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BARODA LOAN TO PENSIONERS

‘Baroda Loan to Pensioners’ was launched in September, 2000 for catering to the
needs of retired employees and for meeting changing needs of the target group.
The product was modified from time to time. On realignment of Retail Loan
products, w.e.f. 01.04.09, Loan to Pensioners is merged with ‘Baroda Personal Loan’.

However, w.e.f. 01.04.2015, to widen its scope and make it more competitive, Bank
has modified the parameters of loan to pensioners including increase in loan limit
and reduction on rate of interest. Accordingly, w.e.f. 01.04.2015, Loan to Pensioners to
be opened/ reported separately as ‘Baroda Loan to Pensioners’ in separate
scheme code.

With the modified features, our branches will find ‘Baroda Loan to Pensioners’ as
highly competitive and attractive product in respect of all the major parameters
rate of interest vis a vis similar products of Peer Banks. We are sure that branches will
make all out efforts to increase this safe and remunerative advance which
eventually will help in increasing healthy retail lending portfolio.

‘Baroda Loan to Pensioners’ – Product Profile

Purpose For any purpose other than speculation.


Target Group  Regular Pensioners, Family Pensioners
 Retired Employees of Bank of Baroda/ their Family
pensioners
Eligible Borrowers  Pensioners/ family pensioners drawing pension through
our Bank’s branches.

 Pensioners who are getting their pension disbursed


through Treasury/DPDO (Defence Pension Disbursing
Office) directly to the credit of their savings accounts
with our branches.

 Pensioners/ Family Pensioners of our Bank.

Family Pensioner: Spouse authorised to receive pension


after the death of the pensioner.

Pensioner should be drawing pension through the branch


for at least last -3- months and his account should have
been conducted satisfactorily. i.e., no return of cheques
for financial reasons.

Age Minimum: 21 Years


Maximum: 75 years
Loan Limit 18 times of monthly pension with a ceiling of:

Regular Pensioners:
For age upto 70 years : Rs.8.00 Lacs
For age above 70 years: Rs.5.00 Lacs

For Family pensioner:


For age upto 70 years : Rs.3.00 Lacs
For age above 70 years : Rs.1.50 Lacs

Total monthly deductions including proposed EMI and EMIs


of existing loans (if any) should not exceed 60% of monthly
pension.

Repayment Period Regular Pensioners/Family Pensioners:

For age upto 70 years : 60 months


For age above 70 years : 36 months

Rate of Interest Effective MCLR + 2.00%

For Retired Employees of Bank of Baroda/ their Family


pensioners: Effective MCLR.

Penal interest Penal interest @2% shall be levied on overdue amount

Penalty for Prepayment --NIL—


Unified Processing Pensioners / Family Pensioners of our Bank : Nil
Charges Others : Rs.1,000/-
Security Documents 1. DP Note
2. Letter of installment with Acceleration clause
3. Declaration cum Undertaking cum Authority
4. Authority letter to recover monthly installment from
pension account - Annexure- 9(a)
5. Undertaking from Legal heirs to pay banks dues in the
event of death or default by the pensioner (Not to be
obtained if wife is alive or personal guarantee of
person nominated to receive family pension is
obtained as a condition of the sanction) – Annexure 9
(b)
6. Letter from the Pensioner undertaking not to transfer
the pension payment, during the currency of the loan,
to any other branch of our Bank/ other Bank without
prior written consent of the Branch – Annexure 9(c)
7. Personal guarantee of wife, if alive, or personal
guarantee of person nominated to receive family
pension (in case the nominee is a minor, guarantee of
the guardian of the minor is to be obtained)
8. Assignment of existing Life Insurance Policy, if available
(i.e., it is not a precondition for sanction. Branches
should endeavor to obtain Assignment of LIC Policy, if
the applicant is already having Life Insurance Cover)

Documents Required to 1. Application form as per Annexure- 8


be submitted by 2. Passport Size Photograph
applicants 3. Identity proof
4. Residence /Address Proof
5. Details of Pension /PPO No. etc.

Risk rating Credit rating will be done as per existing guidelines under
Clean Loan Rating Model and Loan shall not be extended
to the borrowers getting scores below cut-off mark.

Cut off Score is 30 & Investment Grade is CL 7 & above.


(Credit rating sheet is attached as Annexure-16)

Other Conditions  Monthly installments to be recovered from the pension


paid by the branch every month on the date of
payment of pension without fail.
 Proper noting is to be made in the borrower’s pension
file regarding granting of the loan to ensure that the
pension payment is not transferred to any other
branch/bank during the currency of the loan.
 CIBIL data in respect of applicant should be verified.
 Branches to endeavor to obtain Assignment of LIC
policy, if the applicant is already having Life
Insurance Cover.
Lending Powers DLPs of Clean Loans shall be exercised by the Sanctioning
Authority.
Powers of Deviation Financial/ non-Financial Deviations/ Concessions in respect
of scheme parameters/ guidelines may be considered as
per Annexure- 18. (in terms of Circular No.BCC:BR:106/22
dated 21.01.2014 as mentioned under Other Retail Loans)

Letter to Pensioners Branches can send letter to those pensioners who satisfy
basic criteria of loan to pensioners under Personal Loan
scheme.

A draft Pre-approval letters is given in Annexure- 9 (d)


which may be sent to the pensioners after filling up the
necessary information in it.

Scheme Codes Finacle: LA147 Ascrom: 63