1.

INTRODUCTION

1.1.ABOUT THE BANK

Canara Bank India, originally founded by lt. Sri. Ammembal Subba Rao Pai in
1906 as the Canara Hindu Permanent Fund was transformed as a nationalized bank in
1969. Currently, Canara Bank India offers the best services in both commercial and
social banking. The bank was the first to launch networked ATMs and obtain ISO
Certification. Moreover, Canara Bank is in fact the first bank to be conferred FICCI
award for its contribution to rural development.

Over the years, the Bank has been scaling up its market position to emerge as a
major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored
institutions/joint ventures in India and abroad.

As at June 2009, the Bank has further expanded its domestic presence, with 2735
branches spread across all geographical segments. Keeping customer convenience at the
forefront, the Bank provides a wide array of alternative delivery channels that include
over 2000 ATMs- one of the highest among nationalized banks- covering 707 centres,
1362 branches providing Internet and Mobile Banking (IMB) services and 2078 branches
offering 'Anywhere Banking' services. Under advanced payment and settlement system,
all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS)
and National Electronic Funds Transfer (NEFT) facilities.

Not just in commercial banking, the Bank has also carved a distinctive mark, in
various corporate social responsibilities, namely, serving national priorities, promoting
rural development, enhancing rural self-employment through several training institutes
and spearheading financial inclusion objective. Promoting an inclusive growth strategy,
which has been formed as the basic plank of national policy agenda today, is in fact
deeply rooted in the Bank's founding principles.

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 "A good bank is not only the financial heart of the community, but also one with
an obligation of helping in every possible manner to improve the economic
conditions of the common people" - Sri. Ammembal Subba Rao Pai

These insightful words of the founder continue to resonate even today in serving the
society with a purpose. The growth story of Canara Bank in its first century was due,
among others, to the continued patronage of its valued customers, stakeholders,
committed staff and uncanny leadership ability demonstrated by its leaders at the helm of
affairs. The Bank strongly believe that the next century is going to be equally rewarding
and eventful not only in service of the nation but also in helping the Bank emerge as a
"Global Bank with Best Practices". This justifiable belief is founded on strong
fundamentals, customer centricity, enlightened leadership and a family like work culture.

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 1.2 NATURE OF STUDY

This study includes the various activities that happen in the bank on day to day
basis. The procedure for opening account, deposits and the documents required for the
opening are studied in detail. The different kinds of loans that the banks provide for
various activities are also seen in this study. The procedure followed while giving the
loan and advances and the documents needed for sanction of loans also explained in this
study. The various forms used for loans, deposits and accounts are also made a note in
this report.
The banking activity is broadly classified into two
i) Primary Function and
ii) Secondary Function
The Primary Function among others include Accounts, Deposits and withdrawal
of money etc.The secondary function among others include the Safe Deposit lockers,
clearing Cheques and payment of Demand Drafts.etc

The Performance analysis of the bank in the past fiscal year is also done and the
milestones that the company crossed in its 100 year journey are also revisited in this
study. A small study about the future plans that the bank has got is also recorded in this
study.

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 1.3 PERFORMANCE:

• The growth of the Canara Bank India is recorded as 23% during 2007-08, while
the aggregate deposits grew by 22% to move up to Rs.1,42,381 crore, bank's net
advances were of the order of Rs.98506 crore, signifying a 24% growth, year on
year. The Bank's credit to deposit ratio improved from 68% to 69.18% between
March 2007 and March 2008. Total expenditure for the year amounted to Rs.9903
crore and Canara Bank recorded a net profit of Rs.1420.81 crore in 2007-08, the
highest ever. Foreign business turnover of the Bank as at March 2008 recorded
32% growth to reach Rs.1,30,083 crore.

• Canara Bank India launched new money transfer facilities like the Western Union
Money Transfer, Electronic Fund Transfer. It also launched several deposit
schemes like CanChamp, CanTaxsaver and Canara Centenary Deposit scheme.
Canara bank India launched some new loan products like Kisan Tatkal and Kisan
Mitra. For inclusive growth in rural areas the bank introduced Grameen Vikas
Vahini.

1.4 VISION AND MISSION STATEMENT

1.4.1VISION

To emerge as a ‘Best Practices Bank’ by pursuing global benchmarks in

profitability, operational efficiency, asset quality, risk management and expanding the
global reach.

1.4.2 MISSION

To provide quality banking services with enhanced customer orientation, higher

value creation for stakeholders and to continue as a responsive corporate social citizen by
effectively blending commercial pursuits with social banking.

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 1.5 MILESTONES

Year
1st July Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000
1906 shares of Rs.50/- each, with 4 employees.
1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited
1969 14 major banks in the country, including Canara Bank, nationalized on July 19
1976 1000th branch inaugurated
Overseas branch at London inaugurated
1983
Cancard (the Bank’s credit card) launched
1984 Merger of the Laksmi Commercial Bank Limited with Canara Bank
1985 Commissioning of Indo Hong Kong International Finance Limited
1987 Canbank Mutual Fund & Canfin Homes launched
1989 Canbank Venture Capital Fund started

1989-90 Canbank Factors Limited, the factoring subsidiary launched

Became the first Bank to articulate and adopt the directive principles of “Good
1992-93
Banking”.
Became the first Bank to be conferred with ISO 9002 certification for one of its
1995-96
branches in Bangalore
Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering
2001-02
exclusively to the financial requirements of women clientele.

2002-03 Maiden IPO of the Bank

2003-04 Launched Internet & Mobile Banking Services

2004-05 100% Branch computerization

Entered 100th Year in Banking Service
2005-06 Launched Core Banking Solution in select branches
Number One Position in Aggregate Business among Nationalized Banks

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 Retained Number One Position in Aggregate Business among Nationalized
Banks.
2006-07 Signed MoUs for Commissioning Two JVs in Insurance and Asset Management
with international majors viz., HSBC
(Asia Pacific) Holding and Robeco Groep N.V respectively
Launching of New Brand Identity
Incorporation of Insurance and Asset Management JVs
2007-08 Launching of 'Online Trading' portal
Launching of a ‘Call Centre’
Switchover to Basel II New Capital Adequacy Framework
The Bank crossed the coveted Rs. 3 lakh crore in aggregate business
2008-09
The Bank’s 3rd foreign branch at Shanghai commissioned

1.6 FUTURE PLANS

 The Bank is assiduously focusing on

consolidating its position by building profitable core business.

 The new brand identity will be leveraged to

improve standard of customer service and attract younger clientele.

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  The comprehensive 'Corporate Business
Strategy' exercise will help Canara Bank position itself as strong, market savvy and
progressive bank.

 The Bank is well prepared to switchover to new

capital adequacy framework (Basel II norms) from March 2008.

 Under ‘Financial Inclusion’, the Bank has set a

target for mobilizing one million no-frill accounts during FY08 and bring all 24 lead
districts of the Bank under total financial inclusion.

 The Bank envisages a training/re-skilling target

of 1,00,000 during the current year.

In pursuit of the global aspirations, the Bank has moved a step closer in its overseas
expansion drive, with permission by the RBI for commissioning of five branches in
Johannesburg, Frankfurt, Muscat, Manama and QFC – Qatar, obtained out of the 21
international centres identified for expansion in the medium term. Its Representative
Office at Shanghai is being converted into a full fledged branch shortly.

Canara Bank is shortly launching its tech-enabled niche product, viz., Online
Trading Platform, to facilitate millions of its customers for buying and selling shares.

2. PRIMARY FUNCTIONS OF BANK

2.1.SAVINGS BANK ACCOUNT

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TYPES OF SAVING BANK ACCOUNT

i) Individual account

ii) Joint account

a) To open joint accounts, maximum number of persons is restricted to

FOUR.
b) It should be ensured that Survivorship clause is incorporated in NF.101 in
the case of accounts operated JOINTLY.

iii) Account for Minor (Minor Account)

a) Minor is one who has not completed 18 years of age.

b) Although father is the natural guardian, SB account can be opened in the

name of the minor with mother as guardian also.

c) No cheque book is to be issued to the minor accounts when it is operated

by the minor himself.

d) Minor's date of birth is to be recorded in the master.

e) On attaining majority, fresh application and specimen signature card must

be obtained duly countersigned by the guardian and kept along with the
original application.

f) No overdrawings should be allowed in the accounts of the minor.

(iv) Accounts for illiterate persons - Following precautions are to be

taken

a) Rules of business are properly explained to them.

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 b) For withdrawing money, they should come in person.
c) In the case of Joint Account of an illiterate with a literate - Operational
condition must be either 'Jointly' or by 'illiterate only'. Whenever the
condition is jointly, no cheque book should be issued.
d) Left Thumb Impression of the depositor should be attested by a person
known to the bank.
e) Photo of the illiterate account holder is to be obtained and affixed in the
pass book.
f) Fact that the account holder is an illiterate person must be clearly noted
in red ink in the account opening form, Specimen signature card, pass
book and cheque book.
g) Joint accounts of two illiterate persons can be opened with operational
condition 'JOINTLY'.

(v) Hindu United Family (HUF)

a) In the case of Joint Hindu Family accounts, operations in the accounts

must be by Kartha only.

b) In case Kartha is unable to perform the affairs of the family, karthaship

will be shifted to next senior male member of the family. In such case a link
letter as per Appendix-3 of the Manual is to be obtained.

(vi) Accounts in names of Primary co-operative societies, Self Help

Groups, Farmers, clubs,

(vii) Account for Blind Persons

In addition to the above, the following special types of accounts can also
be opened.
a) Non Corporate bodies clubs, Societies, associations, schools etc.

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 b) Trusts, Executors/Administrators, Government bodies, Semi Government
Departments.

Document Required For Opening a Savings Account

• Two passport size photographs

• Proof of residence i.e. Passport/driving license/Gas / Telephone /
Electricity Bill/ Ration card/voters identity card
• An introduction of the person from an existing account holder.
• PAN number / Declaration in form no.60 or 61 as per the Income Tax Act
1961.

2.2 CURRENT ACCOUNT

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 Current Account is primarily meant for businessmen, firms, companies, public
enterprises etc. that have numerous daily banking transactions. Current Accounts are
cheque operated accounts meant neither for the purpose of earning interest nor for the
purpose of savings but only for convenience of business hence they are non-interest
bearing accounts. In a Current Account, a customer can deposit any amount of money
any number of times. He can also withdraw any amount as many times as he wants, as
long as he has funds to his credit. Generally, a higher minimum balance as compared to
Savings Account is required to be maintained in Current account.
As per RBI directive banks are not allowed to pay any interest on the balances
maintained in Current accounts. However, in case of death of the account holder his legal
heirs are paid interest at the rates applicable to Savings bank deposit from the date of
death till the date of settlement. Because of the large number of transactions in the
account and volatile nature of balances maintained, banks usually levy certain service
charges for operating a Current account.

Current Account can be opened by:

• An individual who has attained majority.

• Two or more individuals in their joint names.
• Sole proprietorship concerns.
• Partnership concerns.
• Hindu Undivided Family (HUF).
• Limited Companies.
• Clubs, Societies.
• Trusts, Executors and Administrators.
• Others - Govt. and semi Govt. bodies, local authorities etc.

Documents Required for Opening a Current Account

Following documents are required in case of individuals

• Two passport size photographs

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• Proof of residence i.e. Passport/driving license/Gas / Telephone /
Electricity Bill/ Ration card/voters identity card
• An introduction of the person from an existing account holder.
• PAN number / Declaration in form no.60 or 61 as per the Income Tax Act
1961

In addition to the above, the following special types of accounts can also be
opened.
(i) Provident Fund Account of school/Red Cross Society and to employees

(ii) Accounts of Schools/Head Masters.

(iii) Accounts with minor as proprietor.

(iv) Accounts of Associate of persons

(v) Account in the name of limited company- Receiver account

(vi) Accounts of Post Offices

(vii) Accounts for issue of Dividend Warrants and Interest Warrants.

PROCEDURE FOR OPENING THE ACCOUNT:

• Accounts are to be opened as per Rules of Business. Guidelines issued on
KYC and AML, are to be adhered to, while opening new accounts as also
while monitoring the transactions in the accounts of the customers.

• All accounts are to be properly introduced.

• Account opening forms as specified above along with specimen signature

cards and stamp size/pass port size photographs to be obtained duly filled and
signed by the account holders.

• PAN number or Form 60/61 as the case may be must be obtained.

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• In order to confirm the correctness of the address given by the account holder
a copy of documentary evidence may be obtained as per Rules of Business.

• After verifying the signature of the introducer, the supervisor should put his
signature with name and signing power /staff number as the case may be.

• On obtention of all the relevant forms, the account should be opened after
ensuring that the initial deposit is paid in cash.

• Opening of new accounts should be authorised by the Manager. However in

large branches, Officer-in-charge of the Department can authorise the same.

• Scanning of Specimen signatures shall be done alongside by the operators

while entering the data for the news accounts to be opened and uploading and
verficiation shall be done by the Officers and Supervisors, including
temporary supervisors.

SPECIMEN SIGNATURE CARDS:

• Specimen Signature should be obtained in the presence of branch officials and
signed by the supervisor. It should be counter signed by the Officer/Manager
concerned. Account number, name of the account holder and instructions
regarding the operation of the account should be clearly noted on it. It should
be date stamped

• Once the account is opened, Specimen Signature cards should be arranged

serially which should be under lock and key and during office hours be in the
custody of the concerned supervisor. The supervisor will be responsible for
the safe keeping of the specimen signature cards

• Specimen signature cards pertaining to inoperative accounts are to be removed

from regular file and maintained in a separate file and be kept preferably in
FBR strong room/FBR safe/Fire Resistant Record Cabinet (FRRC) or in a
cupboard with dual locking arrangement.

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 OBTENTION OF PHOTOGRAPHS:
• Pass port size / stamp size photograph of the depositors should be obtained in
case of all SB accounts.

• Photographs of the authorised signatories should be obtained in case of joint

accounts, accounts of clubs, associations, societies, HUF, Trust and Minors
account etc.

• Photographs of the student account holders should be attested by the school

authorities on the reverse.

• Photograph should be obtained in case of NRI accounts also.

• Where the accounts are operated by letter of authority, photographs of the

authority holders should be obtained duly attested by the depositor

• OBTENTION OF PHOTOGRAPHS IS WAIVED (EXEMPTED) IN THE

FOLLOWING CASES:
o Employees accounts
o Pension accounts as the photographs will be available in the PPOs
lodged with the bank.
• Photographs obtained from the account holder/s is/are to be stapled in the space
just below the date column in the account opening form.
• In case of closure/transfer of accounts, photographs should not be returned to the
depositors.
• The cost of the photograph is to be borne by the depositors.

INITIAL DEPOSIT & MINIMUM BALANCE:

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• Initial deposit must be made in cash by using NF.131 (SB Challan) duly
signed by the depositor.

• Non maintenance of minimum balance in the accounts where cheque books

are issued attracts a charge of Rs.22/- levied once in a month. However,
following categories of account holders are exempted from the above
stipulation :

• Pensioners drawing pension through the branches

• Employees of the bank

• Non-Resident Indians

• Ex-Employees of the bank who are eligible to earn preferential rate of

interest.

• Salaried class is permitted to open zero balance pay roll accounts

• Penalty for non-maintenance of minimum balance waived till first credit

• Cheque books/ATM cards to be issued after the first credit

GUIDELINES IN RESPECT OF NEW ACCOUNTS:

• A close and intelligent watch over the newly opened accounts especially
during the first six months is to be exercised in allowing operations therein,
particularly those involving huge deposits and withdrawals.

• Branches have to be cautious where cheque/drafts for large amounts are

lodged. Inward remittances etc. received have to be verified with greater care.

• All debits of Rs. 25,000/- and above during the first six months should be
authorised by the Manager - in - charge of the branch/department.

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• All cheques issued should be marked NEW ACCOUNT for the first six
months. These cheques received should be screened under Ultra Violet Lamps
wherever necessary.

CLOSURE OF ACCOUNTS:
• A letter of request for closing the account should be obtained from the account
holder. The signature in the letter should be verified with the specimen
signature.

• In the case of accounts of can card holders, the account should be closed only
after getting instructions from Cancard Division.

• If the account is closed before completion of one year, a service charge of Rs.
10/- per account is to be levied and credited to commission account - Service
charges. However, this is not applicable in the following cases:

(1) Transferring the account to another branch of our Bank.

(2) Opening another account in joint names

(3) On account of death of the Account holder.

• The proceeds of closed/transferred SB accounts are to be routed through

Demand Draft only.

INTEREST:
• Interest should be paid at half yearly rests before 10th of February and
August. Interest is to be calculated on the basis of minimum balance in the
account between 10th and last day of the month. Interest rates of the Saving
Bank account are 3.5% per annum.

• Normally, no interest is payable on Current account.

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 INOPERATIVE ACCOUNTS:
• These are the accounts in which there are no operations for a period of one
years and above from the date of last operation except by way of any charges
debited or interest credited. All the accounts are to be reviewed at least once
in a calendar year and inoperative accounts are to be segregated.
• Among the inoperative accounts, such of those accounts which do not earn
any interest should be segregated and grouped separately classifying them as
"Non-Interest Earning Inoperative accounts" (NIE accounts.)
• Debits other than service charges, excess interest credited etc., in inoperative
accounts are to be permitted only after transferring inoperative accounts to
operative account. Such accounts should be transferred to operative account
after obtaining a suitable letter from the account holder and operations are
permitted only after getting the approval from the Manager-in-charge of the
department of branch-in-charge.
• Issue of cheque book/loose leaves only after properly identifying the account
holder and should be authenticated by the Officer/Manager/Senior Manager.

PASS BOOK AND PASS SHEETS

• Pass books/ pass sheets should be issued to all current account holders. The
same should be written neatly, accurately and legibly and should be initialed
by the Supervisor after verifying the correctness of the ledger balance.
• Duplicate pass book/pass sheets can be issued in case the original is lost or
misplaced after collecting applicable service charges.

CASUAL OVER DRAWINGS IN CURRENT ACCOUNT:

• Depending upon the credit worthiness of the party and Manager's experience
of the party's transaction, casual overdrawings may be allowed subject to
delegation of powers.
• Such overdrawings must be regularised within 15 days. Interest as applicable
to clean advances should be charged. If it is not regularised within the specific

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 period, penal interest at 2% over and above the normal rate of interest to be
charged compounded quarterly (calendar quarter).
• Current accounts in which over drawings remain outstanding beyond the
stipulated period of 15 days must be reported

INOPERATIVE CURRENT ACCOUNTS.

• Accounts in which there are no operations for a period of two years and above
from the date of last operation except by way of any charge debited are to be
treated as inoperative current accounts
• These accounts are to be transferred to a separate ledger called "Inoperative
ledger". This is to be done at least once in a calendar year by reviewing all the
accounts.
• Debits other than service charges, excess interest credited etc., in inoperative
accounts are to be permitted only after transferring inoperative accounts to
operative ledger. Such account should be transferred to operative ledger after
obtaining a suitable letter from the account holder and operations are
permitted only after getting the approval from the Manager-in-charge of the
Department of Branch In charge.

CURRENT ACCOUNT FOR EMPLOYEES

• Employees are not allowed to open Current account in the normal course.
However, in exceptional cases, if the employee submits a request in writing
explaining the reasons for operating a current account, the same may be
opened after obtaining permission from the concerned staff section (W/O). A
Supervisor should not authorise payment of his own cheque.

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2.3 FIXED DEPOSITS
• Fixed Deposits are term deposits repayable after an agreed period , fixed
at the time of deposit. Fresh Deposits as well as renewals etc. may be
accepted in odd amounts with a minimum of Rs.1000/-. It is desired that
branches shall try to maintain deposits in round amounts wherever possible.

• The period of deposit should be 15 days or more but should not exceed 10
years (120 months).(exceptions under Court Orders and deposits in the name
of minors, subject to satisfactory position.)

KAMADHENU DEPOSITS
• Kamadhenu Deposits are term deposits repayable along with accrued interest
after an agreed period fixed at the time of deposit. Here the depositor makes a
lump sum deposit at one time for a fixed term and receives payment thereof
on maturity. The interest accrued is ploughed back so that the deposit earns
compound interest.

DEPOSIT MAY BE OPENED BY:

i) An individual in his/her name

ii) More than one individual (but not more than four) in their joint
names payable 'to all of them jointly', or 'to any one or more of them or
survivor/s' or 'No.1 or survivor/s'.
iii) a guardian on behalf of a minor on furnishing a declaration
as to the date of birth of the minor.

iv) by Minor himself / herself provided he/she is aged 12 years and

above and he/she is able to read, write and capable of understanding
what he/she does, in the opinion of the Bank.

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 v) Hindu Undivided family, partnership firm, a company or an
Association or any other institution etc.

• Guidelines for opening of accounts of Trustees/Provident Funds/ Executors

and Administrators etc., are detailed in Manual of Instructions on Current and
SB accounts.

INTRODUCTION OF ACCOUNTS
• The account should be opened in the name of a person who is properly
introduced to the Bank.
• Introduction by our existing account holder is considered to be the best form
of introduction. The person who is introducing a new account, should himself
have maintained an account with the branch, at least for the past twelve
months prior to the date of introducing the new account.
• However, where the introducer is well known and the Bank is satisfied, he/she
may introduce a new account, though his/her account might not have
completed twelve months.
• If the depositor is well known to the Manager or any other Officer or
confirmed employee, such members of the staff may introduce the
account.
• Where it is not possible to obtain introduction from an existing account
holder, branches may accept introduction of any respectable person of the
locality known to the Bank.
• Identification by way of passport, postal identity card introductory letter
issued by commanding officer of the unit for opening accounts of JCOs /
Jawans etc., is considered adequate introduction for opening new accounts.

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 IDENTITY AND ADDRESS PROOF:
• Any one of the following documents can be produced as proof of identity of
the prospective account holder.
a. Passport
b. Original letter of introduction from existing bank
c. Driving Licence
d. Voter's identity card
e. Employee Identity card with photograph and address of the employee
(subject to satisfaction of the bank)
f. PAN card
g. Photo Credit Card along with the current billing cycle (latest
statement)
h. Arms Licence issued by State / Central Government of India authority
with photograph of applicant.
i. Pension book issued by Government of India with photograph of
applicant containing name, address and validity period.
j. Freedom fighter's pass, issued by Home Ministry of Government of
India authority with photograph of applicant.

In case any of the documents listed above does not contain the address of the
applicant and in case address is different for genuine reasons other documents
may be submitted by the applicant.

OPENING OF AN ACCOUNT
Application Form-NF.108 is to be used for opening the accounts.

• All the application forms should invariably be date stamped and signed by an
Officer/Manager in token of having accepted the deposit.

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 NOMINATION FACILITY:
• Nomination can be made in respect of all types of deposit accounts held
jointly or singly including sole proprietorship accounts.
• However, nomination facility is not available for accounts held In
representative capacities, capacity of partners, accounts of Joint stock
companies / association / clubs and such other organisations.

• Nomination can be accepted in favour of an individual only.

OBTENTION OF PHOTOGRAPHS:
• Passport size / stamp size photographs should be obtained in all cases
where maturity value is more than Rs.10000/-.

• Photograph need not be insisted from depositors already having their

SB/Current accounts with photographs.

JOINT ACCOUNTS
• Joint accounts should be opened with a maximum number of 4 persons only.

• Conversion of existing individual account into a joint account can be

permitted with a maximum addition of 3 persons only subject to guidelines.

PAN /GIR etc.

• Quoting of PAN / GIR or obtention of declarations in form 60 / 61 as
applicable and reporting of transactions is required only for Term Deposits
exceeding Rs.50, 000/- received in cash. Deposits accepted through account
payee cheque, Demand Drafts in favour of a banker, transfer from an account

• Term deposit opened either by way of crossed draft / crossed cheque / debit to
account are not covered irrespective of the amount.

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 ISSUE OF DEPOSIT RECEIPT:
• NF 108 Application form (duly introduced and filled in) should be obtained
along with other applicable enclosures such as Resolution, Constitution letters
etc. FD Challan NF.133 should be used for remitting the deposit amount
either in cash or by cheque drawn on the account with the Branch.

• When the challan is received, the concerned clerk and supervisor should
verify whether the 'Cash received' or 'Transfer' seal has been affixed
thereon under due authentication of the Shroff and the concerned
Supervisors.

• Deposit Receipt is to be properly written, duly incorporating the name and

address, rate of interest, due dates etc - The deposit receipt should be
delivered to the depositor against his acknowledgement.

RATE OF INTEREST
• Rate of interest is determined with reference to the period /quantum of the
deposit, rate of interest is advised by HO from time to time.

PAYMENT OF INTEREST:
• Branches have to refer to the date wise sheet for interest payment of the
corresponding date every day (in case there are preceding holidays, those
sheets should also be dealt with).

• Referring to the respective FD ledger folios slips are to be prepared for

crediting interest amount to respective operative accounts as per the
instructions of the depositors already noted in the respective ledger folios.

• Where periodical interest is payable to the depositor, eligible TDS shall be

deducted before payment of interest.

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 DEPOSIT DUE NOTICE:
• NF.140 should be sent 14 days before the due date of deposit by ordinary post.

• Banks should ensure sending of intimation of impending due date of deposit

well in advance to their depositor as a rule in order to extend better customer
service. However, there is a provision in the fresh Account opening form NF.108
to seek a mandate from the depositor for sending intimation of impending due
date notice or not. Also, the depositor can express their desire not to send due
notice in writing.

PAYMENT ON DUE DATE:

• Fixed Deposit Receipts are not transferable or negotiable, no endorsements
are permitted. The depositor/s is/are required to give discharge on the reverse of
the fixed deposit receipt in the space provided for the purpose.

• The proceeds of deposit shall be repaid to the depositor by crediting to his

operative account or by way of DD / Pay Order. Payment in cash should be
restricted to less than Rs.20, 000/-.

PAYMENT OF OVERDUE DEPOSITS

• All debits under overdue deposits head, except renewals, are to be authorized by
Manager / Senior Manager of the branch or Manager-in-charge of deposits
department.

• In case of renewals with same terms and conditions prevailing system of

authorization to continue.

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 EXTENSION OF THE PERIOD OF DEPOSITS DURING TENURE
(PREMATURE EXTENSION)
• During the tenure of a deposit, the depositor may wish to keep the deposit with
the Bank for a period longer than the period originally agreed to. Branches can
accede to such requests subject to guidelines detailed in Manual of Instructions.

WITHDRAWAL OF DEPOSITS BEFORE MATURITY

• Managers are authorised to permit such withdrawals of deposits before maturity,
without any ceiling on amount and period. The guidelines for payment of
interest on such premature closure are as under:

RENEWAL OF DEPOSITS:
• The request for renewal of the deposit could be obtained on the reverse of FDR.

• In respect of joint accounts, a provision has been made on page 1 of NF.108 for
authorizing any one of the depositors or any one or more of the surviving
depositor/s to renew the deposits on the same conditions of repayment and interest
payment. If this clause is opted for, the branch may act as per the above clause.

• Where the clauses are not opted, the request for renewal should be obtained
signed by all the depositors.

• Fresh application forms need not be obtained for renewal of fixed deposits, if they
are renewed -
o In the same names and in the same order with the same principal amount
(or with whole or part of accrued interest), with the same repayment terms

• In case depositor desires to renew only a part of the overdue deposit from the date
of maturity subject to overdue period not exceeding 14 days, such requests can be
acceded to, provided interest is paid only on the renewed portion of the overdue
deposits after obtaining fresh application form.

25
• Two or more overdue deposit accounts may be combined and a consolidated FDR
may be issued provided all these overdue deposits have matured on the same day
subject to overdue period not exceeding 14 days and also if each of these overdue
deposits stand in identical names and repayment conditions. Where deposits are
continued, a note of this fact should be made on the renewed DR issued by
affixing a rubber stamp.

• Whenever deposit receipts are issued in respect of renewed fixed deposits, a

suitable note of this fact should be made in the deposit receipt as well as in the
ledger folio and also in the application form.

• Branches are permitted to transfer terms deposits from one branch to another
branch outside the city / town / municipal area during the tenure of the deposit up
to a maximum of Rs. 5 lacs under domestic / NRO / NRE deposits and the
equivalent of US $ 10000 under FCNR deposits.

LOANS / ADVANCES AGAINST TERMS DEPOSITS OF THE BANK

Branch-in-charge may sanction loans / advances against term deposits of our bank
(prime security) with 10% margin (standing in the name of depositor/s only) in
respect of loans upto their delegated powers.

• In respect of loans / advances in the case of third party deposits 20% margin to be
maintained.

26
 2.4 LOANS

2.4.1 HOME LOANS

PURPOSE:

• For construction, purchase, repairs, additions, renovations of residential house or

flat including the purchase of land and construction thereon. For taking over of
the Housing Loan liability with other recognized Housing Finance Companies,
Housing Boards, Co-operative Banks, Co-operative Societies and Commercial
Banks at our prevailing low rate of interest.

ELIGIBILITY:

• Salaried individuals, individuals engaged in business / professionals and self-

employed persons. NRIs are also eligible to avail loans without specific
permission of RBI.

RATE OF INTERST AND PROCESSING CHARGES

Repayment Upto Rs. 30 lacs Above Rs. 30 lacs upto Processing
Period Rs.1.00 crores Charges
0 – 300 months ROI EMI PER ROI EMI PER
LAC LAC
First 12 months 8.25 790/- 9.00 840/-
Next 48 months 9.25 860/- 9.75 890/-
Above 60 BPLR – 900/- BPLR – 2.00% 940/- NIL (upto
months upto 300 2.50% subject to 31.12.2009)
months subject to minimum of
minimum of 10.50%
10.00%

SECURITY:

• Hypothecation of the asset.

27
 REPAYMENT:

• Convenient equated monthly installments up to 20 years.

PREPAYMENT :

At your choice. Bank do not levy prepayment penalties except in case of takeover
of the loan by other bank/HF institution.

DOCUMENTS / FORMALITIES:

• Stipulated Loan Application with 2 passport size photos of applicant / guarantor

• Sale Deed, Agreement for Sale

• Copy of the approved plan for the proposed construction / extension / addition

• Detailed cost estimate / valuation report from Bank's Panel Chartered Engineer /
Architect

• Allotment letter of Co-operative Housing Society / Apartment Owners'

Association / Housing Board / NOC from the Society / Association / Builders /
Housing Board

• Salary Certificate and Form No.16 (in case of salaried persons)

• IT Returns filed for the past two years (in case of non-salaried persons)

• A brief note on the nature of business, year of establishment, type of organization,

etc., (in case of self-employed)

• Balance Sheet and P&L Account for the past three years (in case of self-
employed)

2.4.2 HOME IMPROVEMENT LOANS

28
 PURPOSE:

For furnishing house / flat with household furniture items, air conditioners,
wardrobes, kitchen cabinets, refrigerator, washing machine, etc.,

• Can be availed along with a Housing Loan from Canara Bank OR

• Separately in cases where Housing Loan is obtained from other Banks / Financial
Institutions OR Without any Housing Loans

This loan can also be availed where a Housing Loan is already obtained from us and
the liability is subsisting.

ELIGIBILITY:

• Owners of House / flat who are salaried individuals / individuals engaged in

business / professionals / self-employed. NRIs are also eligible.

• Salaried individuals with minimum 25% net take home salary or Rs.2000/- after
meeting loan repayment, whichever is more.

• Other than salaried individuals - minimum annual income of Rs.50,000/- as

evidenced by ITAO / IT Returns

LOAN QUANTUM & MARGIN:

• When availed along with Housing Loan from Canara Bank, amount up to one
year's gross salary / income over and above the normal eligible amount for
housing finance.
• In other cases, one year's gross income / salary will be reckoned to determine the
loan quantum under this Scheme.
• Subject to above, normally, the maximum loan quantum shall be Rs.2 lacs. Higher
quantum considered selectively.

29
• If availed as a part of the housing finance from our Bank, then, the margin
stipulated is 15%. In other cases, the margin is 20%.

RATE OF INTEREST:
• 12% if Housing loans are availed from the bank. If not 12.50% of interest is
charged.
• Along with the interest the bank collect processing charge for the loan taken
which varies with the loan amount.

SECURITY:

• Hypothecation of assets created out of this loan.

• Mortgage of house / flat (if housing loan is availed from us)

• Suitable co-obligation / personal guarantee. Waiver considered selectively.

REPAYMENT:

• In convenient equated monthly instalments upto 60 months.

DISBURSEMENTS :

• Amount will be normally disbursed only after acquiring ready built house / flat or
completion of construction of house / flat or completion of repairs / renovations,
etc., where the loan is availed along with housing finance. In case this loan is
sanctioned independent of a housing loan then, the loan can also be disbursed
against proforma invoice, etc.

DOCUMENTS / FORMALITIES:

30
Stipulated Loan application with 2 passport size photographs

Latest Salary Certificate and Form No.16

ITAO / IT Returns (for professionals and non-salaried persons)

Proforma Invoices, cost estimates

2.4.3 CAN MORTGAGE

31
 ELIGIBILITY:

• Professionals, businessmen, salaried persons

• Customers having satisfactory dealings with our bank

• New customers well introduced and credit worthy with satisfactory banker's/
market reports on them.

QUANTUM :

• Upto 50% on the value of the property offered as security as per the valuation
report of the bank's panel-valuer.

RATE OF INTEREST:

• 16.50% - fixed interest rate

• 13.75% - floating rate interest.

REPAYMENT:

• Up to 60 months by way of EMI

SECURITY

• Equitable Mortgage of property acceptable to the Bank having clear marketable

title.

GUARANTEE

• Personal Guarantee from person of adequate net worth acceptable to the Bank.
Waiver considered selectively.

32
 PROCESSING CHARGES:

• 0.5% of loan amount.

DOCUMENTS / FORMALITIES:

• Stipulated Loan Application with passport size photographs - 2 copies each

• Copy of lease deed

• Income proof of the applicant and guarantor

• Income Tax Assessment Order / IT Returns

• Title deeds of the property / EC, latest tax paid receipt / Legal Scrutiny Report

• Approved plan of building

• Certificate of balance if finance is availed against property from any other source

• Annual Financial Statements for the past 2 years (in case of persons other than
salaried individuals)

33
 2.4.4 SME LOANS

The Bank has adopted a Policy for lending to SME sector, in tune with Govt. of
India guidelines as per MSMED Act, 2006, which has come into force w.e.f. 2 nd
October, 2006.

• SME sector comprises, Micro Enterprise, Small Enterprise and Medium

Enterprises - Manufacturing & Service Segments

Manufacturing Services
Micro The investment in plant and machinery The investment in equipment
Enterprise (original cost) does not exceed Rs.25 does not exceed Rs.10 lakhs.
lakhs.
Small Investment in plant and machinery The investment in equipment is
Enterprise (original cost) is more than Rs.25 lakhs more than Rs.10 lakhs but does
but does not exceed Rs.500 lakhs. not exceed Rs.200 lakhs.
Medium Investment in plant and machinery The investment in equipment is
Enterprise (original cost) is more than Rs.500 lakhs more than Rs.200 lakhs but
but does not exceed Rs.1000 lakhs. does not exceed Rs.500 lakhs.

Note:

1. Enterprise means an industrial undertaking or a business concern or any other

establishment, by whatever name called, engaged in the manufacture or
production of goods, in any manner pertaining to any industry specified in the
First Schedule to the Industries (Development and Regulation) Act, 1951 or
engaged in providing or rendering of any service or services.

2. In calculating the investment in plant and machinery, the cost of pollution

control, research and development, industrial safety devices and such other items
as may be specified, by notification, shall be excluded.

34
 3. The word equipment is defined as "All instruments, office machines and such
other electro mechanical or electronic appliances that are directly related to the
service rendered but excluding furniture, fittings and other items not so related."

TIME NORMS FOR DISPOSAL OF LOAN APPLICATIONS:

• Loans up to Rs.25000/- within 2 weeks from the date of receipt of loan
applications.
• Loans up to Rs.5 lakhs, within 4 weeks from the date of receipt of loan
applications.
• Loans over Rs.5 lakhs, within a maximum period of 8 weeks from the date of
receipt of loan applications.

RATE OF INTEREST:

• Up to and inclusive of Rs 50,000/- 9.75% p.a., for working capital & 10.25% p.a.
for Term Loans
• Over Rs. 50,000/- up to and inclusive of Rs 2 lakhs, for working capital and Term
Loans at BPLR (Presently, 11.75% p.a.)
• In respect of loans under National Equity Fund Scheme and Mahila Udyam Nidhi
Scheme - Up to Rs.50,000 - 9.75% for working capital and 10.60% for working
capital above Rs.50,000 and up to Rs.2 lakhs Up to Rs.50,000 - 10.25 % for Term
loan and 10.60% for Term loans above Rs.50,000 and up to Rs.2 lakhs

35
 SECURITY :

• NO collateral security/third party guarantee in respect of loans to SSIs as under:

i. Up to Rs.5 lakhs

ii. Up to Rs.25 lakhs in respect of units whose track record and financial
position are good as per Bank records.

iii. Up to Rs 25 lakhs in respect of units whose borrowal accounts are

covered under Credit Guarantee fund for Small Industries (CGFSI).

In respect of other SSI and ME units, collateral security/third party guarantee as

determined by Bank is insisted on merits of each case, subject to RBI / GOI guidelines.

Application No To SSIs To MEs

NF 836 Up to Rs.10 lakhs Up to Rs.2 lakhs
Over Rs.10 lakhs and Over Rs.2 lakhs and
NF 837
Up to Rs.50 lakhs up to Rs.15 lakhs
Over Rs.50 lakhs and Over Rs.15 lakhs and
NF 838
Up to Rs.100 lakhs up to Rs.100 lakhs
NF 903 Rs.1 crore and above Rs.1 crore and above

2.4.5 LOAN SCHEME FOR FINANCING POWER TOOLS -

'CANTOOLS'

36
 PURPOSE:
To provide Term Loans for purchase of Power Tools and need based working
capital to the following:
o Auto-Mechanics for servicing & repairs
o Electricians for servicing & repairs
o Plumbers for sanitary servicing & repairs
o Carpenters and Wood workers

ELIGIBILITY:
• All artisans and self-employed persons who are engaged in the field of carpentry
& wood works, servicing & repairs of automobiles, electrical and sanitary
servicing.

NATURE & QUANTUM OF LOAN:

• Financial assistance is by way of composite Loan. Maximum loan limit is Rs.1
lakh.

REPAYMENT:
• Repayable in 3-5 years.

RATE OF INTEREST:
• Upto Rs.50,000/-: 8.75% p.a. for Working Capital & 9.25% p.a. for Term Loan
above Rs.50,000 and upto and inclusive of Rs.1 lakh, for both Working Capital
and Term loan, it is 10.75% p.a.

SECURITY:
• Hypothecation of Tool kits. No Collateral Securities or Guarantee or Co-
obligation. Loans are covered under Credit Guarantee Fund for Small
Industries(CGFSI).

37
 MARGIN:
• For loans upto Rs.25,000/-: Nil. Above Rs.25,000/-: 5 to 10%

PROCESSING CHARGES:
• No processing charges will be collected for the loans sanctioned under this
Scheme.

• For financing Power tools, our Bank has entered into a tie up with MICO-BOSCH
through a MoU. Under MoU, all the dealers of MICO-BOSCH have officially
been permitted to sponsor applications to our respective branches across the
country.

• Though, there is a MoU with MICO-BOSCH for financing power tools, the
choice of the brand of the power tools should be left to the sole discretion of the
borrower.

2.4.6 GOLD LOANS

INTRODUCTION

38
 Lending against the security of gold and gold jewellery is a highly secured way of
providing finance. Even though initially the facility was permitted for agricultural
purpose, recently the lending has become broad based as schemes are evolved to
meet the needs of non-priority segments. Further even lending against gold
bullion is permitted at specific branches.

The gold loans is divided into two catogories:

a) Loans against gold ornaments for agricultural operations and allied
activities
• Loans against gold ornaments are granted to meet the expenses of agricultural
operations and allied activities.

b) Swarna Gold loans

• To meet the medical expenses and other unforeseen commitments /

contingencies and investment purposes / domestic purposes.

CONDITIONS FOR GRANTING GOLD LOAN

• Gold loans are to be granted only against gold ornaments and not against gold
coins, bullion etc.
• Gold loan is to be sanctioned only to the true owner of the jewels. A declaration
has been incorporated in the pledge letter NF.497 to the effect that the applicant is
the true owner of the jewellery offered as security.
• Gold loans are granted only after getting jewels duly appraised by the jewel
appraiser appointed by the Bank.

INTEREST

39
• 10% rate of interest. With 3% subsidy. The subsidy will be paid back to
customer at the end of September and March.

REPAYMENT
• The entire loan should be cleared within 12 months from the date of sanction,
to be repaid in monthly / quarterly / half - yearly instalments or by lump sum
payments. The repayment schedule so fixed should depend upon type of
agricultural / allied activities and cash generation from the enterprises /
repayment capacity of the borrower.

GUIDELINES FOR ISSUE OF GOLD LOANS

JEWEL APPRAISER
• Selection of Jewel Appraiser is to be made by the concerned Regional Office /
Circle Office.

APPRAISING OF SECURITY
• Jewels to be accepted as security for gold loan, will be handed over to the
Jewel Appraiser for weighing, appraisal and certification.
• The appraisal should be done at the branch itself in the presence of the
borrower and officer of the Bank.
• The Jewel Appraiser after appraising the jewels, should record the details in
NF.497 under his signature.
• Once gold jewellery is appraised, the same should not be parted with.
However, for any reason the jewels are handed back to the intending
borrower, they should be re-appraised before granting the loan and the
reappraisal charges in such cases are also to be borne by the borrower.

PROCEDURE FOR GRANTING

40
• Gold loan application in NF.497 should be obtained from the borrower. All the
details are to be filled in. Jewellery is to be got appraised by jewel appraiser.

• The Manager should specify the amount of loan granted against, in consultation
with the party and within the rate of advance permitted.

• The letter of request NF.497 should be handed over for preparing the slips.
Necessary slips as per requirement and mode of payments are to be prepared.

• Two copies of photograph should be obtained from illiterate borrowers and the
left thumb impression of the illiterate borrowers should be taken on the reverse of
the photographs. One copy has to be kept with loan application and the second
one attached to the ledger folio, if not obtained earlier.

• New series of numbers is to be allotted for gold loans granted every year
beginning from 1st followed by the year like 1/06, 2/06, 3/06 etc.

• Loan account Pass Card - NF.385 is to be prepared. The same should be handed
over to the borrower for his reference.

• Loans granted against gold jewellery for all agricultural purposes are to be
classified as direct agricultural finance.

SAFE KEEPING OF SECURITY

• All particulars of the loan account such as name, number, date of advance,
amount etc., are written on the Gold Loan Ticket NF.367 in duplicate. The jewels
are to be kept in a cloth bag of adequate size. One Gold Loan Ticket is securely
fastened to it and the other ticket is placed inside the bag, so that in case the
outside ticket gets detached due to constant handling, the jewels could be
identified. The bag should be tied in such a way that the contents do not drop out
of the bag.

41
• The double lock key holders have to check the jewels with the letter of request for
loan NF.497 and place the same in the FBR strong room / FBR safe, after making
entries in NB 132 (Loan paper inward register).

• The securities have to be arranged serially and kept in the double lock.

PROCEDURE FOR CLOSING GOLD LOAN

• Branches should invariably insist on production of gold loan pass card NF.385
while closing the loan account. In cases where the production of NF.385 is not
possible for any genuine reason Branch Manager should take necessary
precautions to ensure that the person is genuine.

• In all cases of redemption of gold jewellery, the borrower should be asked

to give the description of jewels pledged.

• Upto date interest is calculated in the Gold Loan Ledger and debited to the
concerned loan account. Total liability is to be recovered.

• An acknowledgement from the party is to be obtained for having received

the jewels in original condition, in the concerned folio in the Gold Loan Ledger.

• In the case of illiterate persons, while delivering the jewels, utmost care is
to be taken. His / her left thumb impression should be got attested by a person
known to the Bank.

• After satisfying himself about the correctness / genuineness of the

signature, the concerned Officer should hand over the securities to the party and
affix his signature in the Gold Loan Ledger for having delivered the securities
followed by a date seal.

42
• In case of difference in the signature of the pledger as affixed in the Gold
Loan Ledger with that on NF.497, attestation of the signature of the pledger by a
respectable party known to the Bank should be insisted upon.

• The account number should be rounded off in the Gold Loan Ledger and
Index Book.

AUCTION
• If the gold loan / interest is outstanding beyond due date even after sending
follow up notices the branch should take steps to auction the securities pledged in
consultation with RO/CO within 3 months from the date of becoming overdue.

43
2.4.7 AGRICULTURE LOANS

Agriculture Loans are classified into three categories.

They are:

A. PRIORITY - DIRECT FINANCE TO AGRICULTURE.

B. PRIORITY - INDIRECT FINANCE TO AGRICULTURE
C. NON PRIORITY AGRICULTURE

A) DIRECT FINANCE TO FARMERS FOR AGRICULTURAL

PURPOSES:

SHORT TERM LOANS:

• For raising of crops. This may be in the form of Kisan Credit Card, crop loans,
ALOD, FGCS, etc,
• Produce loans as extension of crop loan up to a maximum limit of Rs.10 lacs
to farmers against pledge/hypothecation of agricultural produce [including
warehouse receipt for a period not exceeding 12 months ) provided parties
should have availed crop loans from our Bank.
• To traditional/non traditional plantations and horticulture to meet the
production expenses.
• For allied activities such as dairying, fishery, piggery, poultry, beekeeping,
etc. to meet their working capital requirements.
• Charges for hired water from wells and tube wells, canal water charges,
maintenance and upkeep of oil engines and electric motors, payment of labour
charges, electricity charges, marketing charges, service charges to custom
service units, payment of development cess, etc.

44
 TYPES OF SHORT TERM LOANS

1) PURCHASE OF AGRICULTURAL IMPLEMENTS AND MACHINERY:

2) DEVELOPMENT OF IRRIGATION POTENTIAL THROUGH:

3) RECLAMATION AND LAND DEVELOPMENT SCHEMES:

4) CONSTRUCTION OF FARM BUILDINGS AND STRUCTURES, ETC.:

5) CONSTRUCTION AND RUNNING OF STORAGE FACILITIES:

6) PRODUCTION AND PROCESSING OF HYBRID SEEDS OF CROPS

7) PAYMENT OF IRRIGATION CHARGES, ETC:

8) OTHER TYPES OF TERM LOANS:

B) INDIRECT FINANCE TO AGRICULTURE:

a) Credit for financing the distribution of fertilizers, pesticides, seeds, etc.

b) Credit limits up to Rs.40 Lakhs granted for financing distribution of inputs for
the allied activities, such as cattle feed, poultry feed, etc.

• Loans to electricity boards for reimbursing the expenditure already incurred

by them for providing low tension connection from step-down point to
individual farmers for energizing their wells. (REC-SPA Scheme, System
Improvement Schemes).
• Loans to farmers through PACS, FSS & LAMPS.
• Deposits held by the banks in Rural Infrastructural Development Fund (RIDF)
maintained with NABARD.

45
• Subscription to bonds issued by Rural Electrification Corporation (REC)
exclusively for financing pump set energisation programme in rural and semi
urban areas. However, the investments that may be made by banks on or after
April 1, 2005 in the bonds issued by REC shall not be eligible for
classification under priority sector lending and such investments which have
already been made by banks upto March 31, 2005 would cease to be eligible
for classification under priority sector lending from April 1, 2006
• Subscription to bonds issued by NABARD with the objective of financing
exclusively agriculture/allied activities. However, the investments made by
banks in such bonds issued by NABARD, shall not be eligible for
classification under priority sector lending with effect from April 1, 2007
• Financing farmers for purchase of shares in co-operative sugar mills, sugar
mills set up as Joint stock companies and other agro based processing units
(upto Rs.6000/).
• Other types of indirect finance such as:

i. Finance for hire-purchase scheme for distribution of agricultural

machinery and implements.
ii. Loans for construction and running of storage facilities (warehouse,
market yards, godowns, silos) including cold storages units designed to
store agriculture produce / products irrespective of their location.If the
cold storage unit is registered as SSI unit, the loans granted to such units
may be classified under advances to SSI provided the investment in plant
and machinery is within the stipulated ceiling.
iii. Advances to custom service units managed by individuals, institutions or
organisations who maintain a fleet of tractors, bulldozers, well boring
equipment, threshers, combines, etc, and undertake work for farmers on
contract basis.
iv. Loans to individuals, institutions or organisations who undertake spraying
operations/pest control measures.

46
 v. Loans to co-operative marketing societies, co-operative banks for
relending to co-operative marketing societies (provided a certificate from
the State Co-operative Bank in favour of such loan is produced) for
disposing of the produce of members.
vi. Loans to co-operative banks of producers (eg. Aarey Milk Colony Co-
operative Bank consisting of licensed cattle owners).
vii. Advances to State sponsored corporations for onward lending to weaker
sections. Advances to National Co-operative Development Corporation for
onward lending to the co-operative sector.
viii. Finance extended to dealers in drip irrigation / sprinkler irrigation
systems/agricultural machinery irrespective of the location subject to the
following conditions:

C) NON - PRIORITY AGRICULTURE:

The Non-priority Agriculture loan include

• Estate purchase loans.

• Produce loan beyond Rs10 lakhs.

47
2.4.8 CAN MOBILE

INTRODUCTION
• Loans are granted to Transport and Non-Transport Operators against
hypothecation of Motor vehicles like Cars, Trucks and Buses. These loans are
secured advances and are classified under the sub-head "Loans against
Hypothecation of Vehicles" (LHV).

GENERAL PRINCIPLE
• LHV is granted for purchase of brand new motor vehicles. However, loans are
also granted for purchase of motor vehicles which are not more than 3 years
old. The motor vehicle purchased should be got hypothecated to the Bank.

MODE OF ADVANCE
• LHV is granted mainly as fixed loans on single transaction basis.

• For reputed big Transport Operators who purchase motor vehicles regularly
throughout the year, regular limit may be sanctioned. Under this regular limit,
individual loans are granted as and when required by the borrower.

• Sanction of advance is subject to delegation of powers. As there are

restrictions on sanctioning powers of branch managers in respect of SRTOs,
for loans to SRTOs under priority sector where the recovery percentage of the
branch under SRTO is less than 75% as on 30th June of every year, the loan
proposals are to be sent to RO/CO for sanction.

• The restrictions are not applicable for sanctioning loans under Government
Sponsored Schemes and SC/ST’s.

48
 RATE OF INTEREST

First 12 months 8.50%

Next 24 Months 9.50%

Above 36 months upto 60 months 10%

Above 60 months 10.50%

REPAYMENT
• Repayment should be stipulated based upon DSCR, cash generation and
repayment capacity of the borrower with a repayment period not exceeding 60
months.

ADVANCE AGAINST USED VEHICLES

• Vehicles not more than 3 years old and which are in good running condition
are only to be considered. Vehicles like cars, trucks, buses, jeeps only may be
considered as generally we do not grant advance against old light vehicles
such as auto rickshaw etc.

• The advance is to be repaid within a maximum repayment period of 3 years

from the date of grant. The branches should ensure that remaining life of the
vehicle is adequate to cover the repayment period stipulated at the time of
sanction and the vehicle remains road worthy during the period of loan.

• Before granting the advance, Branch Manager has to ensure that

comprehensive risk cover is available for the vehicle or Insurance Company is
agreeable to cover the Comprehensive risk.

49
• A margin of not less than 50% on the valuation report / purchase price at
which the borrower is purchasing now / depreciated value of the vehicle
(depreciation on written down value method) whichever is less, is to be
maintained.

DOCUMENTS REQUIRED
• Basic documentation : NF.721
NF.722
NF.373
NF.803

Whenever the total limits permitted is over Rs.50 lacs and whenever multiple
credit facilities are permitted, common hypothecation agreement is to be
obtained.

RTO Forms – (a) 29 and 30 (b) 20 (c) 35 (d) 12A

DISBURSEMENT
• The margin amount is to be collected from the borrower. A letter of authority
for remitting the amount direct to the dealer is to be obtained from the
borrower.

• The margin amount required for body building charges is also to be collected
from the borrower and is to be kept in Sundry Liabilities - suspense - Margin
money for body building charges - LHV account.

• The entire cost of the vehicle is to be remitted to the Dealer directly against
their invoice. Receipts obtained from the dealer should be kept along with
related loan papers.

50
• Along with the remittance ,necessary papers for registering the vehicle in the
name of the borrower and for registering HP endorsement in Bank’s favour
may be sent to the dealer with instructions to arrange for registration of the
vehicle and for noting of the Bank’s HP endorsement and to send the
Registration of Certificate (RC) to the bank.

• Further the RC/Tax Paid receipt / Vehicle should be verified soon after the
registration of the vehicle in the name of the borrower, within 15 days of
disbursement of the loan unless advance remittance is permitted by the
competent authority.

INSURANCE

• Vehicles hypothecated to the Bank are to be insured for comprehensive risks

and for risks of strike, riot and civil commotion (SRCC). However, branches
need not insist on the risks of Civil Commotion if the insurance companies do
not undertake such insurance.

NON REPAYMENT OF LOANS

• Seizure and enforcement of vehicles are to be resorted to in time and in the
initial stages of irregularities. As vehicles are of fast deteriorating nature, if
this recourse is adopted with delay, Bank may be put into greater loss owing
to poor realisation.
• If 3 or more monthly installments remain unpaid, if no rephasement is
considered branches should initiate steps for seizure of the vehicle. Necessary
guidance / help may be sought from the RO / CO in this direction It is made
clear that any decision not to enforce the securities in such cases should have
the approval of the RO / CO.
• It is not necessary to transfer the account to LPD / R&L Section before
resorting to enforcement of securities. However, once the vehicle is seized,

51
 among others, concerned RTO, Insurance and police authorities are to be
informed of the matters
• Recovery, Follow up, seizure and disposal of vehicle hypothecated to the
Bank. Whenever the overdues are observed under LHVs either under principal
or interest dues, branches should initiate suitable recovery action including
seizure of the vehicle/s.

52
3. SUBSIDIARY FUNCTIONS

3.1 DEMAND DRAFTS

INTRODUCTION

• This is one of the subsidiary functions which facilitate remittance of funds.

HIGH RISK AND LOW RISK DD FORMS

• Demand Draft of Rs. 1 lac and above i.e. TL and OC series are treated as high risk
security items. These are to be verified leaf by leaf to ensure that the same has
been received as mentioned in the delivery note.
• Demand Drafts of less than Rs. 1 lac are treated as low risk security items. In such
cases, it should be ensured that packets received are in tact without breaking the
sealed packet.

ISSUE OF DEMAND DRAFTS:

• On receipt of the challan, the clerk in DD department should verify the following
before writing / printing a DD.

i) Whether the challan bears `CASH RECEIVED'/`TRANSFER' stamp.

ii) Whether it bears the signature of the cashier / supervisor.

iii) Whether it bears the signature of cash supervisor / supervisor who has passed
the contra debit.

iv) We have branches at several places which have common or similar names.
When DD is sought on such a place, correct geographical location of the centre

53
 should be got by getting additional information such as name of the taluk, district,
state and PIN code correctly in NF.220 and correct commission is included.

RULES FOR DRAWING A DD:

• The DDs should be written in English. As per rule 10(4) of OL Rules 1976,
Demand Drafts are to be written in Hindi when the applications are filled up in
Hindi by the customers. If the application is filled up in English with the approval
of the customers DD may be written in Hindi.
• DDs for Rs.10, 00,000/- and above are to be issued crossed account payee only.
Further, where the DD for Rs.10 lakhs and above is issued, the issuing branch
should send on the same day an informatory confirmation by way of a telegram/
through a courier to the drawee branch/office. Such confirmation shall cover DD
No., date of issue, name of the payee and amount in code words.
• DDs should be written legibly without any strikings/alterations. If any
strikings/alterations occur, the leaf should be cancelled duly observing the
procedure and a fresh one should be used.

PAYMENT OF DEMAND DRAFTS:

• DDs for Rs.1, 000/- and above paid in cash and DDs for Rs.5, 000/ and above
received in clearing/collection and for transfer should be screened under ultra
violet lamp before payment by the concerned supervisor.
• Payment of DDs for Rs.50, 000/- and above should be routed through account
only
• In case of DDs for Rs.1.00 lakh and above, before making payment, verification
of the DD in all respects, including signatures of the two authorised signatories is
done jointly by two Officers. Branches/offices where two officers are not
provided / available such scrutiny shall be made by that single Officer only.

54
• In case of DDs for Rs.10.00 lakhs and above, verify as to whether related
Informatory Confirmation has been received by drawee branch/office. Payment of
such DDs shall not be refused for non-receipt of Informatory Confirmation. In
such cases, if the DD is otherwise in order, payment is to be made and
immediately the matter is to be taken up with the drawee branch/office/
overseeing DO/RO/CO (as the case may be).

3.2PAY ORDERS

INTRODUCTION

• A Pay Order is an order by a branch of a Bank drawn upon itself to pay a certain
sum of money to or to the order of the payee named therein.
• Pay Orders should be issued for local remittance, excepting for the purpose of
payment of fees by the students for college / university or for job applications or
towards payment of Common Entrance Cell (CET) or for payment to Government
and Semi-Government Department etc. (in which case issue of local DD is
permitted) Pay Orders should be issued wherever local DD is sought by
customers. However, in respect of remittance between FD and branches and vice
versa, existing local DD system will continue. Further, administrative units shall
continue to issue local DDs as at present. No local DDs except for above cases are
to be issued by branch hereafter. Pay Orders should also be issued to or on behalf
of customers when requested for.
• Pay Orders are to be used for interbank settlements other than clearing like
reimbursement of TT, Borrowing, Call money transaction etc.
• Pay Orders shall also be drawn in favour of Commercial Banks, Financial
Institutions, Corporate bodies, Central and State Government departments /
undertakings, Public Sector Undertakings, reputed money market players
authorised by RBI on behalf of our customers etc.
• Pay Orders are security forms. Branches should, therefore, devote special
attention and keep a close watch over such items particularly at the time of

55
 receiving the stocks, taking them out for use, keeping them in the proper custody
etc.

ISSUE OF PAY ORDERS

• There is no upper ceiling limit for issuance of pay order as the payment of pay
orders is restricted to the issuing branch
• On receipt of the challan the clerk writing the Pay Order should verify the
following:

i) Whether the challan bears "CASH RECEIVED / TRANSFER" stamp.

ii) Whether it bears the signature of the Cashier / supervisor.

iii) Whether it bears the signature of cash supervisor / supervisor who has
passed the contra debit.

PAYMENT OF PAY ORDERS:

• At branches other than the branch of issue

• The Pay Order presented at branch other than branch of issue should be treated as
an instrument for collection only.
• Such Pay Orders should be presented to the issuing branch in the immediate next
clearing and proceeds are to be credited to payees account only after realisation.
• At the branch of issue:
• When a Pay Order is presented for payment either in clearing or across the
counter for cash payment or for credit of an account, it should be scrutinised in all
respects including the correctness of endorsements, identity of the payee etc., by

56
 the concerned clerk and ensure having issued the Pay Order earlier. The earlier
entry is to be matched in respect of printed number, beneficiary, amount and date
of issue.
• The Pay Order itself should be treated as the debit slip for debiting "SL Accounts
payable - Pay Orders issued Account". In case of cash payment, dummy debit slip
should be prepared as the pay order is to be retained along with "Cash Paid"
instruments.

VALIDITY PERIOD / OVERDUE PAY ORDERS

• Pay Orders issued are valid for a period of 6 months only from the date of issue.
There is no provision for revalidation.
• . Pay Orders presented for payment after six months of issue should be returned
with the reason "Stale Pay Orders".
• . When the Pay Order remains unpaid, after completion of 6 months from the date
of issue, the branch should transfer all such unpaid Pay Orders to a separate folio
"SL Accounts payable - Overdue Pay Orders". All the overdue pay orders are to
be reported in PRR-43.
• The overdue Pay Orders should be paid to the purchasers themselves duly
observing the guidelines detailed under chapter 13, Part I of Manual of
Instructions on Transfer of Funds (revised till 31.12.2005) and fresh Pay Orders,
if required can be issued to such purchaser.

CANCELLATION OF PAY ORDERS

• All guidelines applicable for cancellation of DD are also applicable here.

Moreover, the fact of cancellation is to be noted against credit entry and on the
concerned slip etc.

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 3.3 COLLECTION OF CHEQUES:

INTRODUCTION
• Collection of instruments is an important subsidiary function of the Bank. Our
customers tender cheques and other instruments i.e., Demand Drafts, Pay Orders,
Dividend Warrants, Interest Warrants, Refund Orders etc. drawn on other Banks/
branches of our Bank for collection.

BANKERS' CLEARING HOUSE

• Banks which desire to participate in the clearing house are required to become
members of the clearing house as per the rules of the clearing house.

• The Bank conducting the clearing house business acts as the Banker to the other
banks participating in the clearing. Member banks shall have to open an operative
account with the Bank conducting the clearing house and shall have to maintain
the minimum prescribed balance as required under the clearing house rules, which
however shall not be less than Rs.25,000/-.

• Banks receive instruments tendered by their customers drawn on other local

banks. Such instruments are to be properly segregated bankwise and a schedule
representing the total number of cheques drawn on each bank - i.e., bankwise and
the total amount receivable from the drawee bank, is prepared.

58
• Every day at the appointed time (twice a day where members meet twice) all the
member banks assemble at the clearing house. Normally, a clerical staff will
represent each member bank at the clearing house. Instruments drawn on each
other are exchanged by the representatives of the member banks duly recording
the inward instruments drawn on them and the total amount.

• Each member bank has to pay other banks the total amount of the instruments
drawn on them which are presented in the clearing. Similarly, for all the
instruments presented to other banks, the total amount of the instruments
presented has to be received from the drawee banks. However, the banker
conducting the clearing house will credit or debit to the accounts of the member
banks only the difference between the amounts payable and receivable by them.

• It may be noted that while exchanging the clearing instruments and settling the
accounts at the clearing house, the validity, legality or otherwise of the
instruments is of no consequence. Only amount payable / receivable to / from the
banks is verified with reference to the number of instruments and total amount
mentioned in the schedule / each instrument.

• When the clearing is adverse i.e., the amount payable by us is more than the
amount received on a day, the bank conducting the clearing will debit the
difference to our account and when it is favourable, credit the difference to our
account.

• If the balance in our account is not sufficient to meet the clearing deficit, we have
to remit cash or discount a TT immediately to meet the obligation. If there is
substantial balance in our account due to favorable clearing, the surplus should be
transferred to our account of the pooling centre with the RBI by way of a TT.

• Periodically, the bank conducting the clearing will send statement of accounts to
various member banks concerning the transactions in their respective accounts.

59
 Statements so received should be scrutinised by the banks concerned and they
should satisfy as to the correctness of the particulars mentioned in the statement.
Errors, if any, should immediately be brought to the notice of the banker to the
clearing house.

PROCEDURE FOR CLEARANCE OF CHEQUES

• In places where we have more than one branch but where we do not have an
Accounts Section or Clearing Section, one of the branches in the place will be
designated / identified as main branch for participating in the clearing on behalf
of other branches.

• Where we have Accounts Section or Clearing Section, all our branches in such a
place are required to present the instruments to Accounts Section / Clearing
Section who in turn would represent our branches at the clearing house.

OUTWARD CLEARING
• It should be noted that instruments for collection are to be accepted only from our
customers so as to get the legal protection under Section 131 of the Negotiable
Instruments Act.

• Acceptance of instruments from the customers may be done at the Clearing

Department itself by the concerned Supervisor / Officer / Clerk, to speed up the
collection work.

• Instruments for clearing should be tendered along with SB/CA challans duly filled
up with all the required particulars and signed. The counterfoil of the same

60
 should be returned to the lodger by way of receipt, duly signed by the supervisor,
after ensuring that the instruments are in order. Then the Supervisor should affix
the special crossing seal on the clearing instruments.

• On receipt of the instrument, the challan counterfoil should be returned to the

customer in token of receipt of the instrument. It should be ensured that the
details such as cheque number, DD number, name of the drawee bank and branch
and amount of the instrument etc., are noted in detail by the customer on the back
of the challan. Where a party tenders two or more instruments under cover of a
single challan, branches should ensure that clearing and collection instruments are
not pinned together.

• Where the instruments are tendered after the time fixed for receiving the clearing
instruments, it would be possible to present the instruments in clearing on the
same day. The date stamp with the words "Too late for today's clearing" should
be affixed on the challan and the counterfoil.

• Special clearing challans - Parties tendering large number of instruments for

clearing, may be requested to make use of special clearing challans NF.136 -
Special Pay-in-slips for Current Account.

• The challans with the instruments are then to be sorted out account wise, i.e., CA,
SB account, OD/OCC account etc., for posting in the Waste Sheet Subsidiary
(Clearing and Collection - NB.67).

• All the instruments drawn on clearing members are to be entered in the "Clearing
Column".

• The day's clearing stamp is to be affixed on all the instruments and the challans.
Where the clearing house meets twice a day, the clearing stamp should be affixed
clearly indicating whether the instruments pertain to first or second clearing.

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 SERVICE CHARGE
• Collection charges are not applicable for inward clearing cheques. However, if
such cheques are returned unpaid for want of funds, a flat charge of Rs.12/- for
SB accounts and Rs.25/- for Current Accounts per cheque should be debited to the
drawer's account under advice to him.

• In case of local inward cheques returned in clearing for want of funds or for any
other reason attributable to the drawer of the cheque, interest shall be levied as
follows to the drawer:

a. Interest shall be levied only on cheques of Rs.50,000/- and above returned

in clearing for want of funds, irrespective of whether it is an SB / Current /
OD cheque.

b. Interest shall be charged from the date of debit of our Bank's account with
RBI/SBI till the date of credit of our Bank's account with RBI/SBI. If
both the presentment and return of the cheque take place in the same day's
clearing and are adjusted with RBI/SBI on the same day, interest need not
be levied, as there will be no outlay of funds for the Bank on account of
return of the cheque.

c. The rate of interest to be levied on cheques pertaining to SB and Current

accounts shall be linked to our clean advances rate. In respect of OD/OCC
accounts, the rate of interest as applicable to the party/account shall be
levied. However, in all the cases a minimum interest of Rs.10/- per
instrument shall be levied.

d. This interest levied on local cheque return shall be credited to Interest

Collected account.

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 DEBITING INWARD CLEARING CHEQUES ON NEXT DAY OF
PRESENTATION:

• Inward clearing cheques are to be debited to respective accounts on the date of

presentation / receipt of cheques itself.

• In exceptional circumstances, where the branches are not in a position to debit the
inward clearing cheques to the accounts on the date of presentation / receipt of
cheques, for reasons such as break down in law and order situation after the
receipt of clearing instruments. Branch enjoying weekly off, system failure in
computerised branches etc., they can debit them on the next working day as the
first entry of the day. However, to adopt this procedure, permission from
respective RO/CO as the case may be should be obtained by the branch,
explaining the difficulties faced by it. ROs shall report to respective Circle
Offices as and when such permission is granted to the branches.

LOCAL CLEARING AND CASH REMITTANCE (LCCR)

• LCCR is a new accounting procedure evolved for local clearing launched in
1995. This system is introduced in some specified Circles at present. It may be
noted that for the present, only clearing transactions are to be brought under this
head of account. For cash remittances, the existing procedure shall continue.

ISSUE / HANDLING OF MICR INSTRUMENTS - TIPS FOR

ADHERANCE
• Where instruments are payable at MICR Centres, they should be drawn in MICR
format only.

• Paper quality / size should be as per specification of MICR

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• Signature of the authorised singnatories and rubber stamp indicating names and
signing power number of signatories of the Demand Draft issued by us should not
encroach on to the bottom band reserved for code line.

• Customer should be advised to the effect that their signature on cheques and other
instruments should not encroach on to the bottom band reserved for code line.

• Avoid folding of MICR cheques / instruments on code line. While mailing

cheques / drafts, envelopes of adequate size are to be used to avoid folding.

• Crossing of cheques / drafts should be done only on the top left hand corner
thereof.

• Use of stamping ink with metallic contents should be strictly avoided.

• Pinning and stapling of instruments should be totally avoided.

• Encoding is to be done within MICR band and alignment should be proper.

• Encoding should not be done on perforated portion of instrument. The perforated

portion of instrument should be removed before encoding.

• There should not be overlapping in the encoding process and over writing on
MICR band.

• In case of return, sticker should not be pasted on MICR band (Neither earlier
encoding should be cancelled by pen nor fresh encoding should be done on the
reverse of the cheque in the same MICR position). Instead, multi-fields encoding
should be done on the reverse top portion of the instrument.

64
• Poor / defective encoding ribbons should not be used to avoid high reject rate at
MICR centres.

• While encoding for the first time, ensure encoding on MICR band on the face of
the cheque and arrange the instruments properly.

• Where, first encoding is not proper, in such cases, encoding should be done on the
reverse top portion of the instrument, but not on reverse of MICR band.

• After encoding, instruments are to be arranged properly so that encoded portion of

all the instruments appear / fall / collate on the same side.

• Presentation of the same instruments repeatedly should be avoided.

• Use of wrong transaction codes while encoding to be avoided.

• In addition to the above, attention of the customers to be drawn on the following

DONT's printed on the cover of cheque book and guide them accordingly :

a. Do not write / sign on the code line

b. Do not pin / staple on the code line
c. Do not paste on code line
d. Do not fold the cheque on code line
e. Do not affix Rubber stamp on code line (affix crossing stamp on the top
left corner only)

HIGH VALUE CLEARING:

• Instruments drawn for value above a specified amount as decided by the
concerned clearing house are exchanged separately for collection in certain
centres. This is named as High Value Clearing.

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 DRAWINGS AGAINST CLEARING CHEQUES
• Such drawings are permitted only in accordance with the sanctioning powers
delegated to the Manager / Senior Managers.

4 UTILITY FUNCTIONS

4.1 SAFE DEPOSIT LOCKER

INTRODUCTION
• Where Safe Deposit Locker facility is available, no articles (excepting our own /
other Bank Term Deposit receipts) should be accepted for safe custody.
However, safe custody services should be made available to local / nearby
branches of the bank / other banks whenever they approach the branch for
lodging the duplicate set of their safe / double lock keys / master key of their safe
deposit locker.

ACCEPTING ARTICLES FOR SAFE CUSTODY:

• Generally, sealed envelopes, sealed packets and sealed boxes of small bulk are to
be accepted for safe custody. At the request of the depositor, the term deposit
receipts of our bank / other bank may be accepted for safe custody at Manager's
discretion, in which case the same need not be placed in sealed envelopes.

• An application should be taken from the depositor as per format of the relevant
Manual of Instructions. Specimen signature of the party should be obtained in
Specimen Signature Card NF.109.

66
• While accepting such sealed articles for safe custody, the branch should carefully
examine the same and satisfy that customer's name is written thereon and that all
boxes are locked and sealed / that all parcels are securely sealed. Boxes / Parcels
etc., should not be sealed with the branch seal. If the customer does not possess
the distinctive seal of his own, his signature in ink may be obtained across the
folds of the cloth used for packing the Box / Parcel. In case of sealed packets /
covers, the signature may be obtained across the pasted flaps / folds.

• When sealed envelope said to contain wills are deposited, instructions should be
obtained in writing as to the disposal in the event of death of the depositor. For
details please refer Manual of Instructions on Executor and Trustee Business.

• Where the articles are deposited jointly by two or more persons (subject to a
maximum of 3) a joint mandate signed by all joint depositors as to the
withdrawal of the article/s should be obtained.

ISSUE OF SAFE CUSTODY DEPOSIT RECEIPT

• Every article deposited should be given a consecutive running number which
should be marked on the article and the Safe Custody Receipt.

• All the articles accepted for safe custody should be entered in the Safe Custody
Register NB.53 serially. Each account should be properly indexed.

• Safe Custody Receipt - NF.338 should be issued for all articles deposited for safe
custody with proper description. A separate receipt should be issued for each box
/ packet / envelope accepted for safe custody.

• Safe Custody Receipts and the relative counterfoils once issued should not be
altered in any manner.

67
• Box / Packet / Envelope accepted for safe custody and the Safe Custody Register
should be checked and initialled by the Officer / Manager before signing the
relative Safe Custody Receipt. The receipt is to be then handed over to the
depositor against his acknowledgement on the reverse of the counterfoil.

• The application along with the specimen signature card should be filed serially.

SAFE CUSTODY OF DUPLICATE SET OF KEYS OF OTHER

BRANCHES / BANKS
• Such requests should be entertained free of charge.

• The conditions of withdrawal (i.e., persons authorised to withdraw) should be

obtained in writing from the branch lodging the box.

• Safe Custody Receipt should be issued duly following the usual procedure.

SAFE CUSTODY DEPOSIT RECEIPTS

• Application for safe Custody need not be obtained while accepting deposit
receipts for safe custody (both resident / non-resident).

• Whenever safe custody of Bank's term deposit receipt is sought by our customers,
it is necessary that safe custody receipt is issued as detailed under clause 2.6.

• The closed envelopes containing term deposit receipts are to be kept in the
Gordian Locker Cabinet in strong room / FBR safe under dual custody and its
movement is to be periodically monitored.

• The Branch Incharge should review all closed deposits under Safe Custody
accounts periodically and ensure that the movement of deposit receipts is under
dual control and responsibility.

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 SAFE CUSTODY REGISTER
When articles are accepted for the safe custody or whenever they are released, entries
are to be made in the Safe Custody Register. Entries in the Register should be
initialed by the Manager / concerned Officer when the relative item is deposited /
released. This Register should be preserved in the Double Lock.

SAFE KEEPING OF SAFE CUSTODY ARTICLES

The joint key holders should place the items in the Safe / Gordian Lock Cabinet in
the strong room after checking the same with Safe Custody Register. Branches
which have strong room should preferably store all the articles accepted for safe
custody in a separate Gordian Locker Cabinet without mixing them up in the
cabinet where cash / loan papers etc. are kept.

WITHDRAWALS
• When a depositor calls at the branch to withdraw the article deposited for safe
custody, the Safe Custody Receipt should be got discharged by him.

• The signature of the depositor should be verified and the Officer verifying the
signature has to affix his signature certifying that the signature has been verified.

• The signature of the authorized signatory on the surrendered receipt should be

cancelled.

• All the arrears of charges in respect of safe custody due to the bank, if any, should
be recovered from the party. The article/s should be taken out of the double lock /
safe, duly noting in the Safe Custody Register.

• The article/s should be handed over to the party after obtaining acknowledgement
Safe Custody Register.

69
• Part withdrawal of items covered by a Safe Custody Receipt should not be
permitted.

NOMINATION FACILITY

• Only an individual who has deposited the articles for safe custody in his
individual capacity can give a nomination. Nomination facility is not available if
the articles are deposited jointly / or in the representative capacity as a holder of
office or otherwise.

UNCLAIMED ARTICES
• Unclaimed articles / valuables left in the branch premises unclaimed are to be
kept in safe custody and the matter may be taken up with R & L Section of
concerned Circle Office.

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 4.2BILLS OF EXCHANGE

INTRODUCTION:
• Purchase/Discount/Negotiation or granting of Rupee Advance against Export
Bills and payment of proceeds before realisation to the exporter of goods from
India is a facility offered to the exporters at concessional rate of interest and is
one of the key segments of bank's forex business.

• Export Bills negotiated/purchased/discounted and also Rupee Advances granted

against Export Bills should be accounted for under Bills Purchased.

• Export Bills in respect of which the exporter does not require finance, are
handled on Collection basis.

• While handling of Export Bills and/or granting post-shipment finance, the

Foreign Exchange Regulations of RBI, Interest Rate directives of RBI, Exim
Policy guidelines of Govt. of India, FEDAI Rules and Rules of International
Chamber of Commerce are to be adhered to.

• The Export Bills could be either Sight Bills or Usance Bills. All Export Bills
more than USD 25000 in value or equivalent should necessarily be accompanied
by relevant Export Declaration Form viz., GR/SDF/PP/ SOFTEX Form.

SANCTION OF CREDIT LIMITS:

71
Finance to customers against Export documents requires sanction of necessary credit
limits from appropriate sanctioning authorities or subject to delegation of powers
communicated by H.O. from time to time.

SIGHT EXPORT BILLS:

These are payable on "Demand" or "at sight". These are normally accompanied by a
Bill of Exchange/Draft drawn payable at sight or on demand. The bills could be
either covered under an Export Letter of Credit or against firm contract/order.
These bills when negotiated (under LC) or purchased (under order/contract) are to
be classified as FDB. Sight Export Bills when handled on collection are classified
as FOSC.

USANCE EXPORT BILLS:

• Usance Export Bill is one which is not payable on demand but is expressed to be
payable after a specified period (usance) mentioned in the bill.

• Usance Export Bills could be either covered under an Export Letter of Credit or
against firm contract/order. These bills when negotiated (under LC) or discounted
(under order/contract) are to be classified as FBE. Usance Export Bills when
handled on collection are classified as FOBC.

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5. HRD INITIATIVES

Human Resources Development envisages the growth of the individual in tandem with
the organization and aims to achieve synchronization in a bid to attain the goals set out. It
also, inter-alia, aims at the upliftment of the individual by ensuring an enabling
environment to develop capabilities and to optimize performance. The organization, on
its part, would endeavour to tap individual talents and through various initiatives, ingrain
in its human resources, a sense of job satisfaction that would, with time, percolates down
the line.

Our Bank has, over the years, taken a series of initiatives in ensuring the development of
our human resources and a number of time – tested systems have been put in place to
hone employee talent and equip them to take the vigours of office and take the measure
of the competition. That we have been largely successful in our endeavour is a testimony
to the efficacy of our well crafted systems:

 Entry Interview
 Training System
 Incentives for Self Development
 Employee Suggestion Scheme
 Staff Meeting
 Study Circle
 Brainstorming Sessions
 Quality Circle

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 Exit Interview

• Entry Interview

Entry Interview assumes great significance as it is the first step in the process of
enfolding the new entrant in the warmth embrace of "Canbank Family Culture". The
pride of being a part of our institution goes a long way in moulding our best asset the
human resource. The system of "Entry Interview" paves way for this. Objectives of
the system is

 To introduce the new entrant to the history, ethos, culture, tradition and work
ethics of the Bank.
 To show concern for proper settlement of the new entrant at the work place and to
ensure full devotion to work.
 Proper introduction of the new entrant to all the employees and to create a feeling
of oneness and a sense of belonging so that the process of emotional integration is
fast and smooth.
 To lay a firm foundation for enriching partnership between the new entrant and
the organization.
• Training System

The Visionaries of the Bank had, long back, foreseen the importance of imparting
professional training to our employees for efficient working. As a result, 'Bangalore
School of Training', the in house training centre of the Bank, was born on 12.04.1954.
Today, our Training system has an Apex College, viz., The Staff Training College
(STC) at Bangalore with 13 Regional Staff Training Colleges (RSTCs) spread across

74
the country for effective in-house and cost beneficial training. The Apex College at
Bangalore is the epicenter of training, involving itself in designing, conducting and
evaluating the in-house training programmes and getting feedback on post training
utilization. It has Core Group of faculty dealing in these aspects. HR&OD Section,
Personnel Wing, HO, co-ordinates with the functions of STC and also takes care of
external, in-company and foreign training of employees and executives.

• Incentives for Self Development

Knowledge Management of Human Resource is crucial for any business organisation

to face the challenges of competition and to march ahead in the field. As knowledge
is power, constant updation of knowledge is essential. Besides, the well established
and constantly reviewed training system, we have certain incentive schemes as HR
initiatives for self development of our employees.

• Employee Suggestion Scheme

Employees are the 'Back Bone' of any organisation. Systems & procedures are
implemented and new & innovative products are delivered through them. They are
the ones who are in constant touch with clients and customers. Hence, they can
pinpoint as to where exactly the shoe pinches and are capable of giving their
suggestions and ideas for improving the systems, procedures, services, products, etc.
To facilitate this, we have a HRD system of 'Employee Suggestion Scheme' in place.
This aims at kindling innovative spirit of the employees and recognizing their
valuable contributions by way of feasible suggestions.

• Staff Meeting

Staff Meeting is one of the oldest format HRD systems of the Bank. It is the most
useful participative forum at branch/unit level enlisting involvement of all the

75
employees at all cadres in the effective functioning of the branch/office. It is a free
forum for two way communication facilitating both individual development and
organizational effectiveness. The concept basically aims at Group Synergy, Team
Building, Open Culture, Family Feeling and Talent Recognition which individually
and cumulatively benefits the organisation.

• Study Circle

The concept of Study Circle aims at self development of employees by instilling a

desire to acquire/update knowledge, information and experience. It also kindles and
triggers thinking and learning process, thus facilitating personality development. This
is an innovative HRD practice of the Bank, envisaging enrichment of general
knowledge, enabling multifaceted development of employees, giving an opportunity
to employees to discover their talent, come out of their cocoon and exhibit the same.
Added advantage is that the same is arranged at the doorstep of the employees for
their benefit.

• Brainstorming Sessions

This is an old and useful technique for generating ideas and suggestions on a topic of
relevance so as to generate different possible solutions to a problem by stimulating
thinking and imaginative power of employees. This common technique is well
utilized by our Bank, involving employees at all levels and cadres. Having faith in
collective wisdom of employees, we have adopted the Brainstorming technique to
generate ideas from a cross section of employees on corporate topics of relevance.

• Quality Circle

The roots of genesis of Quality Circle could be traced to post 2 nd world war scenario
when mass industrial production resulted in low quality, high competition, loss of

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communication and closeness between Management and workers. Japan, which lost
everything, could thrive only on its survival instinct and Dr Kaoru, Ishikawa an
Engineering Professor at Tokyo University conceived the idea of Quality Circle under
his leadership which was registered with Union of Japanese Scientists and Engineers.

Quality Circle is a voluntary group of employees in the same work area, coming
together, working as a team, solving work related problems resulting in self
development and organizational benefit. The concept has been built on the basic
foundation of "Participative work culture" with motivation and involvement of
employees at grass roots level exploring their potentials, creativity and capabilities.

With a view to provide greater exposure and wide experience, Quality Circles which
have successfully completed their projects are nominated –

 To participate in Bank’s Apex Quality Circe Contest.

 For presentations at external forums like – Local Chapter Conventions and
Annual National Convention on Quality Circles(NCQC) organized by Quality
Circle Forum of India (QCFI).

Apart from the above, QC Teams are being nominated to International

Conventions on Quality Control Circles(ICQCC) organized by member countries.
Several of our QCs have won prizes and accolades at these conventions.

• Exit Interview
The concept enables to bid a 'Warm Farewell' to exiting employees, remembering
their long association, respecting their vast experience and considering their valuable
suggestions for organizational benefit. It is an old and well conceived HRD system of
the Bank which needs focussed attention to build better employer – employee
relationship and to ensure post retirement association with the Bank by way of
business and propagation of goodwill.

OTHER HR INITIATIVES

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• Several innovative HR schemes have been implemented by the Bank, especially
during the last two financials.
• In recognition of its varied endeavour in HR initiatives, Canara Bank bagged the
prestigious 'Golden Peacock Award' for excellence in Training, instituted by the
Institute of Directors, New Delhi.
• The Bank has put in place, a unique and innovative HR initiative ‘Club 2020’,
drawing a group of young and talented officers of the Bank, for strategizing the
future growth of the organization.
• A novel scheme, christened ‘Pratibha’, has been introduced to groom and hone
the skills of talented officers in specialized fields.
• Spandan is another innovative HR concept implemented by the Bank to bring
about attitudinal and behavioural changes in the frontline staff.
• Emphasis has been laid on succession planning and lateral recruitment of talents
from premier business colleges and management institutes. Implementation of the
Assessment Development Centre to map competency of executives, develop
leadership ability and decision making capacity is yielding good results.

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6. CONCLUSION:

This report is a short narration of the day today activities that are done in the bank
and it gives a clear picture of the procedure and guidelines for opening accounts and
deposits. This study also will be helpful in knowing the various procedures followed by
banks in granting loans. This also highlights various banking documents that one has to
submit to the bank for getting the loans and opening account and deposit in bank.

The future plans that bank has planned in the years to come and the financial
review of the past financial year is also present in this report.

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BIBLIOGRAPHY
BOOKS
1. Shekar, “Banking Theory and Practice” Mcmillan Publication, 19th
Edition, New Delhi
2. JAIIB, “Principles of Banking”, Indian Institute of Banking and Finance

WEBSITES
1. www.canarabank.com
2. www.iloveindia.com
3. www.google.com
4. www.books.google.co.in

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