CIR. NO.

:: 571/2014
INDEX :: ADV:: 249
DATE :: 13.10.2014
CREDIT POLICY SECTION
AGIZ
RISK MANAGEMENT WING
HEAD OFFICE : BANGALORE-560002

SUB: Car loan scheme to employees of our Bank Workmen & Officer employees
- Modification in scheme guidelines

SYNOPSIS

 Probationary officers (Scale-I and above) with a minimum of 6 months of

continuous service are eligible to avail the loan under the scheme.

 The Rate of interest is charged at Base rate during probationary period under the
scheme.

The scheme of extending loans to officer and workmen employees for purchase of
motor car was formulated with the orders of the Board and communicated to
branches/ offices vide Cir. No.175/2003 dated 07.08.2003. Modifications regarding
eligibility, ROI etc., were effected to the scheme and communicated to branches/
offices from time to time.

Board of Directors have now permitted to extend the scheme to probationary officers
also. Accordingly, Probationary officers (Scale-I and above) with a minimum of 6
months of continuous service are eligible to avail the loan under the scheme.

Under the scheme, during the probationary period, the Rate of interest is charged at
Base rate (presently, 10.20% - compounded monthly) and on confirmation in the
services of the Bank, @ 9.5% (compounded monthly).

The detailed terms and conditions of the modified scheme are furnished in the
Annexure to this circular.

The modified scheme comes into force with immediate effect.

GENERAL MANAGER
 ANNEXURE

TERMS AND CONDITIONS OF THE CAR LOAN SCHEME TO OFFICERS/WORKMEN

EMPLOYEES OF THE BANK

1. Eligibility

Officer Employees

(i) All officer employees (including those under Probationary period with a
minimum of 6 months of service), who are at present not eligible for
car loan under Conveyance loan scheme to officers.

(ii) In respect of those officer employees who are placed under suspension,
this facility should not be extended.

Workmen Employees

(i) All those workmen employees who are having basic pay of Rs.11700/-
and above per month.

(ii) In respect of those employees who are placed under suspension, this
facility should not be extended.

2. Purpose

To meet the cost of motor car to be purchased.

3. Quantum

(i) New vehicle: 80% of the invoice value

(ii)
registration of the vehicle): 80% of the value of the vehicle (determined
as per existing guidelines)

Note: No ceiling for quantum of loan is stipulated as branches have to ensure

minimum net take home pay of 40% of gross salary (after deducting the
statutory and all other deductions including the proposed car loan
instalment) See item No.7

4. Margin

(i) 20% on the invoice value in case of brand new motor cars.

(ii) 20% of the value as appraised by the qualified automobile engineer or

actual purchase consideration or the original invoice price whichever is
less in the case of used motor cars.
5. Rate of Interest

 During Probationary period Base Rate (presently 10.20% p.a.,

compounded monthly)

 On confirmation in the services of the Bank

9.5% (compounded monthly)

6. Repayment

(i) In case of brand new motor car, the entire loan amount together with
interest shall be repayable in not more than 180 Equated Monthly
Instalments (EMIs).

(ii) In case of used motor car, the entire loan amount together with interest
shall be repayable within his/ her remaining actual period of service
OR within the period for which the motor car is likely to be roadworthy
as certified by the qualified automobile engineer OR the period till
which RC is valid whichever is less.

(iii) Where the remaining service period of the employee is less than 180
months but opts for repayment period of 180 months, the EMI shall be
fixed as if he/she is having 180 months service. However, the
outstanding liability, if any, with up-to-date interest should be cleared
by the employee from own sources or shall be recovered out of terminal
benefits on his/her retirement/ resignation, etc. .

(iv) If the remaining period of roadworthiness is less than 180 months, the
above option [6(iii)] is not available.

(v) Repayment to commence from the month immediately following the

date of disbursement of the loan.

7. Net Take home salary

Minimum net take home pay shall be 40% of gross salary after deducting the
statutory and all other deductions including the proposed motor car loan
instalment.

8. Sanctioning Authority

DM of the concerned Circle Office

9. Security

Hypothecation of the motor car purchased by availing loan under this scheme .

10. Disbursement

Directly to the dealer/seller along with the margin amount

11. Documentation & Application

As applicable to conveyance loan scheme to officer employees for purchase of

motor car

12. Insurance, Monitoring, Reporting, Follow-up, etc.

for purchase of four wheelers are made equally applicable

13. Categorisation

Classified as non-priority secured loan.

14. General conditions

(i) An officer employee on reaching basic pay of Rs.19400/-, at the specific

request of the officer concerned, he/she may be permitted to transfer the
outstanding liability under this loan to conveyance loan to officers for
purchase of four wheelers (at concessional rate).

(ii) A workman employee, on his/her promotion to officer cadre and on

reaching a basic salary of Rs.19400/- p.m. and above, at his/her specific
request, may be permitted to transfer the car loan liability under the car
loan scheme to conveyance loan scheme to officers.

(iii) The repayment period stipulated at the time of original sanction is to be

maintained.

(iv) In case he/ she leaves the Bank, the loan shall be cleared or in case
sufficient proof of income on re-employment is available, continuation on
terms applicable to customers may be explored on case to case basis.

(v) All other guidelines relating to conveyance loan scheme to officer

employees for purchase of four wheeler in so far as they are applicable as
specified in Manual of Instructions on Loans/ Advances to Employees shall
be complied with.

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