Loan Policy 

LOAN RULES

1.	Unsecured loan / advance Up to Rs. 1,00,000/- term loan / OD limit
2. i)	Secured loan / OD limits up to Rs. 200 lacs Consumer Durables - Loan for consumer durables such as Computers, TV, VCR, AC etc up to 90% 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 installments. 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 90% of the cost of the new vehicle. Maximum repayable installments 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 Performa 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. For private vehicles max. Loan repayment period will be 60 months. 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. Finance against the hypothecation of old vehicles not more than 3 years old up to 70% of the market value. Maximum repayment period 48 months – age of the vehicle. Interest as charged for business loan. For total loans above Rs. 20/- lacs, collateral security required. In case of property coverage can be up to 75% of the valuation. Max. Four loans at a time may be considered.
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 maintains regular stock. In all other cases collateral security is required. ODL is considered up to 60% of the value of the stock or up to 60% of the market value of the property 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. Limits are sanctioned for the maximum period of three years. 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 for one year at a time. Secured OD limits can be sanctioned up to three years at a time but to be reviewed every year.
iv)	Loan for plant & machinery - If the loan has to be for the purchase of new machinery, Performa invoice to be provided and loan limit will be 70% of the cost or Rs. 1.5 lacs whichever is less without collateral security but with one or two house owner/govt. surety(ies). Above Rs. 1.5 lacs with collateral security of property duly evaluated from the approved valuer and with search report from approved advocate. In case of old machinery the valuation of machinery from the approved valuer required. The loan limit for old machinery shall be 60% of the value. For loans up to Rs. 1.5 lacs security will be hypothecation 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 banks/FIs for a credit facility to construct a house, a copy of the sanctioned plan by competent authority in the name of a person applying for such credit facility must be obtained by the Banks/FIs before sanctioning the home loan. ii) An affidavit-cum-undertaking must be obtained from the person 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 applicant approaches the bank/FIs 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 should 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 applicant 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 loan is Rs. 50 lacs or as decided by RBI from time to time. Maximum repayment in 180 months. For repairs and renovation maximum limit Rs. 2/- lacs. In case of loans for Coop. Group Housing Flats under construction the holiday period will be 12 months or taking over the possession, whichever is earlier. For DDA self finance flats also holiday period shall be 12 months or taking of possession whichever is earlier. 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/Loaning 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 up 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 given, 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. 5 lacs in India and up to Rs. 10 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 installment. 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.
3.	Loan against deposits Up to 90% of the deposits.
4.	Loan against NSC/KVP/IVP/LIC 75% of the face value in case of NSC/KVP/IVP and in the case of LIC policy 75% of the surrender value.
5.	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.
6.	Maximum repayment period for term loan will be 180 months.
7.	The defaulter members whose dues were recovered through Office of RCS will not be eligible for any loan for five years after the full recovery and they will also not be eligible for standing surety for the same period.
8.	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.
9.	Where loans are given against the security of property, no personal surety is required.
10.	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.
11.	Half percent rebate in interest to members belonging to SC/ST category.
12.	1% rebate to regular paymaster members.
13.	On one property maximum three loans can be considered.
14.	Members taking loan against the mortgage of property situated outside Delhi will have to give undertaking that in case for non payment legal action under SARFAESI Act 2002 was taken, he will bear all the expenses.
15.	Levying of interest to be stopped on the cases being referred to the Office of RCS. When any amount was recovered, up to date interest to be calculated and adjusted in the following manner: i) Recovery charges ii) Arbitration cost iii) Intt. iv) Principal
16.	On TOD/overdrawn dr. balances in current account 5% additional Intt. To be charged.
17.	To see cash flow position for loans above Rs. 5 lacs saving and current account statement for the last 12 months to be taken.
18.	To get OD limit up to Rs. 1 lac vehicle up to maximum five years old can be hypothecated.
19.	Revaluation of property will be done after three years. However, a member can get the revaluation done after two years.
20.	The member who received loan against the mortgage of property will have to give undertaking that he will not give the premises on rent without the prior permission of the Bank.

LOAN POLICY

The following loan facilities will be available to the members:

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

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

i) Housing loans

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

iii) OD limit in current accounts

iv) Real estate loans

v) Education loan

vi) Loan against deposits

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

3. Loan sanctioning authorities

i) Board

ii) Loan Committee

iii) Loan Sub-Committees I and II

iv) MD

Loan Committee, Loan Sub-Committees and MD will sanction loans as per 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 BM will provide the necessary information on the credit appraisal form and will give his comments/observations. Thereafter it will be examined by HO officials on the basis of the information provided in the credit appraisal form/loan application along with comments/observations of BM before placing at the sanctioning Committee meetings. Loans of higher amount will also be examined by MD before placing at the loan sanctioning Committee meetings. Wherever required physical verification of property, stock and other assets and liabilities will be done.

6. The maximum credit limit of a member will be determined by the Board annually as per the instructions of RBI after the audit of the accounts. The present MCL of a member is Rs. 2 crores.

7. The share money and CD linkage will be 2.5% for secured loan and 5% for unsecured loans.

8. The CD ratio will be similar to share money with the condition that the minimum CD should be Rs. 5000/- and maximum Rs. 25000/-.

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

10. The time period up to which the loan request will be considered will be fixed and made known to the members.

11. 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 overdrawn debit balance it can be higher as decided by the Board. These rates of interest will be displayed on the notice boards in the branches.

12. Power to write off loan and other dues will be with BOD. However, Board can delegate some power to the Loaning Committee or Grievance and Settlement Committee set up for this purpose. The detail of rebate given by these Committees to be placed at the Board meetings for post facto approval.

13. Every unsecured loan will be given against the surety of one or more members and limit for standing sureties will be decided by the Board from time to time.

14. At the time of applying for loan 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.

15. In joint loans compliance of SM and CD ratio only in one account.

16. More than one secured loans permissible with separate securities/conditions and separate EMIs provided member has repaying capacity.

17. 1% rebate on term loans for regular paymasters.

18. 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.

19. OD limits will be sanctioned for a maximum period of three years. When it is sanctioned for three years it will be reviewed every year and in case of any deficiency, non-transaction, the limit can be reduced or cancelled. If it is sanctioned for less than three years, it will be reviewed at the time of renewal. To get additional loan/advance member can get the property re-valued after two years. However, in OD limits Bank will get the property re-valued after six years.

20. For valuation and search report a panel of valuers and advocates will be approved and made known to the members. These panels will be reviewed every three years or earlier if required. The fee to be charged will be decided by the Board.

21. For loans up to Rs. 25 lacs one valuation and one search report will be required. For loans above Rs. 25 lacs and up to Rs. 50 lacs two valuations and one search report will be required. For loans above Rs. 50 lacs two valuations and two search reports will be received. However, the loanee member will provide only one valuation and one search report and the second will be obtained by the Bank at its own cost. Valuation and search reports will be taken only from the Valuers and Advocates from the approved panel of the Bank. In every case lower value will be taken into consideration.

22. If a member submits false/fabricated documents to get loan he will be debarred from loan for five years.

23. If from a defaulter member, recovery was made through the office of Registrar Cooperative Societies, he will also be debarred from loan for five years. He will also not stand surety to any other loan for five years.

24. 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.

25. 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 also be verified once in two years.

26. In case of default the following actions will 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.

27. The BMs will have power to discount govt./semi govt./autonomous bodies bills up to maximum Rs. 50,000/- and a small power to sanction TOD up to six days will also be permitted as decided by the Board from time to time.

28. No loan will be given against the security of gold.

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

30. In respect of real estate loans the maximum limit will be Rs. 50 lacs but it will always be given against the security of property for which valuation and search report will be taken as per the rule mentioned above. No loan will be given against the mortgage of the property under construction.

31. No loan to member of the Board will be given except loan against own deposits.

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