Non Farm – in Detail

Tiny sector village industries, and rural artisans, SSI (other than above) miscellaneous. The loan under this sector are to be provided on the project to project basis, however the loan amount, repayment period etc shall be as per the approved guidelines circulated time to time by the Head Office.

The cases which are sponsored under KVIC the two government servant sureties with DDO undertaking. In other cases mortgage of landed property is mandatory in addition to hypothecation of plant and machineries.

Scheme

Purpose

For construction of residential houses /acquisition of commercial complex /purchase of ready built flats or houses.

For self employed persons

(a) Short note on the nature of business / organization.
(b) Copies of profit & loss account and balance sheet for the last three years in respect of firm’s business / profession (certified by a Chartered Accountant).
(c) Statements showing computation of Individual taxable income and copies of the IT returns for the last three years (certified by a Chartered Accountant).
(d) Photograph of the applicant as well as of surety.

For salaried persons

(a) Employer certificate for TDS (Form 16) for the latest year, Latest salary slip showing statutory deductions (with date of entry into service and the date of retirement) or Latest IT returns.

For Individual running partnership firms or having Pvt. Ltd Co

(a) Profit and Loss and balance sheet for the last 3 years (certified by a Chartered Accountant) or Copies of IT returns for the last 3 years.
(b) Partnership deed or Memorandum of Association (MOA)
(c) Letter of Authority / Resolution of the board allowing the partner/ Shareholder to borrow an individual capacity for his / her residential house.

For private companies and partnership firms

(a) Profit and Loss and balance sheet for the last 3 years (certified by a Chartered Accountant) or Copies of IT returns for the last 3 years.
(b) Partnership deed or Memorandum of Association (MOA).
(c) Letter of Authority / Resolution of the board allowing the partner / Shareholder to borrow an individual capacity for his / her residential house.

Others

(a) Copy of the pensioners certificate in case of pensioners.
(b) Copy of the rent / advances / lease agreements with supporting bank statements or IT returns.
(c) Adequate numbers of post-dated cheques to be submitted to the bank for repayment.
(d) Original registered sale deed / leased deed / allotment letter / agreement for sale as executed on applicable non-judicial stamp paper.
(e) Copy of the house plan approved by the local competent authority (Municipal Corporation) for construction cases.
(f) Photocopy of the house building advance sanction letter (If HBA has been taken from the employer) indicating the loan amount and the repayment terms.
(g) Bank a/c statement indicating transaction for the last 6 months or a photocopy of the Bank Passbook.
(h) Broad particulars of one guarantor of comparable age and income with latest pay certificate.
(i) Age proof and Residence Proof (for applicant and co-applicant).
(j) Finally detailed cost estimate for the proposed construction prepared by a civil engineer / Registered Architect (in case of construction / extension / improvement / or a letter from the society in case of a house is of a coop. society.

Legal documents required for equitable mortgage

(a) Licence / Sale Deed / Gift Deed / Partition Deed in the name of applicant / co-applicant.
(b) Khatuni slip / patta / Record entry.
(c) Revenue sketch from the Patwari.
(d) Latest non-encumbrance and No-dues certificate from the Tahsildar.
(e) Latest valuation certificate from the Tahsildar or empanelled valuer of the bank obtained prior to the submission of the application.
(f) Mortgage / Sale permission of the respected landed property from the Dy.Commissioner, where equitable mortgage is already done it is not required.
(g) Extract from the register of house site indicating transactions from 1970 onwards.
(h) For the second mortgage / further charge , an attested copy of the first mortgage Deed is to be furnished.

For Salaried persons

(a) Maximum of 72 months gross salary (including salary of spouse)

For Others

(a) Maximum of 6 times average annual income based on Income Tax Assessment Order/IT returns for the past 3 years.
(b) Income / salary of spouse / father / mother / son / daughter with the applicant can also be considered.

Security

(a) First mortgage of the site / house / flat to be constructed / acquired or as advised by the Bank official.

Margin

(a) 25{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} of total project cost for construction / purchase of new flat or house upto 5 years old.
(b) 30{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} for acquiring house which is above 5 years old.
(c) 30{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} of the estimated cost of addition / extension / repairs / renovation.

Processing Charges

For acquiring a house

(a) Equated monthly installments with maximum repayment period of 20 years including repayment holiday of 18 months where eligible.
(b) In case of salaried persons, repayment period shall not extend beyond superannuation and for others beyond 65 years of age.

For repairs / renovation

(a) Maximum repayment period is 5 to 7 years.

Rates of Interest

(a) Housing loan for upto Rs. 30 lacs: 10.75{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a}.
(b) Housing loan for above Rs. 30 lacs: 11.00{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a}.
(c) Subject to change.

Scheme

Purpose

The loan can be provided for tuition fee, hostel charges, cost of instruments needed for study, educational tour etc. In case of study in abroad the airfare may also be included in total loan amount.

Eligibility

The scheme is open to individuals with consistently good academic record to prosecute higher education in India or abroad. The loan may be provided in the name of the parents alone / parents and pupil jointly/pupil alone. However, the loan can be considered on the repaying capacity of the parents.
Courses eligible for the loans: professional , technical degree/diploma courses in specialized subjects, post graduate courses in various disciplines etc are eligible for the loan.

Loan amount

No ceiling is fixed for educational loan by the RBI. However, the quantum of loan for studies in India is raised to a maximum of Rs. 10.00 Lakhs and Rs. 20.00 Lakhs for abroad as per RBI Guideline.

Margin

15{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} to 25{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} on the total expenses of the course wherever scholarship available the same may be considered as margin.

Repayment

The repayment shall be fixed on the basis of the repaying capacity of the parents and the duration of the course. Since the un-employment problem is located in general, the income of the student after completion of the studies is not taken in account however, where the employment is assured suitable repayment programme shall be made after completion of the study, assessing the repaying capacity of the student. The maximum repayment period shall not exceed 3 years or the duration of the course period in addition to 0ne year or six months after getting employment whichever is earlier.

Scheme

The consumption loans do not generate any income, or in other words these are for non-productive purposes, in some cases assets are also not created. Usually following areas are covered under this loan like general consumption, marriage ceremonies, funerals, religious ceremonies where the amount is calculated family wise. It is therefore suggested that the word consumption loan may be replaced with the most appropriate word that is PERSONAL LOANS which have a broader scope and to purchase all consumer durables articles and a vast range of items which are not covered under other category.

Purpose

Under the personal loans the term loan may be considered for:
(a) Acquiring consumer articles like refrigerator, Television, Washing Machine, Toaster, Vaccum cleaner, Micro oven, Food processor, Marriage Ceremonies, etc.
(b) And for acquiring personal computer, accessories, laptop, etc.
(c) Subject to change.

Eligibility

(a) The person should be more than 21 years of age.
(b) They should reside within the operational area of the bank branch.
(c) In case of desirable candidates the norms may be relaxed.
(d) The persons should have minimum net yearly income of Rs. 60,000 p.a.

Loan amount

The total amount under this category should not exceed Rs.2 lacs per individual.

Margin

The margin for these loans should be 25{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} of the cost.

Repayment

The borrowers have the flexibility to opt for 6 monthly gaps in tenures and may choose a tenure of 12,18,24,36,48 months.

Security

(a) For the advances granted on clean basis upto Rs. 25, 000, pledge / hypothecation of asset created out of loan.
(b) For the advances granted above Rs. 25,000 upto Rs. 50,000 the bank should insist for collateral securities and guarantee of one or more individuals.
(c) For the advances above Rs. 50,000 and upto Rs. 2.00 lacs the bank should insist for mortgage of landed properties.

For Salaried Applicants

(a) Latest salary slip showing statutory deductions and DDO undertaking. or
Form 16 (Duly signed by an authorized signatory) or

Latest IT returns

(b) Bank statement for last 6 months.
For self employed/ proprietor
(a) Latest computation of income certificate by a Chartered Accountant. or
Profit and Loss & Balance sheet for last two years certified by a Chartered Accountant. or
Copies of IT returns for the last two years.

Purpose

Loans under Medical treatment may be given
(a) For making payments or expenditures incurred for in-patient treatment in a recognized hospital.
(b) Expenditures incurred on treatments of Cancer / TB as an outpatient.
(c) Expenditures incurred for prolonged treatment for patients suffering from diseases of various serious and complicated nature.
(d) For by-pass surgery of Heart, Kidney, transplantation of human organs, for adjustment of artificial appliance.
(e) For making expenditure in connection with artificial instruments/equipments like:
(i) Supplying of Heart Pace Maker and replacement of pulse generator.
(ii) Replacement of heart Valves.
(iii) Replacement of electronic larynx.
(iv) Artificial hearing aid.
(v) Artificial organs for human body.
(vi) In case of serious accidents and immediate transfer to better hospitals/ nursing home.

Legal documents required

A certificate that the patient is required to undergo advance treatment at mainland by the Superintendent GB Pant Hospital / or by any other recognized Dispensary / Hospital.

Security

The necessary securities like land mortgage etc are to be provided for such loan. The land mortgage is necessary where the amount of loan is above Rs. 1.00 lacs however, the amount below Rs. 1.00 lac may be secured by two personal sureties preferably Govt.servants with their DDO undertaking for effecting recovery in case of default by the principal borrower.
The loan shall include the probable expenditure of the treatment as well as to and fro the flight or ship charges for the patient along with one attendant. Where the patient is willing to go for advanced treatment of his/her own, the bank is free to consult any private medical practitioner to ascertain the necessity of such treatment and decide the loan proposals.

Purpose

Loan under small business may be given for taking up any business activity on submission of project report for such activities. The project may include:
(a) For acquiring of business premises.
(b) Purchase of machinery equipments, furniture, interior decoration, etc and for the working capital for purchase of various items consumables needed in the concerned business. Loan for hair cutting saloon, tailoring, photo copying, running PCO / STD / ISD booths, canteen, restaurants, wholesalers, travel agency, distribution of several consumer items fish / mutton shop, publishers, printers, managing transport business (not having driving licence) tourist accommodation, etc.

Loan Amount

The total loan amount under this category should not exceed Rs. 10.00 lacs including working capital of Rs. 5.00 lacs.

Eligibility

The vehicles should be used for the purpose of public transport of the goods or the passengers.

Purpose

Loan may be given for purchase of bus, truck, auto-rickshaw, pickup Van, Mini bus, Taxi, Tanker, boat, cart, etc. The loan includes the cost of chassis, body building tarpaulin, stepney, insurance, etc.

(In case of larger loans for ships / boats etc the quantum of loan will be higher and the security will be determined by the bank depending upon the merits of the case).

Loan Amount

There is no limit for the loan amount however the number of vehicles financed shall be limited to 02 only at a time. The loan upto Rs. 5.00 lacs is treated under P.S.norms. The proforma Invoice must be obtained from authorized dealers and enclosed with the application in addition to other purpose.

Repayment

The repayment period for these loans should not exceed 5 years in monthly / quarterly installments including reasonable holiday period for body building, etc.
Other Formalities
(a) All the vehicles financed by the bank should be comprehensively insured by the 1st party with the bank clause covering third party risk, riot, strike, etc.
(b) Banks hypothecation should be noted in the RC book of the vehicle as well as on the body of the vehicle.
(c) Wherever applicable route permit should be verified.
(d) True copy of the registration certificate in which bank’s hypothecation charge is duly noted.
(e) In case of public carriers: a copy of valid route permit are to be obtained.
(f) Duplicate ignition key is to be obtained.
(g) Original Invoice, stamped receipt are to be obtained.
(h) Vehicle inspection report is to be obtained once in six months (April & October).
(i) Bank’s name plate indicating the hypothecation charge is to be riveted on the vehicle preferably near the manufacture’s plate.
(j) As the vehicles depreciates faster, the repayments shall be monitored closely.

Second hand vehicle (Four wheeler)

The above formalities will be valid in addition to the followings:-
(a) Loans can be arranged after obtaining a valuation report.
(b) The vehicles shall not be older than 4 years.
(c) Maximum limit is 55{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} of the value of the vehicle.
(d) The balance margin money of 45{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} is to be deposited.
(e) The loan portion (55{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a}) and the margin (45{3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a}) to be remitted to the seller.

Loans can be granted against the gold ornaments not against gold bars or biscuits. Purity of Gold should be minimum 22 carats. It should be ensured that loans against gold ornaments are given only to the owners of ornaments and not to any third parties. Jewels / Golds appraised by a duly appointed jewel / gold appraiser registered money lenders who hold licence to carry on money lending which can be granted loans against re-pledge of ornaments.

Charging the security

The type of charge the bank will have on gold ornaments when taken as security is “pledge”. A pledge letter is required to be taken duly signed by the owner of the gold ornaments which will contain itself all powers granted to the pledge including sale of ornaments and adjustment of the loans with the proceeds of sale, in case of default of repayment of loan.

Advances against stone checked and diamond checked jewels/Gold ornaments should be discouraged.

Amount of Loan and Margin

Bank usually fixed the maximum amount of loan per gram of gold according to its fitness. These charges are fixed periodically keeping in line with the change in price of the gold. Presently, ANSCB has fixed the maximum amount of loan per gram at Rs. 1500. However, in any case the maximum amount of gold loan should not be more than 60 {3f6fc27b7d854a6d11d1a3aff0be80f521428168aac3c68744a82bcc1a5c181a} of the market value.

If the single loanee has expired, the heirs of the loanee should be asked to submit the following:-
(a) Claim form of the Bank duly filled in.
(b) Gold loan card issued by the Bank to the loanee, either of “C” or “d” or “e” mentioned hereunder.
(c) Legal heirship certificate issued by the Tahsildar / Appropriate authority if the Gold ornaments value is less than Rs. 25,000.
(d) A succession certificate obtained from the court of law in case of difference of opinion / disputes arise between legalized / family members of the deceased.
(e) The Gold ornaments shall be delivered to the nominee of the deceased in case of the death.
(f) A letter of probate or letter of administration.

Retail traders are the shopkeepers dealing in various commodities, which are purchasing goods from wholesalers or producers and selling them to public. The following types of retail traders are cover under the priority sector definition.
a. Private retail traders dealing in essential commodities (fair price shops)
b. Consumer cooperative stores.
c. Other private retail traders dealing in non essential commodities.
Retail traders in fertilizers are covered under direct Agri. Advances. The cooperative society dealing in sales of inputs like fertilizers etc may also be financed under this category.

Purpose

Loans to be given for the purchase of the goods to be sold by them in their stores like stationary, grocery, books, flowers, fruits, vegetables, readymade garments, clothes, shoes, hardware, plastic, steel etc.

Loam amount

(1) Upto Rs. 5.00 Lacs for retail traders dealing in Non essential commodities.
(2) The Bank should ensure that the goods are easily marketable.
(3) No other goods or stock shall be allowed to be kept along with the hypothecated stock.
(4) The original invoices of the goods have to be obtained.
(5) The Shop / godown where the goods are kept have top be ensured with bank clause for full value of the stock. (Value: Invoice or markets value whichever is more).
(6) A board has to be displayed in the premises indicating Bank’s Interest/ lien.
(7) Monthly / quarterly stock statement is to be obtained.
(8) The drawing power has to be noted. This will be the value of the goods less prescribed margin (if any) or the limit fixed originally (in case of the overdraft) for the party whichever is less.

This is a fund based working capital credit facility provided to traders / manufacturers and the like. This is running account facility extended for a short period, not more than one year and it is reviewed. On review, the limits may be renewed / enhanced / decreased after a fresh appraisal of working capital credits requirement of a borrower.

This is the nomenclature given to credit limit which is granted against hypothecation / pledge of current assets and Bank’s fixed deposits.

(a) For first time Recommendation:

The bank would ascertain the level of current assets (main stock and bills receivable) required by a borrower to achieve a targeted sales for the projected year. The level of stock / inventory and bills receivable so determined would be compared with the level of the stock and bills receivable held by the borrower in the past years. The loans of the two levels would be taken as the permissible level and the quantum will be calculated accordingly.

(b) For Enhancement:

The borrower will have to submit cash flow for the previous year. The Bank shall scrutinize and verify the entries of inflows and outflows. If the debit summations are more than the credit summations and the resultant position in deficit, the bank would finance the deficit. The enhancement has presently done on the basis of credit summation should be done away with instead of which the bank can follow the basis of projection for the current financial year. The projection should also be verified with the previous year’s achievement, etc. The financial health of the business unit should be based on the various ratio analysis of the financial statement for the year and projected financial statement for the current year.

(c) For renewal Enhancement:

The Kannan Committee suggested a method of lending purely based or cash flow for the projected year (based on the previous two years actual) bifurcating it monthly / quarterly showing therein the details of estimated cash inflows and the cash outflows. The banker then verifies the requirement and assess the actual credit requirement. The RBI has left it to the bank to decide on the credit need of the borrower.