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ALLAHABAD BANK

INTEGRATED RISK MANAGEMENT DEPARTMENT


HEAD OFFICE: 2, NETAJI SUBHAS ROAD, KOLKATA- 700 001
Instruction Circular No.:

14802/CPRMD/2016-17/ 16

Date: 10-01-2017

To: All Offices/Branches

COMPREHENSIVE GUIDELINES ON INTEREST RATES ON LOANS & ADVANCES


The Banks Comprehensive Guidelines on Interest Rates on Loans and Advances were last
circularized vide HO IC No 14238/CPRMD/2016-17/01 dated 01.04.2016.
In view of changes in interest rate environment, ALCO of the Bank has approved the following
MCLR:
Sl.
No
1
2
3
4
5

Parameters
Overnight MCLR
1 month MCLR
3 months MCLR
6 months MCLR
1 yr MCLR

Existing
(w.e.f
10.10.2016)
9.15%
9.20%
9.25%
9.35%
9.45%

Revised
(10.01.2017)
8.15%
8.25%
8.45%
8.55%
8.60%

1. All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016, except those for
which exemptions have been granted, are priced with reference to the MCLR which is the
internal benchmark for such purposes as against Base Rate / BPLR.
2. There will be no lending below the applicable MCLR except exempted category.
3. The actual interest rate charged to customers will be equal to the applicable MCLR plus
applicable spread.The applicable spread has been reset based on credit risk premium and
business strategy premium.
4. The interest rate will be linked to the one year MCLR unless specified otherwise in the
enclosed guidelines.
5. The MCLR prevailing on the date of disbursement will be applicable till next reset date
irrespective of change in the applicable MCLR during the interim period. The branches are
required to specify the interest reset date in the sanction letter. The reset date should be linked
to the date of first disbursement of the loan / credit limits.

Interest Rate on Loans & Advances

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6.

The periodicity of reset of applicable MCLR shall be yearly. However, monthly / quarterly /
half-yearly reset of MCLR for a specific borrower can be permitted by the sanctioning
authority of FGMLCC and above.
7. Bank shall review the MCLR of different maturity from time to time. Bank reserves the right
to change the spread based on business strategy, market competition, embedded option in the
loan product, market liquidity, credit risk, collaterals, customer relationships etc.
8. The existing loan and credit limits linked to Base Rate/BPLR will continue till repayment or
renewal as the case may be. Existing borrowers will have the option to move to MCLR linked
loan at mutually acceptable terms. However, this should not be considered foreclosure of
facility.
9. In case of existing Term Loan linked with Base Rate, where the borrowers opt to move to
MCLR linked rate, a switchover fee @ Rs.10000.00 or 0.50% of the outstanding Term Loan,
whichever is higher, will be levied.
10. No fixed rate interest loan and loans linked to market determined external benchmark, be
sanctioned other than by Head Office or unless clearly specified under any scheme.
11. Fixed Rate Loans upto three years shall be priced with reference to applicable MCLR.
12. The reference benchmark rate used for pricing of loans along with reset frequency shall form
part of the terms of the loan contract.
13. In view of the foregoing, branches & offices are advised to adhere to the instructions
contained in this circular. The Banks comprehensive guidelines on interest rates on loans and
advances are being enclosed for meticulous compliance with immediate
14. In case of any clarification, Field functionaries are advised to contact Shri Ardhendu De,
AGM (IRM) (M: 9874121110) or Shri Deepak Goyal, CM (IRM) (M:9831430662) for
necessary guidance in this regard. Alternatively, mail can be sent to them on
ho.cprmd@allahabadbank.in.

(Sujit Kumar Dey)


Deputy General Manager (IRM)

Interest Rate on Loans & Advances

Page 2

Bank Comprehensive Guidelines on


Interest Rate on Loans & Advances
INDEX
S. No.
1
2
3
4
5
6
7
8
8
9

Subject
Comprehensive Guidelines on Interest rates on
loans and advances
Interest Rate Guidelines for MSME Sector
Interest Rate Guidelines for Agricultural Credit
and other Priority Sector Credit
Interest Rate Guidelines for Export Credit
Interest Rate Guidelines for General Advances
Interest Rate Guidelines for Retail Credit
Rate of interest in Staff Loan
Concession in rate of interest in various segments
Miscellaneous Issues
Appendix & Enclosures
List of Intermediary Agencies
Additional Interest/ Penal Interest
Format for Proposals for interest rate reduction in
the account
Key Fact Statement

Interest Rate on Loans & Advances

Annexure

Page No.

B
C

17
20

D
E
F
G
H
I

23
26
33
38
39
48

Appendix I
Appendix II
Appendix III

49
50
52

Appendix IV

55

Page 3

Annexure- A
1. Comprehensive Guidelines on Interest rates on loans and advances:
1.1. General Parameters:
Sl. Parameters
Existing
(w.e.f
Revised (10.01.2017)
No
10.10.2016)
1
Banks Overnight MCLR
9.15%
8.15%
2
Banks 1 month MCLR
9.20%
8.25%
3
Banks 3 months MCLR
9.25%
8.45%
4
Banks 6 months MCLR
9.35%
8.55%
5
Banks 1 yr MCLR
9.45%
8.60%
6
Banks Base Rate
9.70%
No change
7
Maximum Spread
6.00%
7.10%
8
Maximum Lending Rate (MLR)
Bench
BR + 6.00%
Mark*+6.00%
MCLR+7.10%
9
Maximum Additional /Penal Rate
2.00%
10 Maximum chargeable rate to any customer BM+6.00%+2.00% MCLR+7.10%+2.00%
Banks BPLR
11 ( for existing customer who have not yet
13.95%
switched over to Base Rate)
0.50% relaxation in rate of interest subject to minimum of benchmark rate will be allowed
to Women Beneficiary under MSME category, Food & Agro Processing Units, Seed
12
processing Units and Girl Students under Educational Loan Scheme, subject to minimum of
One year MCLR.
13

Concession of 0.10% for accounts covered under CGTMSE, subject to minimum interest @
benchmark rate, may be permitted by field functionaries.

14

Any relaxation in rate of interest will be effective from the date of sanction/ approval.
Retrospective effect of reduction in rate of interest will be considered by HLCCGM and
above.

15

No foreclosure charges/ pre-payment penalties will be levied on all floating rate term loans
sanctioned to individual borrowers.

*Benchmark rate will be defined as the Base Rate/One Year MCLR, as the case may be.
1.2. Definitions:
RBI has issued Master Direction in regard to interest rate on advances. As per such direction, unless
the context otherwise requires, the terms herein shall bear the meanings assigned to them below a) Bench Mark Rate means the reference rate (BPLR, Base Rate, One Year MCLR) used to
determine the interest rates on loans.
b) External benchmark rate means the reference rate published by an independent benchmark
administrator.
Interest Rate on Loans & Advances

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c) Fixed rate loan means a loan on which the interest rate is fixed for the entire tenor of the loan.
d) Floating rate loans means a loan on which interest rate does not remain fixed during the tenor
of the loan.
e) Advance against own deposit means advance sanctioned against Rupee/ FCNR(B) term
deposit and deposit stands in the name of the borrower, either singly or jointly; one of the
partners of a partnership firm and advance is made to the said firm; the proprietor of a
proprietary concern and advance is made to such concern; a ward whose guardian is
competent to borrow on behalf of the ward and where the advance is made to the guardian of
the ward in such capacity.
f) Benchmark Prime Lending Rate (BPLR) means internal Benchmark Rate used to determine
the interest rate on advances/ loans sanctioned upto June 30,2010.
g) Rests refers to periodicity of charging interest to borrowers.
h) Term Loan means a loan repayable after a specified term period.
All other expressions unless defined herein shall have the same meaning as have been
assigned to them under the Banking Regulation Act, or any statutory modification or
enactment thereto or as used in commercial parlance, as the case may be.
1.3.

Internal Benchmark:
1.3.1. Base Rate
a) All rupee loans sanctioned and credit limits renewed after July 1, 2010 till 31.03.2016, are
priced with reference to the Base Rate which is the internal benchmark for such purposes,
unless switched over to MCLR.
b) Base Rate includes all those elements of the lending rates that are common across all
categories of borrowers.
1.3.2. Marginal Cost of Funds based Lending Rate (MCLR)
a)

b)
c)

All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 are priced with
reference to the Marginal Cost of Funds based Lending Rate (MCLR) which is the internal
benchmark for such purposes.
MCLR is the tenor linked benchmark MCLR of a particular maturity.
MCLR prevailing on the date of first disbursement, whether partial or full, shall be
applicable on the floating rate loan and future reset date/s will be determined accordingly.

1.3.3. Reset of interest rates under MCLR system


a) Banks will specify interest reset dates on floating rate loans. Bank is also having the
option to offer loans with reset dates either to the date of disbursement of the loan/credit
limits or to the date of review of MCLR. Normally the reset date will be linked with the
date of disbursement of the loan/credit limits i.e. periodicity of reset shall be yearly.
However, monthly/ quarterly/ half-yearly reset of MCLR for a specific borrower can be
Interest Rate on Loans & Advances

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changed by the sanctioning authority of FGMLCC and above.


b) The Marginal Cost of Funds based Lending Rate (MCLR) prevailing on the date of first
disbursement, whether partial or full, shall be applicable till the next reset date,
irrespective of the changes in the benchmark during the interim. Future reset dates shall
be determined accordingly.
c) The periodicity of reset shall be one year or lower. The exact periodicity of reset shall
form part of the terms of the loan contract.
1.3.4. Transition to Base Rate from BPLR
a) Existing loans based on the BPLR system shall run till their maturity.
b) The existing borrowers desirous of switching to the Base Rate system, before expiry of the
existing contracts shall be given an option on mutually agreed terms.
c) No fee will be charged for such switch-over.
1.3.5. Transition to MCLR from Base Rate/BPLR
a) Banks shall continue to review and publish Base Rate as hitherto.
b) Existing loans and credit limits linked to the Base Rate/ BPLR shall continue till
repayment or renewal, as the case may be.
c) The existing borrower shall have the option to move to Marginal Cost of Fund based
Lending Rate (MCLR) linked loans at mutually acceptable terms.
d) In case of existing Term Loan linked with Base Rate/BPLR, where the borrowers opt to
move to MCLR linked rate, a switchover fee @ Rs.10000.00 or 0.50% of the outstanding
Term Loan, whichever is higher, will be levied.
e) The switch-over shall not be treated as a foreclosure of existing facility.
1.4. General Pricing Methodology
a) Different MCLR has been arrived at by the Bank considering various components including
marginal cost of funds, negative carry on CRR, operating cost and tenor premium.
b) Pricing of the product / facilities are broadly based on the Credit Risk premium of the
borrower and the Business Strategy of the Bank.
c) The credit risk premium charged to the customer representing the default risk arising from
loan sanctioned is based on an appropriate credit risk rating/scoring model and after taking
into consideration customer relationship, expected losses, collaterals, etc.
d) The Business Strategy Premium is arrived at taking into consideration the business strategy,
market competition, embedded options in the loan product, market liquidity of the loan etc
e) Linking of MCLR is as under,
Maturity of Loan
Up to 1 month
Above 1 month and up to 3 months
Above 3 month up to 6 months
More than 6 months
Interest Rate on Loans & Advances

Reference Rate
1-Month MCLR
3-Month MCLR
6-Month MCLR
1 Year MCLR
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1.5. Objective
1.5.1. The objective of issuing comprehensive consolidated guidelines on interest rates is to
provide a single point reference to the field functionaries for smooth functioning of the
branches.
1.5.2. To ensure that correct interest is charged and occurrence of any instance of revenue leakage
is prevented.
1.5.3. It is also aimed at enhancing transparency in lending rates so as to avoid complaints from
credit customers.
1.6. Benchmark Rate and Spread:
1.6.1. All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 are priced with
reference to the MCLR.
Bank is having following five tenor linked MCLR as benchmark:
o Overnight MCLR,
o One-Month MCLR,
o Three-Month MCLR,
o Six Month MCLR,
o One Year MCLR.
In addition to the above, ALCO is empowered to publish MCLR of any other longer
maturity.
1.6.2. In case of existing loan the Benchmark will be Base Rate or BPLR as per transition from
BPLR/Base Rate to MCLR.
1.6.3. Spread under Base rate system
a) The credit risk premium charged to an existing borrower shall not be increased except
on account of deterioration in the credit risk profile of the customer or change in tenor
premium.
b) The stipulation will not be applicable to loans under consortium / multiple banking
arrangements.
c) The spread guidelines mentioned above shall not apply to loans granted under BPLR
system, which continue till date. Such loans shall be covered under the terms of the
loan agreements.
1.6.4. Spread under MCLR system
The broad component of spread under MCLR system are as under:
a) Business strategy: The component is arrived at taking into consideration the business
strategy, market competition, embedded options in the loan product, market liquidity of
the loan etc.
b) Credit risk premium: The credit risk premium charged to the customer representing the
default risk arising from loan sanctioned shall be arrived at based on an appropriate
credit risk rating / scoring model and after taking into consideration customer
relationship, expected losses, collaterals, etc.
c) The spread charged to an existing borrower shall not be increased except on account of
deterioration in the credit risk profile of the customer. Any such decision regarding
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change in spread on account of change in credit risk profile shall be supported by a fullfledged risk profile review of the customer.
d) It is not applicable to loans under consortium / multiple banking arrangements.
1.6.5. Changes in the Benchmark Rate (One Year MCLR or Base Rate or BPLR) shall be
applicable in respect of all existing loans linked to the Benchmark Rate, in a transparent
and non-discriminatory manner.
1.6.6. Since transparency in the pricing of lending products has been a key objective, bank is
required to exhibit the information on its BR/ MCLR at all branches and also on its
website. Changes in the BR/ MCLR should also be conveyed to general public from
time to time through appropriate channels.
1.6.7. Interest rate for any category of borrower / loans stipulated by RBI which is linked to the
Benchmark Rate (One Year MCLR/BR) and/or fixed rate (DRI at 4.00% etc.), the Bank
will adhere to such prescribed rates.
1.6.8. Spread over Benchmark Rate (BR or One Year MCLR as the case may be) would be
7.10% over One Year MCLR or BR+6.00% at the maximum which will be the
Maximum Lending Rate (MLR).
1.6.9. Benchmark Rate will be uniformly applicable in all branches/offices of the Bank.
1.7.

Types of interest rate:

1.7.1. No fixed rate interest loan and loans linked to market determined external benchmark, be
sanctioned other than by Head Office or unless clearly specified under any scheme.
1.7.2. The rate of interest on all accounts with working capital & term loan , which is not
specifically mentioned will be charged at @ One Year MCLR+5.10% (Base Rate+4%, if
applicable)
1.7.3. Bank will have the freedom to offer all categories of loans on fixed, fixed with reset,
floating or floating with reset clause as approved/decided by the ALCO/Board of Directors.
However, any revision of interest rates whether upwards or downwards, the effect of
revised interest rate (change in MCLR) will come into force from the date of benchmark
reset date. However, the change in MCLR will not be applicable on fixed rate loan or any
other loan which has been specifically exempted.
1.7.4. Bank may also use external or market -based benchmark interest rates for pricing of its
floating rate loan products subject to minimum of benchmark Rate. The rate of interest
which has been fixed with reference to Benchmark Rate (Base Rate or One year MCLR)
and/or market benchmark will be treated as floating rate.
1.7.5. Fixed Rate Loans upto three years shall be priced with reference to One Year MCLR.
1.7.6. In respect of fixed rate loans sanctioned with reset clause, the change in rate of interest will
take place only after the specified period for reset as per terms of sanction. For example, if
a loan is sanctioned at fixed Interest rate of 11.00 % with reset clause of two years, the rate
of interest can be increased/decreased after expiry of two years, say to 11.25%, 11.50%
(and so on) as per the decision of the sanctioning authority. However, under force
Interest Rate on Loans & Advances

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majeure clause, the Bank is authorized to raise fixed interest suitably & prospectively in
the event of major volatility in interest rates.
1.7.7. The spread charged to an existing borrower shall not be increased except on account of
deterioration in its credit risk profile of the customer. Any such decision regarding change
in spread on account of change in credit risk profile shall be supported by a full-fledged
risk profile review and internal rating of the borrower/customer. Provided that the
stipulation contained above shall not be applicable to loans under consortium/multiple
banking arrangements.
1.7.8. To hedge interest rate risk arising due to change in market dynamics, where rate of interest
has been fixed at a rate lower than the rate prescribed in the Banks Policy / guidelines, the
following conditions must be incorporated in the sanction letter i.e.
Competent authority has permitted concessions in interest rate to the extent of ..% with
the stipulation that effective minimum rate would be..%.
1.8. Charging of Interest:
1.8.1. Term Loans and Working Capital advances should be clubbed together for the purpose of
determining the loan and applicable rate of interest, except in cases specifically exempted
as per RBI / Bank guidelines.
1.8.2. Interest at monthly rests may be applied in case of Term Loans, Working Capital Limits,
Bills and other advances in accordance with the directives on interest rates on advances
issued by the Bank / Reserve Bank of India from time to time.
1.8.3. Charging interest at monthly rests shall not be applicable to agricultural advances for which
under noted norms would be applicable.
Bank would charge interest on agricultural advances for long duration crops at annual
rests.
As regards short duration crops and allied agricultural advances such as dairy, fishery,
piggery, poultry, bee-keeping cold storage, rural godown, warehouses etc. bank may take
into consideration due dates fixed on the basis of fluidity with borrowers and
harvesting/marketing season or on half yearly basis while charging interest. Compounding
of the same will be done if the loan installments become overdue.
On all other loans (Indirect Agriculture & MSME), interest will be applied at monthly
rests.
For Short Term Loans granted to small and marginal farmers (in case of crop loan up to 12
months & in case of other loans, loans having maturity up to 12 months), classified as
Standard Asset, the interest applied shall not exceed the principal amount. However, in
case of NPA, Suit Filed, OTS accounts, the notional interest rate will be continued to be
calculated, from the date of last charged interest in the account and kept in the Record
Section of NPA Ledger.
1.8.4. In case Education Loan, once the moratorium period is over, the entire outstanding along
with interest during moratorium, will be added back to principal amount and compounding
of interest will start at monthly rests and will continue till liquidation of the entire loan.

Interest Rate on Loans & Advances

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1.8.5. In case of loans upto Rs. 2.00 Lac, interest including processing and other charges
(excluding additional charges / pre-payment charges / actual charges etc.) for such Loans
would not exceed Maximum Lending Rate (MLR) i.e. Benchmark Rate (Base Rate +6.00%
or One Year MCLR+7.10%).
1.8.6. The interest to be charged shall be rounded off to the nearest rupee.
1.9.

Levying of Additional/ Penal Interest rate:

1.9.1. The Additional/ Penal interest may be levied at the prescribed rate for reasons such as
default in repayment, non-submission of financial statements as provided in APPENDIX-II.
1.9.2. In the case of under noted category of loans, no additional (penal) interest will be charged
Working Capital limits sanctioned to Sick/Weak Units, which have remained closed.
The borrower is affected by political disturbances, natural calamities defaulting thereby in
submission of statements under QIS/Monthly Cash Budget System/ Stock Statement.
Limits sanctioned for export credit as well as against export incentives.
Drawings in excess of operating limit but within overall sanctioned limit / Drawing Power.
Priority Sector Credit upto Rs.25,000.00.
DRI advances irrespective of amount of limit sanctioned.
Educational Loan upto Rs.7.50 lac.
Advances against NSCs/KVPs/FDRs/LIC (Surrender Value) etc. provided stipulated
margin is available.
1.9.3. Unless and otherwise specified, the interest charged inclusive of penal/ additional interest
should not exceed MLR+2% for non-priority sector advances and it will be Applicable
Rate + 2% or MLR whichever is lesser for priority sector advances.
1.10. Withdrawal Against Uncleared Effect :
1.10.1. Where withdrawals are allowed against cheques sent for clearing i.e. uncleared effects
(e.g., uncleared local or outstation cheques) which are in the nature of unsecured advances,
the Bank would charge interest on such drawls as unsecured advance i.e One Year
MCLR+ 7.10%+2.00%.
1.10.2. The aforesaid clause will, however, not be applicable to the facility afforded to depositors
for immediate credits in respect of cheques sent for collection, as a measure of customer
service.
1.10.3. Banks Guidelines on withdrawal against uncleared effect will also be complied with.

1.11. Interest on Loans under Consortium / Multiple Banking Arrangement:


1.11.1. As per RBI guidelines, Banks need not charge a uniform rate of interest even under
consortium arrangement. Thus, the Bank may charge a rate of interest different from other
banks under a consortium arrangement/ multiple banking/ syndicated loan.

Interest Rate on Loans & Advances

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1.11.2. However, Bank may fall in line with the lead bank/ major lender, subject to minimum
of our Benchmark Rate. In such cases under CBS the spread will be adjusted with our
Benchmark Rate (Base Rate or One year MCLR) so as to match our interest rate.
1.12. Zero Percent Interest Finance Scheme for Consumer Durables :
Bank will refrain from offering low/zero percent interest rates on consumer durable advances
to borrowers through adjustment of discount available from manufacturers/dealers of
consumer goods.
Bank should also not promote such schemes by releasing advertisement in different
newspapers and media indicating that they are promoting financing consumers under such
schemes.
Bank should also refrain from linking its name in any form / manner with any incentive based
advertisement where clarity regarding interest rate is absent.
1.13. Refund of Interest:
1.13.1. Permissible /admissible refund to the account holder on account of correction
/rectification of bonafide mistakes, if any, may be made by the present incumbent-in
charge of the branch. In all other cases, the refund will be permitted by ZLCC and above.
1.13.2. The interest or other charges debited in account as per guidelines, some time needs to
be reversed by the bank to fall in line with the consortium decisions or some times in
genuine circumstances beyond control of the bank. In such cases the refund may be
permitted by FGMLCC and above.
1.13.3. Where loan has been allowed against Banks own Fixed Deposit Receipt and the
Branch, after maturity of the FD do not adjust the loan account thereby interest is charged
on the loan outstanding, excess interest charged thereof in the loan account will be
refunded to the customer.
1.13.4. Where Bank after adjustment of the loan account do not remit/credit the remaining
amount of FD to the customers account but keeps balance in sundry creditors account or
kept as Credit balance in the loan account, Bank will compensate to the customer the
interest as payable for the amount kept in the sundry creditors account at savings bank
interest rate, if and only if the customer has not been duly informed.
1.13.5. Where loan has been allowed against NSCs, KVPs, LIC policy and the Branch, after
maturity of the instruments do not collect the proceeds of the instruments in question from
the concerned Post Offices/LIC offices thereby charging of interest in the loan account is
continued, excess interest so charged in the loan account will be refunded to the customer.
1.13.6. In case of reversal of excess interest charged in a borrowal account due to nonadjustment of liquid securities like Fixed Deposit / NSC/KVP etc in time the branch
concerned will obtain prior approval from the respective ZLCC.
1.14. Interest Income Recognition
1.14.1. Income from Non Performing Asset (NPA) is not recognized on accrual basis but is
booked as income only when it is actually received.
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1.14.2.
Thus, till the time an advance is performing one, income from the same should be
recognized on accrual basis. But, the date from which it is classified as NPA (i.e. it ceases
to be performing) the income is to be accounted for on realization basis not only for the
current year but also interest accrued and credited to the income account in a prior
accounting period with respect to that NPA account should be reversed or provided for in
the current accounting period, if remains uncollected.
1.14.3. Interest on advances against term deposits, NSCs, KVPs, IVPs , Life Insurance
Policies ( Surrender Value) may be taken into income account on accrual basis on the due
date provided adequate margins as stipulated during sanction is available in the accounts.
1.14.4. In case of NPA account where interest income has ceased to accrue, the fees,
commission and similar income to the same borrower should not be credited to income
and should be reversed or provided for to the extent to which it is uncollected.
1.14.5. In case of rescheduling or re-negotiation of outstanding debts, the fees, commission
etc. should be recognized on accrual basis over the period of time covered by the renegotiated or re-scheduled extension of credit. Thus, the income would be recognized on
accrual basis from the date of rescheduling as if it was a fresh account.
In case of implementation of Sustainable structuring of Stressed Assets (S4A)/SDR,
income on accrual basis will not be recognized, if interest is not serviced within 90 days
from the due date.
1.14.6. If Govt. guaranteed advances become NPA, the interest on such advances should not
be taken to income account unless the interest has been realized.
1.14.7. If any advance, including bills purchased and discounted, becomes NPA as at the close
of any year, interest accrued and credited to income account in the corresponding previous
year, should be reversed or provided for, if the same is not realized. This will apply to
Government guaranteed accounts also.
1.14.8. The Computation of notional interest for the purpose of arriving at Banks sacrifice on
compromise, following methods will be adopted:
(i)
For Sub-standard & Doubtful Assets- Simple interest @ Benchmark Rate (Base
Rate or One Year MCLR) will be charged from the date of NPA till payment of
compromise sum,
(ii)
For Loss Assets and written off debts- No interest to be loaded over and above
the ledger balance as on the date of NPA.
(iii) The amount by which the notional amount due exceeds the compromise offer
would constitute the sacrifice.
(iv)
Notional Interest for the purpose of processing compromise proposals will be
calculated from the date of last charged interest in the account up to the date of
final payment. However, the computation of notional interest in the record
section of NPA ledger will be continued to be made.
(v)
However, in the cases where the proponent offers to pay the settled amount in
installments with One year MCLR/Base Rate/ documents rate/ stipulated rate ,
notional interest will be calculated only up to the period to which compromise
sum bears no interest.
Interest Rate on Loans & Advances

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(vi)

For delayed period interest in respect of failed compromise proposal, Banks


IC no 14762/ Recovery/2016-17/11 dated 23.12.2016 will be complied with.

1.15. Interest rate in case of Deceased borrowal account:


1.15.1. In case of death of individual borrower/proprietor, the contract between bank and the
deceased ceased to have effect. On receipt of the information of death, the debit balance as
on the date of death should be crystallized and legal notice is to be given to the legal heirs
for recalling and payment of the loan. In case of their failure to repay the loan, legal
process for realizing the amount by selling the securities, if available, is to be initiated.
1.15.2. If the legal heirs come forward to repay the loan/continue with the account, a separate
account is to be opened in the name of the legal heirs and debit balance in the loan account
is to be transferred to that account and appropriate interest is to be charged.
1.16. Appropriate Charging of Interest :
For any irregularities for non-compliance/non-observance of provisions under this policy and
relevant instructions issued from time to time resulting in leakage of revenue, the branch
incumbent will be held responsible.
1.17. Fair Practices Code for Lenders on Interest Rate/Charges :
1.17.1. Interest rates for different loan products would be made available through any one or all
of the following namely ;
a)
In our Banks web site,
b)
Over phone, if Tele Banking services are provided.
c)
Through prominent display in the branches and other delivery points.
d)
Through other media from time to time.
1.17.2. Information regarding rate of interest, processing fees, service charges, refund of charges
etc. to be levied by the Bank from the borrower shall be attached in a prescribed format
along with loan application form.
1.17.3. An undertaking be obtained from the prospective borrower while accepting application
that he has been briefed about and convinced about the charges bank will levy on pre/post
sanction of the loan.
1.17.4. Customers would be entitled to receive on demand periodic updates on the interest rates
applicable to their accounts.
1.17.5. On demand, customers can have full details of method of application of interest.
1.17.6. The bank would notify immediately or as soon as possible any revision in the existing
interest rates and makes them available in the media.
1.17.7. Interest rate revisions to the existing customer would be notified within 3 (three) working
days from the date of change through media.
1.17.8. The bank would notify clearly about the default interest/penal interest rates to the
prospective customers.

Interest Rate on Loans & Advances

Page 13

1.17.9. The bank would notify details of all charges payable by the customers in relation to their
loan account.
1.17.10. The bank would make available for the benefit of prospective customers all the details
relating to charges generally in respect of retail product s in the media.
1.17.11. Any revision in interest rate/ charges would be notified in advance and would also be
made available in the media.
1.17.12. The bank would clearly specify to charge interest and other charges, wherever
necessary and get a mandate for debiting the said account along with documentation.
1.17.13. The reference benchmark rate shall form part of the terms of loan contract.
1.18. Enabling Clause :
Following provision should invariably be incorporated in the loan agreements in case of all advances,
including term loans, thereby enabling the bank to charge the applicable interest rate in conformity
with the directives issued by RBI/Bank from time to time.
Provided that the interest payable by the borrower shall be subject to the changes in interest
rates made by the Reserve Bank and/or by the Bank from time to time.
However, the branches are required to inform the borrower regarding changes in interest rates
whenever made, well in time and should also preserve the proof of delivery of acknowledgement
of such information.
1.19. Interest Rate Subvention:
1.19.1. Branches are advised to follow the instructions of Priority Sector Department/ SME and
Retail Credit , Head Office regarding interest rate subvention for short term crop loans to
farmers, educational loan as well as other priority sector advances, if any, and charge
interest as per rate and methodology prescribed by them.
1.19.2. Similarly, instructions of Foreign Department, Head Office should be followed regarding
interest rate subvention for certain employment oriented export sectors and interest as per
rate and methodology prescribed by them should be applied.
1.20. Exemption from MCLR and Base Rate:
The guidelines prescribe that the following types of loans are exempt from being linked to MCLR.

Loans covered by schemes specially formulated by Government of India wherein Bank


has to charge interest rates as per the scheme is exempted from being linked to Base Rate /
MCLR as the benchmark for determining interest rate.

Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL), etc. granted as
part of the rectification / restructuring package is exempted from being linked to Base Rate
/ MCLR as the benchmark for determining interest rate.

Interest Rate on Loans & Advances

Page 14

Loans granted under various refinance schemes formulated by Government of India or any
Government Undertakings wherein Bank charges interest at the rates prescribed under the
schemes to the extent refinance is available is exempted from being linked to Base Rate /
MCLR as the benchmark for determining interest rate. Interest rate charged on the part not
covered under refinance shall adhere to the Base Rate / MCLR norms.

The following categories of loans are to be priced without being linked to Base Rate /
MCLR as the benchmark for determining interest rate:
a) Advances to banks depositors against their own deposits.
b) Advances to banks own employees including retired employees.
c) Advances granted to the Chief Executive Officer / Whole Time Directors.
d) Loans linked to a market determined external benchmark.
e) Fixed rate loans of tenor above three years .

However, in case of hybrid loans where the interest rates are partly fixed and partly floating, interest
rate

on

the

floating

portion

shall

not

be

exempted

from

MCLR

guidelines.

Provided that fixed rate loans (including fixed rate portion of hybrid loans) of tenor upto three years
shall not be below applicable MCLR at the time of sanction or renewal.
1.21. Other Guidelines:
1.21.1. The total fees/charges applicable on various types of loans to individual borrower
should be disclosed at the time of processing of loan, and it will be displayed on the
website of banks for transparency and comparability and to facilitate informed decision
making by the customers.
1.21.2. The field functionaries will provide a clear/concise one page key fact statement/fact
sheet as per Appendix IV to all individual borrowers at every stages of loan processing
and/or in case of any changes in terms and conditions. Such fact sheet may also be
included as summary box to be displayed in credit agreement. The detailed fact sheet
will be a part of the sanction letter as well as a part of the documents.
1.22. Authority for Amendments in the Policy :
1.22.1. This policy will be reviewed time to time by the Board. The Asset Liability management
Committee (ALCO) shall be the authority to review and approve MCLR, spread and
related issues. Bank will review and publish MCLR on a preannounced date on monthly
basis.
1.22.2. In the interim period, ALCO is authorized to implement any guidelines/ instructions
received from RBI/IBA and/or to revise/amend any clause of the policy to cope with
emerging competitive challenges with subsequent reporting to the Board.

Interest Rate on Loans & Advances

Page 15

1.22.3. The ALCO is also authorised to allow relaxation in the spread which will be reported to
Board for information.
1.22.4. Subsequent guidelines issued, if any, will be treated as integral part of these guidelines.
1.23. The modifications in rate of interest shall be applicable to all fresh sanctions/ enhancement/
review/ renewals in case of working capital loan and on sanction of Fresh Term Loan as well
as switchover from BPLR/Base Rate to MCLR.
1.24. The concession /relaxations/ deviations granted by higher authorities will be allowed by
sanctioning authority on next review/renewal and there is no need to seek concession
/relaxations/ deviations subsequently, provided there is no change in Risk Rating .
1.25. The Rate of interest will be decided based on risk rating. In case of change in risk rating, the
applicable rate of interest according to Revised Risk Ratings will be charged on working
capital.

Interest Rate on Loans & Advances

Page 16

A n n e xu r e B
(M C LR w i l l m e an O n e ye ar M C LR )
2.Interest Rate Structure/ Guidelines for MSME Category
No change in spread is proposed for existing loan linked with Base Rate, BPLR as
circularized by Bank
2.1. Interest rate for Micro, Small & Medium Enterprises (MSME) Advances :
(MCLR means One year MCLR)
S.
Loan Limit
No
1. Upto Rs.0.50 Lacs

2. Above Rs.0.50 lacs upto Rs.2.00 Lacs

3. Above Rs.2.00 lacs & upto Rs.10.00 lacs

Micro
Enterprises
MCLR
(MCLR)
MCLR+1.00%
(MCLR+0.50
%)
MCLR+1.50%
(MCLR+1.00
%)

Small
Enterprises
MCLR+0.50%
(MCLR+0.50
%)
MCLR+1.50%
(MCLR+1.00
%)
MCLR+2.00%
(MCLR+1.50
%)

4. Above Rs. 10.00 lacs (Linked to risk rating of borrower)


Micro Enterprises
Small Enterprises
Existing
Revised
Existing
Revised
AB 1 MCLR+ 1.50% MCLR+1.80% MCLR+ 2.00% MCLR+2.50%
AB 2 MCLR+ 1.50% MCLR+1.85% MCLR+ 2.00% MCLR+2.50%
AB 3 MCLR+1.50% MCLR+2.15% MCLR+ 2.00% MCLR+3.00%
AB 4 MCLR+2.00% MCLR+2.65% MCLR+ 2.50% MCLR+3.00%
AB 5 MCLR+2.50% MCLR+3.30% MCLR+3.00% MCLR+4.00%
AB 6 MCLR+3.50% MCLR+4.45% MCLR+4.50% MCLR+5.65%
AB 7 MCLR+3.50% MCLR+4.45% MCLR+4.50% MCLR+5.65%

Medium
Enterprises
MCLR+ 1.00%
(MCLR+ 1.00%)
MCLR+ 2.00%
(MCLR+ 1.50%)
MCLR+ 2.50%
(MCLR+ 2.00%)

Medium Enterprises
Existing
Revised
MCLR+ 2.50%

MCLR+ 2.80%

MCLR+ 2.50%

MCLR+ 2.85%

MCLR+ 2.60%

MCLR+ 3.00 %

MCLR+ 3.10%

MCLR+ 3.75%

MCLR+3.60%

MCLR+4.40%

MCLR+5.10%

MCLR+6.25%

MCLR+5.10%

MCLR+6.25%

Note: Authority for allowing Relaxation in rate of interest on MSME advances are prescribed
in Paragraph 8.2 of Annexure H
2.2.

Food & Agro Processing Units and Rice Shelling: [(Based on One Year MCLR)]

Sl No

Loan Limit

Rate of interest

1
2

Upto Rs.0.50 lacs


Above Rs.0.50 lacs & upto Rs.2.00 lacs

MCLR (MCLR)
MCLR + 1.30% (MCLR+1.00%)

Above Rs.2.00 lacs & upto Rs.10.00 lacs

MCLR+ 2.30% (MCLR+2.00%)

Above Rs.10.00 lacs


AB 1 to AB 3
AB 4

MCLR+1.30% (MCLR+1.00%)
MCLR + 2.75% (MCLR+2.00%)

Interest Rate on Loans & Advances

Page 17

Sl No

Loan Limit

Rate of interest

AB 5
MCLR + 2.80% (MCLR+2.00%)
AB 6 to AB 7
MCLR + 6.00% (MCLR+5.00%)
*For Micro & Small Enterprises, the interest rate will be as applicable to micro & small enterprises
mentioned at 2.1 under the band Rs 2 lacs to 10 lacs.
Figures in bracket indicates existing rate of interest.
Illustrative list of activities to be covered under Agro Based & Food Processing Units subject to
investment in Plant & Machinery criteria which will qualify for MSME is given as below:

01
03

Rice Shelling Unit/Rice Mill


Cotton Ginning , Cleaning and Bailing

Sl.
No.
02
04

05

Fish: Processing, Canning, Freezing

06

Fruits & Vegetables : Processing, Canning

07

Oils & Fats: Mfg. of Vegetable Oils

08

Mfg. of Grain Mill Product (Rice/Dal Etc.)

09
11

Non-food Agro Products


Mfg. of Starch and Starch Products

10
12

Mfg. of Dairy Products


Mfg. of Indigenous Sugar (Gur/Khandsari)

13
15

Mfg. of Animal Feed etc.


Mfg. of Semi-processed food Items

14
16

Mfg. of Sugar & Sugar Products


Tea Processing/Blending

17
19
21

Coffee Processing
Mfg. of Other Food Products
Processing of Cotton like Ginning etc.

18
20
22

Processing of Edible Nuts


Tobacco Processing
Processing of Jute & FiMCLRe Products

23
25

Mfg of Jute, Mesta Products


Agro-industries Corporations

24

Mfg. of Coir & Coir Products

Sl. No.

Activity Description

Activity Description
Dal Mill
Meat: Slaughter, processing, preservation

2.3.

Scheme for financing Seed Processing Units:


As applicable for advances under MSME. However, for the Micro and Small Enterprises (MSE)
units coming under AB-1 to AB-4 category some concession in interest rate may be allowed.
Accordingly, the undernoted interest rate is applicable:

Category
AB-1 to AB-4

Micro Enterprises
MCLR+1.65% (MCLR+1.25%)

Small Enterprises
MCLR+2.00% (MCLR+1.50%)

However, wherever lower rate is applicable, the same shall be allowed.


[No further concession in interest will be allowed to women beneficiaries as well as units rated by
external agencies coming under the aforesaid categories]
2.4.

Financing to Doctors/ Medical Practitioners for Clinic/ Nursing Homes etc.:

Interest Rate on Loans & Advances

Page 18

S. No. Loan Category


Interest Rate
1.
For loan classified under MSME
As per rate applicable to MSME
Note: Authority for allowing Relaxation in rate of interest on MSME advances are prescribed
in Paragraph 8.2 of Annexure H
Note: Interest rate given in bracket are existing rate as per last guidelines.

Interest Rate on Loans & Advances

Page 19

A n n e xu r e - C
3.Inertest Rate guidelines for Agriculture and Priority Sector Advances
MCLR will mean One year MCLR
3.1. Interest on Agricultural Advances:
S. No.

1
2
3
4

Loan Limit

Rate of interest

Upto Rs.0.50 lacs


Above Rs.0.50 lacs & upto Rs.2.00 lacs
Above Rs.2.00 lacs & upto Rs.10.00 lacs
Above Rs.10 lacs
(Linked to Risk Rating of the Borrowers)
AB 1 and AB 2
AB 3
AB 4
AB 5
AB 6 to AB 7

Direct
Agriculture
Lending
to
Individuals or Jointly with Family
Members: Above Rs.10 lacs & upto
Rs.1 Crore (Not linked to Credit
Rating)

3.2.

Existing

Revised

MCLR
MCLR+1.00%
MCLR+2.00%

MCLR
MCLR+1.30%
MCLR+2.3%

MCLR+ 2.00%
MCLR + 2.50%
MCLR+3.50%
MCLR+ 3.50%
MCLR+5.00%
MCLR +2.50%

MCLR+ 2.30%
MCLR + 3.00 %
MCLR+4.25%
MCLR+ 4.30%
MCLR+6.00%
Not Applicable(As
rating is mandatory
in all accounts
above 10 lacs)

For Kisan Credit Card (KCC)

S. No. Loan Limit

Rate of interest
Existing

1
2

Upto Rs 3.00 lacs


As applicable for
Above Rs.3.00 lacs & upto Rs.10.00
Agriculture loans
lacs

Above Rs.10 lacs


(Linked to Risk
Borrowers)
AB
AB
AB
AB

1 and AB 2
3
4
5

Interest Rate on Loans & Advances

Rating

of

Revised
MCLR+0.40%
MCLR+2.30%

the
MCLR+ 2.00%
MCLR + 2.50%
MCLR + 3.50%
MCLR+ 3.50%

MCLR+ 2.30%
MCLR + 3.00%
MCLR+ 4.25%
MCLR+ 4.30%
Page 20

AB 6 to AB 7

MCLR+5.00%

MCLR+ 6.00%

Interest on Crop Loans/ KCC/ Production Credit upto Rs.3.00 lacs will be charged @ 7% p.a.
as per directives of Govt of India, provided interest subvention is available from Govt of
India, otherwise, it will be charged as per Banks norm.

Rate of Interest for Agriculture Advances includes Ware House, Rural Godowns,
Poultry, Dairy, other Allied Activities, Supply Chain of Agriculture inputs, Rural Health
Care, Against Ware House Receipt etc.

3.3.

Loans to Micro Finance Institutions (MFIs): [(Based on One year MCLR)]

S. No.

Risk Grades

Advances upto Rs 50 Lacs

Advances above Rs 50 Lacs

Existing

Revised

Existing

Revised

1.

AB 1 or AAA

MCLR + 2.00%

MCLR + 2.30%

MCLR + 2.00%

MCLR + 2.30%

2.

AB 2 or AA

MCLR + 2.50%

MCLR + 3.35 %

MCLR + 3.00%

MCLR + 3.35 %

3.

AB 3 or A

MCLR + 3.50%

MCLR + 4.75%

MCLR + 4.00%

MCLR + 4.75%

4.

AB 4 or BBB

MCLR + 4.50.%

MCLR + 5.25%

MCLR + 4.50%

MCLR + 5.25%

5.

AB 5 or BB

MCLR + 5.00%

MCLR + 6.00%

MCLR + 5.50%

MCLR + 6.00%

6.

AB 6 or B

MCLR + 5.50%

MCLR + 6.00%

MCLR +6.00%

MCLR + 6.00%

7.

AB 7 or C

MCLR + 5.75%

MCLR + 6.00%

MCLR + 6.00%

MCLR + 6.00%

3.4.

Loans to Different Agriculture Schemes- : [(Based on One year MCLR)]

S. No.
1.
2.

Schemes
Interest Rate
MCLR+2.30% (MCLR+2%)
All Bank Liquid scheme for Artiyas
Allahabad Bank Potato Growers Credit Card
Scheme
Term Loan
MCLR+1.30% (MCLR+1.00%)
Working Capital Upto Rs. 3.00 lacs

3.
4.
5.
5.1.
5.2.

MCLR+0.40% (MCLR+0.25%)

Working Capital above Rs. 3.00 lacs


MCLR+0.60%(MCLR+0.25%)
(If interest subvention is available, rate of interest on
loans upto Rs.3 lacs would be 7%)
Construction of Godown under lease agreement MCLR +0.40% (MCLR)
with FCI/Central Govt/ State Govt agencies
Financing Sugarcane Growers under Management MCLR +0.40% (MCLR)
Agency agreement with Sugar Mills
Other Specialized Products
Commercial Dairy
As applicable for
Agricultural loans
Supply chain of Agriculture inputs

Interest Rate on Loans & Advances

Page 21

5.3.
5.4.
5.5.
5.6.
5.7.
5.8.
5.9.
3.5.

Rural Health Care Unit Scheme


Scheme for financing personal vehicles to farmers
Scheme for financing transport vehicle to farmers
General Credit Card(GCC): MSE
Artisan Credit Card (ACC)
Lughu Udyami Credit card(LUCC)
Swarojgar Credit Card(SCC)

As applicable for MSME


loans

Interest Rate for Other Priority Sector Advances

3.5.1.

Self Help Groups (SHG)*: [(Based on One year MCLR)]

S. N.

Loan Limit

1
2

Upto Rs.0.50 lacs*


Above Rs.0.50 lacs & upto Rs.10.00 lacs**

Self Help Groups (SHG)*


MCLR (MCLR)
MCLR +1.30% (MCLR + 1.00%)

*For loan upto Rs.50000 per member and Rs.5.00 lakh per group: MCLR
**For loan above Rs.50000 to Rs.1.00 lakh per Member and above Rs.5.00 lakh to
Rs.10.00 lakh per group:
MCLR+1.30%
3.5.2. Housing Loan Scheme to EWS/LIG upto Rs.5 lac in urban areas under Credit Risk
Guarantee Fund Trust for Low Income Housing (CRGFTLIH)
Existing
Revised
MCLR
MCLR+0.15%

3.5.3. Scheme for Financing to Cold Storage Units:


Rating
Existing Rate of interest
Existing
AB 1 to AB 3
MCLR+1.50%
AB 4 & AB 5
MCLR+2.50%
AB-6 & below
MCLR+3.50%

[Based on One Year MCLR]


Revised
MCLR+2.00%
MCLR+3.25%
MCLR+4.50%

Rate of interest for those schemes/ products/ Activities will be as applicable for Agriculture, if
not otherwise expressed.
Note: Authority for allowing Relaxation in rate of interest on Agricultural advances are
prescribed in Paragraph 8.3 of Annexure H
Note: Interest rate given in bracket are existing rate as per last guidelines.

Interest Rate on Loans & Advances

Page 22

A n n e xu r e -D
4. Interest Rate Export Credit [Based on One Year MCLR]
4.1. Interest Rate Export Credit Indian Rupee: (MCLR will mean One Year MCLR)
Type of Export Credit
Interest Rate for Gold Card Holder Normal
Client
(Indian Rupee loan)
(Other than Gold
Card Holder)
AB 1 & AB 2
AB 3 & AB 4
4.1.1. Pre Shipment Credit (From date of Advance)
MCLR+1.35%
MCLR+2.00%
MCLR+2.40%
a. Upto 270 days
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
b. Against incentives receivable from
MCLR+1.35%
MCLR+2.00%
MCLR+2.40%
Govt. covered by ECGC guarantee upto 90
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
days
4.1.2. Post Shipment Credit (From date of Advance)
a. On demand bills for transit period (as
MCLR+1.35%
MCLR 2.00%
MCLR+2.40%
specified by FEDAI)
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
b .Usance Bills(for total period comprising usance period of export bills, transit period as specified by
FEDAI and grace period wherever applicable)
MCLR+1.35%
MCLR +2.00%
MCLR +2.40%
(i) Upto 180 days
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
(ii) Beyond 180 days and upto maximum
MCLR+1.60%
MCLR+2.25%
Not Applicable
period of 365 days
(MCLR+1.25%) (MCLR+1.50%)
c. Against incentives receivable from
MCLR+1.35%
MCLR+2.00%
MCLR+2.40%
Government covered by ECGC Guarantee
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
(upto 90 days)
d. Against undrawn balances (upto 90
MCLR+1.35%
MCLR+2.00%
MCLR+2.40%
days)
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
e Against retention money (for supplies
MCLR+1.35%
MCLR+2.00%
MCLR+2.40%
portion only) payable within one year from
(MCLR+1.00%) (MCLR+1.25%)
(MCLR+1.50%)
the date of shipment. (upto 90 days)
4.1.3. Export Credit not otherwise specified (ECONOS)
a. Pre shipment Credit (For Overdue
MCLR+7.10%
Period)
(MCLR+6.00%)
b. Post shipment Credit
(i) For overdue bills up to 180 days from
MCLR+1.85%
the date of advance.
(MCLR+1.50%)
(ii) For overdue bills beyond 180 days
MCLR+7.10%
from the date of advance.
(MCLR+6.00%)

MCLR+7.10%
(MCLR+6.00%

MCLR+7.10%
(MCLR+6.00%)

MCLR+2.25%
(MCLR+1.50%)
MCLR+7.10%
(MCLR+6.00%)

MCLR+2.40%
(MCLR+1.50%)
MCLR+7.10%
(MCLR+6.00%)

Note: Interest rate given in bracket are existing rate as per last guidelines.
Interest Rate on Loans & Advances

Page 23

4.2.
Interest Rate on Foreign Currency Export Credit:
Type of Export Credit
Interest Rate for Gold Card
Holder
AB 1 & AB 2
4.2.1. Pre Shipment Credit (From date of Advance)
LIBOR
a. Upto 180 days
+3.00%

a. Beyond 180 days and upto 360 days

Normal Client (Other


Than Gold Card

AB 3 & AB 4

LIBOR
+3.25%

LIBOR +3.50%

Rate for initial period


of 180 days prevailing
LIBOR+5.00% LIBOR+5.25%
at the time of extension
plus 200 basis points

4.2.2. Post Shipment Credit


a. On demand bills for transit period (as
LIBOR
LIBOR
specified by FEDAI)
+3.00%
+3.25%
b. Usance Bills (for total period
comprising usance period of export
bills, transit period as specified by
LIBOR
LIBOR
FEDAI and grace period wherever
+3.00%
+3.25%
applicable) up to six months from date
of shipment
c. Export Bills (demand or usance)
realized after due date but upto date of LIBOR+5.00% LIBOR+5.25%
crystallization

LIBOR +3.50%

LIBOR +3.50%

LIBOR+5.50%

Note: Branches will not levy any other charges viz service charges, management charges etc. except
for recovery towards out of pocket expenses incurred.
Note in respect of Interest Rates on Rupee Export Credit:
In the case where the due date(s) / realization period (s) has been extended, the interest at the
applicable rate should be charged upfront till the extended due date (s) / realization date(s). Interest
should however be refunded proportionately to the exporter if the bill is realized before the extended
due date / maturity.
4.3.
S.
No
1
A

Interest on Foreign Currency Loans (In India /Outside India) against FCNR (B) deposit:
Parameters
Rate of interest
To the Depositors
If repaid out of Foreign Currency remittance or maturity
proceeds of FCNR (B) deposits

Interest Rate on Loans & Advances

1% above deposit rate

Page 24

B
2

4.4.

If repaid out of local rupee resources i.e. from NRO


accounts
To third parties

2% above deposit rate minimum


One Year MCLR
Not allowed

Interest for Rupee Loans against FCNR (B) deposits (Both Fund Based & Non-Fund
Based)

S.
No
1

Parameters

Existing

Revised

To the Depositors

To third parties

2% above deposit rate - Minimum:


one year MCLR + 1.00%
3% above deposit rate - Minimum:
one year MCLR + 2.00%

2% above deposit rate - Minimum:


One Year MCLR + 1.35%
3% above deposit rate - Minimum:
One Year MCLR + 2.50%

4.5. Loan against Banks NRO and NRE Deposits (No changes in existing rates)
S.
Parameters
Existing
Revised
No
1
To the Depositors
2% above Deposit Rate
No Change
2

To third parties

3% above Deposit Rate

No Change

4.6. For Bills under Non Prime Banks LC:


As per Rating and WC Loan.
Note: Interest rate given in bracket are existing rate as per last guidelines.

Interest Rate on Loans & Advances

Page 25

A n n e xu r e - E
5. Interest Rate Structure/ Guidelines for General Advances: (MCLR means One Year
MCLR)
In case of Base Rate Linked accounts, existing rate of interest as per last guidelines will be
continued.
(Other than those covered in Annexure B, C, D, F, G,)
5.1. Advances Upto Rs.10.00 lac:
S. No Parameters
ROI Existing
ROI Revised

5.2.

Upto and inclusive of Rs.2.00 lacs

MCLR + 4.00%

MCLR + 4.30%

Over Rs. 2.00 lacs & up to Rs.10.00 lacs

MCLR + 5.50%

MCLR + 6.25%

Advances Above Rs.10.00 lac for Working capital/ WCDL,/Term Loan/Open Term
Loan/STCL (Excluding CRE) including NBFC-AFC:
5.2.1. Above Rs.10.00 lac to Rs.1.00 crore: (One Year MCLR)

S.no.
i.
ii.
iii.
iv.
v.
vi.
vii.

Risk
Grades
AB 1
AB 2
AB 3
AB 4
AB 5
AB 6
AB 7

Repayable up to 3 years
Existing
MCLR + 4.00%
MCLR + 4.25%
MCLR + 4.50%
MCLR + 5.50%
MCLR + 5.60%
MCLR + 5.85%
MCLR + 5.85%

Revised
MCLR + 4.30%
MCLR + 4.60%
MCLR + 5.25%
MCLR + 6.25%
MCLR + 6.40%
MCLR + 6.80%
MCLR + 6.80%

Repayable beyond 3 years


Existing

Revised

MCLR + 4.25%
MCLR + 4.50%
MCLR + 4.75%
MCLR + 5.75%
MCLR + 5.85%
MCLR + 6.00%
MCLR + 6.00%

MCLR + 4.55%
MCLR + 4.85%
MCLR +5.50%
MCLR + 6.50%
MCLR + 6.65%
MCLR + 6.95%
MCLR + 6.95%

5.2.2. Above Rs.1.00 crore to Rs.10.00 crore: (One Year MCLR)


S.no.
i.
ii.
iii.
iv.
v.
vi.
vii.

Risk
Grades
AB 1
AB 2
AB 3
AB 4
AB 5
AB 6
AB 7

Repayable up to 3 years

Repayable beyond 3 years

Existing

Revised

Existing

Revised

MCLR + 4.00%
MCLR + 4.25%
MCLR + 4.50%
MCLR + 5.00%
MCLR + 5.60%
MCLR + 5.85%
MCLR + 5.85%

MCLR + 4.30%
MCLR + 4.60%
MCLR + 5.15%
MCLR + 5.65%
MCLR + 6.40%
MCLR + 6.80%
MCLR + 6.80%

MCLR + 4.25%
MCLR + 4.50%
MCLR + 4.75%
MCLR + 5.25%
MCLR + 5.85%
MCLR + 6.00%
MCLR + 6.00%

MCLR + 4.55%
MCLR + 4.85%
MCLR + 5.40%
MCLR + 5.90%
MCLR + 6.65%
MCLR + 6.95%
MCLR + 6.95%

5.3.

Advances above Rs.10.00 crore for Working capital/ WCDL,/Term Loan/Open Term
Loan/STCL (Excluding CRE)
The revised interest rate/s for loans and advances Rs.10.00 crore & above are based on Internal
Rating as well as External Rating and shall be as under:
[(Based on One Year MCLR)]
Interest Rate on Loans & Advances

Page 26

a) For Loan repayable within 3 years


Existing:
External
Rating
AAA
AA
A
Internal
Rating

BBB

BB & B

C&D

Unrated

AB 1

MCLR

MCLR+0.50%

MCLR+1.00%

MCLR+2.00%

MCLR+3.00%

MCLR+3.50%

MCLR+2.50%

AB 2

MCLR+0.50%

MCLR+1.00%

MCLR+2.00%

MCLR+2.50%

MCLR+3.50%

MCLR+4.00%

MCLR+3.00%

AB 3

MCLR+1.50%

MCLR+2.00%

MCLR+3.00%

MCLR+3.50%

MCLR+4.25%

MCLR+5.00%

MCLR+4.00%

AB 4

MCLR+1.75%

MCLR+2.50%

MCLR+3.25%

MCLR+4.00%

MCLR+5.25%

MCLR+5.25%

MCLR+5.00%

AB 5

MCLR+2.00%

MCLR+2.75%

MCLR+3.75%

MCLR+4.25%

MCLR+5.60%

MCLR+5.60%

MCLR+5.35%

AB 6

MCLR+2.50%

MCLR+3.00%

MCLR+4.00%

MCLR+4.50%

MCLR+5.85%

MCLR+5.85%

MCLR+5.85%

AB 7

MCLR+3.00%

MCLR+3.50%

MCLR+4.50%

MCLR+4.75%

MCLR+5.85%

MCLR+5.85%

MCLR+5.85%

Revised
External
Rating
Internal
Rating

AAA

AA

BBB

BB & B

C&D

Unrated

AB 1

MCLR+ 0.30%

MCLR+0.80%

MCLR+1.30%

MCLR+2.30%

MCLR+3.30%

MCLR+3.80%

MCLR+2.80%

AB 2

MCLR+0.85%

MCLR+1.35%

MCLR+2.35%

MCLR+2.85%

MCLR+3.85%

MCLR+4.35%

MCLR+3.35%

AB 3

MCLR+2.25%

MCLR+2.75%

MCLR+3.75%

MCLR+4.25%

MCLR+ 5.00%

MCLR+5.75%

MCLR+4.75%

AB 4

MCLR + 2.60%

MCLR + 3.35%

MCLR + 4.10%

MCLR + 4.85%

MCLR + 6.10%

MCLR + 6.10%

MCLR + 5.85%

AB 5

MCLR + 2.90%

MCLR + 3.65%

MCLR + 4.65%

MCLR + 5.15%

MCLR + 6.50%

MCLR + 6.50%

MCLR + 6.25%

AB 6

MCLR + 3.65%

MCLR + 4.15%

MCLR + 5.15%

MCLR + 5.65%

MCLR + 7.00%

MCLR + 7.00%

MCLR + 7.00%

AB 7

MCLR + 4.15%

MCLR + 4.65%

MCLR + 5.65%

MCLR + 5.90%

MCLR + 7.00%

MCLR + 7.00%

MCLR + 7.00%

a) For Loan repayable beyond 3 years


Existing
External
Rating
AAA
AA
A
Internal
Rating

BBB

BB & B

C&D

Unrated

AB 1

MCLR + 0.25%

MCLR+0.75%

MCLR+1.25%

MCLR+2.25%

MCLR+3.25%

MCLR+3.75%

MCLR+2.75%

AB 2

MCLR+0.75%

MCLR+1.25%

MCLR+2.25%

MCLR+2.75%

MCLR+3.75%

MCLR+4.25%

MCLR+3.25%

Interest Rate on Loans & Advances

Page 27

AB 3

MCLR+1.75%

MCLR+2.25%

MCLR+3.25%

MCLR+3.75%

MCLR+4.50%

MCLR+5.25%

MCLR+4.25%

AB 4

MCLR+2.00%

MCLR+2.75%

MCLR+3.50%

MCLR+4.25%

MCLR+5.50%

MCLR+5.50%

MCLR+5.25%

AB 5

MCLR+2.25%

MCLR+3.00%

MCLR+4.00%

MCLR+4.50%

MCLR+5.85%

MCLR+5.85%

MCLR+5.60%

AB 6

MCLR+2.75%

MCLR+3.25%

MCLR+4.25%

MCLR+4.75%

MCLR+6.00%

MCLR+6.00%

MCLR+6.00%

AB 7

MCLR+3.25%

MCLR+3.75%

MCLR+4.75%

MCLR+5.00%

MCLR+6.00%

MCLR+6.00%

MCLR+6.00%

Revised
External
Rating
AAA
Internal
Rating

AA

BBB

BB & B

C&D

Unrated

AB 1

MCLR+ 0.55%

MCLR + 1.05%

MCLR + 1.55%

MCLR + 2.55%

MCLR + 3.55%

MCLR + 4.05%

MCLR + 3.05%

AB 2

MCLR + 1.10%

MCLR + 1.60%

MCLR + 2.60%

MCLR + 3.10%

MCLR + 4.10%

MCLR + 4.60%

MCLR + 3.60%

AB 3

MCLR + 2.50%

MCLR + 3.00%

MCLR + 4.00%

MCLR + 4.50%

MCLR + 5.25%

MCLR + 6.00%

MCLR + 5.00%

AB 4

MCLR + 2.85%

MCLR + 3.60%

MCLR + 4.35%

MCLR + 5.10%

MCLR + 6.35%

MCLR + 6.35%

MCLR + 6.10%

AB 5

MCLR + 3.15%

MCLR + 3.90%

MCLR + 4.90%

MCLR + 5.40%

MCLR + 6.75%

MCLR + 6.75%

MCLR + 6.50%

AB 6

MCLR + 3.90%

MCLR + 4.40%

MCLR + 5.40%

MCLR + 5.90%

MCLR + 7.10%

MCLR + 7.10%

MCLR + 7.10%

AB 7

MCLR + 4.4%

MCLR + 4.90%

MCLR + 5.90%

MCLR + 6.15%

MCLR + 7.10%

MCLR + 7.10%

MCLR + 7.10%

5.4.

5.

Financing to Doctors/ Medical Practitioners for clinic/ nursing home and other purpose
not covered under MSME Category: (MCLR is one year MCLR)
Security coverage
Existing
Revised
Loans secured 100% by Collateral security (Real
MCLR + 2.00%
MCLR +
Estate or Cash Collateral)
2.35%
Loans secured 75% by Collateral security (Real Estate
MCLR + 3.00%
MCLR +
or Cash Collateral)
3.75%
Loans secured below 75% by Collateral security (Real
MCLR + 3.50%
MCLR +
Estate or Cash Collateral)
4.35%
For Vehicles
MCLR + 3.00%
MCLR +
3.75%
Personal Loan to Doctors
MCLR+5.00%
MCLR+5.75%

5.5.

Unsecured Loan and Advances & any other Loans & Advances not specified above

1
2
3
4

Loan Limit
Facilities having maturity of less than
3 years
Interest Rate on Loans & Advances

Existing

Revised

MCLR+5.85%

MCLR+7.00%
Page 28

Facilities having maturity of 3 years or


more

MCLR + 6.00%

MCLR + 7.10%

Concession in such loans : CAC may allow relaxation upto applicable MCLR, HLCC ED upto
applicable MCLR + 3.00% and HLCC GM / FGMLCC upto One Year MCLR + 6.10%, considering
the business perspective and other parameters.
5.6. Interest for Other Non Priority Advance: ( MCLR means One Year MCLR)
S.
Parameters
Existing
Revised
No
1. Commercial Real Estates
Rating
ROI
Rating
ROI
above Rs. 10 Lacs
AB 1 to AB- MCLR+3.50% AB 1 to ABMCLR+4.00%
3
3
AB 4
MCLR+4.50%
AB 4
MCLR+5.25%
AB 5 to AB 7 MCLR+5.10% AB 5 to AB
MCLR+6.00%
7
2. Loan against shares to
MCLR+3.50%
MCLR+4.00%
individual
3. Loan against Shares to AB 1 to AB MCLR
+ AB 1 to AB MCLR + 4.50%
Corporate Stock Brokers
44.00%
4
4. Term Loan for construction Upto 2 lac
MCLR
+ Upto 2 lac
MCLR + 4.50%
of Banks Office/ Premises /
4.00%
Staff quarter
Above 2 lac
MCLR
+ Above 2 lac MCLR + 5.00%
4.50%
5. Loans
to
Intermediary Rating
Rate
of
Rating
Rate
of
Agencies including Housing
interest
interest
Intermediaries
AB 1 to MCLR+2.00%
AB 1 to AB MCLR+2.50%
AB 3
3
AB 4
MCLR+2.50%
AB 4
MCLR+3.25%
AB 5
MCLR+3.10%
AB 5
MCLR+4.00%
AB 6 & MCLR+4.10%
AB 6 & AB MCLR+5.25%
AB 7
7
6. DRI

4.00% (fixed)

7. Clean Overdraft/ TOD


MCLR+6%+2% (Existing) /MCLR +7.10%+2% (Revised)
8. Short Term Corporate As per Risk Rating with minimum of MCLR+4.85% (Existing
MCLR+4.00%)
Loan (STCL)
However, for the Project Loan under AB 5 category, the pricing
will be as per AB 4 Category.
9. Inter Bank Participation Market Driven
Certificate with Risk Sharing
Basis
Interest Rate on Loans & Advances

Page 29

5.7. Interest for Discounting of Bills backed by Prime Bank L/C (Both Demand/ Usance)
(MCLR means One Year MCLR)
S. No Parameters
Existing
Revised
1
Demand Bills
MCLR +1.00%
MCLR +1.30%
2
Usance Bills upto 90 days
MCLR +1.50%
MCLR +1.80%
3
Usance Bills above 91 days to 180 days
MCLR+2.00%
MCLR+2.30%
4
5

Usance Bills 181 days to 270 days


Usance Bills above 271 days to 365 days

MCLR + 2.00%
MCLR + 3.00%

MCLR + 2.30%
MCLR + 3.30%

Bills discounted against non prime banks LC

Discounting of Export Bills

As per regular As
per
regular
Working Capital
Working Capital
As per export credit rate based on tenure.

5.8. Relaxation in Interest Rate on Discounting of Bills under Prime Banks Letter of Credit
S.No

1
2

3
4

5.9.

Competent
Authority

Existing
Relaxation/
Concession
ZLCC
Upto applicable
AGM/DGM
MCLR
FGMLCC and Upto applicable
HLCCGM
MCLR
Applicable
MCLR +1%
HLCC ED
Upto applicable
MCLR
CAC & Above
Upto applicable
MCLR
HLCCGM and
above

Revised
Tenor
Relaxation/
Concession
Upto applicable With usance period upto 90 days
MCLR+0.30%
Upto applicable With Usance Period from 91 days and
MCLR +0.30%
upto 180 days
Applicable
With Usance Period from 181 days and
MCLR +1.30%
upto 270 days
Upto applicable With Usance Period upto 270 days
MCLR+0.30%
Upto applicable Any Usance Period permissible as per
MCLR
RBI Guidelines.
May Permit Interest rate upto applicable MCLR for Usance
period upto 90 days

Discounting of Bills under Non Prime Banks LC: As per Borrower Rating and as
applicable for other working capital limit.

5.10. Interest on Loans against Banks Liquid Security including FDR,


Value), RBI Relief Bonds and Central Govt Securities.
S. No Parameters
Existing
1
Loans against deposits (FDR/DDP/RD etc) of our 2% above deposit
Bank standing in the name of borrowers singly or rate
jointly with others maintaining stipulated margin
2
Loans against deposits (FDR/DDP/RD etc) of our 4% above deposit
Interest Rate on Loans & Advances

LIPs (Surrender
Revised
No Change

No Change
Page 30

Bank standing in the name of borrowers singly or


jointly with others from the date of erosion of
minimum margin till the date of regularization of
the account
Loans against third party deposits with our Bank
maintaining stipulated margin (For existing account
only)
Loans against third party deposits of our Bank from
the date of erosion of minimum margin till the date
of regularization of the account
In case of premature withdrawal of deposit (Interest
will be realized from the date of advance)

rate

No loan against third


party
deposit
permitted
No loan against third
party
deposit
permitted
MCLR+4% for loan
upto 2 lac
MCLR +6% for loan
above 2 lac

Term Loan/ Overdraft against LIP (Surrender MCLR+4.00%


Value)/ RBI Relief Bond/ Central Govt Securities

No loan against
third party deposit
permitted
No loan against
third party deposit
permitted
MCLR+4.30% for
loan upto 2 lac
MCLR +7.10%
for loan above 2
lac
MCLR+4.30%

5.11. Restructuring of Potentially Viable Accounts (MCLR means one year MCLR)
S. Parameters
Relaxation in Rate of interest
No
1
In case of accounts referred to CDR/BIFR/ Joint As per package
Lending Forum
2

In case of Micro & Small Industries as well as others

Working Capital

Interest Dues on
Cash Credit and
Term
Loan
(Including
proposed FITL)

Working Capital

Micro & Small Enterprises


Interest on working capital may be
charged at 1.50% below the
documented
rate.
Additional
working capital limits may also be
extended at the same rate, subject to
minimum
of
Base
Rate
(Existing)/MCLR (Revised).
No Interest may be charged on
funded interest. The FITL should be
repaid within a period of 3 5 years
from the date of commencement of
implementation of the rehabilitation
programme.
The rate of interest applicable may

Interest Rate on Loans & Advances

Other advances
Interest @ 1.00% below the
prevailing rate subject to minimum
of MCLR (Revised).

No Interest may be charged on


funded interest. The FITL should be
repaid within a period of 3 7 years
from the date of commencement of
implementation of the rehabilitation
programme.
Interest may be charged @ 1.50%
Page 31

Term Loan

Term Loan

be 2% below the documented rate in


all sick MSE units including tiny and
decentralized units, to be repaid
within a maximum period of 3-5
years.
The rate of interest on term loans
may be reduced from documented
rate, where considered necessary, by
not more than 3% per cent in the
case of tiny/ decentralized sector
units and not more than 2% for other
SSI units.

below the prevailing rate subject to


minimum of MCLR, to be repaid
within a maximum period of 3-7
years.
Concessions in the interest may be
given not more than 1% below the
prevailing rate subject to minimum
of MCLR.

5.12. Other Guidelines on Restructured Advances:


i.
The detailed guidelines as per Domestic Lending Policy will be adhered to.
ii.
In regard to the computation of Economic Sacrifice, the guidelines of RBI is as under:
The erosion in the fair value of the advance should be computed as the difference between the
fair value of the loan before and after restructuring. Fair value of the loan before restructuring
will be computed as the present value of the cash flows representing the interest at the existing
rate charged on the advance before restructuring and the principal, discounted at a rate equal to
the banks BPLR/ Base Rate/One year MCLR as on the date of restructuring plus appropriate
term premium and credit risk premium for the borrower category on the date of restructuring.
Fair value of the loan after restructuring will be computed as the present value of the cash flows
representing the interest at the rate charged on the advance on restructuring and the principal,
discounted at a rate equal to the Banks BPLR/ Base Rate/ One year MCLR on the date of
restructuring plus appropriate term premium and credit risk premium for the borrower category
on the date of restructuring.
iii. In case of CDR, JLF, Consortium/ Multiple Banking and BIFR cases, Bank may fall in line with
the CDR/ Lead Bank / Major lender with proper justification for deciding the rate of interest as
well as discounting factor.
Note: Authority for allowing Relaxation in rate of interest on Traditional advances are
prescribed in Paragraph 8.4 to 8.9 of Annexure H.

Interest Rate on Loans & Advances

Page 32

A n n e xu r e F
6.

Interest Rate structure for Retail Schemes

BR Means Base Rate, MCLR means One Year MCLR.


Sl.
Scheme
Existing
No
6.1. Rate of Interest In Housing Loan Scheme:
1. AAll bank Aashiana Scheme/ Housing Finance Scheme for NRI/PIO

Revised

Upto Rs.75 lac


Above Rs.75.00 lac upto Rs.300.00 lac
Above Rs.300.00 lac upto Rs.500.00 lac
Above Rs.500 Lac
2. BPremium Housing Finance Scheme for
HNI (for loan amount above Rs.5 crores )

MCLR
MCLR
MCLR+0.25%
MCLR +0.25%

MCLR+0.15%
MCLR+0.25%
MCLR+0.50%
MCLR +0.65%

MCLR+0.50%

MCLR+0.65%

3. CHousing Furnishing Scheme

MCLR + 2.00%

MCLR + 3.00%

4. DLoan for Application Money raised by


Housing Board/Development Authority
for
allotment
of
Residential
Plot/Flat/House

MCLR + 3.00% in MCLR + 4.00% in cases


cases where interest is where interest is to be
to be serviced on serviced on monthly
monthly basis.
basis.
MCLR + 2.50% in MCLR + 3.50% in cases
cases where interest for where interest for 6
6 months paid upfront. months paid upfront.
11% (Fixed) with provision for reset in 3 years

5.

All Bank Reverse Mortgage

6.

All Bank
Scheme

6.2.

Credit

Loyality

Benefit For Housing Loan


Borrowers- of
the
Bank- MCLR+1.00%
For Borrowers under
All Bank Property
SchemeMCLR+2.50%

Different Personal Loan Scheme


1. All Bank
Abhusan Scheme (For
Existing accounts)
2. .All Bank Saral Loan Scheme/
All Bank Saral 2 Loan Scheme
(Existing Accounts)
New Saral Loan Scheme

Interest Rate on Loans & Advances

For
Housing
Loan
Borrowers- of the BankMCLR+1.25%
For Borrowers under All
Bank Property SchemeMCLR+3.00%

MCLR+4.00%
(Scheme
has
discontinued.
MCLR + 5.50% (MCLR+5.00%)
MCLR+5.50% (MCLR +5.00%)

since

been

MCLR+4.50% (Revised) / MCLR+4% (Existing)


(0.50% rebate in interest rate is allowed if liquid
Page 33

collateral security (FDR / NSC / LIP / KVP) or


Equitable Mortgage of Land / Building for the
amount equal to the loan amount is offered.)
3. Personal Loan to Doctors
4. Personal Loan For Pensioners
5. Overdraft in Saving Bank Account
6. All Bank IPO/FPO Finance

MCLR+5.00%
(Existing)
Existing
MCLR + 3.00%
MCLR + 4.50%
MCLR + 3.50%

MCLR+5.00% (Revised)
Revised
MCLR + 3.50%
MCLR + 5.00%
MCLR + 4.50%

MCLR + 2.50%
MCLR + 3.00%
7. All Bank Home Appliance Finance
Scheme
MCLR + 4.00%
MCLR + 4.00%
8. Term
Loan/
Overdraft
against
NSC/KVP
6.3. Different Vehicle Finance Scheme
1. All Bank Dream Car Scheme
For New Vehicle
MCLR + 0.25%
MCLR + 0.50%
For Pre-owned vehicles
MCLR+ 0.75%
MCLR+ 1.50%
2. All Bank Mobike Scheme
MCLR + 3.00%
MCLR + 3.25%
Existing
Proposed
3. All Bank Fleet Finance Scheme AB- 1
MCLR+2.50%
MCLR+2.80%
(Loan amount of Rs.2.00 crore AB- 2
MCLR+2.50%
MCLR+2.85%
and above)
AB -3
MCLR+2.50%
MCLR+3.00%
AB -4
MCLR+3.50%
MCLR+4.15%
AB-5
MCLR+3.50%
MCLR+4.30%
AB- 6
MCLR+6.00%
MCLR+6.95%
AB-7
MCLR+6.00%
MCLR+6.95%
4. All Bank Commercial Vehicle
Micro
Small Enterprises
Scheme ( Loan amount upto Loan
amount
Enterpris
Rs.2.00 crore)
e
Upto
MCLR
MCLR
+
0.50%
Rs.0.50
(MCLR)
(MCLR+0.50% existing)
lacs
Above 0.50 MCLR+
MCLR + 1.50% (MCLR+
lacs
to 1.00%
1.50% existing)
Rs.2.00
(MCLR+
lacs
1.00%
existing)
Above
2 MCLR + MCLR
+
2.00%
lacs
to 1.50%
(MCLR+2.00% existing)
Rs.10 lacs (MCLR+
Interest Rate on Loans & Advances

Page 34

Above
Rs.10 lacs

1.50%
existing)
N/A

Existing
AB 1
AB 2
AB 3
AB 4
AB 5
AB 6
AB 7

6.4.
1.

Allahabad Bank Educational Loan Scheme


Education Loan Scheme
Existing
For IIM/IIT Students*
MCLR
(No
Concession)
Other premier Institutes *
MCLR+1.50%
Other
Recognized
colleges/
universities/ recognized by UGC/
Govt./AICTE /AIBMS/ICMR etc.
*(List of institute as per HO
Circular
No.
13950/Retail
Credit/2015-16/09
dated
03.10.2015
&
subsequent
guidelines)
For Abroad Study
Upto Rs. 4 Lacs
Above Rs. 4 lacs to Rs. 7.50 Lacs
Above Rs. 7.50 lacs

2.

Gyan Dipika

6.5.

6.6.

All Property Loan Scheme


All Bank Property Scheme

All Bank Rent Scheme


8All Bank Rent Scheme
.

Interest Rate on Loans & Advances

Revised

MCLR+2.00
%
MCLR+2.50
%
MCLR+3.00
%
MCLR+3.50
%
MCLR+5.50
%
MCLR+6.00
%
MCLR+6.00
%

MCLR+2.50
%
MCLR+2.50
%
MCLR+3.00
%
MCLR+3.00
%
MCLR+4.00
%
MCLR+5.65
%
MCLR+5.65
%

Revised
Other MCLR + 0.35%
MCLR + 1.85%

MCLR+2.00%

MCLR+2.00%

MCLR + 2.00%
MCLR + 2.00%
MCLR + 1.50%
BR+4.00%

MCLR + 2.00%
MCLR + 2.00%
MCLR + 1.85%
MCLR+4.50%

Existing
BR+5.50%

Revised
MCLR+5.50%

Existing
BR+4.00%

Revised
MCLR+4.00%
Page 35

6.7.

All Bank Trade Scheme


All Bank Trade Scheme
a) For Traders classified under As per MSE advances interest rates
Micro & Small Enterprises
b) For Traders not covered
under Micro and Small Rating
Interest Rate Interest
Rate
Enterprise
(Existing)
(Revised)
AB 1
MCLR+3.50%
MCLR+3.80%
AB 2
MCLR+3.50%
MCLR+3.80%
AB 3
MCLR+3.50%
MCLR+3.80%
AB 4
MCLR+3.50%
MCLR+3.80%
AB 5
MCLR+5.00%
MCLR+5.50%
AB 6
MCLR+5.00%
MCLR+5.95%
AB 7
MCLR+6.00%
MCLR+6.95%

6.8. All Bank Gold Loan Scheme


7. 1All Bank Gold Loan Scheme
0
.

For Agricultural purpose


Existing
Revised
Upto Rs.0.50 lacs
MCLR
MCLR
Above 0.50 lacs to 2 MCLR+1. MCLR+1.30%
lacs
00%
Above 2 lacs to 5 MCLR+2. MCLR+2.30%
lacs
00%
(Interest @7% shall be charged in case of KCC
issued for short term production against pledge of
Gold/Gold Jewellery and ornaments/Gold coins
specially minted and sold by banks
For Business purpose/ Consumption Purpose
Upto Rs.3.00 lac
MCLR+2. MCLR+2.60%
25%
Above 3 lacs to 25 MCLR+4. MCLR+4.25%
lacs
00%
For
consumption
maximum limit is
Rs.5.00 lac

6.9.
1.

Other Retail Scheme:


Scheme for Financing Vendors of
ATMs/ Cash Dispenser

Existing
AB 1 to AB 2- BR+2%
AB 3 to AB 5- BR+4%

Interest Rate on Loans & Advances

Revised
AB 1 to AB 2MCLR+2.50%
AB 3 to AB 5MCLR+4.50%
Page 36

2.

Tie up with BSNL for extending Car Loan upto 36 months- MCLR (Existing)
Car Loan above 36 months upto 84 monthsRetail Products to their employees
MCLR+0.25% (Existing)
Car Loan MCLR + 0.50% (Revised)
Saral Loan- MCLR+2.50% (Existing)/ MCLR+3.00%
(Revised)
Educational Loan
IIM, ISB - MCLR (Existing)/ MCLR +0.35% (Revised)
and subsequent guidelines
IIT & Premier Medical College*- MCLR + 1.00%
(Existing)/ MCLR+1.50% (Revised) and subsequent
guidelines
NIT/ Other colleges* - MCLR+2.00% (Existing) /
MCLR+2.00% (Revised) and subsequent guidelines.
Other institutions:
Loan upto Rs.4.00 lac- MCLR +2.50% (Existing)/
MCLR+2.00% (Revised).
Above Rs.4.00 lac and upto 7.50 lac- MCLR +2.50%
(Existing)/ MCLR+2.00% (Revised).
*(List of institute as per HO Circular No.
13950/Retail Credit/2015-16/09 dated 03.10.2015 &
subsequent guidelines)
Note: 0.50% rebate for girl students will be allowed.
1% concession will be allowed if interest is paid within
study period and moratorium.

Rebate of interest will be subject to the condition that


effective rate of interest is not below Base Rate
(Existing)/ MCLR (Revised).
MCLR + 1.50% (Existing)/ MCLR + 1.50% (Revised)

Skill Loan Scheme


*Note: Other guidelines as per the scheme
Note: Authority for allowing Relaxation in rate of interest on Retail Credit Schemes are prescribed in
Paragraph 8.10 of Annexure H
Note: Interest rate given in bracket are existing rate as per last guidelines.

Interest Rate on Loans & Advances

Page 37

A N N EX U R E- G
7. Interest Rate guidelines for STAFF LOANS
S. No.
1
2
3

4
5
6
7

Scheme

Existing/Revised
Housing Loan
8.00% per annum (Simple)
Staff Conveyance Loan
8.50% per annum (Simple)
Clean Overdraft
One year MCLR + 2.00%
(Floating)
10.50% (fixed)
Consumer Loan
One Year MCLR +2.00%
Loan for purchase of Computer
One Year MCLR+4.00%
Term Loan against own deposit (including retired 0.50% over deposit rate (interest
employee)
at half yearly rests)
Term Loan against NSC/LIP/KVP/RBI RELIEF One Year MCLR+1.00%
Bonds/Transferable unit of UTI
Motor Cycle Loan (Conveyance Loan)

Interest Rate on Loans & Advances

8.50% (simple)

Page 38

A N N EX U R E- H
8. RELAXATION & CONCESSION IN RATE OF INTEREST
8.1.

Procedure for allowing concession:


The delegated authority may allow reduction of interest / relaxations on advances/ waiver of
additional (penal) interest after fully analyzing overall income generated/ to be generated from
the account and also taking into account of following factors:
(i)
Banks Business Strategy, market competition, loan liquidity, embedded options etc.
(ii) Satisfactory conduct, proper security coverage and operation of the borrowers account.
(iii) In case of new borrowers, the reputation and track record of the applicant shall be kept in view
along with all other important risk factors such as financial viability, stake of the promoters,
past track record of its group company etc.
(iv) The discretionary powers for reduction in rate of interest shall be exercised selectively and
judiciously.
(v) The reduction in rate of interest shall be reviewed periodically keeping in view all the factors
prevailing at the time of renewal / review.
(vi) Consortium / multiple banking rates are also to be kept in view while allowing such
relaxations. The Branch / Zone must comment about rate of interest charged by other banks in
case of facilities sanctioned under consortium / multiple financing arrangement.
(vii) A comment about the interest charged to other group accounts should also be indicated
separately.
(viii) The decision regarding reduction in interest rate to any borrower should also be recorded in
the relative process note along with proper justifications.
(ix) Before permitting/recommending reduction in rate of interest on case to case basis, the yield
on advances of the Branch and Zone as a whole should also be taken into account.
(x) ZLCC AGM and above will be authorized to allow concession in ROI only in the accounts
sanctioned under their authority or sanctioned by Branches/ offices under their jurisdiction.
(xi) Wherever concessions have been permitted, these may be allowed on the basis of business
strategy and depending on risk profile of the customer. Any decision on regard to change in
spread on account of change in credit risk profile review of the customer.
(xii) While permitting concessions/ relaxations in interest rate, following clause must be
incorporated in the sanction letter to the borrower i.e. Competent authority has permitted
concessions in interest rates to the extent of ..% with the stipulation that effective minimum
rate would be %.
(xiii) Concessions will not be allowed as a matter of routine. These may be allowed purely as
business consideration, with rationale for the same.
(xiv) The authority for allowing concession has been prescribed as under:
*CAC is empowered to sanction upto Base Rate (Existing)/ Applicable MCLR (Revised)
and below Base Rate (Existing)/ Applicable MCLR (Revised) where exemptions are
allowed.
Other Authorities is empowered to allow concession as specified in the note.

Interest Rate on Loans & Advances

Page 39

8.2. Relaxations on MSME advances : (Reference Annexure B)


S.No
Competent
Rating
Concession/ Relaxation
Authority
Category
1. ZLCC
AGM/ AB-1 to AB-4 1.00% subject to minimum MCLR + 2.50% (Revised)
DGM
2. FGMLCC
AB-1 to AB-4 Upto MCLR + 2.00% (Revised)
3. HLCC GM

AB-1 to AB-4

Upto MCLR + 1.75% (Revised)

4. HLCC ED

AB-1 to AB-5

Applicable MCLR (Revised)


In case of MCBOD sanction, maximum concession of
2.25% from sanction rate subject to minimum
Applicable MCLR (Revised)

5. CAC

Any category

Upto Base Rate (Existing)/ Applicable MCLR (Revised),


even in MCBOD cases

8.3.

Concessions/ Relaxation for Agriculture advances: (Reference Annexure-C)

S.No Competent
Relaxation/ Concession
Authority
1
ZLCC AGM/ Interest rate may be reduced by 0.50% in case of cold storage finance
DGM
where collateral is more than 100% by ZLCC and above.
2

FGM-LCC

HLCC GM

HLCC ED

CAC

For loan limit above Rs.2.00 lac and up to Rs 25.00 lac: 1% relaxation
subject to minimum MCLR+1% (Revised)
For loan limit above Rs.25.00 lac: For Internal Rating AB-1 to AB-4 or
External Rating BBB and above, 1% relaxation subject to minimum
MCLR+1.50%
For loan limit above Rs.2.00 lac and up to Rs 25.00 lac: 1.25% relaxation
subject to minimum MCLR+1.00% (Revised)
For loan limit above Rs.25.00 lac: For Internal Rating AB-1 to AB-4 or
External Rating BBB and above, 1.25% relaxation subject to minimum
MCLR+1.00 %
Applicable MCLR+1% (Revised)
Upto Base Rate (Existing)/ Applicable MCLR (Revised) including in
MCBOD cases.

Interest Rate on Loans & Advances

Page 40

Relaxation/ Concession in General Advances (Reference Annexure D & E)


(MCLR means One year MCLR)
8.4.

Financing to Doctors/ Medical Practitioners for clinics /nursing home etc., the
concessions at various levels subject to minimum of Base Rate (Existing)/ MCLR
(Revised), will be as under: (Other than MSME)
S.No:
Authority
Concession/ Relaxation
1.
ZLCC/ DGM
Upto 0.75%
2.
FGMLCC
Upto 1.25%
3.
HLCCGM
Upto 1.50%
4.
HLCC ED
Upto 2.25 %
5.
CAC
Applicable MCLR (Revised)

8.5.

Concessions in Rate of Interests under NBFC and Capital Market Sector:


Authority
Maximum Concession
CAC and Above (HLCC ED in absence of Up to the Base Rate (Existing)/ Applicable
MCLR (Revised) on merit of the case under these
CMD)
categories of advances.
NIL. However, in case loan is backed by 100%
Other Authorities
liquid security, the authority may consider
concession in interest rate not below
MCLR+2.30% (Revised)

8.6. Relaxations in rate of interest financed against FDR/DDP:


S. No. Competent
Maximum relaxation in rate of interest
Authority
1
CAC
Upto Deposit Rate.
2

HLCC ED

Upto Deposit rate

HLCC GM

Deposit Rate plus 0.75%.

FGMLCC

Deposit Rate plus 1%.

ZLCC AGM/ DGM

Upto Deposit rate plus 1.50% provided 10% margin is held.

For Term Loan/ Overdraft against LIP (Surrender value), RBI Relief Bonds, Central Govt
Securities
1
ZLCC
Upto 0.50% concession from applicable rate not below MCLR,
subject to availability of margin of 25%
2
FGMLCC
Upto 1.00% concession from applicable rate subject to availability
of margin of 10% or more

Interest Rate on Loans & Advances

Page 41

HLCCGM

HLCCED

CAC

8.7.

Upto 1.25% concession from applicable rate subject to availability


of margin of 10% or more
Upto 1.50% concession from applicable rate subject to availability
of margin of 5% or more
Applicable MCLR (Revised)

a) Relaxations for loans to CRE:

S.No
1

Rating

Competent Authority
ZLCC AGM / DGM

Relaxations

NA
AB 1 to AB 3

FGMLCC

3
HLCC GM

HLCC ED

CAC and above

AB-4 and AB5


AB 1 to AB 3
AB-4 and AB5
AB-1 to AB-6
Any Ratings

No Concession
1% concession subject to Minimum of
MCLR+3.00% (Revised)
1.00% concession, subject to minimum
of MCLR+4.00% (Revised)
1.25% concession subject to Minimum
of MCLR+3.00% (Revised)
1.25% concession, subject to minimum
of MCLR+4.00% (Revised)
2% concession subject to minimum of
Applicable MCLR+2.00% (Revised)
upto Applicable MCLR (Revised)

b) Relaxations for loans to Intermediary agencies including Housing Intermediaries


S.No

Competent Authority

Relaxations

ZLCC AGM / DGM

No Concession

FGMLCC

No Concession

HLCC GM

Maximum 0.50%, but not below Applicable MCLR

HLCC ED

Maximum 1.50%, but not below Applicable MCLR

CAC and above

8.8.

Upto Applicable MCLR (Revised)

Concession in Rate of interest under Short Term Corporate Loan:

Competent Authority
Relaxations
HLCC ED
Upto Applicable MCLR+3.50% (Revised)
CAC (HLCC ED in absence of CMD) and Upto Applicable MCLR (Revised)
above

Interest Rate on Loans & Advances

Page 42

8.9.

Relaxation in rate of interest on loans for all category of advances not covered above:
a. Based on Internal Rating : (External Rating not available):

Sl. No
1
2

Competent Loan limit & Rating Concession/ Relaxation


Authority
category
ZLCC
AB-1 to AB-4
Concession by 0.50%. Interest should not
AGM/ DGM
fall below MCLR+3.30% (Revised)
FGML CC

AB-1 to AB-3
AB- 4 & AB 5

HLCC GM

AB-1 to AB-3
AB- 4 & AB 5

HLCC ED

AB 1 to AB 5

CAC

Any category

Concession by 1.50% but interest should


not fall below MCLR+2.80% (Revised)
Concession by 2.00% but interest should
not fall below MCLR+3.30% (Revised)
Concession by 1.75% but interest should
not fall below MCLR+2.50% (Revised)
Concession by 2.25% but interest should
not fall below MCLR+3.00% (Revised)
Not below Applicable MCLR + 2.00%. In
MCBOD sanctioned cases, Upto 2.00%
subject to minimum of Applicable MCLR
(Revised).
Upto Applicable MCLR (Revised) even
in MCBOD sanctioned cases.

a. Based on both external and Internal Rating :


Sl. No
1
2

Competent
Authority
ZLCC
AGM/ DGM

Loan limit & Rating Concession/ Relaxation


category
AB 1 to AB 3 with Concession by 0.50%. Interest should not
External Rating AAA to A fall below MCLR+2.80% (Revised)

FGML CC

AB-1 to AB-3 with Concession by 1.00%. Interest should not


External Rating AAA to A fall below MCLR+2.30% (Revised)

HLCC GM

HLCC ED

AB- 4 with external rating


of BBB
AB-1 to AB-3 with
External Rating AAA to A
AB- 4 with external rating
of BBB
AB 1 to AB 5 with
external
rating
of
AAA/AA/A/BBB/BB

Interest Rate on Loans & Advances

Concession by 1.00%. Interest should not


fall below MCLR+3.30% (Revised)
Concession by 1.25%. Interest should not
fall below MCLR+2.00% (Revised)
Concession by 1.25%. Interest should not
fall below MCLR+3.00% (Revised)
Concession by 2%, interest should not fall
below
Applicable
MCLR+2.50%
(Revised).
In MCBOD sanctioned cases, Upto
2.00% subject to minimum of Applicable
Page 43

CAC

Any category

MCLR (Revised).
Upto Applicable MCLR (Revised) even
In MCBOD sanctioned cases.

Note: ZLCC and FGMLCC shall report the reductions permitted by them with justifications,
during the month, in the monthly Discretionary Authority statement to the next higher
authority, as per the extant guidelines.

8.10. Relaxation under Retail Credit Scheme: (Reference Annexure- F):


S.No Scheme/Rating Grade
Competent
Relaxation
Authority
1. All Bank Property Scheme FGMLCC
Concession upto 1.50%

2.

All Bank Rent Scheme

HLCC GM

Concession upto 2.00%

HLCC ED

Concession upto 3.00% but not below


Applicable MCLR+2.80% (Revised)

CAC

Upto Applicable MCLR (Revised)

ZLCC

Concession upto 0.50% minimum of


MCLR+3.50% (Revised)
Concession of 1.50% , but not below
MCLR+2.50% (Revised)
Concession upto 2.00% but not below
MCLR+2.00% (Revised)
Concession upto 2.50% but not below
Applicable MCLR+1.50% (Revised)
Upto Applicable MCLR (Revised)

FGMLCC
HLCC GM
HLCC ED
CAC
3.

4.

5.

All Bank New Saral FGMLCC/


Scheme
(No concession in old
HLCC GM
Scheme)

HLCC ED & above

Concession upto 1.25% subject to Minimum


of MCLR+2.75% (Revised)
Upto Applicable MCLR (Revised)
Concession upto 1% subject to Minimum of
MCLR+2.00% (Revised)
Concession upto 1.25% subject to Minimum
of MCLR+1.75% (Revised)
Upto Applicable MCLR (Revised)

FGMLCC

Not below MCLR+2.50% (Revised)

HLCC GM

Not below MCLR+2.00% (Revised)

HLCC ED & above


Personal Loan to Doctors/ FGMLCC
Personal
Loan
to
Pensioners
HLCC GM

All Bank Trade Scheme

Interest Rate on Loans & Advances

Concession upto 1% subject to Minimum of


MCLR+3.00% (Revised)

Page 44

6.

Loan against NSC/KVP

HLCC ED

Upto Applicable MCLR (Revised)

CAC

Upto Applicable MCLR (Revised)

ZLCC

Upto 0.50% concession from applicable rate


not below MCLR (Revised), subject to
availability of margin of 25%
Upto 1.00% concession from applicable rate
subject to availability of margin of 10% or
more

FGMLCC

HLCCGM

HLCCED

CAC
7.

All Bank Dream Car

FGM LCC

8.
9.

AB Housing Loan Scheme CAC


AB Housing Furnishing HLCCGM
Scheme
HLCCED and above
10. AB Home Appliances HLCCGM
Scheme
HLCCED and above
11. Educational Loan Scheme

HLCCGM

12. All Bank Mobike Scheme

HLCC ED and above


FGMLCC
HLCCGM
HLCC ED

CAC
13. All other Schemes
in CAC
Retail Credit, MSME &
Other
Priority/
Non
Priority
Sector,
not
specified above
Interest Rate on Loans & Advances

Upto 1.25% concession from applicable rate


subject to availability of margin of 10% or
more
Upto 1.50% concession from applicable rate
subject to availability of margin of 5% or
more
Upto Base Rate (Existing)/ Applicable
MCLR (Revised) and nil margin
Concession Upto 0.25% but not below one
year MCLR
Upto Applicable MCLR (Revised)
1% concession subject to minimum of
Applicable MCLR+1.00% (Revised)
Upto Applicable MCLR (Revised)
0.50% concession subject to minimum of
MCLR+2.00% (Revised)
Upto Applicable MCLR (Revised)
1% Concession, minimum
MCLR
(Revised)
Upto Applicable MCLR (Revised)
1% concession upto
MCLR+2.00%
(Revised)
1.25% concession upto
MCLR+1.75%
(Revised)
2%
concession
upto
Applicable
MCLR+1.00% (Revised)
Upto Applicable MCLR (Revised)
Concession upto
Applicable MCLR
(Revised)

Page 45

8.11. Waiver /relaxation in Additional/ Penal Interest:


The sanctioning authority will seek approval from next higher authority for waiver/relaxation in
Additional/Penal interest along with justification. This is not applicable for HLCCGM and above.

COMPETANT AUTHORITY
CAC/ HLCC-ED (in absence of CMD)
HLCC ED
FGMLCC/HLCC GM
ZLCC/DGM

LOANS & ADVANCES SANCTIONED BY


DELEGATEE(S)
Up to loan sanctioned by CAC/ MCBOD
Up to loan sanctioned by FGMLCC/HLCC GM
Up to loan sanctioned by ZLCC/DGM/ Branches.
Up to loan sanctioned by Branches under their
Jurisdiction

8.12. CAC is empowered to waive/reduction in Switchover fees in case existing Term Loan
linked with Base Rate and opt for MCLR linked rate.
8.13. Others:
a) The BH/ ZLCC/FGMLCC may permit the eligible maximum concessions in interest rate for
those borrowal accounts, where sanction is made by the Branches/ Zones within their purview
and also upto their own sanctioning powers.
b) FGMO/ZO/Branch should invariably put on record the rationale/ justification for permitting/
recommending any reduction in rate of interest on case to case basis.
c) The FGMLCC/ HLCC GM/HLCC ED/CAC who are involved in the loan sanctioning process
may permit concessions in the interest rate for loan up to their respective sanctioning powers.
d) The CAC / HLCC ED in absence of CMD may permit concessions in the accounts sanctioned
by the MCBOD, however the same will be reported to the MCBOD in subsequent meeting.
The MCBOD may also permit concessions in the interest rate upto Base Rate (Existing)/
MCLR (Revised) based on suitable justification on the same.
e) The concessions should not be perceived as the main or only strategy to attract / retain
business. The concessions/ relaxations may be passed on to the borrower in order to
effectively meet competitive pressures with minimum loss of income after fully satisfied
about the validity of reasons offered by the Borrowers/ Branches. However, in all such cases
where concessions/ relaxations are permitted, the Risk Grading and the pricing should be
indicated separately.
f) The Borrower enjoying any other benefits of interest rate reduction like festival bonanza etc
will not be eligible for further reduction in rate of interest.
g) The rate of interest applicable for proposals under Govt. Sponsored Schemes like PMRY,
SGSY etc and other schematic loans under Agriculture and MSME sector will be charged
without allowing any reduction.
h) In case of MSME advances, if the Branches are unable to assess original investment criteria, a
certificate with regard to investment in plant and machinery / equipment should be obtained
from a Chartered Accountant.

Interest Rate on Loans & Advances

Page 46

i) If any concessions or authority to allow such concessions is mentioned in any specific scheme
of the Bank, the same will be followed for allowing concessions under the said scheme.
j) The concession /relaxations/ deviations granted by higher authorities will be allowed by
sanctioning authority on next review/renewal and there is no need to seek concession
/relaxations/ deviations subsequently, provided there is no change in Risk Rating.
k) A letter of such revision / reduction in interest rate in case of existing borrowers stipulating all
the terms of interest rate revision/reduction should be given to borrowers and their
acknowledgement/acceptance will be obtained and held with the security document.
l) Where concessions are extended to customer in rate of interest & if he/she/they does/do not
avail the facility at this rate within two months of the sanction or from the scheduled date of
disbursement, the concessions in the rate of interest may be reviewed / withdrawn by the
sanctioning authority considering the prevailing interest rate scenario, liquidity position of the
Bank/ Market etc. While accepting any proposal from the borrower for reduction of interest
rate, the above terms must be communicated to the borrower through the sanction letter.
m) Concurrent auditors/ Inspecting officials will check the cases of concessions in Rates of
Interest at Branch level and ensure that the same have been approved by the appropriate
authority and charged as per guidelines.

Interest Rate on Loans & Advances

Page 47

A N N EX U R E- I
9. Miscellaneous Issues on rate of interest:
9.1. General Guidelines:a) Construction Contractors - The rate of interest as applicable to the category of advance of the
borrower at the time of availing the loan shall be applicable.
b) Open Term Loan to existing units of the bank/other banks - The rate of interest as applicable
to the category of advance of the borrower at the time of availing the loan shall be applicable.
c) Reset clause must invariably be incorporated in all the sanctions viz loans sanctioned at fixed
rate of interest or loan sanctioned on floating rate of interest aiming to hedge interest rate risk
arising out of change of any regulatory conditions, market changes etc.
d) Procedure for resetting Interest Rate:

The re-set clause is to be exercised at the end of re-set period.

The condition of reset clause will invariably be part of sanction letter. The reset may be
subject to other external bench marks like SBAR, LIBOR, G-Sec as per practice or mutually
agreed terms.

The Branch will review the position well in advance.

e) In case of Devolvement of L/C or invocation of Bank Guarantee, interest will be charged @


MCLR+7.10% on the amount so devolved or invoked for the period of default.
f) In case of sanction of Adhoc limit, additional interest of 2.00% over and above the rate
stipulated for regular limit will be stipulated for the Adhoc portion only (Exception export Credit).
For TOD, the rate of interest will be MCLR+7.10%+2%.
g) The applicable rate of interest (fixed/floating/reset), reset clause as well as the foreclosure
charges (wherever applicable) should be clearly and correctly stipulated in the loan sanction
communication to the borrower as well as in the loan documents.
h) The Revised rate will be applicable to all future loans and advances and in case of existing
working capital facility, the revised rate of interest based on risk rating will be considered while
reviewing/ renewing the facility.

Interest Rate on Loans & Advances

Page 48

APPENDIX-I
An Illustrative list of Intermediary Agencies
1. State sponsored organizations for on-lending to weaker sections. Weaker sections
include
i) Small and marginal farmers with landholdings of 5 acres and less, and landless labourers, tenant
farmers and share-croppers;
ii) Artisans, village and cottage industries where individual credit requirements do not exceed Rs.
50,000/-;
iii) Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY);
iv) Scheduled Castes and Scheduled Tribes;
v) Beneficiaries of Differential Rate of Interest (DRI) scheme;
vi) Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY);
vii) Beneficiaries under scheme of Liberation and Rehabilitation of Scavengers (SLRS);
viii) Advances to Self-Help Groups (SHGs);
ix) Loans to distressed poor to repay their debt to informal sector, against appropriate collateral or
group security; Loans granted under (i) to (viii) above to persons from minority communities as may
be notified by Government of India from time to time. In states, where one of the minority
communities notified is, in fact, in majority, item (ix) will cover only the other notified minorities.
These States/Union Territories are Jammu and Kashmir, Punjab, Sikkim, Mizoram, Nagaland and
Lakshadweep.

Distributors of agricultural inputs / implements.

State Financial Corporations (SFCs) / State Industrial Development Corporations (SIDCs) to


the extent they provide credit to weaker sections.

National Small Industries Corporation (NSIC).

Khadi and Village Industries Commission (KVIC).

Agencies involved in assisting the decentralized sector.

State sponsored organizations for on-lending to the weaker sections.

Housing and Urban Development Corporation Ltd. (HUDCO).

Housing Finance Companies approved by National Housing Bank (NHB) for refinance.

State sponsored organizations for SCs / STs (for purchase and supply of inputs to and/or
marketing of output of the beneficiaries of these organizations).
Micro Finance Institutions / Non-Government Organizations (NGOs) on-lending to SHGs.

Interest Rate on Loans & Advances

Page 49

APPENDIX-II
Realization of Additional Interest/ Penal Interest
Sl No
Parameters
1

6
7
8
9

Non submission of review/ renewal proposals of working capital facilities:


Where the borrower has submitted the complete proposal for renewal per
due date, additional (penal) interest will not be charged. The additional
rate is applicable if the renewal /review proposal is not submitted by the
borrowers within 30 days from the due date. In case of non-submission,
period for additional interest will be reckoned from the due date (i.e. on
expiry of one year from the date of issue of last sanction letter to the
borrower based on full review.)
Non-Submission of Stock Statements:
The period for which additional (penal) rate of interest should be
applicable, is to be reckoned from the due date of submission till actual
receipt, on the total working capital limit outstanding. A grace period of 7
days or the time limit agreed is admissible. Additional interest will be
charged from 8th day or period as agreed from due date till date of
submission.
Non-Submission of QIS-II & III (for Limit of Rs.10.00 Crore & above)
The period for which additional (penal) rate of interest should be
applicable, is to be reckoned from due date of submission till actual receipt
on the working capital limit outstanding. The Stipulated period for
submission of QIS is as:1. FORM:II: To be submitted within six weeks after closing of the quarter.
2. FORM:III: To be submitted on a half yearly basis within two months
from the close of each half year
Default in payment of monthly/Quarterly or periodical installment for
Term Loan. Additional interest in such cases will be reckoned from the due
date of installment and for the amount of default.
Default in payment of monthly/Quarterly or periodical interest. Additional
interest is to be charged, if interest is not paid within 7 days of end of the
month/ quarter/half year/year (or as per stipulation) for the entire period of
default including grace period.
Adhoc Limits (Other than Export Credit) not paid on the due date or within
the due date permitted for the entire period of default
Non-payment of dishonored Bills for entire overdue period
Bills remaining overdue for more than 7 days for entire overdue period
In case of outstanding balance in C/C, O/D account remaining in excess of
sanction limit or Drawing power for more than 7 days. Additional Interest
will be charged for overdrawn amount only and for the period from date of
such overdrawing till date of regularization

Interest Rate on Loans & Advances

Additional
interest
2%

2%

2%

2%

2%

2%
2%
2%
2%

Page 50

Non-Compliance of terms and conditions of sanction


2%
If Corporate/ PSU Borrower is not rated by External Credit Rating Agency 1%
within subsequent quarter of sanction or renewals of the credit facility an
additional Interest will be charged for the period from date of sanction/
renewal till date of rating.
Commitment Charge on the unutilized portion of the working capital limit 2%
12
subject to tolerance level of 15% of such limits applicable for funded
Credit limit of Rs.1.00 Cr and above. The Exemption from the purview of
commitment Charges are given below.
Exempti 1. Drawing in excess of operative limit but within sanctioned limit.
2. Working Capital Limit sanctioned to Sick/Weak units.
on(for
3. Limit sanctioned for Export Credit as well as against export incentive.
Sl
4. Inland Bill limits extended by way of bill purchase/ discount or
no.12)
overdraft/ Cash Credit /Sub-limit against bill for collection.
5. Credit limits sanctioned to Commercial Banks, Financial Institutions and
Co-operative Banks including Land development Banks.
6. In case of consortium advance as per decision of the consortium.
(The operative limit as allocated by lead bank will be considered as
operative limit or in sole banking the proposed utilization level as
confirmed by the borrower.)
10
11

Interest Rate on Loans & Advances

Page 51

APPENDIX III
Format for Proposals for interest rate reduction in the account.
Zone:
Branch :
Account :
Whether existing or new connection :
Risk Grading :
Previous
Financial Risk
Management Risk
Business Risk
Activity/Industry Risk
Overall
External Rating:, if any:
Name of Rating Date of finalization
Agency
external rating

Present

Remarks

of Long
Term Short
Rating
Rating

Term Valid
upto

A. Present Proposal :
To consider reduction in rate of interest.
Facility

Interest as per
Interest rate
guidelines

Sanctioned
rate of interest

Proposed Rate
of interest

No of times rate of
interest reduced
excluding present
claim

B. Borrower Profile :
1. Name of the Account
2. Business / Activity
3. Borrowing since
4. Asset Classification
5. Lending Arrangement
6. If consortium, Lead Bank & our % of share
C. Facilities sanctioned :
Last sanction/Review
Details of Limits from our Bank :
Sr. Facility
Interest Rate on Loans & Advances

: dated
(Rs/Lacs)
Sanctioned Limit

Outstanding as on
Page 52

no
a.
b.
c.

Packing Credit
FBP/FBN
Fresh Term Loan

D. Security :
Particulars

Value &
Date
(Rs./lac)

Primary :Collateral:-

TOTAL
E. Position Of account:a. In case of Working Capital:Particulars
Value of Stock

Margin

b. In case of term loan:Particulars


Proposed/ Remaining repayment Period

Outstanding

In case of take over or existing


account repayment position
with the bank.

F. Conduct of the account.


Servicing of Interest
Payment of Term Loan installments
Overall Conduct of the account
Overall conduct of group accounts, if any
Whether the account was PNPA since last one
year

G. Rectification of Inspection Irregularities, if any:I. ) Internal Inspection Irregularities


Rectification

Interest Rate on Loans & Advances

Page 53

II.) RBIs AFI Irregularities


Yield on Advances of the Zone
Yield on Advances of the MCLRanch

Rectification

H. Justification for reduction in rate of interest :


I. Recommendation :
Signature
Name & Designation

Interest Rate on Loans & Advances

Page 54

Appendix IV
Key Fact Statement: (to be included in sanction
a) Name of the Customer:
b) Nature of the Loan:
c) Details of Credit Facilities:
Sl No
1.

Particulars
Facility

Amount

Total
2.
3.
4.

Loan Term
Interest Type
Interest Chargeable

5.
6.

Date of reset of interest


Mode of communication of
changes in interest rate
Fees payable
On application (All types of
fees to be specified)
During the tenor of the loan
(All types of fees to be
specified)
On Foreclosure (All types of
fees to be specified)
Fee Refundable if loan is not
sanctioned/ disbursed
Conversion
charges
for
switching over from floating
rate to fixed rate and vice
versa.
Penalty for delayed payments
Penalty for non compliance of
terms and/or non submission
of requisite statements, review

7.
8.
9.

10.
11.
12.

13.
14.

Interest Rate on Loans & Advances

Fixed Rate/ Floating Rate


Fixed Rate
Floating Rate
Base Rate (Existing)/ Base Rate (Existing)/
MCLR (Revised)+
MCLR (Revised)+

Page 55

15.
16.

17.

papers, if any,
EMI / Installment payable
Details of securities
Primary Security
Collateral Security
Guarantee
Date of documents
Date of registration of charge
with CERSAI/ ROC as
applicable
Date on which annual
outstanding balance statement
will be issued

Signature of Authorized Officials of the Branch

Interest Rate on Loans & Advances

Page 56

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