Reg: CONSOLIDATED CIRCULAR ON GENERAL LOANING POWERS.

Transcription

1 H.O. : Near Bajrang Bhawan, Delhi Road, Rohtak (Haryana) Tele: / , Fax: TO ALL OFFICES Loans & Advances Circular No.51/2016 Reg: CONSOLIDATED CIRCULAR ON GENERAL LOANING POWERS. Loaning s of officers at all levels and guidelines to exercise the same were last circulated vide Loans & Advances Circulars No. 34/2012 dated The revisions, modifications, amendments and clarifications have been advised through various Loans & Advances Circulars issued by Head Office from time to time. The existing Loaning s are not sufficient to increase the loan portfolio of our bank. The small amount disbursed within their vested s of Branch Managers, is mitigated by the recovery in term loans. Being the largest bank of Haryana State, we should have a huge Credit portfolio. To enhance the visibility and increase the loan portfolio of our bank, Honorable Board of Directors in its 21 st Meeting held on has approved the revised loaning s of all Branch Managers & RO headed by RM. Loaning s for HO headed by General Manager and for HO headed by Chairman are already described in circular 126/2014 dated In terms of extant guidelines, loaning s are to be exercised by the Incumbents according to their scale and not as per the class of office, they hold charge of. All Incumbent-In-Charge of the Branches and Regional Managers are advised to exercise the loaning s within their vested s judiciously as per stipulations given in notes, in place of exercising activity wise loaning s and ensure strict compliance of all guidelines and instructions circulated vide: a) Various operative circulars and circular letters issued and to be issued from time to time by Head Office/Regional Office unless otherwise superseded. b) Various schemes of the Bank in operation e.g. priority sector loans, retail segment loans, staff welfare loans, etc. Wherever certain s are kept in abeyance or restrictions are placed (inspite of being provided in the loaning chart) either at particular level(s) or at all levels, such restrictions shall be strictly adhered to during the period of abeyance. Any deviation of the above would be viewed seriously. GENERAL MANAGER Loaning Powers 1

2 GENERAL LOAN ING POWER CHART Annexure to Loans & Advances Circular No. 51/2016 ANNEXURE-I (Amt. in Lakhs) Sr. No. Nature of Facilities Incumbents in the Grade JMG-I MMG- II MMG-III SMG- IV headed by RM headed by G.M. headed by CHAIRMAN 1. AGGREGATE COMMITMENT PER BORROWER The proposal beyond the Loaning s of the Credit Approval Committee headed by the Chairman shall be placed to the Board 2 With in 1 above 2.a Secured Fund Based Officials up to General Manager shall exercise 50% and 25% of their Secured Fund Based s in case of Term loan and Book Debt facility respectively. For Term loan of financing educational institutions the Chief Manager & RO headed by RM shall exercise 50% of their Secured Fund Based s 2.b Unsecured Fund Based FULL FULL 2.c Non Fund Based cash margin 100% Full Full Full Full Full FULL FULL cash margin 50% Nil Nil FULL FULL cash margin 25% Nil Nil FULL FULL Notes (i) The s vested in officials can be exercised by them subject to the ceiling/stipulations in respective schemes, if any, as per Bank s internal schemes, the Reserve Bank of India & Government of India guidelines issued from time to time. Sanctions shall also be subject to margins in force. (ii) For housing loans, Branch Managers of Scale I will exercise 125% of his vested Term loan s, Branch Managers of Scale II & Scale III will exercise 150% of his vested Term Loan s. Loaning Powers 2

3 Non Fund Based Business : Letter of Guarantee/Letter of Credit I. The cash margin mentioned should be in the shape of either FDR or balance in Saving or Current account and lien should be marked on that amount of deposit till maturity date of the LC/LG. Where cash margin is less than 100%, other security in the shape of assignment of Life Insurance Policy/NSC/KVP and/or mortgage of IP should be obtained to the tune of 150% of the remaining amount. CHAIRMAN may waive or relax this condition on the basis of merits of the case. II. Scale-IV at Branch/RMs/GM may permit issuance of letter of Guarantee upto a maximum of 5 years and incumbents in scale I, II & III may permit issuance of LG upto the maximum of 1 year, but up to the maximum of 3 year in case of 100% liquid margins excluding claim period not exceeding 6 months. The Chairman shall have full s in the matter. III. Letter(s) of credit should not, normally, be opened for customer who enjoy credit facility with other bank(s) and maintain only a current account with us. If any request is received from such customer(s), proposal(s) should be thoroughly scrutinized with a view to ascertain the genuineness of customers need, their reliability, capacity to retire the documents and reasons as to why they have not approached the bank(s) with whom they already enjoy other facilities, before considering opening of LCs. STAFF LOANS Sr. no. 1. Purpose Incumbents in the grade headed JMG-I MMG-II MMG-III SMG-IV by RM Housing OD limit in existing House Loan Conveyance Festival Loan **** Clean OD Nil Nil Nil Nil Nil Nil Only Two Wheeler Only Two Wheeler Nil Nil Nil headed by G.M. headed by CHAIRMAN Loaning Powers 3

4 NOTE: (i) RECOVERY PARAMETERS: FOR LOAN OF TRACTOR WITH IMPLEMENTS I. The recovery of the branch in tractor advances should be minimum 75 per cent. II. Incumbents-In-charge of Branches with less than 75 per cent of recovery in tractor advances will not sanction any such advance at their level and they shall recommend tractor loan cases to their respective Regional Managers for sanction. III. However, Incumbents-In-charge of Branches (with less than 75 per cent of recovery under tractor financing) may sanction tractor loans, only to those existing borrowers as well as past loanees of our Bank who have availed loan earlier for any purpose and have satisfactory repayment history / dealing for minimum two years with our Bank. FOR TRANSPORT LOANS Sanctioning Authority Minimum Recovery percentage in Transport Advances on Yearly basis as on June Current dues Overall dues Branch Manager up to Scale III 80 Over 65 Chief Manager/Regional Manager 70 Over 60 (ii) (iii) (iv) (v) (vi) Staff loan will be sanctioned by Incumbents In-charge with in his vested s at branch level except his/her own loan which will be sanctioned at concerned regional offices. Scale IV Officers posted at Head Office and Scale III officers posted at Regional Office/s shall also exercise revised loaning s under the head Chief Manager/Senior Manager. Book debt facilities are to be allowed only against those debts for which borrowers have not availed bills purchased/discounted limits. Further, book debts should be spread over reasonably good number of parties and drawing should be restricted upto 90 days older. Book debts older than 6 months should not be accepted as security. Limits/outstanding (whichever is higher) under term loan, DPG and ILC/FLC (capital goods) together should not exceed the powe rs vested in various officials for term loan. However, in case of fully drawn Term Loan, the outstanding shall be reckoned. Advance against clearing instruments and advance/purchase/discounts against domestic and foreign clean bills/cheques are to be permitted only in respect of cheques representing genuine trade transactions and should not be exercised for cheques of allied/associate concerns. Further, the s are to be exercised after obtaining market report about the creditworthiness of the party and ensuring that the past conduct of the account is satisfactory. These s may be exercised for allowing casual advance against uncleared effects and for casual purchase of cheques. (vii) While exercising s, it may be ensured that proper mix of pre and post sales limit are considered. Loaning Powers 4

5 3. AD-HOC LOANING POWERS UPTO CHAIRMAN LEVEL (Rs. Lakh) Nature of facilities Incumbents in the grade JMG-I MMG- II MMG- III SMG-IV headed by RM headed by G.M. 3(a) Ad-hoc facilities by way of drawings beyond limits In emergent circumstances, drawings in SECURED FUND BASED LIMITS in excess of sanctioned limits, within available DP, may be allowed upto 3 months subject to: 10% 10% 10% 10% 15% 15%..Of sanctioned limit OR Whichever is lower. 3(b) Ad-hoc facilities by way of reduction in margin In emergent circumstances, availment in excess of drawing but within the sanctioned limit(s) may be allowed for a period of 3 months by allowing reduction in stipulated margin(s) upto the extent of: 5% 5% 5% 8% 8% 10% OR Whichever is lower. These s cannot be exercised with a view to regularize an irregular account. Availment in excess of sanctioned limits on lines as mentioned above may be permitted in case of Non-Fund Based limits also. However, wherever adhoc facilities are to be permitted in both. Fund Based (FB) and Non-Fund Based (NFB) limits, the same can be permitted by various officials upto the extent of their vested s (i.e. %age of sanctioned limit or quantum wise ceiling, whichever is lower) taken together and not separately/independently. While permitting adhoc facilities as above to a borrower to whom regular limits have been sanctioned under their vested loaning s, the aggregate commitment per borrower should normally not be exceeded by them, inclusive of such adhoc limits. However, in deserving cases, the same may be exceeded maximum upto the extent of 10% of their respective s under the head Aggregate commitment per borrower. If on permitting ad hoc limit of 10%, Aggregate commitment per borrower exceeds the vested s of sanctioning authority, then approval from higher authority should be obtained. Further, a lower authority should not allow adhoc facilities in Fund Based or Non-Fund Based limits, till the adhoc facility permitted earlier by a higher authority in respect of either of these limits is outstanding. Chairman will have complete discretion on the matter. Loaning Powers 5

6 4 POWERS FOR CONFIRMATION: IN CASE OF OWN SANCTIONS AND SANCTIONS BY A LOWER AUTHORITY RMs/GM working in administrative offices may confirm action of a lower officer in having exceeded his loaning s in secured and unsecured advances. However, such s for confirmation can be exercised only when the excess limit so permitted by the lower officer fall within the existing limits/outstanding (whichever is higher) taken together fall within the vested loaning s both f acility wise and aggregate commitment per borrower of the confirming authority. CHAIRMAN, however, will have full s on the matter. 5. Over & above aggregate commitment per borrower Sr. no. Nature of facilities Incumbents in the grade JMG-I MMG-II MMG- III SMG-IV headed by RM headed by G.M. headed by CHAIRMAN 5.a Negotiation of DP Bills & DA bills on or before due date drawn under irrevocable ILC of public sector banks/banks approved by CAD, HO. 5.b Advance against Govt. Securities, LIC Policies, Gold/Silver Jewellery/Ornaments, Postal Saving Certificates (NSCs/KVPs), IVPs etc. Nil Nil Nil FULL FULL FULL FULL FULL FULL FULL FULL NOTES:- The facility/limit of discounting DA bills backed by ILCs is to be allowed after setting up of limit. Loaning Powers 6

7 6. Miscellaneous (Full Powers) (Refer Note) Sr. no. Nature of facilities Incumbents in the grade JMG-I MMG-II MMG- III SMG-IV headed by RM 6.a Advance against Bank s own deposit..full Powers 6.b Purchase of cheques drawn by Central & State Govts. & drafts of public sector banks/banks approved by CAD, HO and from first payee only. 6.c Purchase of cheques and drafts if proceeds are to be placed in Bank s fixed deposits at least for minimum prescribed period of deposit (no loan or premature withdrawl to be allowed till realization of proceeds). However normal charges for collection/purchase of cheque should be recovered. 6.d Purchase of drafts issued by all scheduled commercial bank. 6.e Opening of ILCs/FLCs when full cover is held by way of deposits till maturity. 6.f Issuing of ILGs/FLGs irrespective of time period when full cover is held for currency of LG including claim period. 6.g Negotiation of DP/DA bills on or before due date drawn under Bank s own Letter of Credit, strictly in terms of LC. 6.h Purchase of Govt. Cheques for credit to accounts of Govt. Deptt. /Corp n/undertakings..full Powers..Full Powers..Full Powers..Full Powers..Full Powers..Full Powers..Full Powers headed by G.M. (Rs. Lakh) headed by CHAIRMAN 1) Full s are to be exercised for bonafide transactions for existing/properly introduced/kyc compliance customers only : 2) Full s are subject to the ceilings prescribed in the respective schemes, if any Loaning Powers 7

8 7. Margins (Refer Note) (Where ever not specially prescribed under the specific scheme of the Bank) Minimum margin for exercise of vested s are: S.No. Nature of facilities Incumbents in the grade JMG-I MMG-II MMG- III SMG-IV headed by RM (Rs. Lakh) headed by G.M. headed by CHAIRMAN 7.a Term Loans 25% 25% 25% 25% 25% 20% 10% 7.b Working Capital against Hyp/Pledge of stocks 7.c Working Capital against Book Debts upto 90 days older 7.d Letter of Credit/Letter of Guarantee 20% 20% 20% 20% 20% 20% 10% 40% 40% 40% 25% 25% 20% 10% 25% 25% 25% 25% 25% 20% 10% NOTES: 1) Margin prescribed are the minimum. However, higher margins may be stipulated wherever deemed necessary: 2) Denotes minimum margin prescribed for issuance of guarantee where the bank has first charge over fixed assets and adequate surplus of security is available after following the usual norms. Loaning Powers 8

9 GUIDELINES FOR EXERCISING LOANING POWERS FOR ALL LEVELS AND COVERING ALL LOANS INCLUDING PRIORITY SECTOR ADVANCES 1. Loaning s shall be exercised judiciously with due care and in good faith having regard to duties and responsibilities attached to the post held by the sanctioning authority. 2 The sanctioning authority while sanctioning a proposal should clearly specify the amount & nature of facility, the security, margin etc., alongwith other norms/terms and conditions governing the facility sanctioned. 3. All loan facilities must be considered after obtaining a loan application from the borrower(s) concerned, report from CIC and compilation of confidential report(s) on him/them and the guarantor(s), if any, in accordance with the instructions/guidelines issued from time to time. However, in case of priority sector advances any specific instructions issued shall have precedence over these instructions. 4. Loaning s shall not be exercised for sanction of any facility, which shall be, directly or indirectly, to the advantage of sanctioning authority. Such proposals should be referred to next higher authority. 5. Monthly Loan Limit: As per L & A circular no. 70/2014 dated :- Board of Directors in its 6th Meeting held on dated has accorded its kind approval to enhance Monthly Loan Limit from Rs. 30 lakh to Rs. 50 lakh and the ceiling of total advance of Rs. 50 lakh in a month may be increased by Regional Managers upto Rs. 75 lakh of the Incumbents-In-charge where 2 nd Officer is not posted, wherever they find it necessary depending upon the potential available in the area. Such ceiling will not include advances against Deposits, Govt. Securities, Life Insurance Policies, and advances against 100% deposits. This ceiling would not be applicable where 2nd Man is posted. All such branches where the above ceiling of Incumbents have been revised, the Regional Managers will have close monitoring through Limit Sanctioned Statement on monthly basis. Further, the documents in such type of branches should be got checked by the concerned Regional Office on quarterly basis under intimation to Head Office. 6. (a) Total credit facilities proposed to be sanctioned to party shall be considered by an officer under whose s they fall. (b) In special cases where separate facility, other than ones already sanctioned, is required and which falls within the of an officer junior to the sanctioning authority, such facility may be sanctioned by Regional Manager and above within sanctioned limits. Facility so sanctioned will be incorporated in the main proposal at the time of review/renewal/enhancement and submitted to the sanctioning authority subsequently. (c) An officer lower in rank shall not sanction any credit facility within his discretionary s if the competent previous sanctioning authority had rejected any proposal or had sanctioned any credit facility lower than the one recommended earlier. (d) Higher authority may exercise s of the same nature/full s as vested in a lower authority. 7. The s by lower authority, if any, vested with him, may be exercised where limits have been sanctioned by higher authority provided: Loaning Powers 9

10 (a) Non-Fund Based facilities are permitted over and above the sanctioned limits only where full cover is held by way of deposits. (b) Facilities for which s are now being exercised by lower authority have not been turned down/declined earlier by higher authority. 8. In respect of a credit facility relating to term loan, the actual outstanding against the term loan limit already sanctioned and the additional limits proposed to be sanctioned shall not exceed the loaning s of the officers concerned. However, where term loans sanctioned have not been fully disbursed and are being disbursed in stages, the limits sanctioned shall be reckoned. In respect of credit facilities other than term loan, the limits already sanctioned and additional limits proposed to be sanctioned shall not exceed the loaning s of the officers concerned. For aggregate amount of the limits in respect of fund based facilities, the actual outstanding under term loans accounts shall be taken into account besides taking the actual outstandings or the original limits, whichever is higher, under other fund based facilities. However, in case term loan has not been fully disbursed and is being disbursed in stages, the limit sanctioned be reckoned. 9. NEGOTIATION/DISCOUNTING OF BILLS DRAWN UNDER IRREVOCABLE LETTER OF CREDIT : It is advised that when bank issues a Letter of Credit, it assumes responsibility to pay its beneficiary on production of bills drawn in accordance with the terms & conditions of the Letter of Credit. The drawee branch should negotiate such bills to the full extent of the L/C after satisfying that they are drawn in strict conformity with the terms & conditions of Letter of Credit. It is further advised that the branches are not to discount L/C bills of other banks as well as of our Bank without setting up the regular limits. The usual safeguards/guidelines issued from time to time be followed in the matter. 10. AUTHORITY ON LEAVE OR ON TOUR: (a) Persons working in officiating arrangements shall be vested s of the officers one grade above than the person who is officiating and that such higher may be exercised when the permanent Incumbent-In-charge is on long leave/tour/training (minimum 7 days). (b) Whenever the officiating In-charge exercises higher s, the sanctions/amendments/recommendations made in exercise thereof shall be recorded in separate register, to be maintained for the purpose and shall be put up alongwith relative files to permanent Incumbent on his return from leave/tour for his confirmation. (c) In case, permanent Incumbent disagrees to any sanctions/amendments/recommendations made during his absence, he shall record reasons, thereof & take necessary corrective measures/action. 11. ALLIED/ASSOCIATE CONCERNS: a. Officers upto GM level, may sanction credit facilities, subject to condition that aggregate amount in respect of each facility to be allowed to parties and their allied/associate concerns does not exceed overall s vested in them for a particular facility/aggregate limits per party. Chairman, however, shall have full discretion on the matter. Loaning Powers 10

11 b. While exercising the above s, it should be ensured that all such allied/associate concerns in the group are in the category of standard assets. c. For purpose of Loaning Powers, concerns shall be allied/associate of another, if: - i) Two concerns have one or more common partners/proprietors, OR ii) Any of the directors of the private limited company is director of another private limited company, OR iii) The proprietor/partner of a firm is a director in a Pvt. Ltd. Company, OR iv) A limited company is subsidiary of another limited company or is closely held company with substantial interest (i.e. more than 50% of the equity share capital of the company is owned by the another company), OR v) Where two or more limited companies belong to the same group having commonality of management and control. d) Inspite of the above broad based definitions of associate/allied concerns, if the sanctioning authority still feels that two firms/companies are suspected to be connected but not covered under the above definition, he should treat them as associate/allied concerns. e) Common guarantors are not to be taken into account for defining associate/allied status. However, if the guarantor has sufficient/ substantial interest in either one or more of the common concerns, they should be treated as connected accounts and accordingly dealt with as stipulated at (d) above. 12. STAFF AND/OR RELATIVE OF STAFF MEMBERS: a. Clean advances are not to be made/sanctioned to any member of the staff except in situation mentioned at Item No. 14 (c) below or as per the scheme for grant of clean overdraft facility to staff members. Further, Bank's pay orders/drafts, LIC and Govt. cheques may be purchased in staff accounts, provided staff member is the first payee of such instruments. b. Sanctioning authority should not sanction/set-up any limit in his own favour at his own office even against Banks' own deposits/govt. Securities/ LIC Policy/Gold/Silver jewellery/postal Saving certificates/units of Mutual Funds/Shares/Debentures/Bonds of public sector undertakings. However, he may sanction such facilities within his own vested s to any officer, other than himself, irrespective of the fact that the borrowing officer is senior or junior to him. c. Credit facility should not ordinarily be granted to spouse/close relatives of bank s workmen staff for the purpose of any trade/ business. However, depending upon genuineness of the case, loans may be granted after obtaining the prior permission of Chairman. Further, no credit facilities should be granted to the workmen staff for the purpose of any trade/business. d. No officer or any committee comprising an officer, as a member shall sanction any credit facility to his/her relative. Such a facility should be sanctioned by the next higher sanctioning authority. Loaning Powers 11

12 13. TRANSFER OF LOAN FACILITIES: (a) Regional Managers shall have discretion to permit transfer of any loan facility within their respective areas. (b) Chairman shall have full discretion. 14. TAKING OVER LOAN FACILITIES: Borrowal account should be taken over from other Banks/Financial Institutions (FIs) like All India Financial Institutions (AIFIs) and State Financial Corporations (SFCs) on selective basis after obtaining prior approval from the next higher authority of the officia l under whose s the takeover of the account (entire fund based and non -fund based limits) is proposed. In case of working capital limits if enhancement of 25% and above is considered at the time of takeover, instead of seeking prior approval from the next higher authority, the proposals shall be sanctioned by the next higher authority on merits of the case subject to the compliance of the other guidelines. Such approval shall not be necessary for taking over of existing housing loan account of individuals from other banks/fis and in cases where the accounts of other banks/fis have been adjusted for over 3 months. In case of crop loans/kcc, the prior approval from next higher authority is not necessary even if the accounts from other banks/fis have been adjusted within three months subject to the compliance of other takeover parameters and subject to the condition that only those accounts be taken over wherein there was no default in payment of interest/instalment during the last previous one year with the previous banker. 15. WITHDRAWAL OF POWERS: Regional Managers and above are authorized to suspend/withdraw the loaning s, for reasons to be specified, of their junior(s) wherever they feel that s so delegated are not being exercised judiciously or in Bank's interest. The worthy Chairman is emed for restoration of loaning s of Incumbent-In-charge of branches on the recommendations of Regional Managers. Whenever, loaning s of Branch Managers are suspended, it means that the loaning s of that particular person i.e. Incumbent-In-charge are suspended. The loaning s of the Incumbent-In-charge would remain suspended even after his / her transfer to some other branch and the loaning s would remain suspended till the restoration of loaning s by the worthy Chairman on the recommendations of the Regional Manager. 16. CONFIRMATION OF ACTION: a. In case, officials, in organizational interest, have to exceed their vested loaning s (i.e. where there is transgression of discretionary s), then after such a transaction has taken place (including the cases where telephonic/oral sanctions wer e obtained from the higher authority for exceeding the s), it should be reported immediately to the controlling authority, i.e. Regional Managers through submission of a proposal on Bank's prescribed format, for confirmation of action by the Competent Authority giving full details/justification of the case and explaining the circumstances necessitating accommodation beyond their s and the reason why it was not possible to have prior approval from the Competent Authority. Loaning Powers 12

13 Reporting of transgression after 7 days shall be considered as staff side lapse and immediate action in this regard shall be initiated by the Competent Authority. Cases of delay in reporting, if justifiable may, however, be considered for confirmation exceptionally. b) Proposal for confirmation is not to be linked with the renewal/review/sanction of facilities. c) The procedure, time schedule and other general guidelines to be followed by the branches, Regional offices and the competent authority with regard to confirmation of action proposals, as circularized through L&A Circulars from time to time, should be complied with. 17. REVALIDATION OF SANCTION: Sanctions in respect of working capital and Term Loan facilities shall be valid for 6 months, from the date of sanction. Facilities not availed within the above period should be treated as lapsed and borrower be advised accordingly. Unless a lapsed sanction is got revalidated by competent authority within a maximum period of 6 months from the date of sanction, no facility should be released. 18. RESCHEDULEMENT OF TERM LOAN: a. Sanctioning authority may reschedule Term Loan upto 1 year only. b. Authority one step higher may reschedule Term Loan upto total period of 7 years. c. Regional Managers may extend the period upto 3 years and General Manager (Head Office) upto 5 years and Chairman shal l have full s to reschedule repayment of Term Loans in their own sanctions as well as sanctions by lower authorities. In case of sanctions by higher authorities, matter is to be referred to sanctioning authority for consideration. 19. FACILITY AGAINST 100% MARGIN: (a) A lower authority should not sanction any limit/facility even against 100% cash margin, where sanction of other related facilities fall within s of the higher authorities and/or where sanction of such limits (even against 100% margin) automatically or impliedly entails sanction of other facilities by higher authorities. (b) Advance payment guarantee against 100% cash margin should not be sanctioned, where such margins are proposed to be released at a later stage by sanction of advance payment guarantee limit with lower margins by higher authorities. Sanction of such limits/ facilities against 100% margin should be linked to party's requirements for related credit facilities and thereafter the concept of sanctioning total credit facilities at one level. 20. REIMBURSEMENT/DISBURSEMENT IN TERM LOAN ACCOUNT: a) Reimbursement in Term Loan Account In emergent circumstances, Regional Managers & above may permit reimbursement, on merits, within six months of acquisition of fixed assets to the extent of loan sanctioned to SME borrowers within their vested loaning s and after ensuring end use of funds. Loaning Powers 13

14 In other than SME borrowers also, reimbursement in term loan account may be given in highly deserving cases, on merit of the case. Chairman, however, shall have full discretion on the matter. b) Disbursement in Term Loan Account In exceptional and deserving cases, part disbursement of term loan may be allowed through current/cash credit account by the sanctioning authority not below the level of Regional Managers subject to maximum of 25% of the sanctioned limit. The following guidelines should be taken into consideration while permitting disbursement through current/cc accounts in branches: The disbursement should be made in stages. Next installment should be released after verification of end use (through bills/physical inspection etc.) for previous installment. The permission for disbursement through current/cash credit account may be given on merits of each case and condition to this effect may be incorporated in the terms of the sanction itself. Due caution should be taken by the disbursing authority to ensure the end use of funds. For disbursement through current/cash credit account beyond 25% of sanctioned limit, the case be referred to the next higher authority. However, Chairman shall have full s in the matter. 21. CREDIT FACILITIES TO DIRECTORS AND THEIR RELATIVES: (a) Bank is prohibited from entering into any commitment for granting any loans or advances to or on behalf of any of its directors, except in case of loans and advances covered under the exemptions specified by RBI. (b) All loans and advances to Directors of other banks, any relative of bank s Directors or relative of other banks Directors, any firm in which any Director of other banks or relative of bank s Directors or relative of other banks Directors is interested as a partner or guarantor and any company in which any Director of other banks or relative of bank s Directors or relative of other banks Directors hold substantial interest or is interested as a director or guarantor: (i) for Rs. 25 lac & above need to be sanctioned by the Bank's Board of Directors/Management Committee of the Board. (ii) for less than Rs.25 lac may be sanctioned by the competent authority in terms of s delegated to them. However, such cases are subsequently to be reported to the Board. 22. SANCTIONING POWERS PRIOR TO RETIREMENT: (L&A circular no. 43/2015 dated ) :- As per extant guidelines, in those branches where there are atleast two officers posted, the Incumbent-In-charge will co-sanction the credit facility alongwith the 2nd Man during the period of six months before retirement. The monitoring system for Limit Sanction Statements of such branches be strengthened. Such branches shall submit their Limit Sanction Statements (LSS) on fortnightly basis to concerned Regional office and the same will be scrutinized Loaning Powers 14

15 properly by the Regional Office and in case of any adverse features, prompt action shall be taken. In case of branches where there is only Incumbent and no other officer is posted, the existing system of withdrawal of loaning s prior to six months from the date of retirement would remain continue. Note: Regional Manager for branches headed upto scale III, and Chief Manager CAD, HO.for branches headed by Scale IV.will ensure the compliance of Limit Sanction Statements. 23. CASH ADVANCES: a. Cash advances given by the borrowing units to public sector and blue chip companies can be considered for financial assistance by treating this as a part of inventory and by allowing DP on the same. While allowing such facility, the sanctioning authority should ensure that the same should be 20% of the CC limit OR amount as indicated in the loaning chart for unsecured loans, whichever is lower. b. Such advances can be given at the level of General Manager (Head Office) and above. Branches while recommending facilities for cash advances should consider the credit worthiness of the borrower, conduct of the account, security available, age of such advances, etc. c. Furthermore, proper loan documents, particularly to secure cash advances where the available security is only stock, should be got drafted from the approved local legal retainer. In case of companies, modifications of charges should also be appropriately filed within stipulated time with the Registrar of Companies. 24. EXERCISE OF LOANING POWERS FOR ADVANCES UNDER THE PRIORITY SECTOR SCHEMES: (a) Powers are to be exercised subject to ceilings, terms & conditions of various Priority Sector credit schemes of the bank/rbi/sidbi/ Government of India/NABARD. If any relaxation, either in general or in specific areas to suit local conditions is needed, reference may be made by Regional Managers to HO for consideration and authority to relax the terms and conditions of the Priority Sector Scheme may be vested with the Chairman. Incumbents shall not exercise the loaning s beyond the restriction stipulated in respective Priority Sector Schemes for sanction of term loan/working capital loan/corporate loan including consumption credit need of farmers. While sanctioning composite loans to meet both production & investment requirements under allied agriculture activities, aggregate of loaning s shall be used with respective Sub-limit for CC & TL. (b) There is no bar in considering a facility under conventional loans if any proposal, otherwise in order, does not meet the requirements for considering under the priority sector. Loaning Powers 15

16 25. SANCTION OF ADHOC FACILITIES: (a) (b) (c) (d) Sanctioning Officials must ensure that wherever adhoc facilities are permissible in terms of the guidelines, the loaning s for the same are exercised discreetly only in emergent circumstances to meet the genuine requirements of the borrowers, after a complete appraisal thereof giving proper justifications. The loaning Powers for allowing adhoc facilities should not be exercised in a repetitive and routine manner. Fresh Adhoc limit facility should be granted to the borrower/party when the previous adhoc limit facility, if any, has been fully adjusted and after analyzing the financials and requirements of the company/borrowers. The period of adhoc facility, including roll over should not be beyond the period for which the respective sanctioning official has permitted adhoc facilities. In case the requirement of the borrower for additional facilities is genuine, instead of allowing frequent adhoc facilities, Incumbents should either consider sanctioning the need based higher facilities (if the same are within their s) OR submit an enhancement proposal to the competent sanctioning authority. 26. Credit facility to any new unit/company promoted/established by the Directors/Entrepreneurs in whose case negotiated settlement has taken place earlier in respect of any other unit/company promoted by them, may be sanctioned on case to case basis by an authority one step higher than the authority under whose s the case falls. 27. REVISION/AMENDMENT OF GUIDELINES Chairman may revise/amend any of the above guidelines and explanatory note of the chart as and when necessary in the interest of smooth operations and in the light of experience gained and on the recommendations of Regional Managers. ***************** Loaning Powers 16