Pandyan Grama Bank

Administrative Office

2-70-1, Collectorate Complex



Publication of information under Section 4 (1) b of Right to Information Act, 2005


The Right to Information Act, 2005 confers the Right to Information for Citizens to secure access to information under the control of public authorities in order to promote transparency and accountability in the working of every public authority. It has been made obligatory for every public authority to publish the following information besides maintaining all its records computerized and connected through a network all over the country on different systems so that access to such records is facilitated.


Details in respect of information available to or held by it reduced in an electronic form:


The information held in electronic form is available in our website


Who can ask for information?


Any citizen can request for information by making an application in writing or through electronic means together with the prescribed fees.


Who will give information?


The Central Public Information Officer will provide necessary information to the public as permitted under the law within 30 days. Any person who does not receive the decision from the Central Public Information Officer whether by way of information or rejection within the time frame may within 30 days from the expiry of period prescribed for furnishing the information or 30 days from the date of receipt of the decision prefer an appeal to the Appellate Authority to be designated by the Bank.


Official designated as Central Public Information Officer for providing information to persons requesting for the information under the Right to Information Act, 2005:




Central Public Information Officer/

General Manager

Pandyan Grama Bank

Administrative Office

2-70-1, Collectorate Complex

Virudhunagar 626002




Role of Central Public Information Officer (CPIO):


The CPIO is required to process the request for providing the information and dispose of the same either by providing the information or rejecting the request within a period of 30 days from the date of receipt of request.


Official designated as Appellate Authority under Right to Information Act, 2005:




Appellate Authority under RTI / Chairman

Pandyan Grama Bank

Administrative Office

2-70-1, Collectorate Complex

Virudhunagar 626002




Role of Appellate Authority:


The Appellate Authority will entertain and dispose appeals against the decision of the CPIO as required under the Act.


Right to Information – Regulation of fee and cost – Rules:


A request for obtaining information under subsection (1) of section 6 shall be accompanied by an application fee of rupees ten by way of cash against proper receipt or by demand draft or bankers cheque payable at Virudhunagar favouring “Pandyan Grama Bank”.


For providing the information under subsection (1) of section 7, the shall be charged by way of cash against proper receipt or by demand draft or bankers cheque payable at Virudhunagar favouring “Pandyan Grama Bank” at the following rates:


a.    Rupees two for each page (in A4 or A3 size paper) created or copied

b.    Actual charge or cost price of a copy in larger size paper

c.    Actual cost or price for samples or models and

d.    For inspection of records, no fee for the first one hour and a fee of rupees five for each subsequent hour or fraction thereof.


For providing the information under subsection 5 of section 7, the fee shall be charged by way of cash against proper receipt or by demand draft or bankers cheque payable at Virudhunagar favouring Pandyan Grama Bank, at the following rates.


a.    For information provided in diskette or floppy rupees fifty per diskette or floppy and

b.    For information provided in printed form at the price fixed for such publication or rupees two per page of photocopy for extracts from the publication.


Fees in any other form namely Court fee stamps, Non-judicial stamp paper, UCR receipt, Postal stamps, etc., are not valid mode of payment of fee towards application or additional fee and therefore not acceptable for the Public Authority under Rule 3 of RTI (Regulation of fee and cost) Rules, 2005.



Particulars of organisation, functions and duties:


Pandyan Grama Bank was established on 9th March 1977 with its Administrative Office at Sattur and was subsequently shifted to Virudhunagar on 16.07.1993. The Administrative Office has started functioning in its own building from 31.10.2000 onwards.



Chairman of the Bank:



(Assistant General Manager; Deputed from IOB)


General Managers of the Bank:



            General Manager (Operation)

   (Chief Manager; Deputed from IOB)


2.    Shri. G. Mohan

General Manager (Administration)

(Chief Manager; Deputed from IOB)

2.    Shri. M.R. Sridharan

General Manager (IT)

(Chief Manager; Deputed from IOB)



Board of Directors:




The general superintendence, direction and management of the affairs and business of the Bank are vested in the Board of Directors of the Bank who may exercise all the powers and discharge all the functions which may be exercised or discharged by the Bank. The Board of Directors consists of


The Chairman of Pandyan Grama Bank


and the following other members.


Sponsor Bank Representatives:


Senior Regional Manager, IOB, Thoothukudi


Senior Regional Manager, IOB, Karaikudi


Reserve Bank of India Representative:


Deputy General Manager from Reserve Bank of India, Chennai


NABARD Representative:


Deputy General Manager, NABARD, Chennai


State Government Representatives:


Project Director, Virudhunagar

Project Director, Tirunelveli


Non-official Directors nominated by Central Government:


Two Directors


The Board is represented by persons with diversified professional experience in various fields. The Directors bring in wide range of expertise and experience to the Board, facilitating proficient, professional, informed and unbiased direction and control to the Bank.


The Board and its committees meet at frequent intervals and guide the Bank to achieve its objectives in a prudent and efficient manner and to ensure high standards of customer service, ethical practice and professional management of the Bank. The responsibilities such as policy formulation, performance review analysis and controls are discharged by the Board and its Committees.


The members of the Board are:


1.    Sri. N. Ravichandran


2.    Sri. R.Bookya


3.    Sri. S.N.Mallick


4.    Shrimathi. A.Umamaheswari


5.    Sri. P.Sugumar


6.    Sri. S.Suresh, Project Director,Virudhunagar


7.    Sri. S.Suresh


8.    Project Director,Tirunelveli


9.    Sri. A. Rasool Mohideen


Meetings of the Board:


Minimum 6 meetings will be conducted in a calendar year. Performance of the Bank, NPA  (Non-performing Assets) analysis, Profitability analysis, Staff matters, Frauds happened in the Bank, Investments, Reconciliation, etc. will be reviewed on periodical basis. A quorum of 5 members is needed to conduct a Board Meeting.   


Committees of the Board:


Audit Committee:

The Audit Committee of the Board has been constituted by three Directors viz,


1.    Chief Regional Manager, IOB, Thoothukudi

2.    Assistant General Manager, Reserve Bank of India, Chennai

3.    Deputy General Manager, NABARD, Chennai


The committee reviews the performance, NPA, frauds, inspection, balancing of books, reconciliation, etc.



Information related to Meetings of Board of Directors/ Management Committees:


None of the meetings of the Board of Directors or Committees are open to public and the minutes of such meetings are also not accessible to the public, since these are confidential in nature. The public cannot participate in these Committees. There is no need to make any arrangement for consultation with members of public in formulating any policies by the bank.


Inspection/ Auditing done in the Bank:


Internal Inspections:

1. Internal Inspection of branches is conducted by Bank’s Inspectors once in a year.

2. 100% Jewel verification at branches is conducted once in a year by Inspectors of the bank.

3. Snap Audit of branches is conducted in 15% of total branches every year by other Branch Managers/ Officers as per guidelines of NABARD.

4. Rapid Action Force: A supervisory mechanism capable of delivering the desired preventive measures to contain and minimize the irregularities on all fronts under jewel loan advances, has been formed to carryout surprise checks taking one day for each branch, chiefly focusing on the maintenance/ updation of Jewel Packet Register & the counting of jewel packets and tallying the same with the relevant computer log and reappraisal of jewels at random.

External Audits:

1. Long Form Audit and Tax Audit are conducted by Statutory Auditors as of 31st March every year.

2. Concurrent Audit has been introduced in the bank from January 2011 in branches which have a business mix of over Rs.40 crores and advances over Rs.20 crores. The auditing work was assigned to Charted Accountants. So far 14 branches were subjected to concurrent audit. Review meetings were conducted with the Managers of all the 14 branches and the concerned Auditors for the period from January 2011 to December 2011. The observations made by the Auditors were discussed in the review meetings and the branches were advised to comply with the observations.

3. Statutory Inspection by NABARD is conducted once in two years.

4. Management Audit is conducted once in two years by Officials from our Sponsor Banks.

5. Information Systems Audit is conducted once in a year by Auditors who are qualified with Diploma in Information Systems Audit (DISA).


None of the reports submitted by Internal Inspectors or External Auditors and the Investigation reports submitted by the Investigation Officers are open to public. Those reports are not accessible to the public, since they are confidential in nature.

Branch Network:

The Bank is operating in sixteen districts. There are 272 branches in our bank. All branches of the bank are CBS branches. NEFT facility is available in all branches.


The District-wise branch network is given below: AS on 31.03.2015


Sl. No.














































































































List of Regional Offices and its Contact Numbers:


Sl. No.

Regional Office

Districts covered


Regional Manager









Mr. S. Deivanayagam

04562- 247188






Mr. S. Sangilipandi

0462- 2321310






Mr. N.Sabarathinam

04575- 242356






Mr. S.Subbiah

0461- 2390007

5 Thanjavur







                 34 Mr.V.Sampoornalingam 04362-271477











Directory of Officers and Employees, Monthly remuneration received by each of its officers and employees including the system of compensation as provided in its regulations:


The names of Executives at Administrative Office and the Regional Heads are mentioned above. The staff strength of the bank is 927. The staff members are liable to transfers and therefore it is not possible to publish the list of officers and employees and keep the same updated from time to time.



Staff strength as on 31.03.2015:




Of which






Chief Managers – Scale IV







Senior Managers – Scale III







Managers – Scale II







Assistant Managers – Scale I














Office Assistants (Multipurpose)







Office Attendants (Multipurpose)







Grand Total









Scales of Pay (w.e.f. 01.11.2007) for Officers:


The present scales of pay for officers in different scales are given below:



Scale of Pay

JMG Scale I

Rs.14500 – 600/7 – 18700 – 700/2 – 20100 – 800 – 28100

MMG Scale II

Rs.19400 – 700/1 – 20100 – 800/10 – 28100


Rs.25700 – 800/5 – 29700 – 900/2 – 31500

SMG Scale IV

Rs.30600 – 900/4 – 34200 – 1000/2 – 36200

SMG Scale V

Rs.36200 – 1000/2 – 38200 – 1100 – 40400


Scales of Pay for employees:

The present scales of pay for the clerical and subordinate staff with effect from 1st November 2007 are as under.



Scale of Pay

Office Assistant (Multi-purpose)

Rs.7200 – 400/3 – 8400 – 500/3 – 9900 – 600/4 – 12300 – 700/7 – 17200 – 1300/1 – 18500 – 800/1 – 19300  

Office Attendent


Rs.5850 – 200/4 – 6650 – 250/5 – 7900 – 300/4 – 9100 – 350/3 – 10150 – 400/3 – 11350


 Various Committees in Pandyan Grama Bank:



Members of the committee

Functions of the committee


Investment Committee


General Manager(Operation)

General Manager(Administration)

Senior Manager-Planning Dept.

Senior Manager-Advances Dept.

Senior Manager-Accounts &   Reconciliation Dept.


All investments are made after the recommendation of the committee.


Grid Committee

Senior Manager-Law and Recovery Dept

Senior Manager-Inspection Dept

General Manager(Operation)

General Manager(Administration)



Proposals exceeding GM sanction are recommended as per loan policy


ALCO Committee


General Manager(Operation)

General Manager(Administration)

Senior Manager-Planning Dept.

Senior Manager-Advances Dept.

Senior Manager-Accounts &    Reconciliation Dept.


Maturity pattern of deposit, due date pattern of borrowings and repayment pattern of loans & investments are analysed and mismatch is avoided



Purchase Committee (PSD)

Senior Manager-Law and Recovery Dept.

Senior Manager-Premises and Stationery Dept.

Senior Manager-Inspection Dept.

General Manager(Operation)


For purchase of stationery items and security items.


Purchase Committee (CPPC)

Manager-Computer Planning and Policy Cell

Officer-Computer Planning and Policy Cell

Senior Manager-Inspection Dept.

Chief Manager-Planning Dept.

General Manager(Operation)



For purchase of computers and its peripherals.


Vigilance Screening Committee

Senior Manager-Inspection Dept

Senior Manager-Personnel Administration Dept.

General Manager(Operation)


To decide and recommend cases having vigilance angle alongwith reasons for treating them as vigilance or non-vigilance, as the case may be.



Audit Committee

Representative of NABARD, RBI, IOB to Board.

Secretary to Committee:                    General Manager(O)

 General Manager(A)


To review P&L , Balance Sheet, performance of the Bank, frauds if any, etc.


SARFAESI Committee

Senior Manager-Law and Recovery Dept.

Senior Manager-Advances Dept.

General Manager(O)

General Manager(A)

Secretary: Manager-Law & Recovery Dept.

Issuing notice to Borrowers under SARFAESI Act and execution of recovery proceedings.


Interest Rate Committee

Senior Manager-Planning Dept.

Senior Manager-Advances Dept.

General Manager(O)

General Manager(A)



To analyse the market trend and revise the interest rate periodically



Opening of Accounts:


At the time of opening of deposit account, the applicant must give a request in the appropriate Account Opening Form. Normally the applicant must call at the bank branch for opening any type of deposit account. Both the residential and official/business addresses of the applicant and details of the occupation of the applicant must be obtained without any omission. The approval to open an account must be given by the Branch Manager. In respect of Term Deposits and Savings Bank accounts in the name of individuals except where the introduction or circumstance of opening of the account requires scrutiny by the Branch Manager, the officer in-charge of the department may approve the opening. The opening of accounts approved by official other than the Branch Manager must be scrutinised at the end of the day by the Branch Manager.



Obtention of Photographs:


As per the directives of Reserve Bank of India, branches are required to obtain two photographs from the customers under following categories:


a)    All types of Deposit accounts viz., Savings Bank, Current Account, Term Deposit, Recurring Deposit, etc.

b)    Resident and Non-resident customers.

c)    Pardanishin Women.


Separate photographs need not be obtained for each category of Deposit. The application for different types of Deposit Accounts should be properly referenced. Branches are advised to bear in mind that photograph cannot be a substitute for specimen signature.



Introduction of Accounts:


All Deposit Accounts should be properly introduced to the satisfaction of the Bank before they are opened. Satisfactory introduction is a legal requirement to ensure protection under the provisions of the Negotiable Instruments Act and also for complying with the directives of RBI and IBA guidelines in this regard.


The following persons may introduce a deposit account:

a)    An existing account holder, who has operated his/her account satisfactorily for a period of atleast six months. The introducer should be well aware of the prospective depositor and his/her period of association with the depositor should be recorded in the Account Opening Form.

b)    Any respectable member of the public who is acceptable to the bank branch.

c)    Any permanent member of our Bank’s staff who has understood the implications of introducing an account. The staff should certify the bonafide of the applicant as a respectable person with good reputation.

d)    Valid passport or Postal Identification Card (It can be accepted only in the case of Term Deposits and Savings Bank account)


In respect of items (a) and (c) only the Branch Manager should approve the opening of accounts. Whether an introduction is acceptable or not depends upon the type and nature of the account and the status of the introducer. The decision to accept or reject the introduction always lies with the Bank. It is not necessary to divulge the reasons for not accepting a given introduction. However the Bank should be clear about the reasons for rejecting a particular introduction as an unacceptable one.


Type of Accounts:


1.    Personal accounts may be opened in the name of individuals. The accounts may be operated on either by the account holder or by any other person authorised by the account holder. Such authorisation may be made by either a mandate letter to the bank or through a Power of Attorney executed in favour of the authorised person.


2.    Joint account may be opened in the names of two or more individuals. While opening such joint accounts it should be ensured that there is no ambiguity in respect of the mode of operations in the accounts. The joint account operated in banks provides for joint and several liabilities of the constituents. It will enable the Bank in case of necessity to set off the credit balances in the personal names of the account holders against any liabilities payable to the bank in joint capacity under notice to them. In case, any overdraft or loan against the deposit, the documents for such availments must be executed by all the joint account holders.


The following types of mandate are available for operation of joint accounts:

a)    Accounts operated by two persons

1) Jointly by both the depositors

2) Both or survivor

3) Either or Survivor

4) Former or Survivor


b)    Accounts operated by more than two persons

1)    Jointly by all the depositors

2)    Jointly by all or Survivor(s)

3)    Anyone or Survivor(s)

4)    First named or Survivor(s)




Deposit Interest Rate



Service Charges



Loan Policy Document 2015-16

1. Preamble:


Loan Policy Document is the embodiment of various aspects of our loan policies forming the basis of various credit decisions. This document enables and helps the Bank and its officials to have firsthand knowledge of credit policies and to focus credit administration efforts in line with broad policy guidelines.


2. Objective of the policy:


a)      a) To comply with Govt. Guidelines / RBI / NABARD regulations on capital adequacy, credit deposit ratio, prudential norms, asset classification guidelines, Risk Management guidelines, etc.

b) To achieve targets fixed for priority sector advances including exports, housing, etc.

c) To Deploying funds in a prudential and profitable manner.

d) To have diversified loan portfolio.

e) To facilitate objective decisions in extending credit.

f) To have effective post Disbursement follow-up.

g) To Reduce occurrences of delinquency

h) To avail refinance whenever necessary.

3. Coverage of the Policy:


The policy document covers the following aspects:

i. Objectives & Coverage.

ii. Deployment of Credit / Thrust areas.

iii. Risk Management and Prudential norms.

iv. General Lending Guidelines.

v. Types of facilities.

vi. Finance to various segments.

vii. Credit appraisal.

viii. Terms of Assistance.

ix. Credit Monitoring.

x. Restructuring / Rehabilitation of borrowal accounts.

xi. Restrictions for financing.

xii. Miscellaneous matters.

4. Resource Management:


Our Bank will continue to endeavour to increase our resources through mobilisation of low-cost deposits, availing of refinance wherever available, for profitable deployment.

While the Bank will ensure compliance with CRR & SLR requirements and aim at achieving the various national norms under Priority sector lending, the remaining available resources will be earmarked for non-priority sectors which will be financed in a profitable manner.

5. Deployment of credit to Priority Sector:


The broad categories of priority sector as defined by Reserve Bank of India were circulated to branches vide Circular No. 65/2015-16 dt 10.12.2015 As per the concept of the priority sector, Regional Rural Banks have to maintain 75% of their total credit to priority sector advances with the following sub-targets.

Priority Sector to total advance minimum 75.00 %
Agri. advance to total advance minimum 18.00 %
Advances to SF/MF with Agriculture 8.00 %
Micro Enterprises 7.50 %
Weaker section advance to total advance 15.00 %
The targets fixed under various Government schemes like TAHDCO, PMEGP, etc. should be achieved.

The Bank being a member of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) will extend advances under Credit Guarantee Fund Scheme (CGS) for eligible Micro & Small Enterprises up to the limit of Rs.10.00 lakh as statutory obligation without security and may go up Rs.100.00 lakh based on the merit of the case by covering under CGT MSE.

6. Prudential Norms:


The Bank will adhere to the prudential norms prescribed by RBI / NABARD from time to time for lending to a single borrower and single group as detailed here under:

For Single borrower limit is to 20% of owned Capital funds

For Group exposure limit is to 45% of owned Capital funds

The above ceiling on single/ group exposure limit for the financial year will be calculated based on owned capital funds as on previous financial year subject to the ceilings indicated above.

The above ceiling on single/ group exposure limits do not apply if any credit facilities proposed fall under the following categories:

Principal and interest are fully guaranteed by GOI or loans and advances granted against the security of Banks own term deposits.

Loan and advances granted against the security of Banks own term deposits.

In our Bank, we have quite a large number of proprietary concerns and partnership firms enjoying credit limits. Most of them are engaged in trading activity. Due to more risks involved in extending huge credit to proprietary concerns and to partnership firms, it has been decided by the Bank to fix exposure limit in financing to these segments.

Accordingly, single borrower exposure limit for individual and proprietary concerns, a ceiling of Rs.3.00 crore is fixed.

With regard to partnership firms, a maximum of Rs.5.00 crore is fixed as exposure limit.

An exposure limit to a single trust/society account has been fixed at Rs.7.00 crore.

7. Types of loans and maturity pattern:


Loans are generally granted in the form of working capital by way of Demand Loan, Cash credit, Bills purchase and term loan for building up of assets. Since RBI has given Banks the flexibility to fix the loan and cash credit component, it has been decided to empower respective sanctioning authorities to fix working capital demand loan and cash credit in any proportion/ratio on case to case basis.

The Line of credit for 3 years assures that the clients will get enhanced credit limits, if their performance is satisfactory. The limits are to be reviewed by stepping up or stepping down the quantum of facilities based on the performance by calling for minimum but vital requirements like, achievement of projected turnover, projected profitability, operations in the account etc. Such reviews will be done by the sanctioning authority of the limits within one year from the date of sanction/last review.

Kisan Credit Card (KCC) for uninterrupted credit to agriculturists for Crop Loans, Agri. Term Loans, SME, JLG, Weavers Credit Card, Loan against warehousing receipt continue to be encouraged.

For loans to MSE - Retail, Service sector and other micro entrepreneurs under SCC, traders under JLG, and General Credit Card branch discretion continue to be withdrawn till the same is reviewed on performance and reduction in over dues.

8. Project Financing / Term Loan:


Loans granted with repayment period (including holiday period) of 12 months and below are classified as short term loans.

Loans granted with repayment period (including holiday period) of more than 12 months are classified as Term Loans.

To ensure there is no mismatch in the Banks Assets & Liabilities portfolio, Bank will restrict its total term loan exposure limit to 40% of its total advances. Term loans with a residual maturity up to one year are not taken into account for computing the limit of 40%.

9. Special Credit Schemes:


Housing loans for individuals for purchase / construction of new /old house, repair / renovation of the existing houses will be considered only in accordance with the scheme without any deviation. Due compliance of KYC norms and close monitoring will be strictly adhered to in order to prevent fraud and slippage of the accounts to NPA. Unauthorised construction, misuse of properties and encroachments on public land are not considered for sanctioning. Focussed attention on the following schemes:

Pushpavahanam for purchase of new cars for ones own use.

Easy loan to meet expenditure on social / financial commitments such as marriage etc. to Individuals with regular income.

Term loan for construction of Shopping Complex / Malls / Hotels, etc

Liquirent scheme for Line House / Shopping Complex owners against rent receivables.

Regd. Medical practitioners for the purpose of construction of nursing home, hospitals, purchase of equipment, vehicle and ambulance.

Consumer Loan to salaried persons to meet personal and domestic expenses.

Loan against LIC Policy on 75% of surrender value / NSC certificates.

Jewel Loan for Agri. Term Loan

Loans for establishing Kitchen Garden.

Loans against warehouse receipt

Flood relief loan for the period up to 31.03.2016

10. Miscellaneous Cash Credits:


To encourage trade credit to those who cannot submit financial statements and to those who find it difficult to submit stock statement Bank is extending credit against immovable properties to the extent of 50% of the forced sale value of the property as 50% Margin.

11. Risk Management:


Risks are inherent in any financial intermediation and hence the bank is exposed to certain risk that arise from its business and the environment within which it operates, Bank has separate policy for credit risk management.

Credit monitoring cell under Law and Recovery Department at Head Office closely monitors overdue accounts so that they do not slip into to sub-standard category.

12. Credit Approval Committee:


At Head Office all new credit proposals falling beyond the powers of the General Manager limit exceeding Rs.50.00 lakh are referred to Credit Approval Committee for sanction.

Proposals seeking enhancement of any amount including group exposure of exceeding Rs.50.00 lakh and adhoc limit (both fund based and non fund based) and any change in the terms of sanction in respect of proposals falling under the powers exceeding the General Manager are to be routed through Credit Approval Committee for sanction.

Proposals seeking renewal of existing limits exceeding Rs.50.00 lakh without enhancement and without any change in the terms of sanction need be routed through Credit Approval Committee for sanction.

Credit Approval Committee consists of General Manager Operation & General Manager Administration with Senior Manager Law & Recovery Department and Personnel Administration Dept. as members.

13. Valuation of securities:


For all borrowal account irrespective of the limit the valuation of property offered as security is required to be done once in three years.

For all advances above the credit limit of Rs.100.00 lakh two valuation reports are required to be obtained from two different approved valuers. If variation is more than 10% third valuer opinion to be obtained and lowest value be taken as the notional fair market value of the property.

14. Credit Expansion:


Each Rural and Semi Urban branch should endeavour to finance 100 new farmers every year. Each Rural and Semi Urban branch will identify and formulate 2-3 area specific Agri Credit schemes under Investment Credit.

Each Rural and Semi Urban branch has to issue a minimum of 150 KCC loans, by way of production credit in a year.

Focus to be made on financing Agri Clinic/ Agri Business Centres, Rural Godown, Plantation and Horticulture crop, Medicinal / Aromatic / Herbal crops / Loans against warehouse receipts in accordance with NABARD guidelines.

Special emphasis for quality credit linking of SHGs and JLGs.

Thrust will be given for implementation of Debt swap scheme to farmers / SHGs as Government of India fixed a target of 3% of total disbursal.

Special Thrust will be given to finance Tenant farmer / oral lessees through JLGs.

Marketing various insurance products like National Agri Insurance Scheme, Weather Based Crop Insurance Scheme, Personal Accident Insurance Scheme, Janashree Bima Yojana for SHG members, cattle insurance, Stock in trade insurance, Vehicle insurance, property insurance and health insurance etc.,

Agri Transport/ Bike Scheme, Farmers Easy Credit are to be marketed among farmers. No Security / NIL Margin for Agri Advances upto a limit of Rs.1 lakh.

Micro Small and Medium Enterprises:



Manufacturing Unit

Service Enterprises

Micro Level 1

Investment in Plant & Machinery*

Up to Rs.5 lakhs

Up to Rs.2lakhs

Micro level 2

Above Rs.5 lakhs to  Rs.25 lakhs

Above Rs.2lakhs to Rs.10 lakhs

Small Enterprises

Above Rs.25 lakhs to Rs.5 Crore

Above Rs.10lakhs to Rs.2 crore

Medium Enterprises

Above Rs.5 crore to Rs.10 crore

Above Rs.2 crore to Rs.5 crore


*While computing the investments in MSME units, original cost of land and building and certain other items not directly related to the service rendered or as may be notified under the MSMED Act 2006 and communicated vide our circular are to be excluded.

All advances granted to units in Khadi and village Industries Sector will be brought under Small Enterprises segment and treated as priority sector advance irrespective of their size of operations, location and amount of original investment in plant and machinery.

Bank will consider sanctioning of viable MSE proposals with fund and non-fund based limit up to Rs.100 lakh without collateral security/third party guarantee subject to the same being covered under Credit Guarantee Scheme of CGTMSE.

15. Margin:

For loans up to Rs.25000/- to MSME, no margin is required.

For loans above Rs.25000/- margin to be obtained depending upon the scheme.


16. Security:

No collateral security and third party guarantee are required for MSE (Manufacturing & Services) advances up to Rs.10.00 lakhs. Such cases are invariably be covered under CGS of CGTMSE. In case f MSE – Retail trade, since there is no coverage under CGT, Collateral Security be insisted / obtained for loans exceeding Rs.25000.


No collateral security and / or third party guarantee is required for MSE advances up to Rs.100lakhs on the basis of good track record and financial position of the MSE and such loans will be covered under CGS of CGTMSE subject to compliance of guidelines in place.


If the borrower prefers to bring acceptable collateral security including third party guarantee in lieu of the guarantee cover under CGTMSE the same will be considered.


Composite loans up to Rs.1crore may be granted to eligible SME units.


17. Thrust Areas:

Consumer credit is one aspect where returns can be maximized. Bank proposes to increase exposure under CLSP upto 2% of total loan outstanding. Presently it is Rs. 8.30 crore out of total outstanding of Rs. 4020.10 crore which constitutes 0.21 %.

Loans against the security of NSC, Life policies issued by Life Insurance Corporation of India will continue to be extended.

Trade credit advances for construction of Shopping Complex, Branch Premises yield good interest income apart from income through generation of rental income. For this advance, margin of 25% to 30% will be insisted in the total outlay. The rental income will be the only source of income for economic viability of the proposal. Repayment shall be 7 years period with 12 months initial holiday.

Trade credit advances for builders will be considered either as cash credit / term loans for 2 years period. The Subjects should offer prime as well as collateral security for the advances. Margin will be 25% to 30 % of total project cost.

The Government / RBIs guidelines in respect of lending to priority sector will continue to receive needed attention.

Line of credit for a year to the transport operators with satisfactory track record with us is being considered.

Loan against rent receivables Liquirent continue to be given active thrust.

There is no change in the policy except the following, under (15) thrust areas:

i. To extend credit to viable micro/small enterprises in semi-urban/urban centres on large scale.

ii. To accelerate credit under MOU arrangements especially for 3 wheelers and commercial vehicles with CGTMSE CGS cover.

iii. To extend loan against agri produce by branches upto a loan of Rs.1. lakh per farmer to start with (Ref: Circular No.04/2011-12 dt 23.04.2011)

iv. To continue to encourage all branches to extend finance for rearing of Milch animals under Nonscheme and DEDS NABARD capital subsidy scheme at present.

v. To continue to encourage all branches to extend finance for rearing poultry broiler birds under tie-up with various poultry farm agencies under Animal Husbandry Department scheme.

vi. To encourage all branches to participate actively under NABRDs capital subsidy scheme on Integrated Development of Small Ruminants, Rearing of Male buffalo calves and Pig Developments.

vii. Revised KCC is to be implemented by our branches effectively

viii. To reduce gradually the AJL content of our agri advances from the present level of 73.17% of agri advances to 60% in 3 years 281 Branches should aim to achieve 70 % during this year, 68% in 2016-17, 60% in 2017-18.

ix. To redue the gold loan content of our advances portfolio in a gradual manner.

x. To increase the non priority sector advances in order to match the target under priority set by Govt. of India. At present non priority advances constitute 4.75 % of our total advances: there is room to improve this to 20% there by our priority sector advances would be 80 % which is well above the stipulated norms of 75 %.

xi. To increase Solar Lighting Scheme, Solar Water Heater, Solar Pumpset with NABARDs subsidy assitance under Jawaharlal Nehru National Solar Mission (JNNSM)

18. Loans to NRI:

Term loan under Housing Loan, Easy loan and Trade credit will be considered.

Margin Security & rate of interest will be same as residents of India.

For income proof, employer should issue employment cum pay certificate duly authorised by embassy will be obtained.

50% of monthly average inward remitted family at NRI account in any bank in India will be taken as income for assessing the limit and repayment capacity.

NRI or his authorised POA holder will execute loan documents and create and mortgage over the property. Branch should get prior approval from Head / Regional Office in this regard.

Branch to persuade the NRI to open NRI account in our bank.

19. Terms of Assistance:

Interest Rate:

As per our Circular No. 67/2011-12 dt 23.01.2012 the Bank has framed interest rate on advances and the same is in force.

CIBIL report to be obtained for advances except under Agriculture for loan amount exceeding Rs.2 lakh.

Concessional rate of interest is permitted by Chairman as per guidelines communicated vide Circular Adv 43/08-09 dated 25.08.08 as follows: Minimum loan eligibility is Rs.10.00lakh and satisfy 4/7 parameter noted under:

PSU/GOI undertaking/ PVT individuals/ Partnership earning profit for 3 to 5 years.

Sales consistent in value/volume.

Prompt compliance of Banks terms & conditions. No remarks in Statutory Audit/ NABARD inspection / Management Audit of IOB and internal inspection reports.

Audited financial statement submission within 6 months of the year ended.

3 Bank branches in the area of business place/ residence of the applicants.

Business connections/ contributions Scope of business- cross selling our products.

20. Processing Charges:

Bank will continue to collect processing fees as per Advances Circular No. 66/2013-14 dt 12.02.2014 and discretion to waive processing charges vests with the Chairman.


21. Pre-payment charges:

Pre payment charges at 1% of pre-paid amount in case of term loans where the repayment of loan exceeds one year are to be charged. Discretion is given to General Manager and Chairman for waiver of pre-payment charges on case to case basis according to the level of sanctions made by them.


22. Mortgage charges:

Mortgage charges of 0.5% of loan amount with a maximum of Rs.600/- will be collected while creating equitable mortgage at the notified centres.


23. Margin:

Bank recognises margin as a concept of security and therefore the Bank will endeavour to prescribe a suitable margin.

Against immovable properties we generally insist on a margin of 50%.

For non-fund based limit a minimum cash margin of 10 to 25% is prescribed.

In case of Letter of Guarantees, minimum cash margin for performance guarantee is fixed at 10% and for a financial guarantee cash margin of 25% is fixed.

Discretion is vested with Chairman for reduction / waiver of margin in deserving cases. This discretion will be used, if any 3 parameters out of the following are satisfied.

Long standing connection of borrower.
Adequate security support.
Good performance in the past.
Continuous profit earning for the last three years.
Current ratio more than 1.33%
Other Banks stipulating lower margins.
PSU/ reputed pvt. Sector undertakings/ Govt. undertakings.

For sanctioning cc against book debts the age of which are not more than 120 days the minimum margin should be 40% and to book debts which are not more than 90 days, the minimum margin is fixed at 25%.




Based on risk perceptions, the Bank will endeavour to obtain sufficient and suitable tangible collateral security wherever possible. Waiver of security on case to case basis shall be vested with Chairman.


Forced Sale Value or 85% of market value whichever is less of the immovable property should be taken as the value of the property for appraisal purpose.  


24. Guarantees:


The Bank will continue to insist for personal guarantees of partners/ directors. In the case of advances to private Ltd Companies - personal guarantee of all promoter directors is to be insisted.


In the case of advances to Public Limited Companies, personal guarantee of all the directors except institutional director/ Govt director/ Bank nominee and or professionals serving as directors will be insisted upon.


25. Penalties:


Bank will continue to penalise borrowers who draw from their  account in excess of drawing power and / or donot submit the statements under quarterly information system/ stock statements and / or do not provide timely information for renewing the limits etc. The penalty in the case is by charging overdue interest of 2% over the normal rate of interest and in extreme cases by pruning down or withdrawal of limits.



26. Documentation:


Branches to obtain the documents prescribed for the loan and ensure that the documents are enforceable. No unfilled / blank documents, no unstamped / un cancelled documents are to be kept with.


27. Credit Appraisal:


Working Capital:


Borrowers with working capital limits up to Rs.2crore (Rs.7.5crore in case for SME) will be assessed as per Nayak Committee Turn over method.


Borrowers enjoying working capital limits of Rs.2crore and above and up to Rs.10crore (above 7.5crore to 10 crore in case of SME) will be assessed as per the existing traditional method of arriving at maximum permissible Bank finance (MPBF) calling for the CMA data.             


Term loan / Project Financing:


The appraisal of term loan will cover Managerial competence, Technical feasibility, Commercial viability and financial viability. In term loan appraisal, besides other factors, Debt Service Coverage Ratio(DSCR) and Debt Equity Ratio(DER) are given more importance.


Debt Service Coverage Ratio(DSCR):


                Net Profit after tax + depreciation+ Int on Term loan & other long term debts

DSCR=   ----------------------------------------------------------------------------------------------

                Inst. of TL & other long term debts + int on TL & other long term debts


While the ideal ratio would be above 2:1 an average DSCR of 2.0 with a minimum of 1.50 in any year for MLI and in case of SME in backward areas DSCR1.5:1 can be accepted.


Debt Equity Ratio (DER):


To apply a yardstick of 2:1 as desirable DER and to give relaxation on case to case basis


5:1 for technician oriented projects/ SRTO having national permit/ Single vehicle operator


3:1 SSI up to Rs.10 lakhs long term loan


2.5:1 High tech projects


3.5 - 4: 1 for infrastructure projects/ projects with project cost above Rs.500 crore


1:1 for risky ventures


1.5:1 where civil construction work is high





Promotors equity or margin can be brought in full before the Bank starts disbursing credit




promotor bring certain % of their equity (40 to 50%) upfront and balance is brought in stages




promoters agree, ab-initio, that they will bring in equity funds proportionately as the bank finance the debt portion.( source of promoters contribution be called for and ascertained) 


A certificate from the auditor who will audit the books of accounts of the firm should be called for, to ensure that the stipulated DER is maintained at any point of time, whenever prorata infusion of promoters equity in the project is acceptable to us at the time of appraisal of the project.


Calculation of Drawing Power (DP) based on the stock/ debtors statement:


Working capital limits are sanctioned


CC against hypothecation of stocks

CC of book debts

CC stocks & book debts


Calculation of DP for the CC against stocks:


Value of stocks                                                1  =


LESS unpaid stocks

a.       Trade Creditors                                         =             Rs.

b.      Liability under LC                                      =             Rs.         

c.       Goods purchased under guarantee =             Rs.         

      = ============

Value of paid stock 1 – (a+b+c)              =             Rs.

LESS Margin                                                    =             Rs.


Drawing Power                                             =             Rs.         



Calculation of DP against Book debts:

DP = Value of eligible book debts - margin

Calculation of DP against stocks & book debts


Both as above together.


Current ratio:

While it is desired that the current ratio of 1.33:1 is to be continued as a benchmark for deciding the WC requirements of the borrowers, in justifiable cases lower current ratio can be considered on a case to case basis depending up on the componenets of Current assets and current liabilities.



28. Holiday period:


It should not be uniform and vary from project to project with minimum of 3 months and maximum of 12 months.


29. Term Loan exposure to Gross advances:


It is decided to fix up an exposure limit of 40% of total domestic advances for term loans and also to exclude term loans with a residual maturity up to one year for computing term loan exposure. Term loans for this purpose include the following:


Housing finance

Term loan

Staff Housing

Agri term loan

Easy trade finance

Easy loan



30. Monitoring system:


Submission of compliance of Terms & Conditions within 15 days on disbursement of loan

Regular submission of monitoring statement

Regular submission of stock statement

Ensure 100% renewal/review of borrowal account with credit limit of Rs.1 lakh and above

Verification of securities pledged/mortgaged to the Bank.

Conducting regular inspection of borrowing units

Rectification of internal inspection/ statutory audit report/ NABARD inspection reports


31. Loan review mechanism:


Identify credit weakness and initiate corrective action.

Isolate problem areas on the basis of portfolio quality.

Assess the adequacy of and adherence to loan policies and procedures and compliance with relevant laws and regulations.


Provide information on credit administration including credit sanction process, risk evaluation and post sanction follow up and recommend corrective action to improve credit quality.

Review borrowal accounts above Rs.1crore within 3 to 6 months of sanction/renewal/ enhancement.


32. Submission of stock statement/ unit inspection:


While arriving at drawing power based on monthly stock statement, unpaid stocks should be excluded.


Ensure Bank's advances are sufficiently secured by prime/collateral securities and also during periodical inspection of the unit ensure that the unit is functioning well and there is active movement of stocks.




33. Submission of auditor's certificate:


Whenever the borrower is advised to produce auditor's certificate by the Bank, such auditor's certificate should be from the one who has originally audited and certified the books of accounts  of the firm.


34. Discretionary Power:


Branches will ensure that the discretionary powers are judiciously exercised and there are no deviations in this regard.


35. Recovery Policy:


Bank is aiming to reduce the level of NPA to the barest minimum by adopting

Recovery through One Time settlement

Recovery through close follow up of suit filed/decreed accounts

Recovery through Lok Adalats

Recovery through SARFAESI ACT.

Recovery through rescheduling/rephasement.


36. Advance to Bank's Director:


As per Section 20(1) of the Banking Regulation Act 1949 Banks are prohibited from entering into any commitment for granting any loans or advances to or on behalf of

  1. any of its directors or

  2. any firm in which any of its directors is interested as partner, manager, employee or guarantor or

  3. any company ( not being a subsidiary of the banking company or a company registered under section 25 of the companies Act 1956 or a Govt company) of which any of the Directors of the Bank is a director, managing agent, manager, employee or guarantor or in which he hold substantial interest or

  4. any individual in respect of whom any of its directors is a partner or guarantor.


37. Loans and advances to officers of Banks and their relatives:


No officers or any committee comprising inter alia, an officer as member shall while exercising powers of sanction of any credit facility, sanction any credit facility to himself or to his/her relative.


38. Takeover of accounts from other Banks:


The following guidelines be followed while taking over borrowal accounts from other Banks/ financial institutions as advised vide Advances Circular No.ADV6/2014-15 dt 22.04.2014:


a)      Only borrowal accounts which are standard and performing should be taken over.

b)      The financial benchmarks stipulated for sanctioning credit facilities in the normal circumstances should be adhered to and deviations in exceptional cases should be justified in the note put up for sanction.

c)       All precautions that are being taken while extending credit facilities to a new borrower must be taken.

d)      Credit report from the existing bankers should be called for.

e)      Reasons for shifting over to our Bank should be mentioned.

f)       Independent market enquiries, oral/written may be made

g)      Statement of accounts with erstwhile bankers atleast for 6 months may be studied and commented upon.

h)      If there is already concession in pricing/charges etc at the time of takeover no further concession can be considered till 1 year from the date of sanction.

i)        If the borrowal account with the existing bankers is liquidated out of advances extended by our Bank, it is to be treated as takeover. All other cases will not be treated as takeover.

j)        We may takeover borrowal accounts from Banks, Financial Institutions / Agencies.

k)      Account should have recorded cash generation / profit for the proceeding two years out of three years unless the account is not in operation for three years and business conditions should indicate improvement in profitability.

l)        Proper due diligence including pre-inspection visit to the premises of the customer shall be conducted before the account is considered for taken over.

m)    Before taking over an account, credit information from the transferor bank should be obtained as per the prescribed format. No waiver is permitted.

n)      A certified copy of the statement of accounts duly signed by the officials of the erstwhile bank should be taken without relying on the Xerox copies of statement of the account produced by the applicant.

o)      The financial discipline of the borrower should in no way be compromised at the time of takeover and their credit requirements are to be independently assessed.

p)      While taking over the account, the remaining repayment period shall not be extended. No waiver shall be permitted at any level for this.

q)      The formalities such as fresh documentation, transfer of securities, etc are to be expeditiously completed.

r)       Bank treats the accounts that become NPA within a year of its sanction as quick mortality when the takeover account becomes quick mortality the staff accountability should be examined thoroughly.


39. Review/renewal of borrowal accounts:


Review/renewal of borrowal accounts sanctioned will be ensured within 3 months from due date.


Review of all credit limits are to me made once in a year except loans against NSC/ LIC/ Jewel / Term deposit.


40. Compulsory audit of borrowal accounts:


It has been decided that all borrowers with credit limits of above Rs.10lakhs should get themselves audited compulsorily by chartered accountants.  


41. Exit Policy:


Whenever the borrowal account is showing signs of sickness or if it is found that funds of the bank are diverted for the activity not associated with the activity of the borrower, efforts should be made to liquidate the outstanding in borrowal accounts.

If the following irregularities are noticed then bank should treat those signals as warning signals and examine the need to exit from the exposure to these accounts.

CC a/c remaining stagnant without operations or with negligible operations for a period of Six months preceding the date of review.

Continuous irregularities in CC a/c such as drawings frequently exceeding the sanctioned limit, periodical interest debited remaining unrealised

Non submission or undue delay in submission of stock statements or submission of incorrect stock statements and other financial statements.

Failure to make timely payment of instalments of Principal and interest on term loans

Non payment of statutory dues viz. PF dues, dues to suppliers of raw materials, water, power etc. bills sent on collection basis / bills purchased/discounted

Diversion of sale proceeds.

Downward trend in credit summation in the a/c / poor turn-over by generating F209 in the system.

Frequent return of cheques/bills.

Steep decline in production, Downward trends in sales and fall in profits and other adverse features notice in financial statements.

Any other serious irregularities noticed by the various field level functionaries/ inspectors etc., jeopardising the safety of advance.

42. Unsecured exposures:


Banks outstanding unsecured guarantees, plus total outstanding unsecured advances should not exceed 25% of its total outstanding advances.

Unsecured exposure is defined as an exposure where the realizable value of security, as assessed by the Bank / approved valuer is not more than 10%, ab-initio, of the outstanding exposure.

Security will mean tangible security, property charged to the Bank and will not include intangible securities like guarantees, comfort letters etc.

43. Financing to Non-customers:


As per RBIs instruction vide circular dated 24.01.2003 no fund based or non fund based facilities like opening of LCs providing guarantees and acceptances to non- constituent, borrower should be extended by the Bank.


44. No loans for acquisition of KVPs:


As per RBI circular DBOD No.Dir.BC.69/13.03.00/2006-07 dated 14.03.07 no loans will be sanctioned for acquisition of / investing in small savings instruments including Kisan Vikas Patras.

45. Consortium Lending


a. In the case of consortium lending, independent approval and due diligence done by Sponsor Bank shall be taken in to consideration. But in the case of other bank, it shall be done notwithstanding the leader banks appraisal note / report.

b. In respect of the terms and conditions for consortium advances, Bank will fall in line with consortium and leader Banks.

c. If due diligence report on supplier of machineries / equipments obtained from Leader Bank a copy of the same shall be obtained and kept on record.

d. Wherever credit appraisal reports prepared by outside consultants (including a subsidiary of any bank) or in-house consultants of the borrower, a certificate shall be obtained from the consultant stating that they have verified the technical and financial aspects of the project and based on their assessment, the project is technically viable and economically feasible.

e. The parent bank of the consultant subsidiary which has appraised the project shall take a share in the project funding.

f. Stipulations at (c), (d) and (e) above shall be the conditions precedent for banks participation in consortium since bank believes these are important for sound credit dispensation.


46. Guidelines regarding checking of wilful defaulters and measures against them:


End use of funds will be ensured after the disbursal of loan by undertaking supervision through diligence. The following measures against wilful defaulters are to be initiated:

No additional facilities and a/c may be put on recovery basis.

Entrepreneurs where diversion of funds/siphoning of funds/ falsification of accounts/ fraudulent transactions have been identified by other banks will be debarred from financial assistance for a period of 5 years from the date the name of wilful defaulter is disseminated.

Legal proceedings and foreclosure against the borrowers/ guarantors for expeditious recovery of dues will be initiated.

Criminal proceedings against the wilful defaulters wherever necessary ( as per provisions of sections 403 and 415 of IPC 1860)

A proactive approach for a change of management of the wilfully defaulting borrower unit wherever possible will be adopted.

Guidelines regarding checking of borrowers featuring in the defaulters/caution list of RBI:

No additional facilities should be granted without prior approval of the next higher layer.

Recovery steps including exit of the a/c should be initiated for the current dues.

47. Banking Codes and Standard Board of India (BCSBI):


With regard to lending the codes and standards set by Bank such as 

Communicating to the applicant the reasons for rejection of a proposal where the loan amount applied does not exceed Rs.2.00lakhs.


Information to the borrower regarding the fees / charges payable for processing, pre-payment options and any other matter which may affect the interest of the borrower.


And communicating to the borrower the limits sanctioned with terms and conditions thereof etc., are put in place for strict compliance.


48. Definition of Group:


A group is defined by invoking associate / sister concern concept.


Where a proprietor or partner of a firm / director of one company is proprietor or partner of another firm / director of another company, they are called as associates falling within the purview of group concept.


Where a proprietor or partner of a firm / director of one company / a company is the guarantor of another partnership firm/ another company where guarantor has no financial

Stake (or has no commonality of management and effective control) then they are not to be treated as associates.


Where common director / partners are employees/ institutional nominees/ or have no financial stake, the group concept will not apply.

In case  of common guarantors if they have substantial interest ie.51% or more stake in one or any of the common concern, then the a/c should be treated as associate concern.


Even after complying with the above directions, if a sanctioning authority is of the opinion that the borrower should be considered as an associate concern, then the provisions of associates shall be applicable (such as very closely connected family members, say wife, son, daughter etc under one umbrella)


49. Conclusion:


Based on the loan policy document and taking into account the extant guidelines of RBI / NABARD / GOI from time to time, the Bank will issue detailed operational instructions to Branches / Regional offices periodically.


As and when modifications are made and a change in Loan Policy is announced by RBI/NABARD/GOI the respective changes will form part of this policy. The revised Loan Policy Document is valid until next review is made.



General Manager

Annexure I

Interest rate w.e.f 02.01.2017

Priority Sector Advances

1. Agri. Term Loan

Rate of Interest (%)

Upto Rs.50000

11.00 %

Rs.50001 to Rs.2 lacs

11.75 %

Above Rs.2 lacs

12.00 %

2. AJL / KCC / Crop*

Upto Rs.50000

11.00 %

Rs.50001 to Rs.2 lacs

11.75 %

Above Rs.2 lacs

12.00 %

3. SHG

Upto Rs.50000

12.00 %

Rs.50001 to Rs.2 lacs

13.00 %

Above Rs.2 lacs

13.50 %

4. SME (W.C & TL)

Upto Rs.2 lacs

12.00 %

Above Rs.2 lacs

12.50 %

5. Education Loan

Upto Rs.50000

12.50 %

Rs.50001 to Rs.2 lacs

13.50 %

Above Rs.2 lacs

14.00 %

6. Agri. Term Loan [Jewel]

Upto Rs.2 lacs

10.50 %

Above Rs.2 lacs

11.00 %

7. Housing Loan [General]

10.25 %

Rural Housing Loan (10 Years)

Upto Rs.15 lacs

9.62 %

Urban Housing Loan (10 Years)

Upto Rs.10 lacs

9.80 %

Non Priority Above Rs.25 lacs

10.25 %

8. Govt. Sponsored TAHDCO Scheme

As applicable to SME & Agri Term Loans as the case may be

9. Jewel Loan [Others]

11.75 %

Jewel Loan [Others]-Special

11.00 %

PGB Retail [Jewel Loan]

11.25 %

10. Trade Finance to RT

Upto Rs.2 lacs

12.25 %

Above Rs.2 lacs

12.50 %


* upto Rs.3 lacs is 7% p.a which is applicable to one year from the date of disbursement or date of closure whichever is earlier, if interest subvention is available vide Govt. Notification


11. Pushpavahanam (applicable up to 31.03.2017)

10.50 %

12. Consumer Loan to Salaried Person

Disbursement on Declaration

13.75 %

Disbursement on Purchase of consumer durables with bills

13.00 %

13. Easy Loan

12.75 %

14. Loan against NSC / KVP / LIC / Trade Credit / MCC / Liquirent

13.00 %

15. a. JLG MSE

12.00 %

b. Crop Loan

Upto Rs.50000

11.00 %

Rs.50001 to Rs.2 lakh

11.75 %

c. Agri. Term Loan

Upto Rs.50000

11.00 %

Rs.50001 to Rs.2 lakh

11.75 %

16. Demand Loan

a. loans to Depositor

DR + 1.50 %

b. Loan / CC to Third Party

DR + 2.00 %

17. a. Clean Overdraft

15.00 %

b. Overdraft to Smart Card

12.25 %


Upto Rs.2 lacs

12.00 %

Above Rs.2 lacs Up to Rs.30 lacs

12.50 %


Upto Rs.50000

10.00 %


Upto Rs.2 lacs

11.00 %

Above Rs.2 lacs Up to Rs.30 lacs

12.50 %


Upto Rs.2 lacs

12.00 %

Above Rs.2 lacs Up to Rs.30 lacs

12.50 %


Upto Rs.100 lacs

11.75 %


Upto Rs.10 lacs

12.25 %

Above Rs.10 lacs Up to Rs.100 lacs

12.50 %


Upto Rs.10 lacs

9.80 %

Above Rs.10 lacs Up to Rs.15 lacs

10.25 %


Upto Rs.25 lacs

11.50 %


Upto Rs.50000

11.00 %

Rs.50001 to Rs.2 lacs

11.75 %

Above Rs.2 lacs

12.00 %


I.                    Introduction

In order to have a broad guideline over the entire area of NPA Management, Comprehensive Recovery Policy has been brought out.

II.                 Objectives of the loan recovery policy :

F  To ensure arresting slippage by initiating timely remedial action whenever the advance becomes irregular.

F  To ensure considerable reduction in non Performing Assets by way of Upgradation and Recovery.

III.               Measures to achieve the objective of the policy:

1.      The NPA recovery starts, even before the account is classified as NPA, by initiating necessary curative steps when irregularity in the account is identified.

2.      To coordinate with Advance Department / Law and Recovery Department, whenever required, in formulation of various strategies to prevent Borrowal accounts from slipping to NPA.

3.      The documents should be reviewed and the legal enforceability of all documents to be perfected before classifying the account as NPA.

4.      The slippages are to be monitored on continuous basis and try for upgradation by recovering the “critical amount” or by restructuring / rescheduling as per the prescribed norms of RBI.

5.      There should be overall reduction of 20% of opening NPA level. Accordingly required targets to be assigned to the Branches / Regions, taking into account the recoverability of the accounts involved, during the year.

6.      To initiate timely actions, without loss of much time to ensure recovery towards reduction of NPA, through legal and other ethical measures.                               

7.      Introduce schematic recovery campaigns for specific focused areas.

8.      Implementation / adherence to guidelines prescribed by the Bank / RBI / Government from time to time (in respect of Management of NPAs / OTS schemes).

9.      Minimize provision by improving recovery / security coverage or by deferring movement to next status as per the RBI norms.

10.  Elimination of Non-recoverable loans

11.  Maintaining a database of profile of NPA borrowers for dissemination among the branches of the Bank.

12.  Review of delegation of powers to various functionaries in the Bank with regard to filing of suit / waiver of legal action / Sacrifice / write-off etc.,

IV.             Methods of recovery:

F  Adjusting the permitted credits :

Eligible subsidy / margin money / liquid securities must be credited immediately on classification of NPA after giving due notice of information to the borrowers.

F  Persuasion / Personal contacts with the Borrower / guarantor :

Regional offices to ensure that branches are contacting the borrowers / guarantors at frequent intervals and persuade them to upgrade / close the NPA amount. The latest contact address / details and other particulars of the borrowers / guarantors / securities / condition of the units / business activities must be recorded so that the bank is not put loss for want of details.

F  Recovering critical / overdue amount to upgrade:

The following feasible steps should be adopted for upgradation of NPA accounts:

o   Recovering the critical / overdue amounts.

o   Restructuring / rephasing / rehabilitating the NPA account wherever possible as per extant guidelines.

o   Whenever an account is upgraded one layer above the sanctioning authority should review the upgradation.                                                                                       

For reschedulement/rephasement the account should fulfill the following criteria.

a.      The borrowers are very much available

b.      They are still in the line of business and prime security is available

c.       The outstanding amount including undebited interest is less than the DPN amount  Branch Manager is confident enough that if restructured, further recovery of instalment is possible without any difficulty.

d.      Letter requesting for restructuring of loan shall be obtained from borrower / in case of SHG resolution shall be obtained to that effect.

e.       Debit confirmation of Balance shall be obtained.

Branch Manager shall identify such accounts for rephasement / restructuring, on fulfilment  of  above conditions and get approval from Regional Office/Head Office.

F  Use of ethical measures such as publication of photographs / classifying as willful defaulters etc., :

·         Publishing the photograph of the eligible defaulters as per the laid down norms.

·         Identifying and classifying the willful defaulters for submission to RBI / CIBIL as per the RBI guidelines.

·         The help of the Govt. bodies / officials should be utilized for recovery of all Govt. Sponsored loans.

F  Timely action under SARFAESI ACT 2002 :

o   In the event of failure to upgrade the account the actions under SARAESI ACT 2002 should be initiated immediately for all eligible loan accounts and subsequent actions should be followed on due dates without fail till the recovery is made. Regional Offices to ensure that 100% SARFAESI actions are initiated on all eligible accounts before completion of next quarter from the date of classification of NPA.


F  Legal Actions and filing of suits at appropriate forums :

Normally, legal action thro’ court / DRT should be the last resort adopted for recovery of dues. Before initiating legal action, steps to be taken to ensure recovery by probabilities for compromise settlements, encashing liquid securities / disposal of charged securities / exercise right of setoff etc., After examining the pros and cons of filing suit the following measures to be initiated.

o   Serving legal notices

o   Filing suit in civil court / DRT as per the case after obtaining permission from appropriate layer of authority.                                                                   

o   Referring to Lok adalats for settlement through conciliation. The forum of Lok Adalats should be used frequently as it is cost and time effective to take it to decreed stage. In the event of failure to honour the Lok Adalat commitments EP proceeding should be initiated immediately.

o   Filing ABJ and obtaining injunction order, seeking interim orders wherever applicable.

o   Vigorous follow-up of suit filed cases should be made before due dates by contacting the lawyers and providing whatever materials / details required by them to avoid delay from our part.

o   Regional offices to monitor the proceedings in DRT cases by ensuring attendance of lawyers / branch managers on hearing dates, carrying out orders etc.,

o   Invoking provisions under section 138 of NI Act wherever applicable.

o   File appeal / review / revision petition wherever necessary within limitation period.

o   Unnecessary adjournments should be objected or cost should be insisted for every unreasonable adjournment.

F  Obtaining decree / RC expeditiously.

o   Execute Decree / RC immediately, without waiting upto the limitation period provided as per law, to bring the securities for sale, attach and sell the assets of the judgement debtors, seek Garnishee orders, seek arrest of JD in the event of nonpayment of decreed amount.

o   Filing insolvency petitions wherever desirable.

o   Initiating criminal proceedings wherever necessary.

V.                Compromise settlements

A.    Compromise settlement is one of the most effective and cost & time saving process in recovery of NPAs.

The compromise settlement policy aims at :

1.      Deciding the mutually agreeable amount based on the present paying capacity of the borrower / guarantor.

2.      Simplify the procedure in calculations and provide clarity to the field level functionaries.

3.      Early recovery of Hard core NPAs, by considering the issues involved in such accounts.

4.      Considering the Worth of the borrower / guarantor and realizable time and value of securities.

B.     Eligible Accounts:

1.      All NPA accounts – both suit filed and Non – Suit filed.

2.      Written – off Accounts

3.      Any other Potential NPA Accounts and Special Mention Accounts, which are covered by specific recovery campaign, launched, as per the terms of such campaign.

C.     Ineligible accounts:

1.      A loan account sanctioned earlier by the officials, who is the competent authority presently to consider the compromise settlement of the same account has to be sanctioned only by the next higher layer of authority.

D.    Negotiation process :

        i.            Grounds to entertain Compromise settlements :

1.      The account should have been classified as NPA and the recovery of the dues to the Bank in the normal course is found difficult or would take unduly longer period depriving the Bank the immediate benefit of recycling of funds.

2.      Any other Potential NPA Accounts, which are covered by specific recovery campaign, launched, as per the terms of such campaign, lok adalats etc.,.

3.      Efforts for upgradation either by restructuring or rehabilitation have failed and / or may not yield desired results.

4.      The securities, income / worth of the borrower / guarantor are not sufficient to ensure full & early recovery of the dues.

5.      Any other reason in which continuation of relationship with the borrower is considered not in the interest of the bank.

6.      The recovery through legal measures will take longer time to result in recovery.

7.      In case of SHG, Dormancy, disintegration, migration of the members due to natural calamities etc., will be considered.

8.      In case of CLSP, death, non traceable, termination / suspension of borrowers will be taken into account.                                                                                           

     ii.            Compromises may be negotiated with :

1.      Principal Borrower/s

2.      Guarantor either for partial payment or for full payment.

3.      Other interested parties like drawees of bills, legal heirs etc.,

   iii.            The following factors would also be considered while negotiating :

1.      Realizable value of security evaluated on a distress sale basis. The difficulties in sale of the security, problems in title deeds etc.,

2.      Means of the borrowers / guarantors other than the security charged in the account or attached in the execution proceedings and their current income if they are engaged in gainful activities.

3.      Total undebited interest due.

4.      Stage of recovery action where it stands and probable time to recover.

5.      Cost of maintaining the suit, maintaining and safeguarding the security.

6.      Impact of accepting the compromise proposal on P & L a/c (by way of write back of provisions and recovery of undebited interest)

7.      Any other loans for which the borrower has extended Guarantee.

8.      Statutory Dues if any.

    iv.            In the process of negotiation, sacrifice of various components of the dues as below in the order of desirability would be considered :

1.      Penal interest

2.      Incidental expenses including inspection / insurance charges.

3.      Guarantee Corporation guarantee fees

4.      Legal expenses incurred and to be incurred.

5.      Undebited interest

6.      Write off should be avoided as far as possible and should be considered only when it is unavoidable.

7.      In cases where a person has obtained loan from the bank by making fraudulent representation or otherwise committing any fraud as far as possible, efforts should be made to recover the entire amount of loan.


      v.            The negotiation should Endeavour to maximize recoveries / compromise amounts taking into various facts as below:

1.      Age of NPA

2.      Strength and weakness of bank in respect of documentation, realization of security etc.,

3.      Age and stage of suit proceedings.

4.      The possibility of deterioration and alienation of assets leading to threat to security / recovery.

5.      Capacity for negotiation by the Bank and the borrower.

6.      Present status of activity of borrowers.

7.      Source of payment to honour the commitment made by the negotiator.

8.      The borrower should be advised of the contractual dues and the actual benefit to the borrower should be explained to him.


Types of accounts :

Staff loans and staff related accounts:

The occasions to consider compromise settlement in staff / staff related accouts will be very rare and should be judiciously decided based on the following guidelines:

A.    Compromise in accounts of third parties or close relatives of staff members, where staff members is a guarantor, shall be approved by the respective layer of authority as per the discretionary powers ONLY after obtaining clearance from vigilance Dept, and Personnel Administration Department in administrative office.

B.      In respect of loans in the name of Ex-staff members who have deceased / retired or no more in the service of the Bank compromise proposals may be considered on merits.





Compromise / negotiated settlement can be considered under the policy in respect of all NPA accounts irrespective of Asset Classification and whether suit filed or non-suit filed or decreed or recovery certificate obtained.


AGRICULTURAL ADVANCE:  This policy is applicable for all Agricultural Advances.


Within the delegated powers, the sanctioning authorities at Head office level and above can consider relaxation of norms in compromise settlement cases (except those covered under RBI

policy), which might not conform to norms, with proper justification and to the satisfaction of the sanctioning authorities.

Staff lapses:

All OTS proposals should have the status report on staff lapses as on the date of submission of proposal as per the Bank’s staff Accountability Policy for Non Performing Credits.

Non – Discretionary and Non- Discriminatory Treatment:

The branches should follow the above guidelines for compromise settlement of all NPAs covered under the scheme, without discrimination and a monthly report on the progress and details of settlements should be submitted by the concerned authority to the next higher authority.                                                                     

Payment terms:

Ø  Upfront payment: The borrower has to make an upfront payment of 10% of the offer under “no lien” account when the proposal is submitted. However, if the intention to make payment immediately on sanction is justified, the upfront payment need not be insisted upon to consider the proposal. Similarly if the OTS is to be paid only by sale of Securities charged to the Bank, the upfront payment need not be insisted upon.


Ø  Time Limit for payment of OTS: The sanctioned OTS should be recovered, normally, within 3months from the date of conveying the sanction without charging interest.

However, if the payment is to be made in installments and has to extend beyond 3 months, 25% of the OTS sanctioned amount is to be paid within 3 months of conveying the sanction and the balance 75% may be paid in monthly / quarterly installments not exceeding further 9 months together with interest at 12% on the date of sanction, from the date of conveying the sanction to date of final payment made.


A.    Source of funds : sanctioning authority should satisfy themselves as to the source of payment of the OTS, if sanctioned. The sources from where the borrower / guarantor intend to raise funds must be obtained from the borrower and in case of settlement in installments; the funds available from the source to meet the installment amount should be verified and recorded. In case of proceeds by way of disposal of assets are not sufficient to meet the OTS amount, proper installments should be fixed depending upon other available sources.

B.     Extension of Time :

a.      Whenever the extension of time for honouring the OTS is sought and if the request is genuine, the concerned sanctioning authority themselves may extend the time with payment of interest @ 12% for the delayed period.

b.      Wherever the proposals which have lapsed due to non-payment / part payment and or withdrawn and a period of 12 months have elapsed from the due date, in such cases, any request for revival of such proposals may be treated as fresh proposals only.                                                              


For Secured and unsecured loans, Book outstanding as on the date of proposal may be taken as Minimum acceptable amount, to avoid write off. However, under unavoidable circumstances write off may be permitted after recording proper justification for the same.


Compromise below the minimum acceptable Amount / Benchmark Amount should not be treated as deviation as long as it is with cogent reasons.

vi.            Accounting procedures :

Ü  The appropriation of recovery should be done as detailed below,

·         In the case of recovery in the Non-suit filed accounts the recovery should first be appropriated towards income and the balance left, if any, will be credited to the book outstanding.

·         In the case of recovery through compromise settlement recovery should be first be appropriated to Book outstanding and after adjusting the Balance only, will be taken to income.

·         In the case of suit filed accounts, recovery under both normal and compromise settlement recovery should first be appropriated towards Book outstanding and after adjusting the Balance only, will be taken to income.

·         In the event of accounts involving write off after full recovery of OTS amount, any recovery of delayed period interest should be adjusted toward Book outstanding only and the balance alone should be claimed for write off from accounts dept.

·         Recovery from written off Accounts (written off at branch level) should be transferred to Head Office.

VI.              Waiver of legal actions

Ü  Every endeavour shall be made to recover the dues in the ordinary course. However, where securities are not available to realize our dues or borrowers are not having any assets or means to repay the dues or chances of recovery in the normal course / by compromise are remote and initiation of legal action for recovery is not prudent, in such exceptional cases, Bank may consider waiver of legal action as a last resort.

Ü  As the waiver of legal action would be a step towards writing off the dues, sufficient care shall be taken by the branches before recommending waiver of legal action. Branches shall submit the proposal for waiver of legal action to the appropriate authorities sufficiently in advance before the date of limitation sets in. The power of waiver of legal action can be exercised by all the functionaries upto the limit of write off powers delegated to them.  .

Ü  By waiving legal action, Bank loses only its right of recovery through legal process. However, it does not vitiate its right of appropriation of the amount received in the ordinary course of business or other recovery measures. Hence, recovery steps in the normal course should be continued even after waiver of legal action.



Continuation of NPA accounts where the chances of Recovery is bleak either by legal process / persuasion may only affect the performance result of the Bank. Further the cost and valuable manpower in maintaining these accounts can be better utilized for the improvement of the Bank. Hence after exhausting all avenues of recovery, Bank may consider writing off such accounts after proper sanction from the appropriate authorities.


The write off exercise shall be used only as a last resort when:

Ü  The account is classified as doubtful or loss asset

Ü  Full provision is made in these accounts

Ü  There are no securities are available or there is NIL / Nominal salvage value of securities

Ü  Net worth of the borrower / guarantor is NIL or Nominal

Ü  The Borrower / Guarantor are not traceable after reasonable enquiries

Ü  The borrower / Guarantor has no source of income

Ü  In case of suit filed accounts no use of continuing the suit except adding to the cost and even if decreed, the decreed amount cannot be recovered.

Ü  All avenues of recovery have been exhausted

The authority vested with the powers for write off can exercise such powers in respect of all NPAs requiring write-off after satisfying the above norms. Sanctioning authorities at the time of permitting write off shall stipulate a condition in the sanction letters that recovery efforts should be pursued in the written-off accounts on an ongoing matter as writing off such    

accounts does not vitiate the legal rights of the Bank for recovery of its dues from the borrowers. Any recovery in the written off accounts will directly add to the profit of the Bank.

Write off is an internal mechanism of the Bank to clear the Non Performing Assets from the Balance Sheet. As a matter of general policy, no fresh finance is being granted to the borrowers whose liabilities are written off. Hence to prevent such defaulted borrowers from seeking / availing fresh finance, it is necessary to maintain a Register of Written-Off accounts at every branch as per the extant guidelines.

Notwithstanding writing off of the dues (other than the accounts settled and recovered under OTS), branches should continue their efforts to recover their dues either by persuasion or initiating legal action wherever legal remedies are in force, if they come to know that the party has got resource now to repay. In this connection the   Register of Written-Off accounts should be made use of and updated with details of contacts and recoveries made.


Writing-Off at Administrative Office Level :

The RBI guidelines provide Writing-Off of  NPA accounts at Administrative office level even though the relative advances are still outstanding in the branch books provided necessary provision is made as per the classification accorded to the respective accounts. In tune with the above guidelines and to avail the tax benefits, Bank may carry out the Write-Off exercise with approval of Board at Administrative office level as and when required, and such accounts shall be maintained at administrative office to ensure that such accounts are taken to logical conclusion.



VIII .  Issue of “No due certificate” / delisting from defaulter / willful defaulter list in respect       of accounts settled under OTS:

Ü  Wherever the borrower repays the entire contractual dues, Bank shall, at the request of the borrower issue ‘No due certificate’.

Ü  Wherever the borrower settles dues with the bank as per “OTS Scheme” or “Compromise Settlement Policy of the Bank” by availing concessions, in such case also bank, at the request of the borrower may issue ‘No Due Certificate’. However, such certificate should contain a clause indicating that the borrower has settled the dues under one Time Settlement Scheme of RBI / Bank as the case may be.               

Ü  In respect of written off accounts, ‘No Due Certificate’ should not be issued unless the dues are paid / settled subsequently.                                                                               

IX . Extension of Further loans to Borrowers already settled accounts under compromise settlements:

Ü  In this regard the Borrower has  to pay the balance due to the Bank for availing fresh credit.

X . Guidelines for follow up of NPA Accounts

As soon as an account slips to Sub-Standard category, Branch should examine the account in detail, the reasons for accounts becoming NPA and assess the possibility of upgradation / rehabilitation. In fact the strength of the accounts before slippage to substandard category, would have already been known to the branch. It should be ensured that all accounts slipped into NPA are reported to RO / Admn.Office.

If rehabilitation / upgradation is found to be not possible steps to be taken for recovery immediately.

Guidelines to be followed after sanction of OTS:

þ  The Admn. Office shall review the following monthly :

F  Compromise proposals pending sanction / follow up done

F  Recovery made on sanctioned proposals

F  Identification of new accounts to bring  under compromise settlement

þ  Branches to diarize the due dates / date of post dated cheques obtained and ensure recovery as per terms of sanction of OTS.

þ  Any communication to the borrowers / guarantors / mortgagors in respect of suit filed accounts, shall be superscripted “WITHOUT PREJUDICE TO THE ………………”

þ  Consent decree to be obtained at the earliest whenever compromise settlement is sanctioned by filing a joint memo in suit filed accounts as per RBI guidelines.

þ  Satisfaction memo to be filed seeking permission of the court to withdraw the suit / EP filed, after compromise amount recovered in full.


XI . Engagement of Recovery Agents

       Board permitted vide subject No.217/2013 dated 30.10.2013 to engage one Recovery Agent enrolled by Indian Overseas Bank and one from State Bank of India. In accordance with the Board’s direction, we have opted for engagement of M/s.S.M.Associates, Madurai now renamed as S.M.A.Resolutions Service (P.) Ltd., as Recovery Agent for recovery.

       Accounts eligible for recovery - NPA Accounts, Potential NPA Accounts, Special Mention Accounts and SARFAESI Accounts.


       The seizure of the vehicles and protecting the vehicles under custody shall be made by the Recovery Agents as we are not having any yard for protecting the vehicles seized.


       The Recovery Agents will also assist for conducting auctions of the property.

       The fees structure for the Recovery Agent shall be paid in accordance with the Indian Overseas Bank.  

 Since the potential NPA Accounts and Special Mention Accounts are not provided, considering the urgency to realize the loan amount and to reduce further deterioration in the realizable value of Assets such as Four Wheeler, Two Wheeler the accounts covered under SME Category and movable assets the sacrifice amount shall be debited to the Profit & Loss Account for the current year.

XIII.            Modification to the policy

Chairman is permitted to modify the policy, relating to the compliance of guidelines issued by regulatory authorities, from time to time with the prior approval of the Board.

Delegation of powers shall be given to the Regional Managers & Branch Managers for sanction of OTS in order to speed up the process of recovery within the powers extended. The Chairman shall be vested with the powers for such delegation.


Conclusion :

It should be kept in mind to recover the maximum amount with minimum sacrifice through effective negotiation.

This will supersede all our earlier NPA Recovery Policy.      



1. Introduction

                        In order to extend better and transparent customer service to our customers, the policy on collection of cheques/instrument is derived.


2. Aspects of the policy


Ø  Collection of Cheques and other instruments payable locally and at centres within India and abroad.

Ø  Commitment regarding time norms for collection of instruments

Ø  Payment of interest in cases where the Bank fails to meet the time norms for realisation of proceeds of outstation instruments

Ø  Collection instruments lost in transit.


3. Collection of Cheques and other instruments


 Local Cheques


 All cheques and other negotiable instruments payable locally would be presented through the clearing system prevailing at the centre. Presently some of our Branches are direct member in the clearing house and some branches are collecting cheques as Sub Clearing Member of sponsor bank.


Cheques deposited at branch counters before the specified cut-off time will be presented for clearing on the same day.


Cheques deposited after the cut-off time will be presented in the next available clearing at the centre.


The cut-off time for acceptance of cheques shall be displayed in the branches and it is applicable for all cheques including those received towards government taxes.


As a policy, branches would give credit to the customers' accounts on the same day in which the clearing settlement takes place, ie when the account with clearing House bank gets credited or sponsor bank credits our account with them as the case may be. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the Clearing House of that centre. Wherever applicable, facility of high-value clearing (same day credit) will be extended to the customers.


 Where no Clearing House exists in a centre, branches shall present local cheques to drawee banks across the counter and it would be their endeavor to credit the proceeds at the earliest.


Branches having clearing facility shall display a Notice Board in the banking hall containing the following so that the customers can have a clear picture of the clearing process:


a. The cut-off time upto which the cheques received at their counters would be sent in the same day clearing,

b. The time when the customer's account shall get credited with the relative proceeds and

c. When the customers would be able to utilise these proceeds.


Outstation Cheques


Cheques drawn on other banks at outstation centres will, normally, be collected through our branches/sponsor bank branches at those centres.


Where our Bank/Sponsor Bank does not have a branch, the instrument would be directly sent for collection to the drawee bank or collected through a correspondent bank.


Cheques drawn on our branches at outstation centres will be collected using the inter branch arrangement in vogue.


Networked branches which are connected through a centralised processing arrangement and are offering anywhere banking services will provide same day credit to their customers in respect of outstation instruments drawn on any of our branches in the CBS network subject to recovery of appropriate charges prescribed by the Bank.


Cheques payable in Foreign Countries


Cheques payable at foreign centers will be collected through Sponsor Bank. The services of correspondent banks of sponsor banks will be utilised in countries/centers where the presence of Sponsor Bank correspondents exists.


Cheques drawn on foreign banks at centers where its sponsor bank correspondents do not have direct presence will be sent direct to the drawee bank or any bank situated in the centre with instructions to credit proceeds to the respective Nostro Account of sponsor bank maintained with one of the correspondent banks.


4. Immediate Credit of Local/Outstation Cheques/Instruments


Branches of the Bank can afford immediate credit of outstation cheques/ instruments upto an aggregate value of Rs.15000/- tendered for collection by individual account holders

subject to satisfactory conduct of such accounts.


A satisfactorily conducted account shall be the one


a. which is opened at least 6 months earlier and complying with KYC norms,

b. conduct of which has been satisfactory and the branch had not noticed any irregular dealings,

c. where no cheque/instrument for which immediate credit afforded earlier was returned unpaid for financial reasons and

d. where the branch had not experienced any difficulty in recovery of any amount advanced in the past including cheques returned, after giving immediate credit.


Immediate credit will be provided against such collection instruments at the specific request of the customer or as per prior arrangement.


A branch can also afford immediate credit for an instrument if it is payable at par at that branch and also DDs drawn on core branch (if available) to which that branch is attached to.


The facility of immediate credit would also be made available in respect of local cheques at centres where no formal clearing house exists.


The facility of immediate credit will be offered on Savings Bank, Current and Overdraft accounts of individuals subject to recovery of charges as per HO circular.


 For extending this facility there will not be any separate stipulation of minimum balance in the account.


 The customer’s account should be in his/her personal name and should not contain transactions relating to business. Such accounts may be in the single or joint name/s.


 Trading concerns whether proprietary, partnership or company and accounts not in the names of individuals are not eligible.


 This facility is also not available to minors, non-residents and individuals who are ineligible for any credit facility in general viz., insolvent, lunatic, etc.


 Prepaid instruments like Demand drafts, Interest/Dividend warrants shall be treated on par with cheques under this policy.


 Endorsed cheques are not acceptable under this facility.


Customers shall have to use only the prescribed pay-in-slip containing the request clause for availing this facility.


 In the event of dishonour of a cheque against which immediate credit was provided, interest shall be recovered from the customer for the period the Bank remained out of funds at the rate applicable for overdraft limits sanctioned for individual customers.


 Bank shall levy normal charges and out of pocket expenses as per extant guidelines while providing immediate credit against outstation instruments tendered for collection.


5. Purchase of local/outstation cheques


 A cheque deposited by a customer can be purchased by the branch provided the customer has a sanctioned limit or makes a specific written request. Besides satisfactory conduct of the account, the standing of the drawer of the cheque will also be a factor to be considered while purchasing a cheque.


 The request can be considered by the Branch Manager on a case-to-case basis as per the discretionary powers delegated to him or after obtaining permission from the Head office.


6. Time Frame for Collection of Local/Outstation Cheques/Instruments


 For Local Cheques presented in clearing, credit will be afforded as on the date of settlement of funds in clearing and the account holder will be allowed to withdraw funds as per return clearing norms ranging from 48 to 72 hours (in the normal circumstances) depending on the location of the branch.


 Cheques / instruments presented in High Value Clearing (with the minimum value of Rs.1 lakh) shall be credited on the same day. This is applicable only in areas covered by high value/same day clearing.


 In case of Out station Cheques and other instruments sent for collection to centres within the country the following time schedule shall be adhered to for realisation by branches:


                  Drawee centres

 Time Norms

Cheques presented at any of the four major Metro centres

(New Delhi, Mumbai, Kolkata and Chennai) and payable at any

of the other three centres


Metro Centres and State Capitals (other than those of North

Eastern States and Sikkim)


In all other centres Maximum period of



Cheques payable in Foreign Countries


 Such instruments are accepted for collection on the Best of Efforts basis. The Bank may enter into specific arrangement with it’s or sponsor bank correspondent bank for speedy collection of such instruments. Branches shall give credit to the parties only on receipt of the proceeds to the credit of the Bank’s Nostro Account with the correspondent bank or on receipt of proceeds to the credit of Sponsor Bank`s Nostro account with their correspondent bank, after taking into account the cooling period as applicable to the country concerned.

 The Bank assumes no responsibility for the genuineness of the instruments tendered by the customers and accepted by it for collection.


7. Payment of Interest for delayed Collection of Outstation Cheques


 The Bank shall pay interest to the customer on the amount of collection instruments in case there is delay in giving credit beyond the time frame mentioned in para 6.3. Such interest shall be paid without any demand from the customers in all types of accounts.


 There shall be no distinction between instruments drawn on the bank’s own branches or on other banks for the purpose of payment of interest on delayed collection.


 Interest for delayed collection shall be paid at the following rates:


 Savings Bank rate for the period of delay beyond 7/10/14 days as the case may be in collection of outstation cheques.


 In case of extraordinary delay (i.e., delays exceeding 90 days), interest will be paid at the rate of 1% above the corresponding Term deposit rate.


 In the event of the proceeds of cheque under collection is to be credited to an overdraft/loan account of the customer, interest will be paid at the rate applicable to the loan account. For extraordinary delays, interest will be paid at the rate of 1% above the rate applicable to the loan account.


 The interest payment for delayed collection shall be applicable only for instruments sent for collection within India.


8. Cheques/Instruments lost in transit/clearing process or at paying branch


 If a cheque or an instrument accepted for collection is lost in transit or in the clearing process or at the paying bank’s branch, the bank shall immediately on coming to know the loss, bring the same to the notice of the account holder so as to enable him to inform the drawer to record stop payment. This shall also facilitate the payee to take care of those cheques, if any, issued by him/her are not dishonoured due to non-credit of the amount of lost cheques/instruments.


The Bank shall provide necessary and reasonable assistance to the customer to obtain a duplicate instrument from the drawer of the cheque.


 The Bank shall compensate the account holder in respect of instruments lost in transit as under:


 If the intimation of loss of instrument is conveyed to the customer beyond the time limit stipulated for collection (7/10/14 days as the case may be), interest shall be paid for the period exceeding the stipulated collection period at the rates specified above.


 In addition, the Bank shall pay interest on the amount of the cheque for a further period of 15 days at Savings Bank rate to provide for likely further delay in obtaining a duplicate cheque/instrument and collection thereof.


 The Bank shall also compensate the customer for any reasonable charges he/she incurs in getting a duplicate cheque/instrument upon production of receipt, in the event the instrument is to be obtained from a bank/institution who would charge a fee for issue of duplicate instrument.


 The Bank shall also bear charges related to recording Stop Orders, in the event of loss of cheques/instruments in transit.


 In case of loss of a cheque which was discounted by the Bank, the charges to obtain a duplicate may be borne by the bank provided the duplicate is realised. In case of any return, the customer has to bear the charges in addition to paying commission, interest on the amount of the cheque and other handling charges like postage etc.


9. Force Majeure


 The Bank shall not be liable to compensate customers for delayed credit if some unforeseen event (including but not limited to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fires, natural disasters or other “Acts of God”, war, damage to the bank’s facilities or of its correspondent bank(s), absence of the usual means of communication or all types of transportation, etc) beyond the control of the Bank which may prevent it from performing its obligations within the specified service delivery parameters.


10. Charging of Interest on cheques returned unpaid where Instant Credit was given


 If a cheque sent for collection for which immediate credit was provided by the Bank is returned unpaid, the value of the cheque will be immediately debited to the account. The customer shall not be charged any interest from the date immediate credit was given to the date of return of the instrument, unless the Bank had remained out of funds on account of withdrawal of funds.


Interest where applicable shall be charged on the notional overdrawn balances in the account had credit not been given initially.


 If the proceeds of the cheque were credited to the Savings Bank account and were not withdrawn, the amount so credited shall not qualify for payment of interest when the cheque is returned unpaid.


 If the proceeds were credited to an Overdraft/Loan account, interest shall be recovered at the rate of 2% above the interest rate applicable to the Overdraft/Loan from the date of credit to the date of reversal of the entry if the cheque/instrument was returned unpaid to the extent the Bank was out of funds.


11. Service Charges


 For all Collection services, branches shall recover appropriate service charges as prescribed and communicated by Head Office from time to time.


12.       Modifications and Review

The Policy shall be reviewed once in a year and modified, if necessary, to suit the need of the Bank and to comply with Revised Guidelines issued by RBI from time to time.