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There is always a demand to meet the targets of advances by the higher authorities. Our Finance Minster, Hon. Mr. Chitambaram also asked the nationalized banks to increase their advance portfolio to keep themselves competitive in the changing environment of competition from private as well as foreign banks.

The big question is how to increase  the advance portfolio?

Why it is difficult to search quality advances?

Due to stringent NPA norms, creating of undue cry of fixing of responsibility in case of failure of advance, Changing structure of businesses fast change in business environment due to competition and liberation and free economy, wide development in committing frauds in banks and ever changing newer techniques in committing the frauds in retail banking like housing etc., more devotion of time in monitoring, operations & never ending audits. It is very difficult for a humble managers to increase a quality advances to meet the targets as well as development of the banks.

In spite of above difficulties, the managers have to perform and increase the advance portfolio for the development of their banks as this portfolio is the bread earning for himself as well as his organization.

How to increase the advances?

FEW TIPS from my views:


The Staff:

The requirement for various type of finances by the staff members of the bank. It is observed that the staff need services also which they will cater from outside their organization.

Remove unnecessary restrictions in staff advances, It is need of the hour that they should be treated at least equal to the borrower outsider the org. The bank can consider to advance their requirement by keeping minimum margin say 10% on all their accumulations in PF,etc. till the date. This is  a secured option as such advances are fully secured. In case this will not be  it may be possible that they will look for finance from outside the org.

The banks has to consider liberally the income and security of all the earning members in the family of the staff for the purpose of mix amount the staff can borrow.

IN case of Services it is observed that number of staff members as well as their family members are using the credit cards, ATM, Debit Cards of the other banks or institutions outside the origination where they serve. They should be motivated to use all the services available within the organisation with a motto that they have share in the charges they pay for use of services in form of salary or improvement in their organization.

The bank should service their staff to the fullest extent as a part of service to self is service to bank. And by doing so you will observe that the quality advance portfolio will automatically increase without undertaking a major risk.

This line of action also helps the banks to analysis the feedback from the staff on the services provided and decide the corrective action. The second advantage is that the staff will automatically enlarge the positive approach out side the org and give the bank additional mileage without incurring any cost on advertisements.


The Existing borrower:

These are the customers of the bank who already have some borrowing from the bank. It is utmost required to ascertain the quality clients out of the number of borrowers. This can be easily done as the customers has their dealings with the banks for a time and the financials are very well known from the operations  and conduct of the account.

Once the quality borrowers are found out the following steps may be taken to increase the advance.

Serve the borrower to the fullest extent of his requirement in the existing  type of borrowings and ascertain their requirements on at least quarter to quarter basis instead of yearly projections. They may require additional finance for a specific season/period of the year over & above their yearly requirements. The bank has to keep tap on such requirements and allow to meet these seasonal/ periodic/ as well as specific requirement of their own borrowers.

It is also observed that, the borrowers tend to borrow their other needs from other financial institutions. It is a reality that, a cash credit account holder have car finance from company finance agency, housing finance from housing finance agency and a credit card of some other institution. The banks can find the scope to tap these requirements of their borrowers, their family members to increase our share in all type of total financial needs of such customers.

The banks has to convince such customers that they are faster, economic, and much better in service for such type of retail and other specific advances.

The Other Customers:

The in-house search for new advances is possible and easier too. A current account holder since last 02 years. A current account holder have always debit balance but require against clearing, temporary overdraft, for a specific part of the year or few to sometimes during the previous year.

The bank should call such account holders and convince them the benefit of having a regular limit instead of such overdrafts. It is very much possible that some of them will definitely add to our borrower list having regular tie-up.

The in-house search can be carried out for saving bank account, deposit holders, large tax payers like value added tax, service tax etc from the account. to ascertain about their business activity etc to further the advance portfolio to existing customers.

The greatest advantage in  in-house search is they are known people and as such having low risk category compare to outsider or a unknown borrower.


May I help you counter:

The counter ' MAY I HELP YOU' is your first approach to increase the list of your borrower outside your branch It is place in the branch and hence is consider as In house search for advance.

It is observed that this counter only with extended arms of mobiles, E-mails, telephones, and latest best technique of communication has established the private as well as foreign banks in the completion with the nationalized banks.

The principle is know your perspective customer faster than others. Reach to them before others reach as well as ascertain them at earliest than others.

This counter is to be consider as a best advertisement potential of your branch as well as bank.

A professional approach in solving the pity problems of the customers as well as strangers will definitely create a greater confidence in them to expand their ties with the bank.

It is possible to keep all the broachers, information materials, details, facilities provided by the bank on this counter. The movement a person approaches this counter after replying his quires and solving his problems the information martial may be passed on him. The person will definitely looked for your bank first as you reach him first and along with a report card of your service recently provided.

This counter can be developed as also a feedback counter on services provided by the bank. The experiences of feedback on services as well as number and type of visitors should be discussed daily to search for a advance customers.



The general principles of development of business has changed widely and there are new principles developed in fast changing scenario.

In liberalization and a world of completion it won't help to say  the defaults drawbacks , disadvantages of your competitor and this will not also help you in your business, you have to stress on how you are better without mention the competitor. Informing the disadvantages of  competitor is not a guarantee that the dissatisfied customer will reach you. It may be possible that he leave your one competitor and join the other. Be positive about yourself and present in that manner as this only attract the prospective customer to your organization.

Before you venture outside for quality advances portfolio decide the  parameters clearly and precisely and well prepared in house and then venture outside with full vigor.

The parameters can be decided as under.

The customers you are looking for ? The sector in which you will like to take exposure? The existing norms for such customers, advances and and applicable to this sector and the leverage to the extend you can go for new advances.

It is also required to be specific in the approach before presenting your products. You will also be specific in details other than product details. Say, the product is housing finance:

The product details are rate of int. applicable on various slabs, Minimum and mix. Finance provided, processing fees applicable etc. The other specific details required are say how many man days you need to  sanction and  disbursement? Number of times a prospective customer has to visit the branch? The details if any you like to verify from others ? Say from  employers, references, etc. Number & name of staff a prospective customer has to meet for his finance?

And only when such details are precisely ready the bank should approach the outside prospective customers. 

It is always better to approach fewer prospective customers and convince them fully so that the ratio between the prospective customer approached and the customer borrower is always higher. This technique will also help to shorten the time as very less time is available for the development than monitoring.



The bank should collect the information under each specific head as above and observed the results in increase in advances on month to month basis. The rush to meet the advance target at the end of the year or target period will always have greater risk of slippage of such advance.


CA Satish Badve, F.C.A, D.C.M, D.I.S.A. (ICA)


Published by

CA Satish Badve
(Professional Practice)
Category Accounts   Report

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