“VIKAS AADHAR OVERDRAFT”

Sl. No Details Guidelines
1. Name of the Product VIKAS AADHAR OVERDRAFT
2. Purpose

Any genuine business/personal credit requirements.
However it shall be ensured that the facility shall not be used for any speculative purpose like investment in real estate, construction / acquiring of building for sale or for any other purpose specifically prohibited by the Credit Policy of the Bank.

3. Eligibility

i. Location of the property: Residential / Commercial building/s constructed in NA lands, which are situated in Semi-Urban / Urban only are eligible for financing. (If the security offered is not situated in Semi-Urban / Urban areas, sanctioning of loan is strictly prohibited).

ii. Salaried class and non–salaried class who are Bonafide owner/s of residential or commercial building/s (Non-Agriculture) standing in their own name/s having regular stream of income.(Third party and agricultural property shall not be accepted). Only open site/s or open space is/are not eligible for finance under the scheme.

Preference shall be given to customers with satisfactory dealings with our Bank. While extending the facility to new customers it shall be ensured that their market standing and credit worthiness are verified before entertaining the proposal.

4. Takeover from other Financial Institution

Takeover of loans from other Financial Institution is not permitted under the scheme.

5. Quantum

The per party maximum amount that may be sanctioned under this scheme shall not exceed: Rs.25.00lakhs.

6. Assessment of Loan Quantum for various types of borrowers

Subject to the overall ceiling given above, the quantum of loan for various types of borrowers shall be determined as follows:

Salaried: 60 times of monthly gross salary OR 5 times the average annual income based on IT Return for last 3 years filed in respective years or Form No.16 ( Salary Certificate) issued by the employer OR 50% of the value of the property whichever is less subject to cutback norms. One year statement of account where salary is being credited shall be obtained.

Non-Salaried: 5 times the average annual income based on IT Return for last 3 years filed in respective years OR 50% of the value of the property whichever is less subject to cutback norms.

Clubbing of Income: Income of spouse of the borrower supported by IT returns only can be considered for arriving at the quantum of the loan, cut back &repayment of the loan. In such case they should join the loan transaction as co-borrower.

(In any case income from Agriculture should not be taken into consideration).

Note: In respect of the loans BELOW Rs.5.00 Lakhs the sanctioning authority may adopt holistic approach while calculating the average income for the purpose of arriving at eligible amount of loan under this category. It is responsibility of the Branch Manager to assess the income of the applicant& repaying capacity. Branch Manager has to obtain self declaration(as per Annexure I) with supporting proof of income. Branch Manager should also have to assess the income based on the information furnished by the applicant

7. Income Proof

For loans Above Rs 5.00 Lakhs, IT returns for the past 3 years filed in respective years is compulsory. In case of salaried class who have not filed IT returns, Form No.16 and Salary Certificate issued by an employer and statement of account for one year of the account where salary is being credited, may also be accepted.

8. Cut-back

The total deductions including the proposed monthly interest on OD should not exceed 50% of the monthly income in case of salaried class and 50% of yearly income in case of non-salaried persons

9. Security

Irrespective of the loan amount, REM/SRM of the property is compulsory. While creating mortgage along with other revenue records, obtaining of original sale deed/s is mandatory.

Irrespective of the loan amount, obtaining of legal opinion & search report is compulsory. For obtaining of retainer's opinion extant guidelines issued vide credit policy and various circulars have to be followed

10. Margin

50% of the Value of the Property.

11. Creation of additional charge on property mortgaged under the scheme

Subject to availability of the margin not less than 50% of the value of the property mortgaged under this scheme and ensuring the regularity of the existing account, additional charge may be created on the residual value in respect of any other loan facility sanctioned to the borrower for which the same property is offered as security.

Illustration:

Borrower has availed mortgage overdraft with limit of Rs.20.00 lakhs against house/commercial property worth of Rs.80.00 lakhs. Keeping the account regular, if the borrower approached for any other term loan, say SSI loan, the Quantum of the term loan is decided as follows:

(Amt in lakhs)

Existing Vikas Aadhar OD limit Rs.20.00

Valuation of the property Rs.80.00

Available residual value of the property (Rs.80lakhs-Rs.40 lakhs=Rs.40.00 lakhs) Rs.40.00

Then Quantum of applied SSI loan(Available security-133.33%) Rs.30.00

However, branch has to ensure that, including the existing account, cut back norms shall be adhered for proposed loan.

12. Guarantee

Third party guarantee/surety having adequate net-worth acceptable to the Bank shall be taken

13. Repayment

Limit is valid for 3 years & loan shall be renewed every year.

14. Rate if interest

12.50% p. a. and overdue interest at 14.50% p. a. to be compounded at monthly rests (normal rate of interest @ 12.50% p. a. + overdue rate @ 2.00% p. a.)