18-24

2. 24-30

2. Gender

1 Male

2 Female

3.Marital Status

1. Married

2. Single

4. Occupation

1. Doctor

2. Engineer

5. Annual household Income(in Rs Lakhs)

Upto 3

6. Highest Qualification

1.Undergraduate

3-7

2. Graduate

3. 30 and above

3. Business

4. Student

7-10

More than 10

3. Masters

4.Doctorate

5. Others

5.others (specify)


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Customer Satisfaction Towards Retail Lending of UCO Bank in Chandigarh

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