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					ANCILLARY SERVICES:

INDIANBANK MASTERCARD PLATINUM DEBIT CARD-launched on 29.09.2011
Salient features:

Targeted for issuing to High Net worth individuals.
Transactions done using this card on POS and Online earn a higher revenue share for the Bank.
Daily ATM cash withdrawal limit of Rs.50000/-.
Daily POS/Online transaction limit of Rs.100000/-
Daily aggregate limit of Rs.150000/-
Rewards and offers by the MasterCard network through Discounts, Hotels, Club Membership, Dining,
Shopping and privileged access to Airport lounges, etc.
International Cardholder benefits offered periodically by MasterCard International will be available.
Indian Bank MasterCard Platinum Debit card is signature based and accepted at 32 million locations in
more than 210 countries and territories

AMC charges on debits cards - Maestro Debit Card MasterCard Debit Card
One year from the date of first use --- FREE; From Second year Onwards Rs.50/- per year + applicable
taxes
The above charges are not applicable for the Senior Citizen Debit Cards and Biometric Debit Cards.

Charges for ATM transactions
ATMs                        Charges for Cash withdrawal              Charges      for     Non       financial
                                                                     transactions
                                                                     (Bal enquiry, Mini   stt., PIN change
                                                                     etc)
                                Savings             Current          Savings              Current
Indian Bank ATMs                Free                Free             Free                 Free
First 5 transactions in a
month
Other Bank ATMs (domestic) Free                  Rs.20/- per tran. Free                   Rs.10/- per tran.
From      6th      transaction
onwards in a month
Other Bank ATMs (domestic) Rs.20/- per           Rs.20/- per tran. Rs.10/- per tran. Rs.10/- per tran.
                                 tran.
The new debit master card (Unembossed) will be issued only to the customers of CBS branches. Use of
PIN is required at ATMs only and PIN is not required at POS(point of sales); Authentication is based on
signature in the charge slip at POS as in the case of Credit card transactions. Existing customers having
a deposit of Rs 25000/- or more in SB/CA /FD/NRE accounts are eligible for issue of debit master card.
                                        BANCASSURANCE PRODUCTS
IB Jeevan Kalyan - LIC Circular reference ADV 88/2005-06 Dt. 20-10-2005
    Type                 Yearly renewable, Term assurance
    Eligibility          All accounts, death only
    Age                  18-55 yrs
    Amount               Rs.1 lakh
    Premium              18-55 – Rs.180; 36-45 – Rs.288; 46-55 – Rs.720
    Other features       Premium payable from 01 11 to 31 10; Joininng after 30th Nov – Prorata premium on
                         monthly basis, no medical check up, rebate under Sec 80C of IT Act
IB CHHATRA - UIIC        (Refer Circular ADV 88/2005-06 Dt. 20-10-2005)
   Type              Yrly renewable; Personal accident Insurance policy
   Eligibility       All account Holders Death due to accident only
   Age               12-70 yrs
   Amount            Rs.1 lakh
   Premium           Rs.25/- p.a. inclusive of service tax
   Other features    Death claim due to Accident


IB VARISHTHA – LIC       Refer Circular ADV 88/2005-06 Dt. 20-10-2005
   Type              Yrly renewable; Life cover with Double accident benefit Insurance policy
   Eligibility       Senior Customers Term deposit a/c holders
   Age               56-64 yrs
   Amount            Rs. 0.50 lakh only; In case of death due to accident Rs.1.00 lakhs
   Premium           Rs.828/-p.a.
   Other features    Rs.50000/- natural death; Rs.100000/-accident; From 01 11 to 31 10; Lien clause for
                     first 45 days for death due to certain ailments; 10% - 15% on premium collected will be
                     reimbursed, no medical check up; Rebate under sec 80C of IT Act


IB GRIHA JEEVAN - LIC
   Type                     Group mortgage Redemption assurance; Term cover – Min 3 yrs, max 20 yrs
   Eligibility              Home Loan Borrowers ; (SLP); Loan for purchase of house site " – NRI; IB
                            Rent Encash, Ind Mortgage, IB Home Improve, Rep & Renovations, My Own
                            Shop
   Age                      Age at entry level – Min 18 yrs, max 60 yrs Age at the time of entry- Max 65 yrs
                            – exit
   Amount                   Rs.50000 to Rs.50 lakhs (outstanding balance in loan a/c)
   Premium                  As per Table; IT benefit under S-80c; Basis of premium – Age,
                            outstanding loan amt at entry date, term of loan, remaining term of loan
   Other features           Medical Examination - not reqd 45yrs upto loan amt of Rs.10 lakhs; Upto
                            50 yrs for loan amt upto 5 lakhs; Simple medical report – Rs.10 lakhs to
                            Rs.20 lakhs
                            Other cases – Full medical Report; Jt. a/c - both earning members - onedeath
                            50% of outstdg loan amt will be covered. Commn to Bank –4% on premium
   IB JEEVAN VIDYA - LIC
   Type                    Group life insurance Cover
   Eligibility             Ednl. Loan borrowers (compulsory) Single premium policy
   Age                     16-50 yrs; cover ceases at 60 yrs
   Amount                  Ins. Cover for bal.outstg. at the time of entry or limit sanctd. whichever is
                           less
                           Maximum Rs.15 lakhs India; Rs.25 lakhs Abroad
   Premium                 As per Table; IT Rebate sec 80C
   Other features              No Insurance cover for 45 days except death due to accident; Commn. -
                               12% on premium amt ; Premium range – 428/- for 3 yr term ; 8342 for 12
                               yrs term & 46-50 yrs age


IB AROGYA RAKSHA- UIIC         Refer Circular CRA 128/ 03.11.11
   Type                    Unique floater Mediclaim policy
   Eligibility             All customers - focus on families; TPA – TTK & Medicare TPA Services
                           If no claim for 3 yrs free health check up @ 1% on avg of the sum insured
                           opted during the preceding 3 policy period
   Age                     3 mon to 80 yrs; Maximum age of entry and insurance available upto 80 yrs;
                           renewal – every year; exit age - 80 yrs
   Amount                  Min - Rs.50000; Max-Rs.1000000
                           For Plan ‘C’ Max – Rs.3,00,000/- at entry level and Max. Sum Assured is
                           Rs.5,00,000/- only
                           Personal accident death cover – 100% - a/c holder, 50% - spouse, 25% -
                           children ;No Personal accident cover for parents
   Premium                 As per slab; Plan A (upto 35 yrs); Plan B (upto 65 yrs); Plan C (upto 80
                           yrs)–
                           Refers to the age of the eldest member sought to be covered
                            IT rebate sec 80D – 15000 for general & 20000 senior citizen
                           Child care, maternity expenses etc. subject to certain conditions
   Other features          Any 2 dependent children & Parents of the proposer covered; Sons –
                           upto 25 yrs/ employment whichever is earlier; Daughters – marriage/
                           employment whichever earlier
                           Commission to our Bank – 10% of (Premium – service tax) for each policy
   IB HOME SURAKSHA -      (Kotak Mahindra Old Mututal Fund Insurance Ltd.
   Type                    Single premium policy
   Eligibility             New Home loan borrowers
   Age                     18 – 65 yrs; Max age at exit 75 years
   Amount                  1 lakh – 200 lakhs; Min.3 years Max: 20 years
   Premium                 As per table; Scheme available for NRIs also but medical check up in India
   Other features         Tax Benefit Sec.80C; Only Declaration of Good Health – Loan of Rs.60
                          lakhs age 18 -35 yrs; Loan of Rs.40 lakhs age >35 yrs upto 40 yrs; Loan
                          of Rs.30 lakhs age >40 yrs upto 50 yrs; Loan of Rs.20 lakhs age >50 yrs
                          upto 55 yrs
                          Loan of Rs.10 lakhs age >55 yrs upto 59 yrs
                              Commn:15% on net premium
IB YAATRA SURAKSHA -
UIIC
    Type                 Covering death/disability due to accident on Domestic Travel tours by
                         Road, Rail and Waterways
   Eligibility           All customers; 5 – 20 members per group
   Age                   3 yrs – 70 yrs
   Amount                Sum insured – Rs. 1 lakh / 1.5 lakhs / 2 lakhs
   Premium               Plan A, B & C
   Other features        Death / permanent disability / partial disability / loss of limbs & medical
                         expenses +add ons like baggage loss + detour (Optional) ; A very low
                         premium of Rs.13 /Rs.22 /Rs. 22 for plans A/B/C for an amount of Rs.1
                         lakh (excluding service tax of 10.3%)

IB VIDYARTHI SURAKSHA     (Ref;Cir: CRA 76/2011-12 DATED 06.08.2011) TIE-UP WITH METLIFE
    Type                  Group life insurance Cover
   Eligibility            Ednl. Loan borrowers (compulsory); Single premium policy
   Age                    15-50 yrs cover ceases at 60 yrs; At exit 70 years
   Amount                 Ins. Cover for bal.outstg. at the time of entry or limit sanctd. whichever is
                          less
                          Minimum: Rs. 0.10 lakh; Maximum: Rs.25.00 lakh
   Premium                As per Table; IT Rebate sec 80C
   Other features         No Insurance cover for 45 days except death due to accident; Commn. -
                          15% on premium amt ; Premium range – 6.00/- for 3 yr term 888.60 for
                          25 yrs term & 45 yrs age

JanaShree Bhima Yojana
   Type                   SHG, JLG, RMG, Farmers’ Club, Men group, Youth group financed by IB
   Eligibility            BPL families who have opened No frills account under fiancial inclusion
   Age                    18-59 yrs
   Amount                 Natural death – 30000; Accident – 75000; Disability – 37500 to 75000
   Premium                200/- per member (50%) central govt. subsidy; Can be extended to Non
                          BPL families also but without govt. subsidy
   Other features         Scholarship under Siksha Sahaya Yojna – Max 2 students of Class 9-12
                          Rs.100/- p.m. each
UNIVERSAL HEALTH CARE            UIIC
   Type                          Govt subsidy
    Eligibility                  Below Poverty Line families & Above Poverty Loan families
    Age                          5 - 65 yrs; 3 months kid; 5 yr children
    Amount                       Hos exp – max 15000 per Illness; 30000 p.a. per person or family
                                 Death – 25000; Leave sal - 50/day max 750 for over 3 days
    Premium                      Premium –       APL SUB BPL
                                 Ind -            365 - 200 - 165
                                 Fam - 5 -        548 - 300 - 248
                                 Fam – 7 -        730 - 400 - 330
    Other features               10%commn as service charges Diff slabs for hosp, surgeon, x ray etc.


    Group Insurance products withdrawn – IB Insured RD, IB Jeevan Kalyan Plus
    Except for petty cash, all other disbursals/payments are to be made only through direct credit to account.
    The payments include payments to staff, vendors, suppliers, disbursement of loans and payment towards
    interest / investment.
    Collection of commercial tax through e payement to be remitted within T + 1 day
    Agency commission on the above 75% of normal commission (normal – Rs.45/- for each challan
    collected)
    E payment of TDS collected to be remiitted with T + 1 day
    New IB Jeevan Vidhya – Insurance cover for studies in India – Rs.15 lakhs Insurance cover for studies
    abroad – Rs.25 lakhs
    Comprehensive House Holders Insurance cover which is given as a value addition to Supreme Current
    account scheme – Separate website developed for online submission of proposals and for direct credit of
    premium in the designated Premium collection account.
    In the case of Senior Citizen Deposit account, in the cse of death of depositor before maturity the account
    should be closed and deposit refunded on submission of application in Form F alongwith interest till the
    date of death at the prevailing rate, to the nominee / legal heir
    New family pensioners can opt to become a member of Tamilnadu Govt. Health Fund scheme by paying
    Rs.75/- per month. Service pensioners to pay Rs.100/- per month
    IB Arogya Raksha – Service charges Rs.50/- + applicable service tax at 10.3% - presently Rs.55/- apart
    from premium
The time schedule for collection of outstation cheques and other instruments as per our Bank’s Policy on
Compensation to Customers for deficiency in services rendered is as follows:
1. Maximum of 7 days in case of cheques presented at a Metro Centre and payable at any of the other 3
    Metro centres
2. Maximum of 10 days in case of cheques payable at Metro Centres and State Capitals (other than those
    of North Eastern States and Sikkim)
3. Maximum of 14 days for cheques payable at all other centres.
In case there is delay in giving credit beyond the time schedule period, the Bank will pay interest to the
    customer concerned at the following rates:
1. For delay beyond 7/10/14 days - at SB interest rate
2. For delay beyond 14 days after time schedule - at Term Deposit of interest for respective period
3. For Exordinary delay i.e. beyond 90 days         2% + TDR rate
OBC Collection charges – Less than Rs.10000/- Rs.50; From Rs.10000 – Rs. 1 lakh – Rs.100/-; Above Rs.1
lakh – Rs.149/- per instrument
Cheque Return charges – Local cheque inward return – Rs.30; OBC return – 50% of collection charges with
a minimum of Rs.30/- (apart from other Bank charges)
Pension Adalats for redressal of pensioners’ grievances to be conducted by branches twice a year – January
& July
Monetary allowance attached to Jangi Inam increased to Rs.500/-
No BCTT shall be charged in respect of any Banking transaction on or after 01 04 2009
Branches should contact the locker hirer and advise them to either operate the locker or surrender it, even if
the locker hirer is paying the rent regularly in the following cases: Where the lockers have remained
unoperated for more than 3 years for medium risk category or one year for a high risk category customer
Door Step Services shall be offered only to those customers in whose case proper KYC procedures have
been followed.
Bank’s own employees shall normally be used for cash related doorstep services and business facilitators/
service providers shall be engaged for pick up and delivery of cheques and other instruments.
The bank will compensates the account holder , in respect of instruments taken under collection ,are lost in
transit in the following way: Interest for the collection period + reasonable charges in getting a duplicate check
+ stop payment charges incurred by the customer.
Amount of cash handling charges for current account /OD/OCC: For the first 10 sections in a day in any
denominations free. From 11th section onwards in a day - For sections of Rs.100/- & below – Rs.20/- per
section; For sections of Rs.500/- & Rs.1000/- - Rs.15/- per section
Where the instruments are deposited in the drop box along with counterfoil, branch should arrange to keep
those counterfoils duly acknowledged by an officer in a spike kept in the counter enable the customer to get
back on the next day.
CBS service branches will not send IBGA credit advises under 5 OBC and 3 BP to branches for realization,
instead it will be credited with the originating CBS branches, BGL accounts 86911/86903 with a 20 digits
reference number.
All branches to emboss an identification code (Part I of uniform branch code) on the keys of lockers hired out
by them


                       STRUCTURED LOAN PRODUCTS (Other than Agri & MSME)



Home Loan
Purpose           Home Loans can be considered
                  a) to purchase / construct a new house / flat
                  b)     to purchase house site and construction of house thereon
                  c) to purchase an existing house / flat
                  d) to extend an existing house/ additional construction
                  e) to repair / renovate an existing house / flat
                  f) to take over Home Loans from other Banks / Housing Finance Institutions
                     approved by National Housing Bank for Housing Finance/ Co-operative
                     Societies.
                  g) For reimbursement of cost incurred for purchase/construction of house/flat
Eligibility
  1.              Minimum entry age is 18 years and maximum exit age is 60 years
Quantum of        * 36 times of Gross Monthly Income or 60 times of Net Monthly Income whichever is
Loan              higher.
                  * Spouse Income can be included for calculating eligible amount if he / she has
                  steady income.
                  * 60% of future rental income, if any from the house property to be purchased /
                  constructed shall also be included (quantum of rent receivable to be certified by our
                  panel engineer).
                  * (Take home Income should be more than 40% of gross monthly income after
                  deduction of EMI for the proposed loan, apart from other deductions.)
Margin            Loan for construction / purchase of a new house / flat:
                  * For Loans upto Rs. 20 lakhs : 15% & for loans above Rs. 20 lakhs : 20%
                  Loan for purchase of old house / flat:
                  * For Loans upto Rs. 20 lakhs : 20% & for loans above Rs. 20 lakhs : 25%
Processing fee    * 0.25 % on Loan amount (Non refundable) (to be remitted at the time of submission
                  of application)
                  * 0.32 % on Loan amount (at the time of acceptance of sanction)
Interest Rates    Please refer the Interest Rate link on home page in our Bank’s Website
                  Variable rate/Fixed rate options are available
                   Fixed rates are subject to reset once in 5 years
                   After the account has run for 3 years, from the date of sanction, one time option
                      can be exercised for converting fixed rate into variable rate. For the said Switch
                      over, a one time fee of 1% on the outstanding balance in the loan account will
                      be charged as service charges.
                   If conversion of fixed rate to variable rate is sought after 5 years, from the date
                      of sanction, the one time fee of 1% shall not be applicable.
                   Conversion from floating to fixed rate is not permitted.


Repayment            Loans for purchase / construction of House / Flat: 20 years (including holiday
Period                period)
                     Maximum Holiday Period of 18 months allowed for Home Loans for the purpose
                      of construction of House / Flat
Prepayment
                  * Zero Pre-closure charges.
charges
Security          * Equitable Mortgage of Property purchased / constructed out of loan proceeds
                  * {Equitable Mortgage to be registered (at Applicant’s cost) if there is a provision for
                  the same in the State where property is located }
Documents to      1. Completed Application Form with 3 passport size photograph.
be submitted      2. Assets and liabilities statement in the Bank’s format from applicant(s), Co-
for processing    applicant(s) and guarantor(s)
the application   3. Proof of Identity such as PAN Card / Voter’s ID/Passport/Driving License.
                  4. Proof of residence such as Recent Telephone Bill / Electricity Bill / Property Tax
                  Receipt / Passport / Voter’s ID
                  5. Proof of business address in respect of businessmen / industrialists.
                  6. Proof of Employment.
                  7. Salary Certificate generally for the last 6 months.
                  8.Statement of Bank account of the applicant(s) for a reasonable period, say 6
                  months for verifying salary credit/other income/nature of transaction etc
                  9. Proof of other income like rent, interest on investment, if any.
                  10. Balance Sheet for the past three financial years in the case of Professionals,
                  Businessmen & Self employed.
                  11. A brief note on the nature of business/service, year of establishment,
                  constitution, securities charged in respect of other loans availed from our Bank/other
                  Branches/Banks/Finance companies/Other sources.
                   12. Form16/Income Tax / Wealth Tax (if applicable) Returns for the past 3 years
                   13. Agreement of Sale / Sale Deed.
                   14. Approved Building Plan.
                   15. Title Deed Documents for 13 years/30 years as the case may be.
                   16. Proof of title in the Revenue Records.
                   17. Property Tax receipts wherever applicable
                   (Up-to-date EC, Legal Opinion from Advocate & Valuation of property from Engineer
                   will be arranged by Bank at applicant’s cost)
Value added        Group Insurance cover:
                   * At the option of the applicant, Group Insurance Life Cover is arranged at
                   concessional premium (to be borne by the Applicant).
                   * The Applicant may opt for including the premium amount as part of Home Loan
                   Project Cost.
Insurance          Property (offered as security) to be insured at borrower’s cost with Bank clause
                   against fire, flood, earthquake, riot and other risks, which are normally covered by
                   insurance companies.


NRI Home
Loan
Salient Features                  For purchase or construction of a house / flat / repair / renovate or alter
                                  an existing house / flat. The scheme covers both Non Resident Indians
                                  (NRIs) and Persons of Indian Origin (PIOs).
Eligibility                               Maximum permissible age at the time of applying is 50 years &
                                           at the end of repayment period is 60 years.
                                           NRIs gainfully employed with a residual contract period /
                                           service of atleast 3 more years to run.
                                           * NRI professionals with regular monthly income.
Income Criteria                                                                                           Mini
                                      Maximum Loan           Minimum monthly income                       mu
                                            limit                  requirement                            m
                                         Rs in lakh            US $ or its equivalent                     mon
                                     Upto 3.50                           250                              thly
                                    > 3.50 and upto                      500                              inco
                                    5.00                                                                  me
                                    > 5.00                               900                              requ
                                  irement for NRI Home Loan.
                                  If income of spouse is included for the purpose of arriving at the eligible
                                  loan amount then spouse should stand as guarantor for the loan.
Quantum of Loan                   * 36 times of Gross Monthly Income or 60 times of Net Monthly Income
                                  whichever is higher.
                                  * Take home Income should be more than 40% of gross income after
                                  deduction of EMI for the proposed loan, apart from other deductions.
Margin                            Loan for construction / purchase of a new house / flat:
                                  *For Loans upto Rs. 20 lakhs : 15% & for loans above Rs. 20 lakhs :
                                  20%.
                                Loan for purchase of old house / flat:
                                *For Loans upto Rs. 20 lakhs : 20% & for loans above Rs. 20 lakhs :
                                25%.
                                (Margin to be brought in either by way of fresh inward remittances/funds
                                from Non Resident accounts/Local Funds
Processing fee                  * 0.25 % on Loan amount (Non refundable) (to be remitted at the time of
                                submission of application)
                                * 0.32 % on Loan amount (at the time of acceptance of sanction).
Interest Rates                  * NRI Home Loans are offered on Floating Rates only.
                                (Please see the Interest Rate link on home page of our Bank’s website)
Repayment Period                * Loans for purchase / construction of House / Flat: Max. 15 years
                                (including holiday period)
                                * Maximum Holiday Period of 18 months allowed for Home Loans for the
                                purpose of construction of House / Flat.
                                The repayment may be made by way of remittance from abroad or from
                                other domestic sources including rental income from the property etc.
                                Repayment of instalment of Home Loan, interest and other charges, if
                                any can be made by close relatives through their bank account directly
                                to the borrower’s loan account.


Prepayment charges              * Zero pre-closure charges
Security                        * Equitable Mortgage of Property purchased / constructed out of loan
                                proceeds. No second charge or extension of charge shall be accepted.
                                * Equitable Mortgage to be registered (at Applicant’s cost) if there is a
                                provision for the same in the State where property is located.
Documents to be submitted for 1. Completed Application Form with passport size photograph.
processing the application    2. Salary Certificate.
                              3. Proof of other income like rent, interest on investment, if any.
                              4. Balance Sheet for the past three financial years in the case of
                                  Professionals, Businessmen & Self employed.
                              5. Income Tax / Wealth Tax (if applicable) Returns for the past 3 years.
                              6. Agreement of Sale / Sale Deed.
                              7. Approved Building Plan.
                              8. Title Deed Documents for 30 years.
                              9. Proof of title in the Revenue Records. (Legal Opinion from Advocate
                                  & Valuation of property from Engineer will be arranged by Bank at
                                  applicant’s cost).
                              10. Passport copy with page containing visa stamping
                              11. Copy of work permit
                              12. Employment contract copy (an English translation duly attested by
                                  employer/consulate/embassy/our foreign branches , if it is in any
                                  other language)
                              13. Copy of identity card issued by the employer
                              14. Copy of continuous discharge certificate in respect of applicants
                                  employed in merchant navy.
                              15. Brief write up about employment profile for the last 3 years
                              16. Brief write up about the company /institution where employed i.e.
                         constitution, activity, employee base, net profit etc.
                     17. Statement of overseas Bank account for the last six months which
                         reflect salary credit , savings etc
                     18. Specific irrevocable Power of Attorney, if applicable, duly stamped
                         and notarized / attested by Indian Embassy / consulate and
                         adjudicated in India.
                     Additional documents for PIOs
                      A photocopy of the PIO card or any of the under noted documents
                      Current Passport indicating place of birth in India
                      Indian Passport if held earlier
                      Parents’ or grandparents’ passport with details therein
                         substantiating his claim of being a PIO
Value added                 Group Insurance cover: At the option of the applicant, Group
                             Insurance Life Cover is arranged at concessional premium (to
                             be borne by the Applicant).
                            The Applicant may opt for including the premium amount as part
                             of Home Loan Project Cost.
Insurance            * Property (offered as security) to be insured at borrower’s cost with
                     Bank clause against fire, flood, earthquake, riot and other risks, which
                     are normally covered by insurance companies.


Plot Loan
Purpose               For purchase of House Site on ownership basis; House site should be
                      located in layout which is approved by Competent Authority
Eligibility           Minimum entry age is 18 years and maximum exit age is 60 years


Quantum of Loan       * 30 times of Gross Monthly Income subject to a maximum of Rs. 50
                      lakhs.
                      * Spouse Income can be included for calculating eligible amount if he /
                      she has steady income.
                      (Take home Income should be more than 40% of gross income after
                      deduction of EMI for the proposed loan, apart from other deductions)
Margin                33% on Land cost
Processing fee        1.15 % on Loan amount
Interest Rates        Please see the Interest Rate link on home page of our Bank’s website.
                      *Construction of house has to commence within 2 years from the date
                      of availing the loan / from the date of handing over possession by the
                      Government Housing Development Agency, as the case may be,
                      otherwise higher Rate of Interest will be charged for the delayed
                      period.
Repayment Period      Maximum 180 EMIs (No Holiday Period)
Prepayment charges    * Zero pre-closure charges
Security              * Equitable Mortgage of Property purchased out of loan proceeds.
                                    * Equitable Mortgage to be registered (at Applicant’s cost) if there is a
                                    provision for the same in the State where property is located.
Documents to be submitted for       As detailed in our Home Loan product.
processing the application          All the applicable/relevant documentary evidences are to be submitted
Other terms                             Property to be purchased should be in a good accessible
                                         developed/developing area and the Bank should be able to sell
                                         the same without problem in case of default.
                                        Property should be properly protected by fencing/compound wall.
                                        The lay out of the house site should have been approved by the
                                         appropriate authorities like CMDA, BDA, DDA, Town Planning
                                         Authorities etc.
Value added                         Group Insurance cover:
                                    * At the option of the applicant, Group Insurance Life Cover is arranged
                                    at concessional premium (to be borne by the Applicant).
                                    * The Applicant may opt for including the premium amount as part of
                                    Plot Loan.


NRI Plot Loan
Purpose         For purchase of House Site on ownership basis; House site should be located in layout
                approved by Government authority. Loan for purchase of house site at rural area is not
                permitted.
Eligibility            Maximum permissible age at the time of applying is 50 years & at the end of
                        repayment period is 60 years.
                       NRIs gainfully employed with a residual contract period / service of atleast 3 more
                        years to run.
                       NRI professionals with regular monthly income.
Quantum of             30 times of Gross Monthly Income;
Loan                   Maximum Loan amount: Rs.50 lakhs.
Margin          50% on Land cost
Processing
                1.15 % on Loan amount.
fee
Interest        Please see the Interest Rate link on home page of our Bank’s website
Rates           **Construction of house has to commence within 2 years from the date of availing the loan
                / from the date of handing over possession by the Government Housing Development
                Agency, as the case may be, otherwise higher Rate of Interest will be charged for the
                delayed period.
Repayment
                Not Exceeding 180 EMIs (No Holiday Period).
Period
Prepayment
                * Zero pre-closure charges
charges
Security        * Equitable Mortgage of Property purchased out of loan proceeds.
                * Equitable Mortgage to be registered (at Applicant’s cost) if there is a provision for the
                 same in the State where property is located.
Documents
to be
submitted
                 As detailed in our NRI Home Loan product.
for
                 All the applicable/relevant documentary evidences are to be submitted
processing
the
application
Other terms       Property to be purchased should be in a good accessible developed/developing area
                   and the Bank should be able to sell the same without problem in case of default.
                  Property should be properly protected by fencing/compound wall.
                  The lay out of the house site should have been approved by the appropriate authorities
                   like CMDA, BDA, DDA, Town Planning Authorities etc.
Value added Group Insurance cover:
            * At the option of the applicant, Group Insurance Life Cover is arranged at concessional
            premium (to be borne by the Applicant).
            * The Applicant may opt for including the premium amount as part of Plot Loan.


Home Improve
Purpose                             For purchase of household furniture, kitchen racks, cupboards, TV
                                    sets, Fridge, Computers, Wall paper provisions, lighting, interior
                                    decorations, Air-Conditioners, Kitchen Chimney, modern gadgets for
                                    kitchen / modular kitchen & piped gas supply/cost of digging of bore
                                    well with suitable water lifting devices like jet pump set, compressor,
                                    solar system and immersible pump set.
Eligibility                         Existing Home Loan borrowers (both residents & non-residents) /
                                    Prospective Home Loan borrowers.
Quantum of Loan                     * 30 times of Net Monthly Income subject to a maximum of Rs.5 lakhs.
                                    * Spouse Income can be included for calculating eligible amount if he /
                                    she is in Government / Public Sector organization / reputed private
                                    sector.
                                    * Take home Income should be more than 40% of gross income, with a
                                    minimum of Rs.6000/- as net monthly income, after recovery of
                                    proposed EMI.
Margin                              15% of cost of the articles to be purchased under the loan.
Processing fee                      1.15% of loan amount.
Interest Rates                      Please refer Interest Rate link on home page in our Bank’s Website
Repayment Period                    No Holiday period. Maximum repayment period allowed:
                                    For TV, Computer & other electronic items with less life span: 48
                                    months
                                    For others                                        : 60 months
Prepayment charges                  Zero pre-closure charges
Security                            * Extension of Equitable Mortgage of Property mortgaged for Home
                                Loan/EM of property for which the facility is availed.
                                * Equitable Mortgage to be registered (at Applicant’s cost) if there is a
                                provision for the same in the State where property is located.
Documents to be submitted for   As detailed in our Home Loan/NRI Home Loan product.
processing the application      In addition to this Quotation for articles to be purchased is also to be
                                submitted.
Insurance                          Household articles offered as security to be insured at borrower’s
                                    cost with Bank clause against fire, flood, earthquake, riot and other
                                    risks, which are normally covered by insurance companies.
                                   Property (offered as security) to be insured at borrower’s cost with
                                    Bank clause against fire, flood, earthquake, riot and other risks,
                                    which are normally covered by insurance companies.


IB Vehicle Loan
Salient Features                For purchase of New Two Wheeler or New / Used Four Wheeler(Used
                                four wheeler should not be more than 3 years and should be certified
                                by reputed automobile engineer / valuer)
Eligibility                     * Salaried Class with minimum service of three years.
                                * Businessmen, Professionals and Self-employed with minimum
                                experience of three years.
                                * Pensioners with repayment capacity.
                                * Minimum Gross monthly income for purchase of Four wheeler should
                                be Rs.20,000/-.
Quantum of Loan                 * 20 times of Gross Monthly Income Spouse Income can be included
                                for calculating eligible amount if he / she has steady income.
                                * Take home Income should be more than 40% of gross income after
                                deduction of EMI for the proposed loan, apart from other deductions.
                                * For Businessmen, Professionals & self-employed, based on their
                                average income earned in the last 3 years and capacity / ability to
                                repay the loan.
                                * Maximum Loan amount for purchase of Two Wheeler : Rs.50,000/-.
                                * Four Wheeler: Rs. 15,00,000/-"
Margin                          * 15% for New Vehicle.
                                * 40% for used vehicle (Four wheeler).
Processing fee                  0.30% of loan with a minimum of Rs. 300/-
Interest Rate                   Please see the Interest Rate link on Bank website home page
Repayment Period                Not exceeding 84 EMIs for salaried class applicants and 60 EMIs for
                                others. (No Holiday Period).
Security                        * Hypothecation of Vehicle to be purchased out of Loan.
                                * If the loan amount exceeds Rs. 10.00 lakhs, additional security
                                equivalent to amount exceeding Rs. 10.00 lakhs to be provided in the
                                form of Fixed Deposit Receipts / NSCs / LIC Policy (with surrender
                                value equivalent to the security to be provided) / Mortgage of
                                immovable property.
Documents to be submitted for   1. Completed Application Form with passport size photograph.
processing the application      2. Proof of Identity such as PAN Card / Voter’s ID/Passport/Driving
                                License.
                                3. Proof of residence such as Recent Telephone Bill / Electricity Bill /
                                Property Tax Receipt / Passport / Voter’s ID.
                                4. Proof of business address in respect of businessmen / industrialists.
                                5. Proof of Employment.
                                6. Salary Certificate.
                                7. Proof of other income like rent, interest on investment, if any.
                                8. Balance Sheet for the past three financial years in the case of
                                Professionals, Businessmen & Self employed.
                                9. Income Tax / Wealth Tax (if applicable) Returns for the past 3 years.
                                10. Copy of Driving Licence.
                                11. Quotation for Vehicle to be purchased from the authorized dealer.


IB Pension Loan
Salient Features                To meet expense towards medical, education, family function etc
Target Group                    * Central & State Government Pensioners, Family Pensioners, Re-
                                employed Pensioners, Indian Bank Retirees both under VRS and
                                superannuation.
                                * Whose Pension SB accounts are maintained at Indian Bank.
Quantum of Loan                     Age Limit (at entry level)           Eligible Amount
                                                               10 times of monthly pension with a
                                Pensioners aged upto 70 years
                                                               maximum of Rs.1 lakh
                                Pensioners aged above 70       10 times of monthly pension with a
                                years and upto 75 years        maximum of Rs.60,000/-
                                Family Pensioners aged upto 70 10 times of monthly pension with a
                                years                          maximum of Rs.60,000/-
Processing fee                  Nil up to Rs.25000/- and Rs.250/- for above Rs.25000/-
Interest Rates                  Please see the Interest Rate link on Bank website home page
Repayment Period                Maximum 36 months


IB Clean Loan (to Salaried Class)
Purpose                         For meeting Marriage/Educational and medical expenses, to celebrate
                                family functions and for other household expenses
Eligibility                     Permanent Employees with minimum service/ experience of three
                                years with Govt./Quasi -Govt./ Boards/ Endowments/ reputed
                                companies/ Corporate Industrial Establishments etc. with minimum
                                take home pay of 40% of gross salary after servicing the proposed
                                EMI.
Quantum of loan                 Eligible amount is calculated @ five times the gross salary (maximum
                                of Rs.50000/-) for account holders whose salary is credited in the
                                branch account or @7 times of gross salary (maximum Rs.1 lakh) with
                                employer sponsorship with undertaking letter from the employer to
                                    recover EMI from salary and remit to Bank.
Margin                              Nil
Interest Rate                       Please see the Interest Rate link on Bank website home page
Processing fee                      0.50% on the loan amount with min of Rs 500/-
Repayment Period                    36 Equated Monthly Instalments (EMI)
Security                            (a). Employer's sponsorship
                                    (b). Authorisation to debit SB account or
                                    (c). Third party guarantee and/or Encashable collateral security,
                                    (d). Obtention of post dated cheques


Loan / OD against NSC / KVP / Relief bonds of RBI / LIC policies
Salient Features                    Can avail Loan against NSC/KVP/Relief bonds of RBI/LIC policies to
                                    meet any expenses.
Eligibility                         All properly introduced individual customers, who have capacity to
                                    service the loan and interest.
Margin                              25% of the interest accrued value of NSC / KVP / RBI Relief Bond /
                                    Surrender value of LIC Policy.
Interest Rates                      Please see the Interest Rate link on home page of our Bank’s website
Processing fee                      0.30% of loan amount with minimum of Rs.300/-
Repayment Period                    Maximum: 5 years (for loan against NSC/KVP/RBI Relief Bond). 6
                                    years (for loan against LIC Policy).
Security                            Pledge of NSC / KVP / RBI Relief Bonds / Assignment of LIC Policies.
Documents to be submitted for       1. Salary Certificate / IT Return copy for assessing the capacity to
processing the application          service the interest / instalment.
                                    2. Original NSC / KVP/ RBI Relief Bond / LIC Policy.


Ind Mortgage
Salient
                 Any bonafide purpose other than speculative purpose
Features
Eligibility      Salaried class:
                 * Permanent Employees of Central / State Govt./Quasi Government Bodies/Public Limited
                 companies/ Reputed Private Limited companies with clear record of paying timely salaries.
                 * completed minimum 3 years of service.
                 * Should have regular minimum monthly income of Rs.15,000/- & take home pay should be
                 more than 40% of gross income after deduction of EMI for the proposed loan, apart from
                 other deductions.

                 Self employed / Professionals / Businessmen:
                 * based on their average income earned in the last 3 years
                 * Minimum net annual income has to be Rs.1,50,000/- after deduction of proposed EMI.
              Firms and companies:
              * based on cash flow.

              Age criteria for individuals:
              Minimum entry level age: 18 years.
              Salaried Class individuals:
              Exit Level age : 60 years (or date of retirement)
              Other individuals:
              Exit Level age : 60 years
Quantum of
           Maximum: Rs. 200 lakhs.
Loan
Margin        50% of Market Value of property offered as security.
Processing
              1.15% on loan amount.
fee
Interest
              Please see the Interest Rate link on Bank website home page
Rate
Repayment
              Not Exceeding 84 EMIs (No Holiday Period)
Period
Prepayment * No pre-closure charges, if loan is closed out of own funds.
charges    * 2.25% on Balance outstanding or applicable Drawing Limit whichever is higher, if loan is
           closed by way of take over by another Bank / Financial Institution.
Security      * Equitable Mortgage of Property offered as security.
              * Equitable Mortgage to be registered (at Applicant’s cost) if there is a provision for the
              same in the State where property is located.
              * Ind Mortgage Loan against Agricultural property or disputed property / property attached
              by Income Tax authorities not allowed.
Documents     1. Completed Application Form with passport size photograph.
to be         2. Proof of Identity such as PAN Card / Voter’s ID/Passport/Driving License.
submitted     3. Proof of residence such as Recent Telephone Bill / Electricity Bill / Property Tax Receipt
for           / Passport / Voter’s ID.
processing    4. Proof of business address in respect of businessmen / industrialists.
the           5. Proof of Employment.
application   6. Salary Certificate.
              7. Proof of other income like rent, interest on investment, if any.
              8. Balance Sheet for the past three financial years in the case of Professionals,
              Businessmen & Self employed.
              9. Income Tax / Wealth Tax (if applicable) Returns for the past 3 years.
              10. Sale Deed.
              11. Approved Building Plan.
              12. Title Deed Documents for 30 years.
              13. Proof of title in the Revenue Records.
              (Legal Opinion from Advocate & Valuation of property from Engineer will be arranged by
              Bank at applicant’s cost).
Insurance     Property (offered as security) to be insured at borrower’s cost with Bank clause against fire,
                flood, earthquake, riot and other risks, which are normally covered by insurance
                companies.
IB Rent
Encash
Purpose                             Repairs, renovation of buildings, marriage, education, household
                                    festivals, medical or any bankable purpose.
Eligibility                         Residential / commercial building owners (individuals / joint owners/
                                    corporate / firms) who have / who propose to let out their buildings to
                                    top notch corporate public sector undertakings / state / central
                                    Government offices.(Lease Agreement between the applicant and
                                    tenant should be Registered).
Quantum of Loan                     Upto 84 months rent or rental value for the unexpired certain period of
                                    lease (Rent receivables).
Margin                              40% on Net Rent Receivables (Rent Receivables Net of Advance
                                    already received from the tenant + TDS) with a maximum of 60% of
                                    Market Value of Property.
Processing fee                      1.15% on loan amount.
Interest Rate                       Please see the Interest Rate link on Bank website home page
Prepayment charges                  * No pre-closure charges, if loan is closed out of own funds.
                                    * 2.25% on Balance outstanding or applicable Drawing Limit whichever
                                    is higher, if loan is closed by way of take over by another Bank /
                                    Financial Institution
Security                            * Equitable Mortgage of Property.
                                    * Equitable Mortgage to be registered (at Applicant’s cost) if there is a
                                    provision for the same in the State where property is located.
Documents to be submitted for       1. Completed Application Form with passport size photograph.
processing the application          2. Proof of Identity such as PAN Card / Voter’s ID/Passport/Driving
                                        License.
                                    3. Proof of residence such as Recent Telephone Bill / Electricity Bill /
                                        Property Tax Receipt / Passport / Voter’s ID.
                                    4. Proof of business address in respect of businessmen /
                                        industrialists.
                                    5. Proof of Employment.
                                    6. Salary Certificate.
                                    7. Proof of other income like rent, interest on investment, if any.
                                    8. Balance Sheet for the past three financial years in the case of
                                        Professionals, Businessmen & Self employed.
                                    9. Income Tax / Wealth Tax (if applicable) Returns for the past 3
                                        years.
                                    10. Sale Deed.
                                    11. Approved Building Plan.
                                    12. Title Deed Documents for 30 years.
                                    13. Proof of title in the Revenue Records.
                                    14. Copy of Registered Lease Agreement.
                                    15. Brief details about lessee and their financials.
                             (Legal Opinion from Advocate & Valuation of property from Engineer
                             will be arranged by Bank at applicant’s cost)
Insurance                    Property (offered as security) to be insured at borrower’s cost with
                             Bank clause against fire, flood, earthquake, riot and other risks, which
                             are normally covered by insurance companies.


IB Bhavishya Prakash
Purpose                      For going abroad for gainful employment on job visas. Loan can be
                             considered for meeting expenses for migration abroad for employment.
                             * Registration Expenses
                             * Test and interview expenses
                             * Agency commission
                             * Visa charges
                             * Air Fare (Payment for air ticket will be made directly to Airlines)
                             * Any other related expenditure in connection with employment abroad.
Target Group                 * The applicant should be properly introduced to the Bank who have
                             successfully completed the following courses.
                             * Professionally qualified persons, such as Doctors, MCA, Qualified
                             Nurses , who have completed (1) B.Sc. (Nursing) or (2) Diploma in
                             general nursing, (3) B.Sc. (Physiotherapy) etc.
                             * Those who have already availed educational loan from us can avail
                             this facility, subject to repayment capacity.
                             * The ward/spouse/close relative of the existing customers are also
                             eligible
                             * Age not exceeding 35 years
Quantum of Loan              Maximum Rs 1.00 lakh for Middle East countries
                             Rs 1.50 lakhs for U.K/Europe
                             Rs 2.00 lakhs for U S A
Age Group                    Not exceeding 35 years
Margin                       10 %
Interest Rate                Please see the Interest Rate link on Bank website home page
Processing fee               0.30% on the loan amount with min of Rs 300/-
Repayment Period             Max 36 EMI or in Lump sum.
Security                     EM of the property OR liquid securities like NSC/LIC policy and Term
                             Deposits of our Bank, worth not less than the loan amount, along with
                             the guarantee of parent or spouse.
Other Requirements/Details   * No prepayment charges.
                             * 75 % of the expenses, like registration charges, agency commission
                             etc. will be reimbursed after getting selection, based on the declaration
                             from the applicant and also on production of selection document


IB Balavidhya Scheme
Salient Features       To meet the cost of admission fees and term fees, cost of books, uniforms,
                       computer fees, transportation cost (if provided by the school) and duly certified by
                       the respective school authority on yearly basis.
Eligibility            * Salaried class
                       * Employees in public sector/reputed companies
                       * Professional self employed with minimum 3 years of satisfactorily operated SB
                       account with our Branch.
Quantum of Loan        Actual expenses – maximum of r.30,000/- per family
Margin                 5%
Rate of Interest       Please refer Interest Rate link on home page in our Bank’s Website
Repayment Period       10 EMI to commence from the next month of disbursement.
Service Charges        A 300/- per application
Security               Employer’s sponsorship/ Salary Account with our Bank/Authorisation to debit SB
                       a/c/Post Dated Cheques
Other                * Donation/Capitation fee is not eligible.
Requirements/Details * Children studying LKG to XII standard in any recognized school/ Govt. aided
                     schools/Approved by Board of Education are eligible.
                     * Roll over can be permitted every year, based on the progress of the student.
IB Home Loan
Combo
Purpose / Objective               As applicable for the individual Loan Products
Eligibility                       Individuals including Joint borrowers who have
                                  * Availed the Home Loan from Indian Bank
                                  * Satisfactorily serviced the Home Loan for at least 3 years after the
                                  Holiday Period.
                                  * Created Equitable Mortgage
                                  * Maintained security margin of at least 15% for purchase of House /
                                  plot / construction of house.
                                  * Home Loan account repayments are regular and the account is in
                                  Standard Category.
Benefits                          Under the package the borrower is entitled for any one or more of the
                                  following loans, with concessional interest rate and processing charges
                                  provided he / she is otherwise eligible as per the individual loan
                                  products.
                                  * IB Vehicle Loan (Both 4 wheeler and 2 wheeler)
                                  * IB Clean Loan (to Salaried Class)
                                  * IB Bhavishya Prakash (for one of the dependants of the borrower)
                                  * IB Pension Loan
                                  * IB Home Improve
Interest Rates                    Concession of 0.50% from the applicable Card Rate for the following
                                  loan products
                                  * IB Vehicle Loan (Both 4 wheeler and 2 wheeler)
                                  * IB Clean Loan (to Salaried Class)
                                * IB Bhavishya Prakash (for one of the dependants of the borrower)
                                * IB Pension Loan
                                No interest rate concession for IB Home improve
Processing fee                  Concession of 50 % from the applicable processing charges of the
                                following loan products
                                 * IB Vehicle Loan (Both 4 wheeler and 2 wheeler)
                                * IB Clean Loan (to Salaried Class)
                                * IB Bhavishya Prakash (for one of the dependants of the borrower)
                                * IB Pension Loan
                                * IB Home Improve
Security                        * The security prescribed for the individual loan products are to be
                                offered
                                * Equitable Mortgage taken for the Home Loan should be extended to
                                cover the other loan/s sanctioned under the package.
Other Requirements/Details      * All other terms and conditions laid down as per the individual loan
                                products should be complied with.
                                * The Home Loan borrowers can avail any one or more of the above
                                products subject to fulfilling repayment capacity for servicing existing
                                loan liability/ies and the proposed loan liability/ies




IB Reverse Mortgage
Purpose of Loan        Medical , emergency expenditure for maintenance of family
                       For supplementing pension / other income
                       Meeting any other genuine need
                      (Speculative, trading purposes shall not be permitted)
Eligibility            Senior Citizens above 60 years, including retired staff of our Bank.
                        Married couples will be eligible as joint borrowers for financial
                        assistance provided one of them is above 60 years of age.
                       They should be owner of self acquired residential property with
                        absolute, clear title / conveyance and self-occupied and it should be
                        Principal residential house / flat, located in India.
                       The property should be free from encumbrance and is saleable
                       The residual life of the property should be more than 20 years
Quantum of Loan        The amount of loan will depend on realizable value of the residential
                        property as assessed by the Bank. The realizable value of the property
                        is calculated at 10% less than the Market Value assessed by Bank’s
                        Panel Engineer.
                       Maximum loan amount: Rs.40 lakh.
                       Loan will be disbursed by Bank on regular monthly terms as annuity.
                        Lump sum up to 20% of the eligible loan amount should be considered
                        only if the amount is meant for utilization for meeting medical expenses
                        of the Reverse Mortgage Loan Applicant/s.
                       The maximum eligible lumpsum is restricted to Rs.15 lakhs.
                       Revaluation of property to be done once in 3 years and interest rate will
                        be reset once in 5 years. Periodic monthly payments will be based on
                           such revaluation and the Loan to Asset Value shall be based on such
                           revaluation. Borrowers consent for this will be obtained upfront.
Margin                 61% on the realizable value of property.
Period of Loan          15 years, with a provision to roll over, in case of need, after revaluation
                        Fresh terms, as at the time of rollover, shall be applicable.

Security                 Mortgage of residential property in favour of Bank
                         Bank reserves the right to seek additional collaterals
                         Commercial property will not be eligible for Reverse Mortgage Loan
                   {Equitable Mortgage to be registered (at Applicant’s cost) if there is a provision
                   for the same in the State where property is located }
Processing fee     NIL for existing customers, Rs. 285/- per lakh for others
Documents to be        1. Completed Application Form with passport size photograph.
submitted for          2. PAN Card copy.
processing the         3. Proof of residence such as Recent Telephone Bill / Electricity Bill /
application            Property Tax Receipt / Passport / Voter’s ID.
                       4. List of legal heirs with name, age, address etc.
                       5. Sale Deed.
                       6. Approved Building Plan.
                       7. Title Deed Documents for 30 years.
                       8. Proof of title in the Revenue Records.
                   (Legal Opinion from Advocate & Valuation of property from Engineer will be
                   arranged by Bank at applicant’s cost).
Insurance          Property (offered as security) is to be insured at borrower’s cost with Bank
                   clause against fire, flood, earthquake, riot and other risks, which are normally
                   covered by insurance companies.
Others                 1. The loan amount need not be repaid during the lifetime of the borrower
                          / spouse. The borrower / spouse can continue to stay in their home
                          during their lifetime.
                       2. The option of pre-payment is available, without pre-payment charges.



LOAN FOR PURCHASE OF VAN/BUS TO EDUCATIONAL INSTITUTIONS
Salient Features                  Purchase of New Vehicles and second hand vehicles by reputed
                                  Educational Institutions with sound financials and smooth cash flow
Eligibility                       Educational Institutions maintaining Current Account with our Bank
                                  (through which all their fee collections and other income are routed)
Quantum of Loan                   Max: 10 lakhs for bus with capacity of 45 (approx)
                                  Max: 7 lakhs for bus with 21 seater capacity
                                  Max: 5 lakhs, if it is Mahindra Van
Margin                            For new Vehicle: 20%; For Second Hand Vehicle: Additional margin of
                                  5% for each year (according to the age of the Vehicle – age of the
                                  vehicle not more than 4 years old)
Rate of Interest                 Please refer Interest Rate link on home page in our Bank’s Website
Repayment Period                 60 EMI - to commence from the next month of disbursement.
Service Charges                  1.15% of loan amount
Security                         Hypothecation of Vehicle to be purchased


Documents to be submitted for         Audited Balance Sheet of the Educational Institution for 3 years.
processing the application            Quotation for the vehicle from a reputed dealer/valuation of the
                                          vehicle (if second hand) from approved valuation Engineer.
                                      Expense statement of the Institution to ascertain income
                                          generation capacity.



Loan to LIC Agents
Purpose                          To meet family , Medical, Educational expenses or any other personal
                                 needs
Eligibility                      LIC Agents with the services of the Corporation for a period of not less
                                 than 5 years and above 21 years of age
                                      Commission payable by LIC to the agents should be routed
                                         through the SB account with our Bank
Quantum of Loan                  50% of the average of annual income by way of commission for the
                                 past 3 years, as per Form 16A with a maximum of Rs. One lakh. If
                                 spouse is employed in Govt. / PSU/ Reputed Public Ltd. Organisations,
                                 then (50% of the average annual income for the last 3 years) spouse
                                 income can also be included to arrive at the quantum.
Margin                           NIL
Processing fee                   0.30% on loan amount with min. of Rs.300.
Interest Rate                    Please see the Interest Rate link on Bank website home page
Repayment period                 Maximum 36 EMIs
Security                              Guarantee from suitable person with sufficient net worth
                                       acceptable to the Bank..
                                      LIC Policies in the name of the applicant, worth not less than the
                                       loan amount to be assigned in favour of our Bank
                                      Spouse guarantee to be obtained wherever his/her income is
                                       taken into account.


Education loan to students is discussed under RBD products



REVISED IBA EDUCATIONAL LOAN SCHEME -2011
Quantum of Finance: Refer Adv 94/2011-12 dt 16.09.2011 for details
Loans in excess of Rs.10 lakhs qualify for interest subsidy under Central Sector Interest Subsidy Scheme
for loan amount upto Rs.10 lakhs only.
Category Priority Sector Non Priority Sector
Studies in India Rs.10.00 lakhs Rs.15.00 lakhs
Studies abroad Rs.20.00 lakhs Rs.25.00 lakhs
Margin:
Upto Rs.4.00 lakhs : NIL Above Rs. 4.00 lakhs: Studies in India : 5% Studies Abroad : 15% Scholarship/
assistantship to be treated/ included in margin
Security:
> Upto Rs.4.00 lakhs: Parents to be Joint borrower(s). No security.
> Above Rs. 4 lakhs and upto Rs.7.50 lakhs: Besides the parent(s) executing the documents as Joint
borrower(s), collateral security in the form of suitable third party guarantee is to be obtained. In
exceptional cases Zonal Managers, at their discretion may waive third party guarantee if satisfied with the
net-worth/ means of parent/s who would be executing the documents as ―Joint borrower‖.
>Above Rs.7.50 lakhs: Parent(s) to be joint borrower(s) together with tangible collateral security, the
market value of which is not less than the loan value, acceptable to bank, along with the assignment of
future income of the student for payment of installments.

Educational Loan (Non IBA Scheme) – for pursuing higher education in India and Abroad
The Revised IBA Educational Loan Scheme- 2011 has been communicated vide our circular
Adv.94/2011-12 dt. 16.09.2011 for implementation. As per the above revised scheme guidelines,
students who secured admission under Management Quota are not eligible to avail educational loan
under the IBA scheme. Hence to provide an alternative opportunity to such segment of aspiring students
to continue their education, a new scheme ―Educational Loan (Non IBA Scheme)‖ outside the purview
of the existing IBA Educational Loan scheme has been formulated. Guidelines are given in the Annexure
to Circular Adv- 107 /2011-12 dt.10-10-2011

Priority Sector – Revised guidelines
Targets and sub-targets linked to Adjusted Net Bank Credit (ANBC)- Net Bank Credit plus investments
made by banks in non-SLR bonds held in HTM Category or Credit Equivalent amount of Off-balance
Sheet Exposures whichever is higher, as on March 31 of the previous year.
Agriculture - Direct Finance to Agriculture shall include short, medium and long-term loans given for
agriculture and allied activities directly:
to individual farmers, SHGs or JLGs(Joint Liability Group) of individual farmers without limit.
 to others (corporate, partnerships, institutions) upto Rs.1 crore
 1/3rd of limit in excess of 1 cr. be classified as direct and rest indirect.
 Advances to Food & Agro based processing units by individuals, SHGs, Co-op.

Thrust Areas – STPL through KCC with Personal Accident Insurance Scheme and NAIS cover for notified
crops. Agri JL for other than crop production also to be encourage. More credit flow to Agri export zones,
food/ agri parks, DRP, sprinkler etc.; contract farming, farm Mechanisation etc. As per GOI directions all
eligible non-default farmers in our Service Area should be provided with KCC.
Agriculture - Indirect Finance to Agriculture will include:
Loans to food and agro-based processing units with investments in plant and machinery upto Rs.10 cr. by
other than individual, SHGs and Coop in rural
Credit for purchase & distribution of fertilizer, pesticides, seeds etc. & Loans upto Rs. 40 lakhs towards
cattle feed, poultry feed etc.
Finance for setting up Agri Clinics and agri business centres.
Loans for construction & running of storage facilities – warehouse, market yards, cold storage, godowns
for agri produces, irrespective of location.
Advances to dealers in irrigation equipment/agri machinery upto Rs.30 lakhs
Advances to Custom Service Units and to Arthias – commision agents in r/su.
Fifty percent of the balance outstanding under General Credit Cards.
Loans granted to NGOs/MFIs/NBFCs for on lending to farmers/SHGs/JLGs.

Small Enterprises – Direct Finance under Priority Sector will include:
Micro (manufacturing) Enterprises - investment in P&M not exceeding 25 lakh.
Micro (service) Enterprises investment in equipment not exceeding Rs.10 lakh
Small(manufacturing)Enterprises – investment in P&M not exceeding Rs.5 cr.
Small (service) Enterprises – investments not to exceed Rs.2 cr. (for all the above 4 items original cost of
land and building are exempted)
Advances granted to units in the KVI Sector (Khadi and Village Industries), irrespective of their size,
location and amount of investment will be eligible under sub target (60%) of small enterprises segment in
priority.
While calculating investment in Plant and Machinery the original price (whether new or 2nd hand) shall be
taken but the following items, which are not directly linked to manufacturing process, can be excluded.
Installation charges, equipment for R&D/pollution control, power generator, bank charges, electrical
installation, gas plants, transportation. Charges, technical know-how charges, fire fighting equipment,
storage tanks, jigs/dyes/moulds/spare parts for maintenance.
Small Enterprises – Indirect Finance shall include:
Advances to individuals/coop of producers in the decentralized sector, supply of inputs and marketing of
outputs of artisans, village and cottage industries
 Existing investments as on 31.3.2007 in NABARD Special Banks upto Mar 2010.
 Deposits in SIDBI by foreign banks upto 30.4.2007 to 31.3.2010 on account of non-achievement of
priority sector target/sub-targets.
 Loans granted by banks to NBFCs for on-lending to Small & Micro Enterprises

SME – Service - Retail Trade: Fair price shops, Consumer Co-op Stores, Retail traders Limit –Rs 20
lakhs. Trade Well Scheme (within 20 lacs)to be focused on for better delivery.

Other Priority Sector Advances:
Micro Credit: Upto Rs.50000/- per borrower either directly or SHG/JLG/MFI/NGO
Educational Loans: Rs.10lk/20lk studies in India/Abroad, Not Institutional Cr.
Housing Loans: Upto Rs.25 lk to individuals, excluding loans to own employees.
Other Focus Area - Credit to weaker sections:
Weaker section under priority sector shall include
i) Small and marginal farmers with land holding of 5 acres or less, land-less labourers, tenant farmers and
share croppers;
ii) Artisans, village & cottage industries where individual credit limits do no exceed Rs.50000/-
iii) Beneficiaries under Government Sponsored Schemes: SGSY, SJSRY with sub-targets under SC/ST;
advances to SHGs.
iv) Loans to distressed poor to prepay their debt to the informal sector, against appropriate collateral or
group security.
v) Financial inclusion scheme with OD and GCC facility.
DRI: Loan of Rs.20000 for housing & 15000 for others(earlier 6500 & 5000) – yearly income below
Rs.18000 in rural & Rs.24000 in urban to be eligible. 40% of credit under the scheme to SC/ST. DRI
2/3rd thro Rural / Semi urban branches.
SC/ST: To give priority and to reach sub targets under govt. sponsored schemes
Minorities‟ Welfare: GoI under PMs new-15 point program 15% of PS in 3 years.
Priority Sector Targets:
Priority Sector should constitute 40% of ANBC of March 31 of the previous year.
18% of ANBC should be for agriculture sector. Indirect lending in excess of 4.5% of ANBC will not be
considered under Agri.
10% of ANBC should be for the weaker sections
1% of previous year‘s total advances should be under the DRI Scheme
40% of the agri disbursals should be towards SF/MF.
 Advances to Small enterprises will be reckoned for Priority Sector advance, of which 40% to Micro
Enterprise (manufacturing) having investment upto 5 lk and micro enterprises (service) investment upto 2
lk, also another 20% to micro E(Mftg) Rs.5.-25lk and micro E(service) Rs.2. to 10 lakh.
For Foreign Banks the Priority target is only 32% of ANBC with sub-targets of 10% of ANBC to Small
enterprises (60% of which to micro enterprises similar Domestic commercial banks – as above), and 12%
of ANBC to export credit - which become part of priority sector for them, but not to domestic Banks.

Micro Finance: encompasses a range of financial services like provision of thrift, credit and other financial
services of very small amounts to the poor to improve their income levels and living standards.
Financial inclusion: Branches to cover min. 250 new households by opening No-frill accounts and
providing OD/GCC facility – Credit Counseling is main to Financial Inclusion.
Micro Insurance Schemes: Jana Shree Bima Yojana & Univeral Health Care Policy.

Charging of Interest on Priority Sector Advances & Security:
 For Agri credits Banks should not compound interest in case of current dues.
 When crop loan or instalments on TL become overdue, interest to be added to principal.
 Where the default is due to genuine reason banks should extend loan period or reschedule the
instalments under term loan.
 No penal interest should be charged by banks for loans under priority sector up to Rs 25,000 as hitherto.
 Long duration crop should be compounded annually. No penal interest for loans under priority sector
upto Rs.25000/-.
 No service charges/inspection charges should be levied on priority sector loans up to Rs. 25,000.
 For loans above Rs. 25,000/- banks will be free to prescribe service charges with the prior approval of
their Boards
 Banks may waive insurance of assets financed by bank credit in all categories of priority sector advances
up to and inclusive of Rs. 10,000 for Fire & other risks. For equipment and current assets of SSI waiver
upto a value of Rs.25000/-.
 The limit for all SSI borrowal accounts for obtention of collateral security is Rs.5 lakhs as per RBI Norms.
But to get insurance cover under CGTSME, collateral security or third party guarantee is not to be taken.
Processing fee waived for all KCC/JL for crop production purpose upto Rs 3.00 lakhs per borrower.
Inspection charges also waived for KCC upto Rs 3.00 lakhs per borrower.

1.5% INTEREST SUBVENTION SCHEME AND 2% ADDITIONAL SUBVENTION FOR SHORT-TERM
CROP LOANS DISBURSED DURING 2010-11
Interest subvention as an incentive to those farmers who repay their short term crop loans as per
schedule is raised from 1% during 2009-10 to 2% during 2010- 11.Further Government of India has
approved the Interest Subvention scheme @ 1.5% for 2010-11 (reduced from 2% during 2009-10) to
provide short term crop loans up to Rs.3.00 lakhs per farmer at 7% per annum.
1.5% Interest subvention Scheme and 2% additional subvention as an incentive to those farmers who
repay their short-term crop loans as per schedule in 2010-11
Salient features of the notification are:
_ Government will provide interest subvention of 1.5% p.a to Banks in respect of short term production
credit up to Rs.3.00 lakhs provided per farmer during the year 2010-11. _ This amount of subvention will
be calculated on the crop loan amount from the date of its disbursement / drawal up to the date of actual
repayment of the crop loan by the farmers or up to the due date of the loan fixed by the banks for the
repayment of the loan, whichever is earlier, subject to maximum period of one year.
_ This subvention will be available to Banks on the condition that they make available short-term
production credit up to Rs.3 lakhs at ground level at 7% p.a
Additional 2% interest subvention to prompt paying farmers who repay their short-term production credit
as per schedule




HR:

Memento to Retired Staff Staff members Retiring on Superannuation are being presented a ‗Memento‘
in the form of an Article worth Rs.7500/- HO:HRM Department will remit the amount towards Memento to
the concerned branches through C2C during the last week of each month enabling the branches to
purchase an article ( and not cash) as per the choice of the retiree and present the same to the retiring
staff member

Staff Members who retire on superannuation / medical grounds are provided with a Medical Aid of
Rs.4000/- per annum on a declaration basis which is made available to the retirees from the subsequent
year of retirement. This facility has to be availed in the current year itself and cannot be carried over to
subsequent year/s

Grant of scholarship for education to the wards of staff members: Considering the average age of our
staff members and the changes in the overall education scenario, the following modifications are made in
the scheme. The number of Scholarships for professional courses has now been increased to 400 from
the existing level of 350. Further, to encourage the wards to take up higher education, 100 number of
scholarships are introduced for Post Graduate courses for 100 wards is given at Rs.4500/-p.a from 2010-
11 onwards. All other conditions remain the same

Leave fare concession – visits abroad. while visiting the declared destination in India. The cardinal
principle is that the employee must visit the designated place which has to be in India. As long as the
officer‘s place of domicile or designated place is anywhere in India and he/she actually visits the place so
designated, he/she may be reimbursed actual charges for his/her entire journey within and outside India
or the cost of fare to his/her hometown/designated place, by the shortest route, by his/her entitled class,
whichever is lower. For award staff the reimbursement would be restricted to the maximum eligible
amount for the entitled distance according to 2 year / 4 year block or the actual cost which ever is lower

―Reimbursement of Health Insurance Premium‖ to retired staff members retired on superannuation for
Mediclaim policy value of Rs 2 lakhs from the existing Policy value of Rs 1 lakh from 01.04.2010.
Maximum amount Rs 5035/- upto the age of 65 yrs and Rs.11832/- above the age of 65 years for
reimbursement will only be for renewal of existing policies or fresh policies taken on or after 01 11 2011

Staff Members who retire on superannuation / medical grounds are provided with a Medical Aid of
Rs.4000/- per annum on a declaration basis which is made available to the retirees from the subsequent
year of retirement.

CBS

Corporate Net Banking :
Customers included :
1. Public / Private Limited Companies and Registered Partnership firms
for both viewing and funds transfer
2. Unregistered firms, Clubs, Association of persons, Societies, Trusts, HUF, and SHGs
[For viewing facility only, for the present]
Users are given specific user-id and transactions have to be authorised by another user. Multi level user
authentication is provided. Customers can view the accounts, funds transfer, RTGS/ NEFT, Salary
uploads, Internet mail options. etc., ensures 24X7X365 banking
HO TMD has launched a website on Information System Security, which can be accessed through the
CBS Help desk site or through the intranet site of our Bank. The site has been launched with the idea of
imparting information about information security related matters and to create awareness on information
security aspects.
Relationship Manager Module has been introduced in CBS system to facilitate the following.
a. Activate Internet Banking, Mobile and Phone banking from the branch itself.
b. The requirement can be entered from the branch by the branch staff themselves instead of sending IP
to Project Office.
c. Based on the updations done by the branch, Project Office generates PIN mailers immediately and
send the same to the branches on the next day itself


Transactions restricted to Home branch in CBS:

        Closure of Deposit accounts
        Addition/Deletion of names in Deposit accounts.
        Change of address.
        Change in Mode of operation
        Noting / Changing of Nomination
        Change of ownership of accounts.
        Modification of signature.
        Issue of Cheque books.
        Revocation of Stop Payment Instructions.
        Modification of SI.
        Form 15G/15H
        Power of Attorney / Mandate
        Settlement of death claims
        Discharge / Release of securities.
        Lifting of Lien / Hold in a deposit account.
        Disbursal of Loan / Release of additional facility / allowing excess in loan accounts.
        Closure of Guarantee account

Internal clearing in CBS

Cheques drawn on Local Indian Bank branches falling within the clearing centre should be paid as
transfer transactions. Such cheques should be booked in ‗Internal Clearing‘ only when the collecting
branch is unable to pay them due to reasons like insufficient funds, excess over limit, withdrawal against
uncleared effect, data security for the drawer‘s account etc., Non-availability of specimen signature in the
system for verification should not be the reason for sending the local cheques in clearing

Charges when transactions are entered in Batch mode:
Options for online charging of host branch transactions are not available in the transfer batch and hence
transfer transaction upto Rs. 25 lacs involving other branch accounts should not be made through a
batch. However, if the transaction involves a single debit and multiple credits necessitating a batch, the
charges have to be recovered manually.
CENTRALISED PENSION / PAYROLL
Points to be taken note of in respect of Payroll updation:
The transfer of employee in respect of transferred staff members should be done through Transfer Portal‘
site, first by the outgoing branch, followed by the incoming branch.
The incoming branch should confirm the joining of the staff in the Transfer Portal itself.
The Pay Master details of a staff member relieved from the Bank‘s service should be deleted by selecting
‗Update‘ code as ‗Deletion‘ in Type-1.
The Special Allowance to award staff should ve entered in Type-2 only.
If salary for the current month is not to be paid, Branch should make the status for the employee as
‗Salary Stopped‘ in Type-1.

Points to be taken note of in respect of Pension Master / Pension Payments :
Branches should always give correct ‗Category Code‘.
In the case of updation of revised basic, the revision tag should be ‗B‘. If it is ‗N‘, then the system will
pay DR on old DA rates, leading to excess payments.
Branches should ensure that the Date of Birth of the pensioner is correct.
In respect of Family pensioner, the Date of birth of the Family pensioner should be entered.
In case of the death of the pensioner, the Date of Death should be updated in the Pension Master
immediately in the same month.
A deceased pensioner is eligible for Pension upto the date of death
In the case of family pensioner, the date of commencement of pension is ‗One day after the death of
general pensioner‘.
The additional quantum eligible for the pensioners at various ages are as under :

i. 20% in respect of the pensioner between 80 years and 85 years.
ii. 30% in respect of the pensioner between 85 years and 90 years.
iii. 40% in respect of the pensioner between 90 years and 95 years.
iv. 50% in respect of the pensioner between 95 years and 100 years.
v. 100% in respect of pensioners above 100 years

The additional Pension is eligible for Dearness Relief
For claiming the arrears paid to the pensioners, the menu to be used is ‗Pension arrears master‘.


Risk Management:

Sector wise exposure ceilings fixed as per the Credit Risk Management Policy 2011-12:

Capital Market exposure                               40 % of the Net worth as on March 31 of previous
                                                      year
Within the above overall ceiling Direct investment in 20 % of the Bank’s worth
shares, convertible bonds/debentures, units of
equity oriented mutual funds and all exposure to
Venture Capital Funds
Stock brokers and market makers (both fund based 15% of the Net worth as on March 31 of previous
and Non fund based)                                   year
Fresh Credit exposure to any single stock broking Rs. 50 Crores per borrower
entity including its associates / interconnected
companies and single broker
Real Estate Sector – Home Loan                   20 % of Gross Global Credit as of previous year
                                                 end
Commercial Real Estate (CRE)                     7.5 % of Gross Global Credit as of previous year
                                                 end
Risk weights for other exposures:

Consumer Credit loans, Personal loans and credit card receivables                           125%
       Capital market exposure                                                              125%
Commercial real estate                                                                      100%
Restructured commercial Real Estate                                                         125%
NBFC ND-SI                                                                                  100%
Home Loans:
where LTV* is not more than 75% - Amount of loan upto Rs. 30 Lakhs                            50%
                                  Amount of Loan – Rs. 30 Lakhs below 75 Lakhs                75%
Where LTV is more than 75% and amount is less than 75 Lakhs                                 100%
Residential housing loans of Rs. 75 Lakhs and above irrespective of LTV                     125%
Restructured Home loans (Additional Risk weight)                                             25 %
Staff Loans
Fully covered by superannuation benefits and / or mortgage of flat / house                   20%
All other loans and advances to Banks own staff                                              75%
All other assets                                                                            100%


                                                                                          Risk
                              Non Performing Assets
                                                                                         Weight
Unsecured portion of NPA, net of specific provisions, other than residential
mortgage loan is
Less than 20 % of the outstanding amount of the NPA                                         150%
Atleast 20 % of the outstanding amount of the NPA                                           100%
Atleast 50% of the outsanding amount of the NPA                                              50%
Where NPA is fully secured fixed assets, other than residential propety                     100%
NPAs secured by residential property
Less than 20% of the outstanding amount of the NPA                                          100%
At least 20% but less than 50% of the outstanding mount of the NPA                           75%
50% or more of the outstanding amount of the NPA                                             50%

An NPA is a loan or advance where: 1. Term Loan: Interest of installment of principal remain overdue
for a period of more than 90 days in respect of a term loan.
2. OD/OCC – A/c out of order for more than 90 days
a) Outstanding balance above limit for 90 days
b) no credit for the last 90 days
c) credits not sufficient to cover interest
d) irregular d/l, no stock statements for the last 90 days

3. Regular credit limits not reviewed/renewed within 180 days from the due date; adhoc not regularised
within 90 days
4. Bills purchased – Bills if overdue for more than 90 days
5. Defaulted Guarantee or devolved LC – When it become fund based and remain overdue for 90 days
from date of Balance Sheet
6. Agriculture Loans STPL/MTL –
a) Interest and/or installment remains overdue
b) 2 crop seasons for short duration crops
c) 1 crop season for long duration crop – above 1 year, beyond the due date.
d) Other Accounts – Amount receivable remains overdue for more than 90 days

NPA Classifications - exemptions
   1) LOD/NSC/LIC/KVP
   2) SHL/SVL & other staff loans where interest is payable after principal – NPA only when
    installments in default
   3)When account is re-phased/restructured before it slips to NPA category - SMA
   Exemptions made as per RBI guidelines- Agriculture loans, natural calamities.
Interest on NPA should be classified under MOI, without vouching.
Rating / Scoring Models (RAM)

Software driven rating / scoring models (Risk Assessment Model – RAM) for
different segments are in place since 1st April, 2008.
Rating Scale (Grade)

The Bank’s Rating scale will be with 9 grades (besides "D" for NPA accounts) viz., AAA, AA+, AA, A,
BBB, BB, B, CC, and C. For project rating, the grades are P1, P2, P3, P4 and P5.
The validity of the ratings is as specified below:




Assignment of Rating grades and confirmation of Ratings:

Following are the functional authorities for assigning, reviewing and approval of the rating grades:

Sanctioning Authority                  Rating Assignor Reviewer             Approver
Branch                                 Loan Officer    NIL                  ABM / RBS
RBS                                    Branch / RBS      NIL                RBS
Zonal Office (< 2 Cr (FB + NFB)        Branch/ZO         Executive of ZO Officer i/c of RM Cell
Zonal Manager > (2 Cr FB + NFB)        Branch/ZO         Executive of ZO      RM Cell / HO
BM having exposure of > 2 Cr           Branch /ZO        NIL                  RM Cell, ZO
Head Office                                              RM Cell ZO         / RM Cell ZO / Executive of
For a/cs Corporate Br                        Branch      Executive of HO      HO
For other Brs                             Zonal Office
PRE RELEASE AUDIT:

As a part of Risk Mitigation techniques, a system of Pre-release Audit is in place for all advances (fresh or
enhancement) of Rs. 10 Lakhs and above excluding structured loan products and for structured loan
products pre-release audit is to be conducted for advances of above Rs. 50. Lakhs.
LEGAL AUDIT:

A system of legal audit for accounts of Rs. 50 lakhs and above, where mortgage of property is involved
has been put in place.
CREDIT AUDIT: Standard borrowal accounts with a limit of Rs.50 lakhs and above and having a rating of
“BBB” and below is to be covered under Credit Audit.
Special Mention Accounts (SMA): All standard borrowal accounts with 30 days impairment besides other
features causing concern are classified as SMA.
                                             Prudential Norms

An NPA is a loan or advance where:

1. Term Loan: Interest of installment of principal remain overdue for a period of more than 90 days in
respect of a term loan.

2. OD/OCC – A/c out of order for more than 90 days

                 a)   Outstanding balance above limit for 90 days
                 b)   no credit for the last 90 days
                 c)   credits not sufficient to cover interest
                 d)   irregular d/l, no stock statements for the last 90 days
3. Regular credit limits not reviewed/renewed within 180 days from the due date; adhoc not regularised
within 90 days

4. Bills purchased – Bills if overdue for more than 90 days

5. Defaulted Guarantee or devolved LC – When it become fund based and remain overdue for 90 days
from date of Balance Sheet

6. Agriculture Loans STPL/MTL –

    a)   Interest and/or installment remains overdue
    b)   2 crop seasons for short duration crops
    c)   1 crop season for long duration crop – above 1 year, beyond the due date.
    d)   Other Accounts – Amount receivable remains overdue for more than 90 days

NPA Classifications - exemptions
   1) LOD/NSC/LIC/KVP
   2) SHL/SVL & other staff loans where interest is payable after principal – NPA only when
    installments in default
   3)When account is re-phased/restructured before it slips to NPA category - SMA
   Exemptions made as per RBI guidelines- Agriculture loans, natural calamities.
Interest on NPA should be classified under MOI, without vouching.

Asset Classification as on 31.12.2011:




                                      Provisioning norms of NPAs:

Provisioning for Standard Advances.

    •   Direct Advances to Agriculture and SME: 0.25%
    •   All other advances: 0.40%.
    •   Commercial Real Estate Projects: 1.00%.
    •   Housing Loans extended at teaser rates: 2%.
    •   Restructured Advances: 2% in the first year.
    •   Any NPA account upgraded to standard: 2% for first year of up gradation.
    •   Provision for delayed implementation of project
    •   Infra: 0.40% till 2 years from DCCO (Date of commencement of commercial operation). 1% from
        3rd and 4th year.
    •   Non infra: 0.40% upto 6 months from DCCO and 1% for the next 6 months.


RBI guidelines on general provisioning as per IRAC norms vis- a-vis actual practice followed by our Bank
or NPAs is as of now are reproduced hereunder:




RBI norms permit Banks to make additional provisions for NPAs at higher than prescribed rates. The
decision of making provision over and above the general regulatory norm was taken by the Bank, over a
period of time so as to build up reserves against possible loss. Such a reserve is being built while the
market conditions are conducive and financials are strong.
One time settlement / Compromise Settlement
RBI vide their circular dated October 4, 2007 has advised that Banks during compromise settlements,
should ensure that One Time Settlement (OTS) amount should generally not be less than the net present
value of the realisable value of available securities
Foreign exchange
NRIs can be Joint Holders in Resident‟s SB/EEFC/RFC Accounts
 Individual residents in India are now permitted to include non-resident close relative(s) as joint holder(s)
in their resident bank accounts, namely, Savings (SB), Exporter Earners‘ Foreign Currency (EEFC) and
Residents‘ Foreign Currency (RFC) accounts, on ‗Former or Survivor‘ basis.

Residents can be Joint Holders in NRE/FCNR Accounts
 Non-Resident Indians (NRIs)/Person of Indian Origin (PIO), are now permitted to open Non-Resident
(External) (NRE) Rupee Account Scheme/Foreign Currency (Non-Resident) (FCNR) Account (Banks)
Scheme with their resident close relatives(s) as Joint Holder(s) on ‗Former or Survivor‘ basis.
Outward remittance :
Private Travel :
Max: USD 10000 (or equivalent)
( Currency Component)- Maximum amount permitted:
US$ 3000 (or equivalent) per ticket / traveller - Except
Iraq / Libya <= US$5000
Iran / Russian Federation and other CIS countries - Full Amount
Travel to and/or residents of Nepal and Bhutan (clause (b) of Rule 3 of FEMA) – Nil

Gift of shares / securities / debentures by resident to NRI – US$ 50000

Gift under LERMS to NRI / PIO – US$200000



Credit Material


As per RBI directives, Branches / Zonal Offices / Head Office while
sanctioning / renewing credit limits to their large corporate borrowers (i.e.
borrowers enjoying working capital limits of Rs.10 crore and above from
the banking system) must fix separate sub-limits, within the overall limits,
specifically for meeting payment obligations in respect of purchases from
MSMEs either on cash basis or on bill basis.
Proposal for Fresh sanction/Review/Renewal/ /Enhancement of limits of
Rs.1.00 Crore and above should be submitted in the Board format
  S.N       Key Ratios                 Bench Mark (minimum)
  o
  1.        Current Ratio              (i)     1.33 (without inclusion                    of      annual
                                               maturing term liabilities                  as      current
                                               liability)
                                       (ii)    1.17 (with inclusion of annual maturing
                               term liabilities as current liability)
                       (iii)    1.00 (including annual maturing term
                             liabilities in exceptional cases like sugar
                       industry)
2.    Debt      Equity (i)     2:1 for Medium & Large Scale industries.
      Ratio *          (ii)     4:1 for Infrastructure Project
3.    TOL/TNW           3:1 for all borrowers with exception to the
                             following sectors:
                        5:1    for Infrastructure Project
                        9:1     for Contractors (including guarantees-
                               NFB) otherwise 3:1
                       For NBFC –1:1 for Residuary NBFC
                                      10:1 for Registered NBFC
                                      3:1 for Unincorporated NBFC
                                      10:1 for NBFC (AFC)
                                      16:1 for Housing Companies
4.    DSCR             1.5 to 2-average ; any year shall not be lower
                       than 1.25 during the repayment period
5.    Interest         1.5 times
      Coverage Ratio
6.    Security         (i)       1.25 times of advance value for WC
      Coverage Ratio           limits.
                       (ii)     1.20 for Term Loans.
7     FACR             1.20


a. While arriving at MPBF, nil margin may be considered for Export
   receivables.
b. IBN/FBN may be considered outside the purview of MPBF with
   applicable margin subject to ensuring there is no double financing
   on this account.
c. Compliance of current ratio need not be insisted for Educational
   institutions, Hospitals and Hotels subject to assessment based on
   cash budget.
d. Deferred Tax Liability shall not be added with Net worth of the
   company. Deferred tax asset should be reduced for net worth
   computation. For calculation of ratios, Deferred Tax Liability need not
   be added with Total Outside Liabilities.
 e. For calculation of FACR only the tangible assets charged to the bank
    as security shall be considered.
 f. PSUs may be exempted from Benchmark financial parameters,
    Exemption from submission of detailed viability study.
a. As per RBI directives, no additional facilities shall be granted to the
   willful defaulters whose name appear in the RBI willful defaulters’ list.
b. In addition, the entrepreneurs / promoters of companies where
   banks/FIs have identified siphoning / diversion of funds,
   misrepresentation, falsification of accounts and fraudulent transactions
   should be debarred from institutional finance from the scheduled
   commercial banks for 5 years.


All loans with maturity in excess of one year may be classified under term
loan category
All the credit proposals for the manufacturing segment for limits of more
than Rs.1 crore shall be accompanied by IDO’s report on the technical
viability of the proposal.
All agricultural proposal above Rs.10 lakhs (except Farm mechanization)
shall be accompanied by RDOs report on the technical feasibility of the
proposal
Income Tax / Sales Tax assessment copies of the borrower has to be
obtained for considering fresh / renewal of advances in all cases.
In case of Trusts exempted under income tax act, copy of exemption shall
be obtained and kept as record along with other loan documents.
SEBI has mandated disclosures regarding pledge of shares by the
promoter and persons forming part of the promoter group to the stock
exchanges, where shares of the company are listed.
Branches / Zonal Office shall collect copy of the details submitted to SEBI
from the listed companies for whom our Bank has considered facilities
(more than Rs.10 crores) on a monthly basis and submit the same to the
sanctioning authority. If the borrower is an unlisted company, the
information shall be obtained from the company / signed by the company
secretary and submitted to Sanctioning Authority.
Subordinated debt shall not be considered as quasi equity.
Unsecured Loans from promoters, if treated as quasi equity for arrival of
tangible net worth, shall be supported by obtention of letter of pegging.
Fresh advances/enhancements to Educational Institutions run by Public
Trusts, where the trust property situated in Tamilnadu is offered as
security, the Bank will consider only if the clearance under Sec.37 B of the
Tamilnadu Land Reforms Act is obtained from the Government of
Tamilnadu, by these institutions.
In all cases of Trust, Societies, Legal Audit is preferable before
disbursement of the loans.
Generally personal guarantee of third party, who is offering his property
as security should be obtained.


Proposals for clearance other than structured loan products exceeding 10
years of repayment including holiday period shall be approved by
Functional GMs at HO and above within their delegated powers subject to
a maximum of 20 years.
Credit limits are sanctioned normally for a period of 1 year for all
accounts.
The delegated powers exercised for granting excess shall be reported on
the same day.
Discretionary powers are given to sanctioning authorities for allowing
adhoc of 20% on SME advances on merits .
Adhoc for IBEX Gold Cardholders by Zonal Manager and above upto 20%
shall be considered..
Adhoc limits are    valid only for a period upto a maximum of THREE
months.
All credit limits sanctioned shall be availed by the borrower within a period
of 3 months from the date of sanction/ communication.
As per the General terms & conditions of sanction, a copy of the Branch
sanction letter duly signed and accepted by the borrower and guarantor
should be received back and kept with the documents.
To mitigate the operational risk arising on account of documentation
defects, the system of ‘Pre – Release Audit’ is in place for all advances
(fresh or enhancement) of Rs. 10 lakhs and above excluding structured
loan products and for structured loan products pre-release audit is to be
conducted for advances of above Rs. 50 lakhs.
Pre-release audit exercise should be completed within 24 hours.
Submission of feed back Report within 15 days from the date of release.
Legal Audit on documentation for advances above Rs.50.00 lakhs where
collaterals available.
Submission of Monthly Select Operational Data (MSOD) is applicable for
all manufacturing concerns enjoying working capital limit of Rs.10 lacs
and above and Quarterly Information System (QIS) is applicable for
borrowers enjoying working capital limit of Rs.1 crore and above from the
banking system.



CMA is applicable for accounts with limit of Rs. 1 crore and above.
CMO Report is to be submitted monthly.
CMO meeting is conducted by ZO monthly.
Standard Assets are to be monitored through Special Mention Account
(SMA) system for recovery of critical amounts with impairment of 30 days
and above for arresting the slippage in the asset quality.
For all the borrowal accounts with an exposure exceeding Rs. 5 crores , it
is the endeavour of the Bank to be rated by an approved external Rating
Agency.
Stock audit to be conducted on an yearly basis (the gap between two
such audits not to exceed 15 months) for the working capital standard
advances and on half yearly basis for the non performing assets.
The Zonal Manager or Second in command shall visit the unit of the Top
Twenty Five Borrowers of the Zone in a financial year.
All WC accounts should be renewed once in a year.
All TL accounts should be reviewed once in a year.
Undertaking letter shall be obtained from borrower for the loans
sanctioned up to Rs.25.00 lakhs and for the loans sanctioned above
Rs.25.00 lakhs, certificate from chartered accountant shall be obtained for
proper end use of the loan proceeds.
Branches to take a declaration mentioning the purpose to ensure the end
use of funds for Loan against Deposits of above 1 crore to commercial
firms and corporate entities.
Legal  Compliance  Certificate            –    Dr    Mitra     Committee
   Recommendations
The recommendations are to be complied with for transactions of Rs.1.00
Crore and above which is subject to verification by the Statutory Central
Auditors.
Interest is charged on per annum / payable monthly basis.
As per the IRAC norms, the account will be classified as NPA, if the
interest is not serviced within 90 days from the end of the respective
quarter.
Quoting floating rates for our loan products is dispensed with since as per
RBI, floating rate has to be linked to external benchmarks like G Sec rate,
MIBOR etc.


For loans sanctioned up to June 30, 2010, BPLR will be applicable..
With effect from July 1, 2010, all categories of loans should be priced only
with reference to the Base Rate.
 However, the following categories of loans could be priced without
reference to the Base Rate: (a) DRI advances (b) loans to banks’ own
employees (c) loans to banks’ depositors against their own deposits.
In those cases where subvention is available to borrowers, if the yield to
the bank (after including subvention) is lower than the Base Rate, such
lending will not be construed to be violative of the Base Rate guidelines.
Eg., Agri advances, Fx loans, and restructured loans
Since the Base Rate will be the minimum rate for all loans, bank is not
permitted to resort to any lending below the Base Rate
Bank is required to review the Base Rate at least once in a quarter.
The Base Rate system would be applicable for all new loans and for those
old loans that come up for renewal.
Existing loans based on the BPLR system may run till their maturity
Presently the following authorities have been delegated the powers
for allowing concession in rate of interest :
a. No Penal interest should be charged for loans under priority sector up
   to Rs.25000/-.
b. Total interest debited to an account should not exceed the principal
   amount in respect of short-term advances granted to small and
   marginal farmers.
c. When crop loans or installments under term loans become overdue,
   interest shall be added to the principal.
d. Regarding rescheduled Agricultural loans, when the overdue become
   current dues interest should not be compounded.
e. Interest on agricultural loans for long duration crops should be
   compounded annually and could be compounded if the loan/ installment
   become overdue.
Branches should club term loans and working capital advances together
for the purpose of determining the size of the loan and applicable rate of
interest.
For the same borrower, different CIF shall not be assigned under CBS. If
different CIF are assigned, the system cannot determine the overall
exposure of the borrower and charge appropriate interest, processing
charges.
Penal interest shall be levied for reasons such as default in repayment,
non-submission of financial / monitoring statements, non-compliance of
terms and conditions/financial covenants
For Other than agricultural advances, holiday period for payment of
interest shall not be more than 2 years and the moratorium period for
repayment of the principal shall not exceed 3 years.
Other than the specific agricultural loans, payment of interest shall be on
a monthly basis with quarterly compounding.
In case of Fixed Rate Option Home Loans, the accounts were subject to
reset period of 3 years in respect of all fresh sanctions made on or after
01 Feb 2008 and this reset period has been amended as once in 2 years
for all fresh sanctions made on or after 01 July 2008.
Fixed rate is not applicable for NRI Home Loan accounts
Branches should not grant fresh loans or renew existing loans in excess
of Rupees 100 lakhs against the Non Resident (External) Rupee Account
and FCNR (B) deposits, either to depositors or to third parties.
Branches should not sanction advances against FDRs or other Term
Deposits issued by other banks.
7% Savings Bonds 2002, 6.5% Savings Bonds 2003 (Non –taxable) & 8%
Savings (taxable) Bonds 2003 issued by RBI can be accepted as
collateral security for the loans extended to the holders of the bonds , not
to be extended in respect of loans of Third Parties.
Loans against Certificate of deposits cannot be granted except against
those held by Mutual Funds.
  Name of the Scheme                       Mar Max. ceiling
                                           gin
  Against     security    of     shares,   50   Rs.10.00 lakhs if the
  convertible    bonds,      convertible   %    securities    held    in
  debentures and units of equity                physical form and Rs.20
  oriented mutual funds to individuals          lakhs if held in demat
                                                form

  Against     security    of     shares,   50   Max. of Rs.10.00 lakhs
  convertible     bonds,   convertible     %
  debentures and units of equity
  oriented mutual funds to individuals
  for subscribing to IPO
  Under ESOP (extending finance to        10   Max. of Rs.20.00 lakhs
  employees for purchasing shares of      %
  their own company. Banks are
  prohibited to extend advance to their
  employees / employee trust for the
  purpose of purchasing their (bank’s)
  own shares under ESOP / IPO or
  from the secondary market.)


  Against security of shares to stock     50   Maximum Rs.50 crore
  brokers & Market makers a minimum       %
  cash margin of 25% within the said
  50% margin shall be maintained


Bank cannot grant any loans and advances on the security of its own
shares in terms of Section 20(1) of the Banking Regulation Act, 1949.
Branches should not lend to public/staff against the pledge of our bank's
shares. Also Lending should not be made against the shares of our own
subsidiaries.
No loan should be granted against partly paid shares and no loans should
be granted to proprietorship/ partnership concerns against the primary
security of shares and debentures.
In terms of para 44(2) of the SEBI (Mutual funds) Regulations 1996 a
mutual fund shall not borrow except to meet temporary liquidity needs of
the mutual funds for the purpose of repurchase, redemption of units or
payment of interest or dividend to the unit holders and further the mutual
fund shall not borrow more than 20% of the net asset of the scheme and for
a duration not exceeding six months.
The repayment period of takeover Home Loans sought with us not to
exceed the overall period already permitted by the other Bank (in any case
maximum overall repayment period is 20 years for floating rate optees and
10 years for fixed rate optees)
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.
a. Any revalidation and / or modification in sanction terms after 15 days
   from the date of communication of sanction by the Bank / Branch will
  attract further processing charges at 25% of the original processing
  charges stipulated.
b. In case of any rephasement during the currency of the term loan, the
   borrower will be required to pay processing charge at 50% of the
   appropriate processing charges/upfront fees
0.28% of loan amount of General advances and 0.25 % of loan amount
for Home Loan Product collected as upfront at the time of submission of
application is non refundable if the sanctioned limit is not availed by the
borrower.
Periodical Inspection Charges on Personal Segment Loan Products are
not to be levied unless if it is specifically mentioned in the scheme.
Export Credit target 12% of the total advances.
Forward Contracts booked in excess of 75 per cent of the eligible limit will
be on deliverable basis and cannot be cancelled.
In the case of an Exporter, the amount of overdue bills shall not be in
excess of 10% of the turnover to avail the forward contract facility.
Restructuring of the accounts will lead to classifying of the account as non
performing asset in the following sectors:
Consumer and personal advances (Home loans and educational Loans
are not considered as personal advances and hence eligible for special
regulatory treatment).
Capital market exposures
Commercial real estate exposures
NPA accounts which have been restructured would be eligible for up-
gradation to the ‘standard’ category after observation of ‘satisfactory
performance’ during the “specified period”(12 months from the date of first
payment of interest and/or instalment as per restructuring)
Interest income in respect of restructured accounts classified as 'standard
assets' will be recognized on accrual basis and that in respect of the
accounts classified as 'non-performing assets' will be on cash basis
For computing the present value, the discount rate to be applied should
be equivalent to the (current BPLR/Base Rate as on the date of
restructuring + appropriate term premium + credit risk premium applicable
to the borrower as on the date of restructuring.
in respect of large corporate accounts, the interest rates are being
determined based on risk perception, market competition and standing of
the borrowal account at the time of sanction.
In the case of working capital facilities, the diminution in the fair value of
the cash credit /overdraft component may be computed reckoning the
higher of the outstanding amount or the limit sanctioned as the principal
amount and taking the tenor of the advance as one year. The term
premium in the discount factor would be as applicable for one year.
Special regulatory treatment has the following two components
(i) Incentive for quick implementation of the restructuring package.
(ii) The unit becomes viable in 10 years, if it is engaged in infrastructure
      activities, and in 7 years in the case of other units from the date of
      restructuring).
The repayment period of the restructured advance including the
moratorium, if any, does not exceed 15 years in the case of infrastructure
advances and 10 years in the case of other advances except home loans.
For Home loans, extension of Repayment period upto 5 years (including
Holiday period extension) may be permitted (Max. repayment period
including extension should not exceed 25 years)
Promoters' sacrifice and additional funds brought by them should be a
minimum of 15% of banks' sacrifice.
As per RBI guidelines, Home Loans on Restructuring are eligible for
Special Regulatory Treatment, if restructuring is implemented within 90
days from the date of taking up restructuring and asset classification will
not be downgraded on account of Restructuring.
Upon Restructuring, other Personal Segment Loan Products (other than
Home Loan and Educational Loan) will not be eligible for Special
Regulatory Treatment and these accounts shall have to be downgraded
from ‘Standard’ to ‘Sub-standard’ category upon restructuring.
A loan for an infrastructure project will be classified as NPA during any
time before commencement of commercial operations as per record of
recovery (90 days overdue), unless it is restructured and becomes eligible
for classification as ‘standard asset’.
A loan for an infrastructure project will be classified as NPA if it fails to
commence commercial operations within two years from the original Date
of Commencement of Commercial Operations (DCCO), even if it is
regular as per record of recovery, unless it is restructured and becomes
eligible for classification as ‘standard asset’.
If a project loan classified as ‘standard asset’ is restructured any time
during the period up to two years from the original DCCO, it can be
retained as a standard asset if the fresh DCCO is fixed within the
following limits, and further provided the account continues to be
serviced as per the restructured terms.
   (a) Infrastructure Projects involving court cases
      Up to another 2 years (beyond the existing extended period of 2
      years i.e total extension of 4 years), in case the reason for extension
      of date of commencement of production is arbitration proceedings or
      a court case.
   (b) Infrastructure Projects delayed for other reasons beyond the
      control of promoters
Up to another 1 year (beyond the existing extended period of 2 years i.e.
total extension of 3 years), in other than court cases.


b. Bank should maintain provisions on such accounts as long as these are
  classified as standard assets as under:
    Until two years from the original DCCO                 0.40%
    During the third and the fourth years after the 1.00%
    original DCCO.


Project Loans for Non-Infrastructure Sector
A loan for a non-infrastructure project will be classified as NPA during any
time before commencement of commercial operations as per record of
recovery (90 days overdue), unless it is restructured and becomes eligible
for classification as ‘standard asset’.


A loan for a non-infrastructure project will be classified as NPA if it fails to
commence commercial operations within six months from the original
DCCO, even if it is regular as per record of recovery, unless it is
restructured and becomes eligible for classification as ‘standard asset’.
In case of non-infrastructure projects, if the delay in commencement of
commercial operations extends beyond the period of six months from the
date of completion as determined at the time of financial closure, banks
can prescribe a fresh DCCO, and retain the “standard” classification by
undertaking restructuring of accounts in accordance guidelines under
para 8.61 provided the fresh DCCO does not extend beyond a period of
twelve months from the original DCCO. This would among others also
imply that the restructuring application is received before the expiry of six
months from the original DCCO, and when the account is still “standard”
as per the record of recovery. _
The other conditions applicable would be:
      a. In cases where there is moratorium for payment of interest, banks
          should not book income on accrual basis beyond six months
        from the original DCCO, considering the high risk involved in
        such restructured accounts.
     b. Banks should maintain provisions on such accounts as long as
        these are classified as standard assets as under:
         Until the first six months from the original 0.40%
         DCCO
         During the next six months                 1.00%
External Commercial Borrowings (ECB) with minimum average maturity of
3 years.
Corporates (registered under the Companies Act except financial
intermediaries (such as banks, financial institutions (FIs), housing finance
companies and NBFCs) are eligible to raise ECB. Individuals, Trusts and
Non Profit making Organisations are not eligible to raise ECB.
Bonus Loan of up to the statutory minimum of 8.33% of the Salary and
Wages may be sanctioned without any margin.             Bonus Loan
sanctioned in excess of 8.33% subject to a maximum of 20% will carry
a margin of 25%. Loan to be repaid in 6 equal monthly instalments
excluding one month holiday period. Bridge Loans can be for a period
not                exceeding                 one                year
Extent of guarantee:
      Category         Maximum Extent of Guarantee where Credit
                       Facility is
                       Upto Rs. 5        Above Rs. 5       Above Rs. 50
                       lakhs             lakhs and         lakhs and
                                         upto Rs. 50       upto Rs. 100
                                         lakhs             lakhs
      Micro            85% of the        75% of the        Rs. 37.50 lakhs
      Enterprises      amount in         amount in         plus 50% of the
                       default subject   default subject   amount in
                       to a maximum      to a maximum      default above
                       of Rs. 4.25       of Rs. 37.50      Rs. 50 lakhs
                       lakhs             lakhs             subject to
                                                           overall ceiling
                                                           of Rs. 62.50
                                                           lakhs
      Women          80% of the amount in default          Rs. 40 lakhs
      entrepreneurs subject to a maximum of Rs. 40         plus 50% of the
      / Units        lakhs                                 amount in
      located in                                           default above
      North Eastern                                        Rs. 50 lakhs
      Region                                               subject to
      (including                                           overall ceiling
      Sikkim) (other                                       of Rs. 65 lakhs
      than credit
      facility upto
      Rs. 5 lakhs to
      Micro
      Enterprises)
      All other        75% of the amount in default        Rs. 37.50 lakhs
      categories of    subject to a maximum of Rs.         plus 50% of the
      borrowers        37.50 lakhs                         amount in
                                                           default above
                                                           Rs. 50 lakhs
                                                           subject to
                                                           overall ceiling
                                                           of Rs. 62.50
                                                           lakhs
One time guarantee fee
(a) Currently 1.00% in the case of credit facility upto Rs.5 lakh and 1.5%
in the case of credit facility above Rs.5 lakh
(b) 0.75% in case of credit facilities upto Rs.50 lakhs sanctioned to units
in North Eastern Region (including State of Sikkim) of the credit facility
sanctioned (comprising term loan and /or working capital facility) shall be
paid upfront to the Trust by the institution availing of the guarantee within
30 days from the date of first disbursement of credit facility (not
applicable for Working capital) or 30 days from the date of Demand
Advice (CGDAN) of guarantee fee whichever is later or such date as
specified by the Trust.
The annual service fee
    0.50% in the case of credit facility upto Rs.5 lakhs and
    0.75% in the case of credit facility above Rs.5 lakhs of the credit
     facility sanctioned on pro-rata basis for the first and last year
     and in full for the intervening years (comprising term loan and / or
     working capital facility) shall be paid by the lending institution within
     60 days i.e., on or before May 31, of every year.
The lock-in period is 18 months for lodgement of claim.
The Bank may invoke the guarantee in respect of credit facility within a
maximum period of one year from date of NPA, if NPA is after lock-in-
period or within one year of lock-in-period , if NPA is within lock- in period.
The Bank bears the one time guarantee fee as under:
For Micro & Small Enterprises with limits upto Rs.5.00 lakhs
                                        % guarantee fee to be borne
        Interest charged on the
                account                  By the
                                                          By the Bank
                                        Borrower
        Upto 11%                          1.00%                0%
        Above 11% to 12.5%                0.5%                0.5%
        Above 12.5%                        0%                1.00%
For Micro & Small Enterprises located in North Eastern States
                                     % guarantee fee to be borne
        Interest charged on the
                account                 By the
                                                       By the Bank
                                       Borrower
       Upto 11%                          0.75%              0%
       Above 11% to 12.5%                0.25%             0.5%
           Above 12.5%                     0%              0.75%



  For other loans covered under CGTMSE
                                      % guarantee fee to be borne
            Interest charged on the
                    account             By the
                                                     By the Bank
                                       Borrower
           Upto 11%                       1.50%             0%
           Above 11% to 12.5%             1.00%            0.5%
           Above 12.5% to 13.5%           0.5%             1.00%
           Above 13.5%                     0%              1.50%
  Margin
  S.No.     Facility                              Margin
  1.        OCC & ODBD (Stocks and                20%
            Bookdebts)
  2.        Term Loan, Plant and Machinery        25%
  3.        Term Loan Land and Building           40%
  4.        LC, Current assets                    10%
  5.        Money Guarnatee                       25%
  6.        Performance Guarantee                 10%
Promoters stake 20% for new units.
Current Ratio : 1.25 for Micro & Small enterprises. In respect of Medium
Enterprises the minimum prescription of current ratio shall be in alignment
with general loan policy. Educational Institutions wherein receipts are on
annual / half yearly basis and repayments and linked to such receipts,
Current Ratio is not applicable for them
Debt Equity Ratio(DER): For Micro and Small Enterprises at 3:1 and for
Medium Enterprises at 2:1.
Structured Loan Products under SME sector:
       1. IND SME Secure
       2. IB Doctor Plus
       3. IB Vidhya Mandir
       4. IB My Own Shop
       5. IB Professional Special
    6. Ib Annapoorna Arogya
    7. IB Caterer
    8. IND Vahana
    9. IB-BEML-Equip Finance
    10.            IB-ALL-CV-Auto Star
    11.            IB-Contractors
    12.            IB Star Rice Mill
Amount of capital charge is calculated for interest rate risk, equity risk and foreign exchange risk separately as
follows:

Risk Category

I. Interest Rate (a + b)

a. General market risk
i) Net position (parallel shift)
ii) Horizontal disallowance (curvature)
iii) Vertical disallowance (basis)
iv) Options
b. Specific risk

II. Equity (c + d)
c. General market risk
d. Specific risk
III. Foreign Exchange & Gold
IV. Total capital charge for market risks (I+II+III)
Is addition of market risk and operational risk capital the only difference between Basel-I and Basel-II?

No. Under Basel-II the credit risk is calculated as per standardized approach where assets are classified into 2
broad categories – performing and non-performing.

Under non-performing asset the risk weight depends upon provisions made. More the provision made less the risk
weight. It has three categories:

                                                                                                  Risk
                                     Non Performing Assets
                                                                                                 Weight
Unsecured portion of NPA, net of specific provisions, other than residential mortgage
loan is
Less than 20 % of the outstanding amount of the NPA                                                  150%
Atleast 20 % of the outstanding amount of the NPA                                                    100%
Atleast 50% of the outsanding amount of the NPA                                                       50%
Where NPA is fully secured fixed assets, other than residential propety                              100%
NPAs secured by residential property
Less than 20% of the outstanding amount of the NPA                                                   100%
At least 20% but less than 50% of the outstanding mount of the NPA                                    75%
50% or more of the outstanding amount of the NPA                                                      50%
Under performing asset, the risk weights are dependent on the quality of borrower / account. Highest category is
sovereign or Govt. with 0% risk weight but state govt. guaranteed exposure and claims on ECGC carries 20% risk
weight. Banks are classified into scheduled and non-scheduled and risk weights are based upon CAR maintained
by them. The scheduled bank with above 9% CAR enjoys the lower risk weight of 20% but non-scheduled bank
carries 100% risk weight. Gradually the risk weight increases and in case of negative capital adequate it is 625%.
Claims on foreign sovereign is risk weighted as per the rating of the sovereign / claim. A uniform 20% risk weight
applies to BIS, IMF, Multilateral development banks. In case of Corporate, primary dealers, PSE the risk weight
depend upon rating by external agency. It should not be solicited by bank and borrower must accept it. There are
only 4 rating agencies recognized by RBI for this purpose: ICRA, FITCH, CARE and CRISIL. The corporate already
having rated for there long term or short term instruments may map that rating to borrower rating.

Rating grades are 9 and D, 10th, with AAA best with 20% risk weight followed by AA 30%, A 50%, BBB 100% and
below BBB 150%. Unrated corporate are to be assigned 100% risk weight. The retail portfolio carries the following
risk weights with short term ratings.

 Short Term Ratings                                                                          Risk Weight




Risk weights for other exposures:

Consumer Credit loans, Personal loans and credit card receivables                                        125%
       Capital market exposure                                                                           125%
Commercial real estate                                                                                   100%
Restructured commercial Real Estate                                                                      125%
NBFC ND-SI                                                                                               100%
Home Loans:
where LTV* is not more than 75% - Amount of loan upto Rs. 30 Lakhs                                         50%
                                  Amount of Loan – Rs. 30 Lakhs below 75 Lakhs                            75%
Where LTV is more than 75% and amount is less than 75 Lakhs                                              100%
Residential housing loans of Rs. 75 Lakhs and above irrespective of LTV                                  125%
Restructured Home loans (Additional Risk weight)                                                          25 %
Staff Loans
Fully covered by superannuation benefits and / or mortgage of flat / house                                20%
All other loans and advances to Banks own staff                                                           75%
All other assets                                                                                         100%
                                        *LTV = Loan to Value (Valuation as per Bank’s approved policy)
How do you define the ‘exposure’?

To mitigate the concentration risk various exposure ceilings have been prescribed. It includes both fund based and
non-fund based exposure taken by the Bank put together for determining the classification of corporate or retail.
For the purpose of calculating amount on which risk weight must be applied, unutilized portion of loan will also be
considered. If it is OCC, then 20% is the credit conversion factor (CCF) in case of Term loan it depends upon the
terms, where bank can unconditionally cancel the unavailed portion then it will not be taken into account else the
amount up to which the borrower has become eligible to draw will be treated as limit and the difference between
this and amount drawn will be the unavailed portion. In case of performance guarantee, standby LC the CCF will be
50% and in case of self liquidating short term credit like LC 20% (upto 1 year) formal standby facilities up to 1 year
20% above one year 50%

Sector wise exposure ceilings fixed as per the Credit Risk Management Policy 2011-12:

Capital Market exposure                                      40 % of the Net worth as on March 31 of previous year
Within the above overall ceiling Direct investment in        20 % of the Bank’s worth
shares, convertible bonds/debentures, units of equity
oriented mutual funds and all exposure to Venture
Capital Funds
Stock brokers and market makers (both fund based and         15% of the Net worth as on March 31 of previous year
Non fund based)
Fresh Credit exposure to any single stock broking entity     Rs. 50 Crores per borrower
including its associates / interconnected companies and
single broker
Real Estate Sector – Home Loan                               20 % of Gross Global Credit as of previous year end
Commercial Real Estate (CRE)                                 7.5 % of Gross Global Credit as of previous year end
Substantial Exposure:

Single borrowers having exposure of 10% of capital funds are classified as borrowers having substantial exposure.
The sum total of substantial exposure is fixed at 200% of Capital Funds of the Bank. In addition to this, substantial
exposure ceiling (whether single or group) is fixed at 350% of the Capital Funds of the Bank as on March 31st of the
previous year. Capital funds as on 31.03.2010 Rs. 7993.63 Crores.

Is there any concessional risk weight given for priority sector advances?

No. The risk weight is based upon the quality of exposure and not the type of exposure.

Why no consideration is given to loans against own deposit / NSC / LIC policy / KVP / RBI bonds /
Jewellery etc?

LOD/NSC/ LIC policy / KVP / RBI bonds / Jewellery etc, are treated as eligible collateral for risk mitigation since
these are liquid securities. It means, the exposure can be netted by the value of security after applying prescribed
margins, known as hair-cut. The securities like cash and equivalent (FD), NSC, surrender value of LIC policy, KVP
can be taken at full value. Gold and bullion at 99.99 % purity and mutual fund units will have a hair-cut of 15%.
Govt securities and debt securities also carry some hair-cut. In case of govt securities less than or = 1 year
residual maturity, the margin will be 0.5%; More than 1 year but less than = 5 years it is 2%; More than 5 years it is
4%; In case of rated and unrated corporate debt instruments the margin varies from 1% to 12%
Risk Measurement:

Rating / Scoring Models (RAM)

Software driven rating / scoring models (Risk Assessment Model – RAM) for

different segments are in place since 1st April, 2008.

Rating Scale (Grade)

The Bank’s Rating scale will be with 9 grades (besides "D" for NPA accounts) viz., AAA, AA+, AA, A, BBB, BB, B,
CC, and C. For project rating, the grades are P1, P2, P3, P4 and P5.



Important Guidelines on Rating:



Generally ‘ratings’ are assigned based on audited financial data or accepted projected financials. In certain cases
where provisional financial data (i.e., unaudited) alone is available, the ratings may be worked out based on such
provisional data also. The validity of the ratings is as specified below:




Assignment of Rating grades and confirmation of Ratings:

Following are the functional authorities for assigning, reviewing and approval of the rating grades:


Sanctioning Authority                      Rating Assignor      Reviewer          Approver
Branch                                     Loan Officer         NIL               ABM / RBS
RBS                                        Branch / RBS         NIL               RBS
Zonal Office (< 2 Cr (FB + NFB)            Branch/ZO            Executive of ZO   Officer i/c of RM Cell
Zonal Manager > (2 Cr FB + NFB)            Branch/ZO            Executive of ZO   RM Cell / HO
BM having exposure of > 2 Cr               Branch /ZO           NIL             RM Cell, ZO
Head Office                                                     RM Cell ZO / RM Cell ZO / Executive of
For a/cs Corporate Br                            Branch         Executive of HO HO

For other Brs                                  Zonal Office
PRE RELEASE AUDIT:

As a part of Risk Mitigation techniques, a system of Pre-release Audit is in place for all advances (fresh or
enhancement) of Rs. 10 Lakhs and above excluding structured loan products and for structured loan products pre-
release audit is to be conducted for advances of above Rs. 50. Lakhs.

LEGAL AUDIT:

A system of legal audit for accounts of Rs. 50 lakhs and above, where mortgage of property is involved has been
put in place.

Credit Audit:

     Standard borrowal accounts with a limit of Rs.50 lakhs and above and having a rating of “BBB” and below
         is to be covered under Credit Audit.

     Credit Audit to be conducted by the Inspector of branches / Chartered Accountants as may be decided by
         HO. Inspection Department. The reports are to be submitted to the branch / Zonal Office / Inspection
         Centre / HO. Functional Credit Departments and HO. Credit Monitoring Department (in case of accounts
         under HO powers).

     Exercise of identifying the accounts for Credit Audit in case of HO sanctioned accounts are to be
         undertaken by HO. Credit Monitoring Department and by Credit Risk Management Cell at Zonal Offices
         for accounts coming under the powers of Zonal Office. The identified accounts are to be intimated to HO.
         Inspection Department to take up the Credit Audit.

     The Credit Audit Reports are to be placed in the CIAC meetings for closure in respect of accounts up to
         the powers of Zonal Office. Serious irregularities if any, are to be brought to the attention HO. Credit
         Monitoring Department. In case of accounts under the powers of Head Office, the reports are to be placed
         in LRMC for closure

Special Mention Accounts (SMA):

SMA is an asset which has potential weaknesses, hence deserves close management attention and which can be
resolved through timely remedial action. If left uncorrected, the potential weaknesses in the said asset may result in
deterioration in the asset classification. With 90 days delinquency norms in place, close monitoring of each and
every account is absolutely necessary for maintaining the quality of the asset. All standard borrowal accounts with
30 days impairment besides other features causing concern are classified as SMA.

Which of the following are the features used for identification of SMA.
1. Default in payment of interest / installment due beyond 30 days.
2. Persisting irregularities due to excess drawl beyond 30 days in Cash Credit account.
3. Shortfall in DP in Cash Credit account not regularised within a week.
4. Devolvement of LC/DPG installment and non-payment of the same beyond 15 days.
5. Non-creation of Primary securities affecting the ultimate recovery prospects in the account.
6. Delayed / Non-submission of stock statements, other monthly information data for 2 months continuously.
7. No operations in the account during the reporting month.
8. Decline in production activity below 60% of the accepted level.
9. Accounts remaining without review / renewal beyond 90 days from the due date.
10. Any other feature considered requiring attention of higher authorities.
11. Continuous overdue in Bills facility beyond 10% of the outstanding balance.
12. BP returned unpaid outstanding beyond 15 days.
                                                   Operational risk

What do you mean by Operational Risk?

Operational risk has been defined by the Basel Committee on Banking Supervision as the Risk of loss resulting
from inadequate or failed internal processes, people and systems or from external events. This definition
includes legal risk, but excludes strategic and reputational risk.

How can you identify operational risk?

Risk identification is paramount for the subsequent development of a viable operational risk monitoring and control
system. Effective risk identification considers both internal factors (such as the bank’s structure, the nature of the
bank’s activities, the quality of the bank’s human resources, organizational changes and employee turnover) and
external factors (such as changes in the industry and technological advances) that could adversely affect the
achievement of the bank’s objectives.

What are the various methods of measuring operational risk?

The Basel Committee has put forward three methods for computing Operational Risk. They are -

(i) Basic Indicator Approach (BIA)
(ii) The Standardized Approach (TSA) and
(iii) Advanced Measurement Approach (AMA)

Bank presently is computing the capital charge as per Basic Indicator Approach and ORMC is appraised of the
same.

The methodology of calculating operational risk under Basick Indicator Approach?

Under Basic Indicator Approach the banks must hold capital for operational risk equal to 15% of average over the
previous three years of positive annual gross income. (Exclude figures for any year in which annual gross income
is negative or zero). Gross income = Net interest income + net non-interest income. It is intended that this
measure should: i) be gross of any provisions (e.g. for unpaid interest) and write-offs made during the year; ii) be
gross of operating expenses, including fees paid to outsourcing service providers, in addition to fees paid for
services that are outsourced, fees received by banks that provide outsourcing services shall be included in the
definition of gross income; iii) exclude reversal during the year in respect of provisions and write offs made during
the previous year(s); iv) exclude income recognised from the disposal of items of movable and immovable property;
v) exclude realised profits/losses from the sale of securities in the “held to maturity” category; vi) exclude income
from legal settlements in favour of the bank; vii) exclude other extraordinary or irregular items of income and
expenditure; and viii) exclude income derived from insurance activities (i.e. income derived by writing insurance
policies) and insurance claims in favour of the bank.

Why and how to report Operational loss data?

The importance of Operational Risk has been felt because of the growing number of high profile operational loss
events. Banks and Regulator view operational risk management as an integral part of the risk management activity.
Basel II prescribed capital charge for the Operational Risk. RBI, to start with, advised the banks to provide the
capital under a simple approach called Basic Indicator Approach. In order to move over to Advanced Measurement
Approach for Operational Risk, Bank should capture actual operational loss data to estimate unexpected loss.
Though the system of collecting the loss data from the functional departments on a consolidated basis is in vogue,
it has been decided to collect the data individually from the branches/ circles/ HO functional Departments in respect
of all operational losses in their area of operations through HO:MIS online. This data collection process will
continue parallely for a period of one year along with the existing mechanism of reporting the loss data to functional
departments. HO:MIS has ported a template in the BBMIS site – ISG ID 507- with the operational guidelines to fill
up the template. The operational loss data are to be entered in the template as and when the loss event occurred,
commencing from October 1, 2009. The data so reported by the branches has to be confirmed by the concerned
Zonal Offices along with the data relating to the Zone on monthly basis. For the purpose of template, the
operational loss events are to be classified under seven Heads -

    1.   Write off
    2.   Penalties
    3.   Legal liability
    4.   Frauds
    5.   External events
    6.   Deficiency in services
    7.   Any other expenditure
                                                  Prudential Norms

An NPA is a loan or advance where:

1. Term Loan: Interest of installment of principal remain overdue for a period of more than 90 days in respect of a
term loan.

2. OD/OCC – A/c out of order for more than 90 days

                   e)   Outstanding balance above limit for 90 days
                   f)   no credit for the last 90 days
                   g)   credits not sufficient to cover interest
                   h)   irregular d/l, no stock statements for the last 90 days
3. Regular credit limits not reviewed/renewed within 180 days from the due date; adhoc not regularised within 90
days

4. Bills purchased – Bills if overdue for more than 90 days

5. Defaulted Guarantee or devolved LC – When it become fund based and remain overdue for 90 days from date
of Balance Sheet

6. Agriculture Loans STPL/MTL –

    e)   Interest and/or installment remains overdue
    f)   2 crop seasons for short duration crops
    g)   1 crop season for long duration crop – above 1 year, beyond the due date.
    h)   Other Accounts – Amount receivable remains overdue for more than 90 days
NPA Classifications - exemptions
   1) LOD/NSC/LIC/KVP

   2) SHL/SVL & other staff loans where interest is payable after principal – NPA only when installments in
        default

   3)When account is re-phased/restructured before it slips to NPA category - SMA

   Exemptions made as per RBI guidelines- Agriculture loans, natural calamities.

Interest on NPA should be classified under MOI, without vouching.

Asset Classification as on 31.12.2011:




                                      Provisioning norms of NPAs:

Provisioning for Standard Advances.

    •     Direct Advances to Agriculture and SME: 0.25%
    •     All other advances: 0.40%.
    •     Commercial Real Estate Projects: 1.00%.
    •     Housing Loans extended at teaser rates: 2%.
    •     Restructured Advances: 2% in the first year.
    •     Any NPA account upgraded to standard: 2% for first year of up gradation.
    •     Provision for delayed implementation of project
    •     Infra: 0.40% till 2 years from DCCO (Date of commencement of commercial operation). 1% from 3rd and
          4th year.
    •     Non infra: 0.40% upto 6 months from DCCO and 1% for the next 6 months.


RBI guidelines on general provisioning as per IRAC norms vis- a-vis actual practice followed by our Bank or NPAs
is as of now are reproduced hereunder:
RBI norms permit Banks to make additional provisions for NPAs at higher than prescribed rates. The decision of
making provision over and above the general regulatory norm was taken by the Bank, over a period of time so as
to build up reserves against possible loss. Such a reserve is being built while the market conditions are conducive
and financials are strong.

One time settlement / Compromise Settlement

RBI vide their circular dated October 4, 2007 has advised that Banks during compromise settlements, should
ensure that One Time Settlement (OTS) amount should generally not be less than the net present value of the
realisable value of available securities.

Calculation of Net Present Value of Securities:

Net present value (NPV) is the present is the worth of an amount/s to be received at a future date/s and arrived at
by applying a discount rate at yield on advances of the Bank for the previous quarter. Net Present value is arrived
at based on future cash flows The formula for arriving at the present value (discounted value) of an amount
receivable at a future date is present value in reciprocal of compounded interest factor i.e.,
                                                One Time Settlement

Minimum Recoverable Amount (MRA):

For the purpose of arriving the quantum of compromise amount, NPAs were grouped in to three categories (viz. (1)
up to Rs 2 lakh, (2) above Rs2 lakh and up to Rs.25 lakh and (3) above Rs.25 lakh) based on total dues which was
arrived by applying the contract rate hitherto. Accordingly total dues are arrived as per the following procedure.



For non suit filed accounts:

a) In respect of non-suit filed accounts and suit filed non-decreed accounts, the amount of unapplied interest is to
be calculated at BPLR or contract rate (whichever is lower) on simple basis from the date when application of
interest in loan account was stopped.

b) In respect of decreed accounts, as per Decree or BPLR simple calculated as above whichever is less.
Modification with regard to arrival of total dues linking BPLR as above is solely for internal purpose to determine the
MRA and the authority for exercising the powers for write off / waiver of unapplied interest. For all other purposes,
like negotiation with the NPA borrowers, furnishing particulars in the compromise proposals, conveying OTS
sanctions to Borrowers, Court authorities etc., total dues shall be calculated and furnished as per the existing
practice which shall mean the amount outstanding as on the Reckoning Date together with unapplied interest
calculated at contract rate, as applicable from time to time, inclusive of penal interest or as per court order, if
decreed.

NPAs with total dues of Rs.2 lakh and below:

a) Where adequate security is available, book balance as on the cut off date plus simple

interest at BPLR minus 4 on book balance should be collected till repayment in full.(BPLR at

the beginning of the current Financial Year, ie on 1st April)

b) Where the security coverage is inadequate , book balance as on the cut off date (date of

NPA) plus simple interest at BPLR minus 6 on such book balance should be collected till

repayment in full.

c) Where security coverage is not available/inadequate, compromise amount can be
considered, on a case to case basis, inclusive of write off, by the Authorities within their

delegated powers. This category encompasses generally small loans and government sponsored scheme loans
wherein mostly securities charged to the Bank are hypothecation of goods created out of loan proceeds disbursed,
value of which may be negligible or nil when the account become NPA. Therefore though the concept of NPV of
realisable value of available securities is not applied for this category, branches should endeavour to realize the
maximum amount in such small value NPAs as well.



NPAs with total dues of above Rs 2.00 lakh and up to Rs.25 lakh:

a) Where Security Coverage is adequate, MRA will be Book Balance as on the cut off date, plus interest at a rate
not less than BPLR minus 2% compounded quarterly from date of NPA till repayment in full.

b) Where the security Coverage is inadequate, MRA will be Book Balance as on the cut off date, plus interest at a
rate not less than BPLR minus 4% compounded quarterly from date of NPA till repayment in full. Wherever OTS
offered is below MRA so arrived, and the realisable value of available security is less than MRA, branches will
endeavor to recover at least the NPV of realizable value of security. It is clarified that proposals falling under the
category of NPAs with total dues of above Rs.2 lakh and up to Rs.25 lakh, where the OTS offered is below MRA
and realisable value of available security is less than MRA, such proposals can be considered by the authorities
within their delegated powers with quantum of sacrifice as the limiting factor subject to recovery of at least the NPV
of realisable value of security.

c) Wherever the applicable rate of interest (RoI) is less than either BPLR as in the case of certain exempted
categories of accounts, MRA has to be arrived at the applicable card rate or card rate minus 2% Quarterly
Compounded in accounts with adequate security coverage and inadequate security cover respectively with a
minimum rate of interest at prevailing Bank Rate (i.e.presently 6%) compounded quarterly from date of NPA till the
repayment in full. Nevertheless with a view to ensuring that our policy document is aligned in tune with and the real
spirit of the guideline issued by RBI, the NPV of the cash flows associated with the realizable value of securities net
of cost of realisation will be worked out based on the account specific factors and efforts should be made to realize
the best value for the asset.

NPAs with total dues of above Rs.25 lakhs

a) Where Security Coverage is adequate, MRA will be either Book Balance as on the cut off date, plus interest
(compounded quarterly) at a rate not less than BPLR minus 2% , till repayment in full or the NPV of realizable
value of available securities net of cost of realization whichever is higher.

b) Where the security Coverage is inadequate, MRA will be either Book Balance as on the cut off date, plus interest
(compounded quarterly) at a rate not less than BPLR minus 4% on book balance till repayment in full, or the NPV
of realizable value of available securities net of cost of realization whichever is higher.

c) Wherever the applicable rate of interest (RoI) is less than BPLR, as in the case of exempted categories, MRA
will be arrived at applicable card rate or card rate minus 2% or 4% in accounts with adequate security coverage
and inadequate security cover respectively, subject to a minimum of Bank Rate compounded quarterly prevailing at
the beginning of the current Financial Year or the NPV of realizable value of available securities net of cost of
realization whichever is higher.

In case of decreed accounts, if the dues calculated as per decree are less than the amount calculated as above
the dues as per decree to be considered as MRA.

In all cases, BPLR/Bank Rate prevailing at the beginning of the current financial year (ie on 1st April) is to
be taken into account for calculation.

RECOVERY OF HOME LOANS:

a. As per the extant guidelines of Management Committee of Board in respect of Home Loan, the minimum amount
to be recovered shall be the interest and principal due. In case the amount of offer is lower than the amount due,
then approval of Head Office shall be obtained.

b. In view of the RBI guideline that OTS amount should generally be not less than the net present value of
available securities which has been adopted in our Recovery Policy since 01.04.08, Board in the meeting held on
25th March 2010 permitted Zonal Managers and above to consider OTS in the Home Loans also as in the case of
other loans within the powers delegated, if there is no write off and if the OTS amount is not less than NPV of
realizable value of security. For the purpose arriving write off portion, balance outstanding under Memorandum of
Legal Expenses plus future Law charges if any should also be included with Book balance. Proposals involving
write off should continue to be referred to Head office.

c. In respect of Home Loan borrowal accounts which are classified as fraudulent, Zonal Office shall verify the status
and if the EM created with our Bank is the first, we should proceed against the properties. If there are claims from
other Banks on the same property,

enforceability of EM should be verified and appropriate action shall be taken for recovery of our dues. In the case
of Home Loans, which are classified as fraudulent, the proposal for settlement should continue to be
referred to Head Office for consideration at MCB / Board.

RECOVERY OF MLE etc: In all the OTS cases, endeavor should be to recover the MLE as well as future law
charges if any. In addition to the above, 100 % cash margin for outstanding non-fund based liability should be
obtained. Also credits and debits made after the cut off date are to be taken in to account while arriving at the
MRA.

RECOVERY OF OTS AMOUNT AS PER TERMS OF SANCTION: Management Committee of Board while
reviewing the compromise proposals sanctioned, directed to recover the amount agreed as per terms of sanction
and in cases where repayments are not forthcoming, to communicate the cancellation of OTS promptly and to
proceed with legal action intensively. Hence Zonal Offices / Branches should ensure that legal action / action under
SARFAESI Act is initiated immediately without any loss of time on failure of the borrower to comply with OTS
sanction terms.

APPROPRIATION OF RECOVERIES IN NPA A/CS:
Uniform Accounting policy for appropriation of amount recovered:

In the absence of a clear agreement between the Bank and the borrower for the purpose of appropriation of
recoveries in NPAs (i.e. towards principal or interest due), the Bank will adopt a uniform accounting Policy and
exercise the right of appropriation of recoveries in a uniform and consistent manner as follows:

Any Recovery should be first appropriated to Book Balance (Principal) and then to Unpaid Legal Expenses (MLE)
and thereafter to Unpaid Interest (MOI).

                    OTS POLICY FOR NPAs WITH BOOK BALANCE UP TO Rs.10.00 Lakhs

Coverage:

The OTS Scheme will cover all NPAs with book balance up to R.10.00 lakhs (net of Interest reversal ie. Net of
INCA/UIPA) as on 31 03 2011 including

_ Accounts where suit has been filed or decreed
_ Cases referred to Lok Adalat and awarded
_ Cases where OTS has already been sanctioned but not paid fully
_ Written-off accounts
_ BOT-NRR accounts
_ Accounts transferred to ARC heads
Exempted category:

The OTS Scheme will not cover:

*NPAs backed by self liquidating tangible assets like Jewels, Term Deposits/ NSCs/KVP/IVPand Life policies (ie.
Accounts for which above securities are available as on 31 03 11).
*Cases of frauds/malfeasance
*Home Loans/Housing Loans
*Advances covered by Securities (collateral) of Land and Building property.
*Salary Loans
*Staff related advances.
However, OTS for Accounts under the above exempted categories (with book balance upto Rs 10 lakhs as on 31
03 2011 and with the exception of willful defaulters and Fraudulent borrowers accounts) can be considered at the
level of Zonal Managers on merits, under discretionary powers delegated under Bank’s Recovery Policy. Every
effort should be made by the Zonal Managers to recover at least the NPV of the realizable value of the securities in
the exempted categories. In cases of Willful defaulters / Fraudulent borrowers accounts and staff/staff related
accounts, OTS will be considered at Head Office.

Settlement Formula:

The Minimum Recoverable Amount (MRA) for settlement of the small loan NPAs will

be based on their asset classification as on 31 03 2011 as follows:-
Branch Managers are vested with powers for sanction of OTS in cases confirming to above norms except in the
case of loans sanctioned by himself / herself earlier and such accounts shall have to be referred to the next higher
authority. viz. Zonal Manager. For arriving at MRA for OTS, the asset classification of the account as on 31.03.11
shall be reckoned for non ARC accounts and in respect of ARC accounts asset classification as on 30.09.10 shall
be reckoned. Write off:

All proposals falling under the purview of the policy can be considered by Branch Managers irrespective of scale
within the powers delegated as above, provided the write off involved is not more than the available provision as on
31.03.2011 plus R.100000/-.(Rs one lakh). All other cases are to be referred to Zonal Manager, who is empowered
to consider write off or consider relaxation under the scheme.

The OTS scheme is valid up to 31 03 2012.

Time Schedule for payment of the OTS Amount:

The OTS amount has be paid in one lump sum immediately on sanction at the Branch level. However, in genuine
cases, Branch Managers can allow a maximum period of 30 days for payment of the OTS amount from the date of
communication of sanction.

Zonal Managers are authorized to allow a maximum period of 90 days for payment of the OTS amount (from the
date of communication of sanction), wherever there are

genuine reasons.

POLICY GUIDELINES FOR SETTLEMENT OF CASES REFERRED TO LOK ADALAT:

Zonal Managers are authorized to agree to the proposals at the Lok Adalats, if the amount of settlement is arrived
at as per the following formula approved.
A) NPAs backed by securities:

I. NPAs where the Book Balance is more than Rs 25 lakhs:-

a) Book Balance plus Interest @ Base Rate (Simple) (or BPLR minus 4%) from the NPA date OR

b) NPV of cash flow associated with the realizable value of Securities net of costof realization whichever is higher.

II. NPAs where the Book Balance is upto Rs 25 lakhs:-

a) Book Balance OR

b) Net Present Value (NPV) of cash flow associated with the realizable value of securities net of cost of realization,
whichever is higher. For allowing the above concessions for Lok Adalat cases, Branches/Zonal Offices are to
ensure the following:-

NPV should be arrived at by applying/taking into account:-

a)Discount Rate at Yield on advances at the beginning of the Financial Year (Quarterly Compounding)
b) Maximum period of 5 years for realization of securities can be considered for NPAs of more than 5 years old and
for A/cs sanctioned under ZO/HO Powers
c) Cost of realization shall be

i) actual plus likely future legal expenses OR
ii) 5% of the suit amount Or
iii) 5% of the realisable value of property if the realizable value of property is upto Rs10 cr or
iv) 2.5% of the realizable value of property, if the realizable value of property is more than Rs 10 cr. whichever is
higher.
B) NPAs without Security: Where there is no security, decide the OTS amount on a case to case basis within the
sacrifice powers delegated in the Recovery Policy.

SALIENT FEATURES OF ONE TIME SETTLEMENT SCHEME FOR MSE NPAs

The policy guidelines are applicable to Micro and Small Enterprises (MSE) sector.

Coverage:

All NPAs under Micro and Small Enterprises (MSE) sector as on 31.03.2011;. However cases of wilful default,
fraud and malfeasance should be referred to HO to be considered at the level of MCB/Board. In staff related
accounts, when accounts are guaranteed by staff, no OTS can be considered by branches/ZO, but referred to HO.
In cases, where there is no guarantee by staff, then OTS for such accounts can be considered by ZM and above
within their delegated powers.

Minimum Recoverable Amount (MRA):

MRA would be arrived as furnished here below.
However, Branch / Zonal Offices have the liberty to negotiate with the borrowers for higher amount taking into
account the paying capacity of the borrower / guarantor and the realisability of the securities held, keeping the
MRA worked out as per guidelines, as the minimum. Interest to be applied on book balance is on simple basis for
all categories while arriving MRA (irrespective of security status). Wherever the applicable rate of interest is less
than BPLR, applicable card rate is to be applied. However minimum rate of interest applied should not be less than
the prevailing bank rate.    However, in recognition of the problems being faced by the MSE sector, Board has
permitted that the dues arrived as above shall be compared with that of the 75% of Net Present Value (NPV) for
available securities net cost of realisation instead of 100%.

(i) Where 75% of NPV of the available securities net cost of realisation is higher than MRA as arrived above, then
the amount arrived at 75% of NPV of the available securities net cost of realisation should be recovered.

(ii) Where MRA as arrived above is higher than 75% of the NPV of available securities net cost of realisation then it
should be endeavored to recover at least 75% of the NPV of the available securities net cost of realisation.

Settlement amounts below MRA:

Any offer / settlement which involve relaxation from norms shall be referred to Head Office and can be considered
at the level of ED / CMD / MCB.

Settlement amounts conforming to MRA but involving Write-off:

Wherever write off is involved, such proposals should be considered only by Zonal Managers and above.

No refund:

Under no circumstances, refund of any amount already recovered shall be made to the borrower.

Payment in installments:

OTS amount can be paid in one lump sum, within 90 days from the date of communication, without any interest for
this period. Where the amounts are not paid in one lump sum, at least 25% of the OTS should be paid as upfront
payment within 90 days of communication of the sanction and the balance 75% is to be paid in suitable
installments within a maximum period of 6 months, with interest at existing BPLR simple or Base Rate plus 4% or
applicable card rate whichever is lower on reducing balances. The repayment period may be extended up to twelve
months on a case to case basis on merits, with interest at existing BPLR simple or Base Rate plus 4% or
applicable card rate whichever is lower on reducing balances.

Upfront amount:
Initially deposit of 10% of the OTS as upfront amount before sanction. The deposit of 10% upfront amount collected
initially shall be taken into account while arriving the 25% of the OTS amount which is to be paid within 90 days in
case the OTS amount is not paid within 90 days.

Computation of MRA where further operations have been allowed beyond the cut off date:

Further debits / credits would be added / deducted respectively from the total dues as on NPA date and MRA would
be arrived.

                         OTS POLICY FOR FARM MECHANISATION / TRACTOR LOANS

Coverage:

    1. All Farm Mechanisation loans NPAs as of 30.06.2010.
    2. All tractor loans which were rescheduled/rephrased before 30.06.2010 and on being classified as NPA
       subsequently.
    3. Tractor loans which were disbursed before 30 06 2010 but slipped to NPA category subsequently
Minimum Recoverable amount (MRA):

Branch Managers : Book Balance as on date of NPA

Zonal Managers. : 90 % of the Book Balance

GMs at HO          : 75% of the Book Balance

Period validity:

Valid till 31.12.2012.




                                      Corporate Debt Restructuring (CDR)

CDR is a non-statutory and voluntary mechanism based on Debtor-Creditor and Inter-Creditor agreements that
ensures benefit of all concerned. The basic aim of CDR system is to preserve viable corporate adversely affected
by certain internal and external factors and minimize the losses to the creditors and other stakeholders through an
orderly and coordinated restructuring program. Reserve Bank of India is not a member of the system. RBI
provides broad guidelines.

Structure of CDR System:

CDR standing forum & its core group is the general body of all financial institutions and banks participating in the
CDR system. It is self empowered body, which lays down policies and guidelines and monitors the progress of
CDR. The CDR core group is carved out f the CDR standing forum to assist the forum in convening the meetings
and taking decisions on its behalf. The CDR empowered group decides the individual cases of CDR. The group
examines the viability and implementation aspects of the rehabilitation proposal. A time frame of 60 days is
generally prescribed for approval of the restructuring package.

Coverage:
The CDR mechanism covers multiple banking / syndication / consortium accounts with bank credit outstanding Rs.
10 Crore and above by banks and FIs. CDR mechanism covers both industrial and non industrial enterprises. The
case may be referred by a lender with exposure of minimum 20 % by value. A corporate can also refer its case
with a letter of support from a lender or lenders with exposure of more than 20% by value. Loan asset of any class
(Standard, Sub-standard and doubtful) can be admitted. Cases of fraud and misfeasance are ineligible. Cases of
will ful default may be considered if permitted by Core Group depending on case specifics. BIFR cases are also
eligible subject to approval of Core Group and with certain additional conditions.

Formulation of restructuring package:

After empowered group decides that restructuring of the company is prima-facie feasible and the enterprise is
potentially viable in terms of the policies and guidelines evolved by the Standing Forum, the taks of working out the
detailed restructuring package is entrusted to the CDR Cell, who work in close conjunction with the lead Institution /
bank of the consortium. The viability and rehabilitation potential of the company is them examined and approval of
the restructuring package is communicated within a specified time frame of 90 days to the empowered group.

Rehabilitation package under CDR system proves ‘Exit option’ to the lenders, who are not in a position to fully
abvide by the CDR empowered group’s decision on restructuring, mainly due to internal reasons. These lenders
have the option to sell their existing share to either the existing lenders or fresh lenders at mutually agreeable
price.

				
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