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CLEAN OVERDRAFT FACILITY: Staff Circular No.

4861

All confirmed full time

3 YRS & ABOVE BUT

5 YRS & ABOVE

employees of bank with 3

LESS THAN 5 YRS

BUT LESS THAN 10

20th June, 2002

10 YRS & ABOVE

years service
YRS
CLERICAL STAFF
Rs.0.40 lakh
Rs.1.85 lakh
Rs.2.00 lakh
SUB-STAFF
Rs.0.25 lakh
Rs.0.60 lakh
Rs.0.75 lakh
1/3 Rs.36500/ Rs.38000/Rs.3/4 Rs.40000/(S C.4987 22 07- 2003) PTS
REDUCTION IN COD LIMITS DURING THE LAST 5 YEARS SC NO.5339 DT.05-01-2007
AGE OF THE APPLICANT
OVERDRAFT LIMIT ELIGIBLE
> 55 < 56 years
90% of the limits
> 56 < 57 years
80% of the limits
> 57 < 58 years
70% of the limits
> 58 < 59 years
60% of the limits
> 59 < 60 years
50% of the limits

NOTE: The reduction in OD limit to the extent of 10% every year commencing from 55 th year
onwards will be done on a monthly basis. If the OD limit sanctioned is Rs.3.50 lacs, when
the employee attains the age of 55 years the limit will be reduced by Rs.3000/-pm approx.
so that the operative limit on his attaining 56 years will be Rs.3.15 lacs .The operative limits
will have to be fixes at the beginning of the every month and the drawings in the a/c
including the monthly intt charged to the a/c should not exceed the operative limit.
Interest on Clean OD:9.5% 1.9.09 BPLR 11.75 to 9.5% SC 5621 dt 26.10.2009

CONVEYANCE LOAN TO AWARD STAFF


(SC NO 5426 DT. 10/09/2007)
Prior to issuance of this circular, there is no provision for Award Staff to purchase 4 wheeler
under Staff Conveyance loan. With the introduction of this circular, Award Staff are also
made eligible for a loan for purchase of 4 wheelers also. This circular is applicable for a
loan for purchase of 2 wheeler and 4 wheeler. Thereafter certain clarifications were issued
regarding the quantum of loan, rate of interest and other conditions The detailed
guidelines are reproduced hereunder. This Circular is issued in supercession of all the
previous circulars / instructions conveyed on this subject.
SC NO 5426 DT. 10/09/2007
1.
EFFECTIVE DATE
01.09.2007
2.
ELIGIBILITY
Workmen employees drawing a pay of Rs.8,940/- and above. Pay shall
include Basic Pay, Special Pay, Stagnation increment and
the Special
Allowance as admissible under the Bipartite Settlement.
Those employees, who have outstanding in the old Clean Loan A/c are not
eligible for the loan under this scheme, unless they liquidate the outstanding
in the Clean Loan Account.
All confirmed workmen having 5 years of satisfactory service shall be eligible
for the loan for purchase of Motor Car and 3 years of satisfactory service for
the loan for purchase of two wheelers.
Those employees, who have outstanding in old Clean Loan Account, are not
eligible for the loan under this Scheme unless they liquidate the outstanding
in the Clean Loan Account.
Those employees, who have availed Clean Overdraft are eligible for
conveyance loan if the total deductions of any nature in his/her salary,
including installment under the Conveyance Loan scheme, does not exceed,
or likely to exceed 65% of the gross salary.
3

QUANTUM OF LOAN
(5432 DT.04/10/2007) This circular issued afterwards
mention about the quantum of loan in SC No5426 DT. 10/09/2007.
80% of the cost of the motor car subject to maximum of Rs 3.50 lacs
FOUR

WHEELER
TWO
WHEELER
4

as there is no

90% of the cost of motor cycle/scooter or 60000/- whichever is less.

REPAYMENT OF LOAN
In respect of 2-wheelers, the loan together with interest therein is repayable in
not more than 84 equal monthly instalments in the ratio of 5:1 towards principal
and interest respectively.
In respect of 4-wheelers, Loan, together with interest thereon, shall be repaid in not
more than 200 monthly instalments. The recovery of loan will be effected in the
following manner

The principal and interest amount of loan for purchase of Motor Car, which is repayable in 200
monthly instalments, will be recovered in the proportion of
3 : 2 period. In other words, the
principal loan amount will be recovered first in 120 months and interest accrued thereon will be
recovered thereafter in the remaining 80 months.

Installments towards the recovery of loan shall be adjusted first for recovery of
principal amount. Once the principal amount is adjusted, no interest will be
charged thereafter.
5

Rate of Interest

In respect of 2-wheelers
Upto Rs.15,000/Beyond Rs.15,000/- Upto Rs.60,000/-

7.5% p.a. (simple)


Higher of Bank Rate or 12% p.a. (simple)

In respect of Motor Car


Upto Rs.80,000/Beyond Rs.80,000/-

8.5% p.a. (Simple)


Higher of Bank Rate or 12% p.a. (Simple)

e.g. For a loan of Rs.3.50 lacs, first Rs.80,000/- shall be charged @ 8.5% p.a. (Simple). Beyond Rs.80,000/-, upto
Rs.3.50 lacs shall be charged @ higher of Bank rate or 12% p.a. (Simple).

6 Loan for repair of Motor Car


For repairs of Motor Car, a loan amount of Rs.10,000/- in addition to the loan
amount sanctioned for purchase of Car will be available once in every 5 years.
This limit for repairs is in addition to the loan amount for purchase of Car, which
will be charged @ higher of the Bank rate or 12% p.a. (simple).
The same will be recovered in the balance number of instalments to be paid by
the workmen e.g. out of 200 instalments stipulated for Car Loan, if a workman has
repaid 75 monthly instalments so far, the loan amount sanctioned for the repairs
will be recovered in balance 125 monthly instalments in the proportion of 3:2
period.
7

General Rules

i)

Conveyance Loan will not be granted - both 2-wheelers and 4-wheelers put together on more than three occasions during the entire service of workmen and the interval
between two loans i.e. 2-wheelers or 4-wheelers shall not be less than 4 years.

ii) The loan shall be granted for the purpose of second-hand vehicle of not more than 10
years old provided the loanees satisfies the sanctioning authority about the fitness and
valuation of the vehicle by producing a Fitness Certificate from a qualified Automobile
Engineer and Valuation Certificate from an approved Surveyor.
iii) The outstanding balance in loan amount with interest thereon at the time the loanee
workman ceases to be in the Banks employment shall be recovered from the
superannuation benefits i.e. Gratuity, Provident Fund, Pension or any other amount due
to him / his nominee. The aforesaid amount falls short of the outstanding in the loan
account with interest thereon, his legal heirs shall be liable to make good the shortfall,
in the event of the death of the loanee workman.
iv) The vehicle will be hypothecated to the Bank and will be registered with Regional
Transport Office to that effect, till the loan amount is repaid in full with interest.
v) It is obligatory on the part of the loanee to take full comprehensive insurance of the
vehicle with Bank Clause.
vi) The loanee shall not sell or part with the vehicle without prior permission of the
Sanctioning Authority.

vii) An employee deciding to avail the loan shall forward his application in the prescribed
form annexed hereto, through Branch Manager / Departmental Head to the Sanctioning
Authority and produce documents and evidence, as deemed necessary by the Bank.
viii)
The purchase of vehicle will be made within one month from the date of drawal of
the advance.
ix) If the loan amount is misutilised or if it is found that the amount of sale proceeds of the
vehicle is misrepresented or not deposited with the Bank within the prescribed time as
determined by the Sanctioning Authority while availing second conveyance loan or any
rule regarding grant of such loan is violated, the employee concerned shall be liable for
disciplinary action. Besides this, the Bank shall have the right to charge commercial
rate of interest on the amount outstanding in the loan account.
x) No workmen employee will be allowed to any concessional loan if the total deductions
of any nature including instalments under this scheme exceeds or likely to exceed 65%
of the gross salary.
xi) The Management will have right to alter the terms and conditions of grant of such loan.
Further, the loan under this category, shall be granted, entirely at the discretion of the
Management.
Schedule of Sanctioning Authority
COMPETENT AUTHORITY ( HRMD:PAD:210:2008 dt. January 29, 2008)
It was recommended that Chief Manager (Credit) at NRO/RO may be vested with delegated
powers to sanction Conveyance Loan to Award staff instead of G.M.O.(which was mentioned
in circular letter no. HRMD:PAD:3383:2007 November 17, 2007). It is suggested that the
Competent Authority specified for sanction of Conveyance Loan to Officer employees be
made applicable for Award staff also. Accordingly the Sanctioning Authority for various employees is
furnished as under:

Employees working at Small/Medium


branches including BMs
Employees working at Large, VLB, ELB,
Service Branches, other than BMs
Employees working at all administrative
offices including ZAO/RAO/STC, Staff
College, Bangalore (except Central
Office)
Employees working at Central Office
BMs of Large/VLB/ELB
Regional Head
FGM/Zonal Head
Officers deputed to RRBs

SANCTIONING AUTHORITY
Senior Manager (Credit) or Chief Manager (Credit)
at Regional Office
In-charge of the Branch or Senior Manager
(Credit) or Authority above him in the respective
branches
Senior Manager (Credit) or Authority above him at
NRO/ZO/RO
Next authority above him at Dept of Personnel
seeking loan
Authority
one
step
ahead
of
BM
at
RO/NRO/ZO/FGMO.
FGM/Zonal Head
ED/GM (P)
In charge of Cr Dept at RO within whose
jurisdiction the HO of the RRB falls.

Clarifications - 1
HRMD:PAD:3383:2007
November 17, 2007
The Scheme for grant of Conveyance Loan to Award Staff was approved by the Board of
Directors in their meeting held on 25/08/2007 which was circulated vide Staff Circulars Nos.
5426 and 5432 dated 10/0-9/2007 and 04/10/2007 respectively. Thereafter certain queries
from the Field functionaries were received and the clarifications for the same are given
below.
Sr.
No
.
1.

2.

3.

4.

5.

Issue

Reply

The Workmen staff drawing Basic Pay of


Rs.8940/-and above will be eligible for
Conveyance Loan. It is not clear whether
Subordinate Staff members will be eligible
for Conveyance Loan, of course, subject
to eligibility norms.

Yes. Subordinate staff members will be


eligible for Conveyance Loan subject to
the condition that the total deductions
should not exceed 65% of gross salary.

In case of Officers, the minimum Basic


Pay for being eligible for Conveyance
Loan has been fixed at Rs.13320/- (Old
Basic Pay Rs.9820/) However, in case of
Award Staff the Basic Pay has been fixed
at Rs.8940/-.
The
balance
outstanding
in
the
Conveyance Loan account with interest
thereon at the time of cessation of service
should be recovered from the terminal
benefits payable to the employee. The
entire Loan is to be repaid in the ratio of
3:2 with a maximum of 200 instalments.
There may be instances where an
employee is left with 2/3 years of service
but desires to avail Conveyance Loan. If
we apply the principle of recovery in the
ratio of 3:2, the amount of instalment will
be very high with no take-home pay.
The Loan can be granted for purchase of
second-hand vehicle which are not more
than 10 years old. Is it applicable to
second-hand two wheelers also?
Some of the employees have availed 2/4
wheeler loan under Union Miles scheme of
our Bank or under Conveyance Loan
scheme of other Banks. With the
introduction of Conveyance Loan to Award
Staff scheme whether such employees
will be permitted to seek conversion of
Union Miles loan of our Bank or
Conveyance Loan of other Banks to

We may advise Branches/Offices that


Officers with Basic Pay of Rs.8940/- or
above be considered for Conveyance
Loan. However, the stipulation of 3 years
of confirmed satisfactory service will be
applicable.
In
such
cases,
we
may
permit
Branches/Offices to fix the instalment at
reasonable level and to recover the entire
balance in Conveyance Loan account from
the terminal benefits payable to the
employee.

Yes. We may continue with the stipulation


of 10 years old vehicles for motorcar but
for two wheelers the period may be
restricted to 5 years.
Yes. We may permit such conversion of
Loans.

6.

Conveyance Loan to Award Staff.


The Competent Authority for sanction
Conveyance Loan to Award is specified as
under:

We recommend that Chief Manager


(Credit), NRO/RO may be vested with
delegated powers to sanction Conveyance
Loan to Award Staff instead of at FGMO.
Clarifications 2 (HRMD:PAD:210:2008 Dt. January 29, 2008)

Further clarifications on the subject matter were issued by the above mentioned circular
letter.
Sr.
Issue
Reply
No
.
1. The Workmen Staff drawing Yes. Subordinate Staff members will be
Basic Pay of Rs.8940/-and eligible for Conveyance Loan subject to the
above will be eligible for condition that the total deductions should not
Conveyance Loan. It is not exceed 65% of gross salary.
clear whether Subordinate Staff
members will be eligible for
Conveyance Loan, of course,
subject to eligibility norms.
2. The sub-staff with Basic Pay of The Workmen Staff drawing Basic Pay of
Rs.8,940/- is said to be "eligible Rs.8,940/- and above will be eligible for
for CONVEYANCE LOAN of Conveyance Loan. It was clarified that the
course,
subject
to Subordinate Staff members will also be
eligibility..". If the minimum eligible for this facility subject to the condition
Basic Pay is stipulated as that the total deduction should not exceed
above, then he will not be 65% of the gross salary.
eligible for 2 wheeler even after
his 18 years of service,
whereas he is eligible now after
3 years of service, subject to It is a fact that a Subordinate Staff member,
the condition that the minimum
even if he is completing 18 years of
Basic Pay should be Rs.8940/service will not reach the Basic Pay of
in the case of Clerical Staff and
Rs.8,940/-. In terms of existing guidelines
Rs.5850/- in the case of
governing Conveyance Loan for purchase
Subordinate Staff members.
of two wheeler, the condition is that the
workmen employee should draw Basic
Pay of Rs.3,910/- (Revised Basic Pay of
Rs.8940/- for Clerical Rs5850/- for
Subordinate Staff). In case of Conveyance
Loan to Award Staff members for
purchase of two wheeler the minimum
Basic Pay of Rs.8,940/- is removed.
However, an employee should have
satisfactory service record with a
minimum three years of service will be
eligible for conveyance loan for purchase
of two wheeler.
For purchase of car, the minimum Basic Pay of
Rs.8,940/- and above will continue.
3. In case
of
Officers,
the Branches/Offices are advised that Officers
minimum Basic Pay for being with Basic pay of Rs.11410/- and above will
eligible for Conveyance Loan be considered for Conveyance Loan for
has been fixed at Rs.13320/- purchase of two wheeler / four wheeler.
(Old
Basic
Pay
Rs.9820/) However, the stipulation of three years of

However, in case of Award Staff


the Basic Pay has been fixed at
Rs.8940/-.
4.
It was suggested that there
may be instances where an
employee is left with two
to three years of service
but
desires
to
avail
Conveyance Loan. If we
apply the principle of
recovery in the ratio 3:2
the amount of installment
will be very high and there
will not be any take home
pay.
5.

6.

7.

confirmed
applicable.

satisfactory

service

will

be

For the purpose of ascertaining the eligibility,


we will continue to take the instalment
payable for the remainder of service left on
the basis of 3:2 recovery ratio. However, the
repayment of instalment may be restricted to
50% of the instalment taken for the purpose
of arriving at the eligibility.

The balance outstanding in the


Conveyance Loan account with
interest thereon at the time of
cessation of service should be
recovered from the terminal
benefits
payable
to
the
employee. The entire Loan is to
be repaid in the ratio of 3:2
with a maximum of 200
instalments. There may be
instances where an employee
is left with 2/3 years of service
but
desires
to
avail
Conveyance Loan. If we apply
the principle of recovery in the
ratio of 3:2, the amount of
instalment will be very high
with no take-home pay.
The Loan can be granted for
purchase
of
second-hand
vehicle which are not more
than 10 years old. Is it
applicable to second-hand two
wheelers also?

We are not in favour of changing recovery


ratio. However, branches are advised that the
recovery towards interest be refixed based on
the amount outstanding in interest account so
as to cover the remaining period of recovery.
For instance if the balance outstanding in the
interest account is Rs. X and is to be
recovered in 80 instalments i.e. maximum
instalment of 200, the instalment towards
interest recovery may be refixed so as to
cover 80 months.

Some of the employees have


availed 2/4 wheeler loan under
Union Miles scheme of our
Bank or under Conveyance
Loan scheme of other Banks.
With
the
introduction
of
Conveyance Loan to Award
Staff scheme whether such
employees will be permitted to
seek conversion of Union Miles
loan
of
our
Bank
or

Yes. We may permit such conversion of Loans.

Yes. We may continue with the stipulation of


10 years old vehicles for motorcar but for two
wheelers the period may be restricted to 5
years.

Conveyance Loan of other


Banks to Conveyance Loan to
Award Staff.
CONVERSION OF UNION MILES TO STAFF CONVEYANCLE LOAN TO AWARD STAFF
HRMD/PAD/18030/2008 DT16/04/2008
In terms of letter no.HRMD/PAD/210/2008 Dt.29/01/2008, conversion of Union Miles availed
by Award Staff into Staff Conveyance Loan was permitted. While permitting the same, the
following guidelines were issued.
Interest on Loan under Union Miles be applied at the stipulated rate upto the date of
conversion of such loans into Conveyance Loan to Award Staff.
The balance outstanding thereafter be transferred to new Loan account i.e
Conveyance Loan to Award Staff.
Fresh set of documents i.e. DP note for balance outstanding, SD-21, SD-10, Letter of
Lien be obtained from the staff member.