LOAN POLICY

(Approved at the Special Board meeting held on 06.05.2012)

 

 

 

          The following loan facilities will be available to the members:

 

1.       Unsecured loans (surety loans and bill purchase within the limit prescribed by RBI or Board)

 

2.       Secured Loans (within the max. limit wherever prescribed by RBI or Board)

          i)        Housing loans

          ii)       Transport, Business, DCG, Plant and Machinery loans

iii)      OD limits in current accounts

iv)      Real estate loans

          v)       Education loans

          vi)      Loans against deposits

          vii)     Loans against NSC, IVP, KVP, LIC policies

 

3.       Loan sanctioning authorities

          i)        Board

          ii)       Loan Committee

          iii)      Loan Sub-Committee

         

Loan Committee, Loan Sub-Committee will sanction loans up to the power delegated by the Board. 

         

4.       A member interested to take loan has to apply on the prescribed form duly filled in along with all papers required to be attached.

 

5.       Each and every loan request will be examined at three stages.  At stage one DM / Loan Officer will provide the necessary information on the credit appraisal form and will give his comments/observations.  Thereafter it will be examined by Member Secretary of the Loan Sub-Committee / Loan Committee on the basis of the information provided in the credit appraisal form/loan application along with comments/observations of BM / DM before placing at the sanctioning Committees.  Loans of Rs. 20/- lacs and above will be examined by CEO or some other official authorized by the Board before placing at the loan Committee and Board.  Physical verification of property, stock will be done by Area Director accompanied by BM/DM or any other official.    

 

6.       CEO/ Other authorized official / Member Secretaries of the Loan Committees will put up a statement of eligibility of loan with other observations / analysis, if any.

 

 

7.       All mortgaged properties will be physically verified once in two years and report to this effect will be written on the register maintained for this purpose.  At the time of ODL renewal also physical verification of the properties will be done, if the earlier done was more than six months old.

 

8.       The maximum credit limit of a member will be determined by the Board annually as per the guidelines of RBI after finalization of the Balance Sheet.

 

9.       The maximum repayment period of loan will be decided by the Board subject to RBI guidelines.  

 

10.     The rates of interest on loan will be decided by the Board of Directors from time to time or as per the directive of RBI.  The penal interest will be charged on the overdue amount @ 3% pa.  However, on unauthorized debit balance in OD limits it can be higher as decided by the Board.  These rates of interest will be displayed on the notice boards in the branches.

 

11.     Power to give rebate in loan and other dues will be vested in BOD.  However, Board can delegate some power to the “Loan Committees” and “Grievance and Settlement Committee”. 

 

12.     Normally every unsecured loan will be given against the surety of one or more regular paymaster members and limit for standing sureties will be decided by the BOD from time to time.  However, for loan against the security of property owned by the applicant loanee member, personal surety will not be required.

 

13.     At the time of applying for loan/advance the member should not carry any overdue in the existing loans taken by him and there should not be any unauthorized debit balance in the current account being maintained by him.  In case the loanee member has stood surety to the loan of any member who carries overdue in loan/advance then at the time of release of the loan to the member sureties will have to clear the entire overdue amount.

         

14.     Processing charges will be taken as per the rates decided by the Board from time to time which will also be conveyed to the loanee member in advance.

 

15.     Revaluation of property will be accepted after three years of the previous valuation.

 

16.     For valuation and search report a panel of valuers and advocates will be approved and reviewed by the Board annually.  Valuation and search report will be arranged by the Bank directly from the valuers/advocates on the approved panel of the Bank.  The fee to be charged will also be fixed by the Board.

 

17.     The unsecured loans will be given as per RBI stipulations.  Diversification of loans will be made to avoid concentration in one segment.  It will be ensured that major percentage of loans should be against tangible security. 

 

18.     Wherever required end-use verification will be done within one month after the release of loan or as decided at the time of sanctioning the loans.  Road worthiness of vehicles will be done once in two years for regular paymaster members and every year for others.

 

19.     In case of default the following actions can be taken against the defaulting member:

 

          i)        To initiate arbitration proceedings.

          ii)       To file case under section 138 of Negotiable Instruments Act

          iii)      To file case under SARFAESI Act.

These actions will be taken as per the guidelines laid in the recovery policy.

 

20.     The CEO, CMs and BMs will have power to discount govt./semi govt./autonomous bodies bills and to give short term TOD as per the power delegated to them by the Board.  

 

21.     No loan will be given against the security of gold and against shares of the members.

 

22.     The Board will prescribe parameters to judge repaying capacity of a member on the basis of reliability of source of income and other aspects.

 

23.     No loan to Director of the Board will be given except loan against his own deposits as per RBI guidelines.

 

24.     The percentage of security coverage of property will be decided by the Board from time to time.

 

25.     The holiday period will be decided by the Board from time to time.

 

26.     The defaulter members whose dues were recovered either through action under SARFAESI Act or through Office of RCS under arbitration process or through action u/s 138 of N.I. Act  will not be eligible for any loan up to five years from the date of clearance of loan.  He will also be debarred from standing surety for the same period.

 

27.     The defaulter member on whom arbitration case is filed but he clears the dues during arbitration case under process will  be debarred for loan and for standing surety for one year after full repayment.

 

28.     If a member is found to have submitted false information to get loan, he will be debarred from loan for a period of five years.

 

29.     Defaulters except mentioned at 26, 27 and 28 above will be eligible for loan after six months.

 

30.     Half percent rebate in interest to members belonging to SC/ST category.

 

31.     When there is a very quick mortality of an advance within the first 12 months of taking the loan the reason thereof to be specifically examined and remedial steps to be decided to avoid any such re-occurrence in future.  In case some laxity was found in the required follow-up the BM/other concerned officials will be held accountable.

 

32.     In all transport loans and other secured loans, if required, end use verification will be done through a visit to the business place of the loanee member and a report to this effect to be kept in the file.

 

33.     The Board of Directors will have power to make any relaxation in the loan policy keeping in view the special merits of a specific case.

 

 

 

 

 

 

 


LOAN RULES

(Approved at the special Board meeting held on 06.05.2012)

 

 

 

1.

Unsecured loan / advance

Up to Rs. 1,00,000/- term loan / OD limit

 

2.

 

The following types of secured loans can be considered :

 

i)

Consumer Durables  -  Loan for consumer durables such as Computers, TV, VCR, AC etc up to 80% of the cost  or Rs. 1,00,000/- whichever is less.  Loan amount to be disbursed direct to the vendor/supplier after taking the margin money.   Advance payment will not be allowed.

Loan will be recovered in 48 equal monthly instalments.  At least one surety from a regular paymaster member of the Bank is required.  Item to be purchased will remain hypothecated to the Bank.  5% of the loan is taken as security for giving post loan disbursement papers.  This amount will be returned immediately on receipt of papers.

 

ii)

Vehicle Loans -  Up to 100% of the ex-showroom price of the new vehicle.  Maximum repayment instalments 60 for LMV and 80 for HMV.  At least one surety from a regular paymaster member of the Bank.  Loan will be paid direct to the vendor/supplier/dealer.  The loan will be considered on the proforma invoice in favour of the member.  Margin money and loan processing charges will be taken.  Name of the bank will be written on the RC and the vehicle will be insured jointly with the bank during the continuation of the loan.

Security – Hypothecation of vehicle in favour of the Bank.

For the purchase of second hand HMVs  and LMVs up to three years old model, loan up to 70% of the value for three years old model and up to 75% of the value for 2 years old model and up to 80% of the value for one year old model. 

Repayment period for second hand LMVs will be 60 – age of the vehicle and for HMVs 80 – age of the vehicle.

Advance payment up to 25% of the cost is allowed subject to providing satisfactory proof. 

For total transport loans above Rs. 20/- lacs, collateral security may be required.  In case of mortgage of property as security, coverage can be taken up to 100% of the valuation and no personal surety to be taken.  

A good paymaster member will be eligible for maximum six transport loans apart from entitlement for ODL.

 

 

iii)

OD limits  -  OD limit  upto Rs. 1.00 lac to be sanctioned against the security of stock and minimum one surety from house owner / govt. servant member.  This OD limit to be given to shopkeepers and other small businessmen who maintain regular stock. For OD limits above      Rs. 1/- lac collateral security is required.  ODL is considered up to 60% of the value of the stock or up to maximum 50% of the realizable value of the property as per the prevalent parameters approved by the Board or 25% of the turnover, whichever is the least.    Quarterly stock statements to be received regularly.  Stock and property to be insured separately and jointly with the bank.  Annual accounts for all OD limits above Rs. 1 lac are required but for limits above Rs. 3/- lacs, these should be certified from a Chartered Accountant.  Unsecured OD limit up to Rs. 1 lac will be sanctioned for one year and thereafter to be renewed on yearly basis.  Limits secured through property can be sanctioned / renewed up to three years at one time and to be reviewed every year and in case of any deficiency, non-transaction limit can be reduced / cancelled.

 

iv)

Loan for plant and machinery -  If the loan has to be for the purchase of new machinery, proforma invoice to be provided and loan limit will be up to 60% of the cost or Rs. 2/- lacs whichever is less without collateral security but with one or two house owner/govt. surety(ies).  Above Rs. 2/- lacs with collateral security of property duly evaluated from the approved valuer and with search report from the advocate on the approved panel.  In case of old machinery the valuation of machinery from the approved valuer required.  The loan limit for old machinery shall be 50% of the value.   For loans up to Rs. 2/- lacs security will be hypothecation and joint insurance of machinery.  For old plant and machinery security will be hypothecation of machinery and mortgage of property.  Joint insurance of machinery and property required separately.

 

v)

Housing loans  -  For house purchase and house construction the following requirements to be fulfilled.

 

a.       Housing Loan for building construction :

i)        In cases where the applicant owns a plot/land and approaches the bank for a credit facility to construct a house, a copy of the sanctioned plan by competent authority in the name of member applying for such credit facility must be obtained before sanctioning the home loan.

 

ii)       An affidavit-cum-undertaking must be obtained from the member applying for such credit facility that he shall not violate the sanctioned plan, construction shall be strictly as per the sanctioned plan and it shall be the sole responsibility of the executants to obtain completion certificate within 3 months of completion of construction, failing which the Bank shall have the power and the authority to recall the entire loan with interest, costs and other usual bank charges.

iii)      An Architect appointed by the bank must also certify at various stages of construction of building that the construction of the building is strictly as per sanctioned plan and shall also certify at a particular point of time that the completion certificate of the building issued by the competent authority has been obtained.

 

 

b.       Housing Loan for purchase of constructed property/built up property:

i)        In cases where the member approaches the bank for a credit facility to purchase a built up house/flat, it should be mandatory for him to declare by way of an affidavit-cum-undertaking that the built up property has been constructed as per the sanctioned plan and/or building bye-laws and as far as possible has a completion certificate also.  

ii)       An Architect appointed by the Bank must also certify before disbursement of the loan that the built up property is strictly as per sanctioned plan and/or building bye-laws.

 

c.       No loan will be given in respect of those properties which fall in the category of unauthorized colonies unless and until they have been regularized and development and other charges paid.

 

d.       No loan should also be given in respect of properties meant for residential use but which the member intends to use for commercial purposes and declares so while applying for loan.

 

e. i)    After construction/purchasing two photographs of the house duly signed by the member.

    ii)   Location plan duly signed by the member (self made to show the exact location).

 

Note :  Wherever property is proposed to be given as security for any type of loan/advance, two photographs duly signed and location plan has to be given invariably.


 

The maximum limit of housing loan is Rs. 70 lacs or as decided by RBI from time to time.  Maximum repayment period 240 months.   For repairs and renovation maximum limit will be Rs. 2/- lacs. 

 

In case loan for purchase of DDA flat mortgage permission in favour of bank is invariably required and the payment to be made direct to the DDA.  In case of loan for construction  of house a physical verification of the plot is done and thereafter the loan is sanctioned by the Board of Directors/Loan Committee and it is released in max. three instalments.  Each instalment is released after physical verification. 

 

vi)

Education loan  -  Up to Rs. 3 lacs to be given against the personal surety of two government employees.    Insurance of life for minimum equal to the loan amount.  Policy to be assigned to the Bank.  Premium to be paid annually to keep it alive.  On the contrary, Bank will get it renewed and the premium to be debited to loan.   However, if for this loan also collateral security is given, personal surety and life insurance conditions to be waived.   Loan above Rs. 3 lacs to be given against the collateral security of property.  The limit is upto Rs. 10 lacs in India and up to Rs. 20 lacs abroad.  Repayment in 60 EMI within six months after completion of the course or getting employment whichever is earlier.    Loan for regular professional courses from recognized institutions.  No margin money.  Interest to be paid every month on the released instalment.  Member can also start payment of EMI (of full loan) immediately after taking loan.          

vii)

Real Estate loan   -  Up to Rs. 50 lacs against collateral security of property other than the property under construction.  No loan will be given against the mortgage of the property under construction.

 

viii)

Loan against deposits   

Up to 90% of the deposits.  

 

ix)

Loan against NSC/KVP/IVP/LIC

Up to 75% of the face value in case of NSC/KVP/IVP and in the case of LIC policy 75% of the surrender value.    

 

3.

Limit of maximum security cover for loan against the mortgage of property

will be as given below :

S.no.

Nature of property

Ownership

Limit of loan

 

1.

Sale Deed / Conveyance Deed / Relinquish Deed / Partition Deed

 

Self / spouse

Loan up to maximum 50% of the realizable value (RV) of the property

2.

Sale Deed / Conveyance Deed / Relinquish Deed / Partition Deed

 

Father / mother / son / daughter

Loan up to maximum 40% of the realizable value (RV) of the property

3.

Sale Deed / Conveyance Deed / Relinquish Deed / Partition Deed

 

Brother or any other person

Loan up to maximum 40% of the realizable value (RV) of the property

 

 No loans will be given to members against the mortgage of property situated in NCR.

 

4.

For loans/advances of Rs. 25/- lacs to Rs. 50/- lacs two valuations and one search report from the valuers on the approved panel of the Bank.  For loans/advances above Rs. 50/- lacs two search reports and two valuations.  Charges for second valuation and second search report to be borne by the Bank.  These two valuations have to be done before the sanction of loan.

 

5.

Maximum repayment period for term loan except transport loans will be maximum 240 months.

 

6.

Combined general and DCG loans can be sanctioned up to max. `1.75 lacs.

 

7.

Rebate to regular paymaster members if they are regular in all loans including OD limit will be given as decided by the Board from time to time.

 

8.

If a member resides in NCR and employed on regular basis in Delhi then for hypothecation loans he will have to provide surety from a government servant employed in Delhi or having his own residential house in Delhi.

 

9.

For general loan above `75000/- two latest ITRs or two latest salary certificates would be required. 

 

10.

On TOD/overdrawn debit balances in current account 5% additional intt. to be charged.

 

11.

Newly enrolled members will be eligible for one transport loan and for second transport loan he will have to wait for six months so that the sanctioning Committees may consider the request on the basis of the repayment record of the previous loan.  However, this condition will not apply when the member provides property as collateral security.  Surety loan will be considered after six months of the membership.

 

12.

For transport loans, registration of vehicle has to be done invariably in Delhi.  If a member wants to get the vehicle registered in NCR, he will have to provide collateral security of property at Delhi.

 

13.

In transport loans the delivery of the vehicle will be given to the loanee members through dealers on the panel of the Bank.

 

14.

The processing charges will be 0.3% of the loan/advance subject to max. ` 15000/-.

 

15.

The share linkage will be 2.5% for secured loan and 5% for unsecured loan subject to maximum Rs. 20,000/-.  Minimum amount of share money will be Rs. 1,000/-.

 

16.

The SDM linkage with loan amount will be similar to share money with the condition that the minimum SDM will be Rs 5,000/- subject to maximum of Rs. 1,00,000/-.  Member at his own can deposit amount in SDM even without seeking any loan facility from the bank with the condition that SDM cannot be withdrawn during the period of his/her membership.  This amount will be given only on resignation.

 

17.

Loan against SDM up to 90% can be sanctioned with 2% higher rate of interest if same is free and there is no linked loan against it. However loans against SDM already given when maximum SDM limit was Rs.25,000/-  be continued as it is and fresh loans to these members will be given as per revised rules i.e. Loan up to 90% of the SDM amount which is over and above revised requirement of  loan linkage i.e. minimum 2.5% or 5% as per loan category (subject to maximum Rs. 1,00,000/-).

18.

If loan request of the member is not considered the reason thereof will be conveyed to him.

 

19.

In joint loans compliance to SM and SDM ratio will have to be done only in one account.

 

20.

More than one secured loan within the overall MCL of the member and within security coverage from the property and with separate EMIs can be availed within the repaying capacity.   A member will be entitled for max. four loans and one ODL at one time.

 

21.

Against the security of one property maximum three loans can be considered to only one member.  However, in the case of transport loans there will not be any such restriction on the number of loans.

 

22.

Loan to a defaulter member who is debarred for loan for a specific period will be considered only by the Board.

 

23.

Loan sanctioning power of LSC and LC will be as given below :

LSC : Up to ` 10 lacs (total)

LC   : Up to ` 1/- crore (total)

 

24.

The power to consider loan against the mortgage of rented property or against vacant plot will lie only with the Board.

 

25.

Clubbing of income will not be permitted except where spouse is befittingly employed in govt./semi-govt./PSU/autonomous bodies/reputed private companies and having separate and regular source of income.  Latest three salary slips or three ITRs are also required.

 

26.

A good paymaster member who has taken loan against the mortgage of property can stand surety for six transport loans at a time.  In general, a member can stand four sureties.

 

27.

The following will be holiday period :

i)        Transport loans               2 months

ii)       Housing loans                 3 months

iii)      Business loans                2 months

iv)      Education loans              6 months after the completion of the

study or getting employment, whichever is

earlier.

v)       Loan for Coop.Group       12 months or taking over the possession

          Housing Flats                  whichever is earlier

vi)       DDA Self finance flats                   - do -

 

 

28.

The CMs and BMs will have power to sanction bill purchase or TOD up to 10% of the sanctioned limit or ` 1/- lac whichever is the minimum for maximum six days.  The CEO will have power to sanction bill purchase up to 10% of the sanctioned limit for maximum10 days.  This power will be exercised when a bill is presented in clearing but sufficient credit is not available to clear the bill.  The Board can increase the power of CMs and BMs for the convenience of the account holder.

 

29.

BOD will have power to make departure from the rules in exceptional circumstances.

 

30.

Sanctioned loans have to be taken by the members within 60 days of the sanction.  Thereafter up to 90 days, re-validation will be permitted on written request.  After 90 days the sanction to be cancelled and fresh application to be given for loan.

 

31.

When a loan has been sanctioned against the security of the property the member can neither give that property on rent nor part with the possession in any way without the written permission of the Board of Directors.

 

32.

If loan request is up to Rs. 5/- lacs against the security of property, no valuation would be required if the face value is more than the requested loan.  However, as usual search report would be required.

 

33.

After the clearance of transport loan no dues certificate and form no. 35 can be sent to the member through post.

 

34.

The L.C. / Board can sanction TOD up to 20% of the sanctioned OD given against collateral security of property for a maximum period of two months at one time.   This sanction can be extended by one month on the written request of the member.  This TOD has to be cleared invariably after the due period of 2/3 months.  Thereafter request for OD for the second time can be considered with a gap of full one month.  It should be ensured that the TOD sanctioned meets the percentage of turnover, security coverage of the mortgaged property and also insurance cover.  SM and SDM linkage has to be maintained.  Processing charges also to be paid proportionately.

 

 

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