Banking letters are essential to modern business, performing various functions such as opening accounts, closing payments, and requesting loans and advances.
A Letter to Bank Manager is written when there is a need to communicate banking matters such as account-related issues, loans, or other financial concerns.
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Banks perform the following functions:
- Accepting deposits from individuals,
- Allowing customers to withdraw money from their accounts as needed,
- Lending money to customers who can provide appropriate security and charge interest,
- Collecting cheques, dividends, warrants, etc. on behalf of customers,
- Providing drafts and letters of credit,
- Safeguarding customers’ securities and other valuables
Drafting a letter to Bank Manager
While drafting any letter to Bank Manager for correspondence with the bank, it’s essential to:
- Use precise wording,
- Avoid any potential confusion,
- Express yourself in a polite and respectful manner
Letter to Bank Manager for loan
When writing a letter to request a loan from the bank, it’s important to clearly state the valid reasons for needing the funds. Examples of these reasons could include:
- Purchasing fresh inventory for upcoming seasonal festivals,
- Upgrading or renovating your business premises,
- Recovering from unexpected damages caused by floods or fires,
- Starting a new business or expanding an existing one,
- Meeting a temporary or speculative demand for money,
- Financing a large investment needed to fulfill an order.
Sample Letter to Bank Manager
Sample Letter to Bank Manager #1
Q. Write a letter to Bank Manager for opening a current account with the bank.
New Hope Foundation
123, Park Street, Mumbai – 400001
May 8, 2023
The Manager
ICICI Bank
Park Street Branch
Mumbai
Subject: Request for opening a current account
Dear Sir/Madam,
I, on behalf of the New Hope Foundation, am writing to request the opening of a current account with your esteemed bank. Please find enclosed the necessary documents required for opening a current account:
Certified copy of the resolution of the meeting of the Board of Directors, dated May 1, 2023, regarding the opening of a current account with your bank
- Copy of the trust deed registered with the Registrar of Trusts
- Specimen signatures of the directors
- A duly filled Account Opening Form
- A crossed cheque of Rs. 25,000/- on HDFC Bank, Park Street Branch
- As per the resolution, the Secretary and the Treasurer of the Foundation have been authorized by the Board of Directors to sign all cheques and other documents on behalf of the Foundation.
We kindly request you to process the opening of the account as soon as possible and provide us with a chequebook containing 100 leaves, a passbook, and blank pay-in slips.
Thank you for your cooperation.
Yours faithfully,
Rohit Sharma
(Chairman)
New Hope Foundation
Sample Letter to Bank Manager #2
Q. Write a letter to the Bank Manager requesting her/him to sanction a loan of Rs. 50,000/- for procuring fresh stock for the festive season.
To,
The Manager
State Bank of India
Kolkata Main Branch, Kolkata
Subject: Loan Request for Business Expansion
Respected Sir/Madam,
I am writing to request a loan of Rs. 50,000/- to purchase new stock for my business. I am a customer of your branch and I availed of a loan of Rs. 40,000/- in 2013, which I repaid on time.
My business, ‘Fresh Garments’ has been running successfully since then, and I have become a favorite destination for many customers. However, with the festive season around the corner, I am in dire need of new stock to meet the increasing demand for readymade garments. The upcoming Durga Puja festival is expected to bring a lot of customers to my store, and I do not want to disappoint them with a shortage of stock.
Due to a lack of funds, I am unable to procure the necessary stock to meet the growing demands of my customers. Therefore, I request your financial assistance to sanction a loan of Rs. 50,000/-. I assure you that I will repay the loan on time, as I have done in the past.
I hope you will consider my request and help me in providing quality service to my customers during the festive season. Thank you for your time and consideration.
I hope for a positive response from your end.
Yours faithfully,
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[Your Name]
[Your Business Name and Address]
Sample Letter to Bank Manager #3
Q. Write a letter to Bank Manager requesting a loan for a manufacturing unit.
To,
The Manager
State Bank of India
Address: XYZ Branch
City: ABC
Subject: Request for a loan of Rs. 20 lakhs for a new manufacturing unit
Respected Sir/Madam,
I am writing this letter on behalf of my company, M/s ABC Manufacturing Ltd., to request a loan of Rs. 20 lakhs for a new manufacturing unit. We are a well-established company dealing with the manufacturing of industrial goods and have been a valued customer of your bank for many years.
Our Board of Directors has approved a project to open a new manufacturing unit to meet the increasing demand for our products. The estimated cost of the project is Rs. 40 lakhs, out of which we plan to raise Rs. 20 lakhs from advances made by our customers. We request a loan of Rs. 20 lakhs from your bank for the remaining amount. The loan will be repaid within a period of ten years on your usual terms and conditions.
We are ready to hypothecate the new unit, which is valued at Rs. 40 lakhs, as security for the loan. Our aim is to complete the new unit soon and utilize it to enhance our production capacity and the quality of our products, which will help us repay the loan without any hassles.
We have been associated with your bank for a long time, and we hope that you will consider our request for the loan. We are confident that we will be able to repay the loan within the stipulated time period, just as we have repaid all our previous loans.
Thank you for considering our application. We look forward to hearing a positive response from you soon.
Yours sincerely,
[Your Name]
[Your Company Name]
Address: XYZ
City: ABC
Date: [Current Date]
Sample Letter to Bank Manager #4
Q. Write a reply from the bank to the above letter agreeing to lend the amount asked for.
Mr. Alok Sharma
General Manager
GLOBAL FOOD INDUSTRIES LTD.
34, Park Street
Kolkata – 700016
Sub: Your loan application for a manufacturing unit
Ref.: No. Your Letter No. App-Loan/3/23 dated 2nd May 2023
Dear Mr. Sharma,
We have received your loan application for a new manufacturing unit. We appreciate your business with our bank and are pleased to inform you that we will process your application on our standard terms and conditions. These terms and conditions include:
- Repayment within 10 years through monthly EMIs,
- A fixed interest rate of 14% per annum for the first two years, which may be subject to change at our discretion,
- A non-refundable processing fee of INR 5,000 is to be paid within 7 days of this letter,
- Sanction of the loan is subject to satisfactory site inspection and documentation,
- The loan will be disbursed in three installments,
- A penalty will be charged for early repayment or delay in repaying EMIs,
- The first installment of the loan will only be disbursed after the hypothecation of your manufacturing unit,
- If you find these terms acceptable, please deposit the non-refundable processing fee and inform us, so that we may proceed with the necessary formalities to sanction the loan.
Thank you for your business. We look forward to serving you.
Sincerely,
SBI Bank
Branch Manager,
Park Street Branch,
Kolkata – 700016.
Sample Letter to Bank Manager #5
Q. Write a letter to a customer in reply to a request for a loan against Life Insurance Policy
JALANGI BRANCH
UNITED BANK OF INDIA
Jalangi, Murshidabad
Ref. No.: Loan/234/21
May 8, 2023
Ms. Anuradha Roy
9, Rani Rashmoni Road
Jalangi, Murshidabad
Sub: Your request for a loan against your Life Insurance Policy
Dear Sir,
We received your letter dated May 2, 2023, requesting a loan against your Life Insurance Policy. We appreciate your association with our bank and are happy to process your application for a loan. However, we have certain limitations. As per the bank’s policy, we can consider a loan amount of up to 75% of the surrender value of your Life Insurance Policy. Our terms and conditions are as follows:
- The loan repayment should be made in 60 installments.
- The interest rate for the loan will be 12%, which may vary from time to time.
- You must submit a certificate from the Life Insurance Corporation stating the surrender value of your policy.
- You must mortgage the policy to the bank by assigning it to us.
- If you agree to our terms and conditions, please obtain a certificate from the Life Insurance Corporation that states the surrender value of your policy and contact us. We will process your application for a loan as quickly as possible.
We appreciate your patience as we must observe certain formalities while processing your request.
Thank you.
Yours faithfully,
On behalf of
United Bank of India
Jalangi Branch
Anupam Das (Manager)
Sample Letter to Bank Manager #6
Q. Write a letter to the Branch Manager requesting for increasing the overdraft limit.
SEN JEWELLERS
Ghoshpara Road
Krishnanagar, Nadia
Ref. No.: Let/Bank/345/23
May 8, 2023
The Branch Manager
HDFC Bank
Main Road
Krishnanagar, Nadia
Sub: Request for an increase in overdraft limit
Dear Sir/Madam,
I am writing to request an increase in my overdraft limit. I have been a valued customer of your bank for the past eight years, and my business has grown significantly during this time. However, due to the current market conditions, I find myself in need of additional funds.
My business involves the production of jewelry items, and I need to hold stocks of raw materials and finished products to cater to the demands of my customers. The prices of gold and other metals have been on an uptrend, and my working capital is not sufficient to keep up with these increasing costs.
I am requesting an increase in my overdraft limit from the current amount of Rs 1,00,000/- to Rs 2,50,000/-. This increase will help me to overcome the financial difficulties I am currently facing and enable me to provide better service to my customers.
I assure you that I am ready to provide additional securities proportionate to the increase in the overdraft limit. Please let me know what documents are required from my end to initiate the process.
I hope you will consider my request favorably and look forward to hearing from you soon.
Thank you.
Yours faithfully,
Rahul Sen
(Proprietor)
Sen Jewellers.
Sample Letter to Bank Manager #7
Q. Write a letter to a customer in reply to a request for a loan against a policy.
UNITED BANK OF INDIA
Debra Branch
Debra, Paschim Medinipore
Ref. No.: Loan/145/21
May 8, 2023
Mr. Rajiv Sharma
NH 16, Debra High Road
Debra, Paschim Medinipore
Sub: Your request for a loan against your policy
Dear Sir,
We received your letter dated May 2, 2023, requesting a loan against your market-based policy. We appreciate your association with our bank and are happy to consider your request for a loan. However, we have certain limitations. As per the bank’s policy, we cannot sanction a loan for such a market-based policy since it has no fixed surrender or maturity value, and we require collateral security to process any loan.
We suggest that you open a fixed deposit account of the same amount as your loan demand to use as collateral. We can then sanction the loan against the fixed deposit, subject to your fulfilling other terms and conditions.
We understand your financial needs and apologize for any inconvenience caused. We hope you will appreciate our limitations.
Thank you.
Yours faithfully,
On behalf of
United Bank of India
Debra Branch
Sudip Mondal (Manager)
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