Asset product & liability Harish Deore

Asset and Liability Product

1. A Presentation on ‘ Asset Product ’ 1 Presented By: Mr. Harish Deore

2.   Asset Products   An asset is what the bank holds in terms of the credit given to the customer Interest rate charged are different for different products Fixed interest followed for some products while a floating interest charged for others The interest rate varies with the changes in the inter-bank rates like Benchmark Prime Lending Rates If there is an increase in the BPLR then the customer has to pay a higher EMI and vice-versa In fixed interest rates, the customer is protected against fluctuations in the interest rate 2

3. Types of Asset classes 3

4. Housing loans 4 These form majority of the asset portfolio for a retail bank Given in order to extend financial support to the people who want to construct a house The amount extended depends on the expenditure involved and the repaying capacity of the customer The repayment period is long term in nature

5. Personal Loans 5 Is given to customers to help them meet personal expenses like marriage, travel etc. Depends on the customer’s ability to repay and his credibility Personal loans given to salaries employees and self employed people Financial institution grant personal loan to its customer on the basis of few documents like KYC, Financial Document, Bank stat etc. It is an unsecured loan but in recent time few financial institutions are taking partly collateral like LIC, FD, property, land etc depending on the customer’s requirement and customer’s financial strength

6.   Property Loans/Mortgage Loans One of the most common type of loan extended by the banks Under this, property assets like land, buildings, vehicles and gold etc are mortgaged Interest rates fixed on the prevailing bank rates 6

7. Agriculture Loans   Typical products include crop loans, farm equipment loans against warehouse receipts Provide loans for horticulture activities, poultry, dairy, rearing of goat and sheep, sericulture etc Depends on mortgaging or hypothecation in most loans Loan cards have been brought by many banks which can be ATM’s or credit cards 7

8. Vehicle loans Provide loans for purchase for two wheelers, four wheelers and commercial vehicles Usually financed up to 85-90% of the total invoice amount Repayment is made through equated monthly installments (EMI) 8

9. Credit cards/Debit cards In credit cards, the amount is paid to the merchant electronically The money is paid by the card user to the bank through EMI’s or in a lump sum amount In Debit cards, the amount is deducted from card holder’s account and paid to the merchant No interest is paid by the Debit card holder Credit cards are very aggressively marketed by bank merchants 9

10. Investment Products A fairly new category as compared to asset and liability products Includes pension and mutual funds, insurance products etc Provides additional liquidity to the bank to invest in other avenues These products are also used as tools to retain the customers These are mainly cross-sold 10

11. Snapshot of Asset Product 11

12. THANK YOU 12

13. A Presentation on ‘ Liability Product ’ 13 Presented By: Mr. Harish Deore

14.   Liability Products   Commercial banks offer a variety of "liability products" to consumers. These products are known as "liability products“ because they represent liabilities of the bank Consumers generally know them as "deposit" products.  Typically, liability products include checking andsavings accounts, money market accounts and certificates of deposit (CDs)   Bank liability products are useful to consumers since they provide a safe place to keep their funds and givet hem the opportunity to earn interest on cash that they may not immediately need. 14

15. Importance of Liability Products 3

16. Difference Between Asset & Liability 4

17. Sector wise Liability Products 5

18.   Liability Products Liability products also give consumers access to cash via checks and ATMs, and except for most checking accounts, they allow consumers to earn interest on their deposits There are three major Liability banking Porduct Saving Account Current Account Term Deposit 6

19. Savings account   Savings account has been designed to help people save for their future financial requirements. Under this account, bank gives free ATM cum debit card. The account can also be accessed through SBI internet banking facility by downloading instant sbi . The rate of interest is compounded half yearly under this account. On the other hand, savings plus account gives the facility of savings account along with term deposit account. Any surplus funds in the account exceeding the threshold limit, for a minimum amount of Rs.10,000 and in multiple of Rs.1000 in any one instance, are transferred as term deposit and earns interest as applicable to term deposits. 19

20. Current Account Non interest-bearing bank account which allows the accountholder to write checks against the funds in the account Individuals, public and private limited companies, partnership firms, and trusts Overdraft facility is a short-term credit instrument to secure the liquidity you need for your operational business @1.5% p.a 8

21. Term deposit Earn higher income on surplus funds Bank offers flexibility in period from 15 days to 10 years can be opened with a nominal amount of Rs . 1000/  Against your fixed deposit you can take loan/overdraft during your urgent financialrequirement . Interest rate- 15 days to 45 days ± 4.00 9

22. List of Liability Products offered by HDFC Bank Saving Account Regular Savings Accountb .  Savings Plus Accountc .  Savings Max Accountd . Senior Citizens Account. No Frills Account. Institutional Savings Accountg . Salary Account 10

23. List of Liability Products offered by HDFC Bank Salary Account Payroll Classic  Regular  Premium  Defence No Frills Salary Account Reimbursement Current Account 11

24. Contd..  Kid's Advantage Account Pension Saving Bank Account j. Family Savings Groupk . Kisan No Frills Savings. Kisan Club Savings Current Account Plus Current Account Trade Current Account Premium Current Account Regular Current Account 12

25. Contd.. RFC - Domestic Account Flexi Current Account Apex Current Account  Max Current Account Merchant Advantage Current Account  Merchant Advantage Plus Current Account 13

26. Fixed Deposit Account Regular Fixed Deposit 5 Year Tax Saving Fixed Deposit  Super Saver Facility Sweep-in Facility Recurring Deposit Account 14

27. THANK YOU 15