Handbook On Promotion 2021

A
HANDBOOK
FOR
PROMOTION
EXAMS
2021
Compiled by …….SATISH RELHAN
ZONAL RISK MANAGEMENT CELL, JODHPUR

ECONOMIC DEVELOPMENT BUDGET & POLICY
, 1
Origin of PNB
PNB was born on May 19, 1894. The founding board was drawn from different parts of India professing
different faiths and a varied back-ground with, however, the common objective of providing country with a
truly national bank which would further the economic interest of the country.
The Bank opened for business on 12 April, 1895. The first Board of 7 Directors comprised of Sardar Dayal
Singh Majithia, who was also the founder of Dayal Singh College and the Tribune; Lala Lalchand one of the
founders of DAV College and President of its Management Society; Kali Prosanna Roy, eminent Bengali
pleader who was also the Chairman of the Reception committee of the Indian National Congress at its Lahore
session in 1900; Lala Harkishan Lal who became widely known as the first industrialist of Punjab; EC Jessawala,
a well known Parsi merchant and partner of Jamshedji & Co. of Lahore; Lala Prabhu Dayal, a leading Rais,
merchant and philanthropist of Multan; Bakshi Jaishi Ram, an eminent Civil Lawyer of Lahore; and Lala Dholan
Dass, a great banker, merchant and Rais of Amritsar. Thus a Bengali, Parsi, a Sikh and a few Hindus joined
hands in a purely national and cosmopolitan spirit to found this Bank which opened its doors to the public on
12th of April 1895. They went about it with a Missionary Zeal. Sh. Dayal Singh Majithia was the first Chairman,
Lala Harkishan Lal, the first secretary to the Board and Shri Bulaki Ram Shastri Barrister at Lahore, was
appointed Manager.
The first branch outside Lahore was opened in Rawalpindi in 1900. The Bank made slow, but steady progress
in the first decade of its existence. Lala Lajpat Rai joined the Board of Directors soon after. in 1913, the
banking industry in India was hit by a severe crisis following the failure of the Peoples Bank of India founded
by Lala Harkishan Lal. As many as 78 banks failed during this crisis. Punjab National Bank survived. Mr. JH
Maynard, the then Financial Commissioner, Punjab, remarked...."Your Bank survived...no doubt due to good
management". It spoke volumes for the measure of confidence reposed by the public in the Bank`s
management.
The years 1926 to 1936 were turbulent and loss ridden ones for the banking industry the world over. The 1929
Wall Street crash plunged the world into a severe economic crisis.
It was during this period that the Jalianwala Bagh Committee account was opened in the Bank, which in the
decade that followed, was operated by Mahatma Gandhi and Pandit Jawaharlal Nehru. The five years from
1941 to 1946 were ones of unprecedented growth. From a modest base of 71, the number of branches
increased to 278. Deposits grew from Rs. 10 crores to Rs. 62 crores. On March 31, 1947, the Bank officials
decided to leave Lahore and transfer the registered office of the Bank to Delhi and permission for transfer was
obtained from the Lahore High Court on June 20, 1947.
PNB was then housed in the precincts of Sreeniwas in the salubrious Civil Lines, Delhi. Many a staff member
fell victim to the widespread riots in the discharge of their duties. The conditions deteriorated further. The
Bank was forced to close 92 offices in West Pakistan constituting 33 percent of the total number and having
40% of the total deposits. The Bank, however, continued to maintain a few caretaker branches.
In 1951, the Bank took over the assets and liabilities of Bharat Bank Ltd. and became the second largest bank
in the private sector. In 1962, it amalgamated the Indo-Commercial Bank with it. From its dwindled deposits of
Rs. 43 crores in 1949 it rose to cross the Rs. 355 crores mark by the July 1969. Its number of offices had
increased to 569 and advances from Rs. 19 crores in 1949 to Rs. 243 crores by July 1969 when it was
nationalised.
Since inception in 1895, PNB has always been a "People`s bank" serving millions of people throughout the
country and also had the proud distinction of serving great national leaders like Sarvshri Jawahar Lal Nehru,
Gobind Ballabh Pant, Lal Bahadur Shastri, Rafi Ahmed Kidwai, Smt. Indira Gandhi etc. amongst other who
banked with us
Punjab National Bank, India’s first Swadeshi Bank, commenced its operations on April 12, 1895 from Lahore,
with an authorised capital of Rs 2 lac and working capital of Rs 20,000. The Bank was established by the spirit
of nationalism and was the first bank purely managed by Indians with Indian Capital. During the long history
of the Bank, 9 banks have merged with PNB.
2
Financial Results for the Quarter Ended 31st December 2020(PNB)
KEY HIGHLIGHTS
Global Business of the Bank at Rs. 18,09,587 Crore as on Dec’20 against Rs. 17,90,640 in Dec’19
with a Y-o-Y growth of 1.1%.
Global Deposit of the Bank at Rs. 10,82,156 Crore as on Dec’20 against Rs. 10,74,157 in Dec’19
with a Y-o-Y growth of 0.7 %.
Domestic CASA Share improved by 277 bps on Y-o-Y basis to 44.66 % in Dec’20. CASA
Deposits grew by 6.4 % on Y-o-Y basis to Rs. 4,70,282 Crore in Dec’20.
Savings Deposit grew by 8.4 % on Y-o-Y basis to Rs. 3,99,418 Crore as on Dec’20.
Gross Global Credit was at Rs. 7,27,432 Crore as on Dec’20 against Rs. 7,16,483 Crore in Dec’19
with a Y-o-Y growth of 1.5 %.
Housing loan grew by 6.5 % on Y-o-Y basis to Rs. 83071 Crore in Dec’20. CRAR as per Basel
III increased to 13.88 % in Dec’20 from 12.84 % in Sept’20.
Operating Profit grew by 13.9 % on Y-o-Y basis to Rs. 6391 Crore in Q3 FY’21.
Net Profit for the quarter is at Rs. 506 Crore as on Dec'20 as against Rs 621 crore as on Sept’20.
Global NIM increased to 3.09 % in Q3FY21 against 2.49% in Q3FY20.
Cost to Income Ratio improved QoQ to 43.38% in Q3FY21 from 47.87% in Q2FY21.
Global Cost of Deposits declined to 4.23% in Q3FY21 from 4.48% in Q2FY21.
GNPA ratio at 12.99 % in Dec’20 declined by 44 bps from 13.43 % in Sep’20.
NNPA ratio at 4.03 % in Dec’20 declined by 72 bps from 4.75 % in Sep’20.
Provision Coverage Ratio (PCR) including TWO improved by 216 bps to 85.16 % as on Dec’20
from 83.00 % as on Sep’20.
Business Performance in Key Parameters
❖ Domestic Deposits stood at Rs. 10,52,844 Crore as at the end of Dec’20 as against Rs. 10,55,306
Crore in Dec’19.
❖ Domestic Advances stood at Rs. 7,04,979 Crore as at the end of Dec’20 as against Rs. 7,00,164
Crore in Dec’19.
❖ Domestic Business stood at Rs. 17,57,823 Crore as at the end of Dec’20 as against Rs. 17,55,470
Crore in Dec’19.
❖ Savings Deposit stood at Rs. 3,99,418 Crore as on Dec’20 and Current Deposit was at Rs 70,864
crore.
3
Priority Sector
❖ Mandated Credit under National Goal achieved by the Bank in all parameters i.e. Priority Sector
40%, Agriculture 18%, Credit to Small and Marginal Farmers 8% and Credit to Weaker Section
10%.
❖ Achievement under Priority sector Credit is 42.4% at Rs. 2,84,122 Crore as on Dec’20.
❖ Achievement under Agriculture is 18.59% at Rs. 1,24,549 Crore as on Dec’20.
❖ Credit to Small and Marginal farmers target is 8.01% at Rs. 53,623 Crore as on Dec’20.
❖ Achievement under Credit to Weaker Sections is 11.04% at Rs. 73,933 Crore as on Dec’20
Profitability
❖ Net Interest Income grew YoY by 28.0% to Rs 8,313 crore during Q3FY21 and by 22.4% to
Rs 23,539 crore during 9M FY ‘21.
❖ Total Income stood at Rs 23,299 crore during Q3FY21 and at Rs 71,030 crore during 9M FY ‘21.
❖ Total Expenditure declined by 10.9% to Rs 16,908 crore during Q3FY21 and by 5.0% to Rs
53,684 crore during 9M’21.
❖ Operating Profit grew by 7.5% on Y-o-Y basis to Rs. 17,346 Crore in 9M’21
Efficiency Ratios
❖ Global Yield on Advances was at 7.72% in Q3FY21 against 7.88% in Q3FY20.
❖ Global Cost of Deposits declined to 4.23% in Q3FY21 from 5.19% in Q3FY20 and 4.48% in
Q2FY21.
Asset Quality
❖ Gross Non Performing Assets (GNPA) has declined to Rs. 94479 Crore as on Dec’20 from
Rs. 96314 Crore as on Sep’20.
❖ Net Non Performing Assets (NNPA) has declined to Rs. 26598 Crore as on Dec’20 from
Rs. 30920 Crore as on Sep’20.
❖ Provision Coverage Ratio (PCR) excluding TWO improved to 71.85% as on Dec’20 from
67.90% as on Sep’20 and 58.25% on Dec’19. Credit Cost stood at 2.05% in Dec’20.
Distribution Network
❖ 10925 branches (1967 Metro, 2294 Urban, 2742 Semi-Urban & 3922 Rural). 2 Overseas branches
at Hong Kong and Dubai.
13914 ATMs. 12346 BCs.
4
Capital Adequacy
❖ CRAR as on December, 2020 improved to 13.88%. Out of which, Tier-I CRAR is 10.90%, CET-I
is 10.12% and Tier-II CRAR is 2.98% as on Dec’20.
Bank has raised Rs. 3,000 Crore Capital through Tier-II Bonds during Q3 FY 21.
Bank has raised Capital through AT 1 bonds of Rs. 495 crore in Jan’ 2021
Digitalization
❖ Mobile Banking users crossed 96 lakh and Internet Banking users crossed 250 Lakh.
UPI transactions increased YoY by 23% to 70.18 Crore.
❖ POS installed increased YoY by 31% to 1,09,266.
❖ Bharat/BHIM QR Code installed increased to 4,53,859
Financial Inclusion
❖ Amount mobilized under Pradhan Mantri Jan Dhan Yojana stood as below:
PARTICULARS AS ON 31.12.2020
Accounts opened under PMJDY (No. in Lakh) 394
Amount mobilized (Average Balance – Amt in Rs.) 4021
❖ Enrollment under PMJJBY, PMSBY & APY:-
JANSURAKSHA SCHEME ENROLLMENT UP TO 31.12.2020
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) 33.1

Pradhan Mantri Suraksha Bima Yojana (PMSBY) 147.80
Atal Pension Yojana (APY) 13.9
Amalgamation Update
Integration of all major applications/systems like CBS, ATM switch, Internet Banking, Mobile
Banking has been successfully completed.
❖ 174 surround applications have been made live.
❖ Payment system integration of NEFT/RTGS, IMPS, UPI, NACH/ECS, BHIM has been
completed.
❖ Best fit digital solutions of PNB, e-OBC and e-UNI rolled out to all bank customers upon
migration: Internet Banking (Retail & Corporate), PNB One, UPI, PIHU, M- Passbook, Tab Banking
5
New Initiatives Undertaken
❖ Gram Sampark Abhiyan – (Launched on 2nd October 2020): 11 Lakh customers

contacted in around 30000 camps with increased Credit sanctions, digital on-boarding and
Enrolment for Social Security.
❖ Launch of Digital Lending Solution-PNB LenS: Bank has /customized IT based Loan
Management System i.e. PNB LenS (The Lending Solution) to speed up and maintain
consistency in underwriting standards in loan processing and sanctioning of credit
proposals.
❖ To accelerate the growth of forex business, Bank launched Trade Finance Redefined
Portal. Fx-Retail portal is also being popularized for direct access to Interbank market.
❖ Fintech Initiative: PNB joins hands with IIT Kanpur to set up Fintech Innovation Centre to
conduct research and develop technological solutions for addressing the challenges &
explore opportunities in BFSI gamut.
Awards and Accolades
❖ ET-BFSI Excellence Awards 2020- Most Innovative Public Sector Bank of the Year.
❖ IBA Banking Technology Award 2020 – Winner of the Most Innovative Project Using
Technology - PNBOne
❖ DSCI Excellence Award 2020 under the Category “Security Leader of the Year Banking”
❖ IBA Banking Technology Awards 2020 - Runner Up in Best Use of Data and Analytics
for Business Outcome in Large Bank Category
Social Media Presence of the Bank: (No. of Followers)
❖Facebook: 9,85,945 (https://www.facebook.com/pnbindia/)

❖Twitter: 1,77,946 (https://twitter.com/pnbindia)
❖LinkedIn: 67,292(https://in.linkedin.com/company/pnbindia)
❖Instagram: 57,399 (https://www.instagram.com/pnbindia/)
❖Youtube: 47,993 (https://www.youtube.com/pnbindia)
6
KEY HIGHLIGHTS OF MONETARY POLICY FEB 2021
* Short-term lending rate (repo) stands at 4 pc;

* RBI decides to continue with accommodative stance as long as necessary;
* RBI Guv says Indian economy is poised to move in only one direction and that is upwards;
* RBI projects GDP growth at 10.5 pc for 2021-22;
* RBI revises retail inflation outlook; 5.2 pc for Q4:2020-21, 5 pc in H1:2021-22 & 4.3 pc for
Q3:2021-22;
* RBI to restore CRR to 4 pc in two phases beginning March 2021;
* RBI proposes to provide funds from banks under TLTRO on Tap scheme to NBFCs for
incremental lending;
* RBI announces new scheme to incentivise new credit flow to MSME;
* RBI to set up panel to provide a medium term road map for strengthening of Primary (Urban) Co-
operative Banks;
* Retail investors to get direct access to government securities market; with this India will join select
countries providing such facility;
* Round-the-clock helpline for digital payment services to be set-up for grievance redressal;
* RBI will integrate all Ombudsman schemes & introduce centralised processing of grievances;
Assessment
Global Economy
The global economic recovery slackened in Q4 (October-December) of 2020 relative to Q3 (July-

September) as several countries battle second waves of COVID-19 infections, including more
virulent strains. With massive vaccination drives underway, risks to the recovery may abate and
economic activity is expected to gain momentum in the second half of 2021. In its January 2021
update, the International Monetary Fund (IMF) has revised upward its estimate of global growth in
2020 to (-)3.5 per cent from (-)4.4 per cent and increased the projection of global growth for 2021 by
30 basis points to 5.5 per cent. Barring some emerging market economies, inflation remains benign
on weak aggregate demand, although rising commodity prices carry upside risks. Financial markets
remain buoyant, supported by easy monetary conditions, abundant liquidity and optimism from the
vaccine rollout. Global trade is also expected to rebound in 2021, with services trade on a slower
recovery than merchandise trade.
Domestic Economy
The first advance estimates of GDP for 2020-21 released by the National Statistical Office (NSO) on
January 7, 2021 estimated real GDP to contract by 7.7 per cent, in line with the projection of (-)7.5
per cent set out in the December 2020 resolution of the MPC. High frequency indicators – railway
freight traffic; toll collection; e-way bills; and steel consumption – suggest that revival of some
constituents of the services sector gained traction in Q3 (October-December). The agriculture sector
remains resilient - rabi sowing was higher by 2.9 per cent year-on-year (y-o-y) as on January 29,
7
2021, supported by above normal north-east monsoon rainfall and adequate reservoir level of 61 per
cent (as on February 4, 2021) of full capacity, above the 10 years average of 50 per cent.
After breaching the upper tolerance threshold of 6 per cent for six consecutive months (June-
November 2020), CPI inflation fell to 4.6 per cent in December on the back of easing food prices
and favourable base effects. Food inflation collapsed to 3.9 per cent in December after averaging 9.6
per cent during the previous three months (September-November) due to a sharp correction in
vegetable prices and softening of cereal prices with kharif harvest arrivals, alongside supply side
interventions. On the other hand, core inflation, i.e. CPI inflation excluding food and fuel remained
elevated at 5.5 per cent in December with marginal moderation from a month ago. In the January
2021 round of the Reserve Bank’s survey, inflation expectations of households softened further over
a three month ahead horizon in tandem with the moderation in food inflation; one year ahead
inflation expectations, however, remained unchanged.
Systemic liquidity remained in large surplus in December 2020 and January 2021, engendering easy
financial conditions. Reserve money rose by 14.5 per cent y-o-y (on January 29, 2021), led by
currency demand. Money supply (M3), on the other hand, grew by only 12.5 per cent as on January
15, 2021, but with non-food credit growth of scheduled commercial banks accelerating to 6.4 per
cent. Corporate bond issuances at ₹5.8 lakh crore during April-December 2020 were higher than ₹4.6
lakh crore in the same period of last year. India’s foreign exchange reserves were at US$ 590.2
billion on January 29, 2021 – an increase of US$ 112.4 billion over end-March 2020.
Outlook
With the larger than anticipated deflation in vegetable prices in December bringing down headline
closer to the target, it is likely that the food inflation trajectory will shape the near-term outlook. The
bumper kharif crop, rising prospects of a good rabi harvest, larger winter arrivals of key vegetables
and softer egg and poultry demand on avian flu fears are factors auguring a benign inflation outcome
in the months ahead. On the other hand, price pressures may persist in respect of pulses, edible oils,
spices and non-alcoholic beverages. The outlook for core inflation is likely to be impacted by further
easing in supply chains; however, broad-based escalation in cost-push pressures in services and
manufacturing prices due to increase in industrial raw material prices could impart upward pressure.
Furthermore, there could be increased pass-through to output prices as demand normalises as
indicated in the Reserve Bank’s industrial outlook, services and infrastructure outlook surveys and
purchasing managers’ indices (PMIs) and firms regain pricing power. International crude oil prices
may remain supported by demand build up on optimism from vaccination and continuing production
cuts by OPEC plus. The crude oil futures curve has become downward sloping since December
2020. Taking into consideration all these factors, the projection for CPI inflation has been revised to
5.2 per cent in Q4:2020-21, 5.2 per cent to 5.0 per cent in H1:2021-22 and 4.3 per cent in Q3: 2021-
22, with risks broadly balanced.
Turning to the growth outlook, rural demand is likely to remain resilient on good prospects of
agriculture. Urban demand and demand for contact-intensive services is expected to strengthen with
the substantial fall in COVID-19 cases and the spread of vaccination. Consumer confidence is
reviving and business expectations of manufacturing, services and infrastructure remain upbeat. The
fiscal stimulus under AtmaNirbhar 2.0 and 3.0 schemes of government will likely accelerate public
investment, although private investment remains sluggish amidst still low capacity utilisation. The
Union Budget 2021-22, with its thrust on sectors such as health and well-being, infrastructure,
innovation and research, among others, should help accelerate the growth momentum. Taking these
factors into consideration, real GDP growth is projected at 10.5 per cent in 2The MPC notes that the
sharp correction in food prices has improved the food price outlook, but some pressures persist, and
core inflation remains elevated. Pump prices of petrol and diesel have reached historical highs. An
8
unwinding of taxes on petroleum products by both the centre and the states could ease the cost push
pressures. What is needed at this point is to create conditions that result in a durable disinflation.
This is contingent also on proactive supply side measures. Growth is recovering, and the outlook has
improved significantly with the rollout of the vaccine programme in the country. The Union Budget
2021-22 has introduced several measures to provide an impetus to growth. The projected increase in
capital expenditure augurs well for capacity creation thereby improving the prospects for growth and
building credibility around the quality of expenditure. The recovery, however, is still to gather firm
traction and hence continued policy support is crucial. Taking these developments into consideration,
the MPC in its meeting today decided to continue with an accommodative stance of monetary policy
till the prospects of a sustained recovery are well secured while closely monitoring the evolving
outlook for inflation.021-22 – in the range of 26.2 to 8.3 per cent in H1 and 6.0 per cent in Q3.
9
LATEST RBI UPDATES
Introduction of Introduction of Legal Entity Identifier for Large Value Transactions in Centralised
Legal Entity Payment Systems :
Identifier for Large
Value Transactions RBI has advised the introduction of the LEI system for all payment transactions of
in Centralised value Rs.50 crore and above undertaken by entities (non-individuals) using RTGS
Payment Systems and NEFT.
Banks should :
- advise entities undertaking large value transactions (Rs.50 crore and
above) to obtain LEI in time, if they do not already have one;
- include remitter and beneficiary LEI information in RTGS and NEFT
payment messages.
- maintain records of all transactions of Rs.50 crore and above through
RTGS and / or NEFT.
LEI can be obtained from any of the Local Operating Units (LOUs) accredited by the
Global Legal Entity Identifier Foundation (GLEIF)
The circular is to be effective from April 1, 2021.
RBI :DPSS.CO.OD No.901/06.24.001/2020-21 Dated 05-Jan-2021
Operationalisation Operationalisation of Payments Infrastructure Development Fund (PIDF) Scheme :
of Payments - RBI has advised the framework of PIDF as per annexure.
Infrastructure
- Further, an Advisory Council (AC), under the Chairmanship of the
Deputy Governor, RBI, has been constituted for managing the PIDF
Development Fund and PIDF would be operational for a period of three years from
(PIDF) Scheme January 01, 2021 and may be extended for two more years depending
upon the progress.
- PIDF presently has a corpus of 345 crore ( 250 crore contributed by
RBI and 95 crore by the major authorised card networks in the
country).
Key details :
Target Geographies :
- The primary focus shall be to create payment acceptance infrastructure
in Tier-3 to Tier-6 centres.
- North Eastern states of the country shall be given special focus.
- The tentative distribution of targets across centers will be as follows :
- Tier 3 and Tier 4 centres : 30% of share of total.
- Tier 5 and Tier 6 centres : 60% of share of total.
- North Eastern States : 10% of share of total.
Market Segments and Merchant Categories :
- Merchants providing essential services (transport, hospitality, etc.),
government payments, fuel pumps, PDS shops, healthcare, kirana
shops may be targeted, especially in the targeted geographies.
10
Types of Acceptance Devices Covered
- Multiple payment acceptance devices / infrastructure supporting
underlying card payments, such as physical PoS, mPoS (mobile PoS),
GPRS (General Packet Radio Service), PSTN (Public Switched
Telephone Network), QR code-based payments, etc
- As the cost structure of acceptance devices vary, subsidy amounts shall
accordingly differ by the type of payment acceptance device deployed.
A subsidy of 30% to 50% of cost of physical PoS and 50% to 75%
subsidy for Digital PoS shall be offered.
Initial Corpus
- RBI shall contribute 250 crore to the corpus; the authorised card
networks shall contribute in all 100 crore.
- The card issuing banks shall also contribute to the corpus based on the
card issuance volume (covering both debit cards and credit cards) at
the rate of 1 and 3 per debit and credit card issued by them,
respectively.
- It shall be the endeavour to collect the contributions by January 31,
2021
Recurring Contribution
- Card networks - Turnover based - 1 basis point (bps) i.e., 0.01 paisa
per Rupee of transaction;
- Card issuing banks - Turnover based - 1 bps and 2 bps i.e., 0.01 paisa
and 0.02 paisa per Rupee of transaction for debit and credit cards
respectively; also at the rate of 1 and 3 for every new debit and
credit card issued by them respectively during the year.
RBI : DPSS.CO.AD.No.900/02.29.005/2020-21 Dated 05-Jan-2021
KYC Template for KYC Template for Legal Entities :
Legal Entities - Reporting entities should upload the KYC data pertaining to accounts
of LEs on to CKYCR in terms of Rule 9(1A) of the PML Rules
- Further, the legal entity template has been available in the CKYCR test
environment (https://testbed.ckycindia.in/ckyc/index.php) and its
effective go live date is April 02, 2021.
CKYC/2020/11 Dated 04-Jan-2021
Retention of Retention of Records Relating to Corporate Insolvency Resolution Process :
Records Relating IBBI directs as under :
(i) An IP shall preserve copies of records generated in electronic form for a
to Corporate
minimum period of eight years, from the date of completion of the CIRP or
Insolvency the conclusion of any proceeding relating to CIRP, before the Adjudicating
Authority (AA), Appellate Authority or Court, or any matter pending with the
Resolution Process
Board, whichever is later.
(ii) For records other than (i) above, the IP shall maintain copies for
minimum period of three years in physical form, and for minimum period of
eight years in electronic form, from the date of completion of the CIRP or the
conclusion of any proceeding relating to CIRP, before the Adjudicating
Authority (AA), Appellate Authority or Court, or any matter pending with the
Board, whichever is later.
An IP, in the matter of a CIRP, shall preserve the following copies of records
relating to/forming basis for :
(a) his appointment as IRP or RP, including the terms of appointment;
11
(b) handing over / taking over by him;
(c) admission of CD into CIRP;
(d) public announcement;
(e) the constitution of CoC and CoC meetings;
(f) claims, verification of claims, and list of creditors;
(g) engagement of professionals, registered valuers, and insolvency
professional entity, including work done, reports etc., submitted by them;
(h) information memorandum;
(i) all filings with the AA, Appellate Authority and their orders;
(j) invitation, consideration and approval of resolution plan;
(k) statutory filings with IBBI and IPA;
(l) correspondence during the CIRP;
(m) insolvency resolution process cost pertaining to CIRP;
(n) avoidance transactions or fraudulent trading; and
(o) any other records, which is required to give a complete account of
the CIRP..
IBBI IBBI/CIRP/37/2021 DT 04.01.2021.
Master Direction - Master Direction - Compounding of Contraventions under FEMA, 1999 :
Compounding of - In terms of Section 15 of the FEMA 1999, any contravention under section
13 of FEMA 1999 may, on an application made by the person committing
Contraventions
such contravention, be compounded within one hundred and eighty days
under FEMA, 1999 from the date of receipt of application by Reserve Bank.
Power to compound by Reserve Bank
- If any person contravenes any provisions of Foreign Exchange Management
Act, 1999 (42 of 1999), it can be compounded in case where the sum
involved in such contravention is :
a) ten lakhs rupees or below, by the AGM, RBI.
b) more than rupees ten lakhs but less than rupees forty lakhs, by DGM,
RBI.
c) rupees forty lakhs or more but less than rupees hundred lakhs by GM,
RBI.
d) rupees one hundred lakhs or more, by the CGM, RBI.
Provided further that no contravention shall be compounded unless the amount
involved in such contravention is quantifiable.
For details, refer RBI Master Direction updated on 04.01.2021 on the subject.
Opening of Current Opening of Current Accounts by Banks - Need for Discipline
Accounts by Banks - RBI has decided to permit banks to open specific accounts which are stipulated
Need for Discipline under various statutes and instructions of other regulators / regulatory
departments, without any restrictions placed in terms of Circular dated August 6,
2020. An indicative list of such accounts is as given below :
- Accounts for real estate projects mandated under Section 4 (2) l (D) of the
Real Estate (Regulation and Development) Act, 2016 for the purpose of
maintaining 70% of advance payments collected from the home buyers.
- Nodal or escrow accounts of payment aggregators / prepaid payment
instrument issuers for specific activities as permitted by Reserve Bank of
India under Payment and Settlement Systems Act, 2007.
- Accounts for settlement of dues related to debit card / ATM card / credit
card issuers / acquirers.
- Accounts permitted under FEMA, 1999.
- Accounts for the purpose of IPO / NFO / FPO / share buyback / dividend
payment / issuance of commercial papers / allotment of debentures /
gratuity, etc. which are mandated by respective statutes or regulators and
are meant for specific / limited transactions only.
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- Accounts for payment of taxes, duties, statutory dues, etc. opened with
banks authorized to collect the same, for borrowers of such banks which are
not authorized to collect such taxes, duties, statutory dues, etc.
- Accounts of White Label ATM Operators and their agents for sourcing of
currency.
The above permission is subject to the condition that the banks shall ensure that
these accounts are used for permitted / specified transactions only.
Banks shall monitor all current accounts and CC / ODs regularly, at least on a half-
yearly basis, specifically with respect to the exposure of the banking system to the
borrower.
A set of frequently asked questions (FAQs) providing clarifications related to
implementation of the circulars is provided in the Annex.
RBI/2020-21/79 DOR.No.BP.BC.30/21.04.048/2020- 21 dt December 14, 2020
Processing of E- Processing of E-mandates for Recurring Transactions : Limit For Additional Factor
mandates for Authentication raised from Rs.2000.00 to Rs.5000.00.
Recurring RBI has raised the limit of relaxation in Additional Factor of Authentication (AFA)
while processing e-mandates / standing instructions on cards and Prepaid Payment
Transactions
Instruments (PPIs) for recurring transactions with values from Rs.2,000.00 to
Rs.5000.00, subject to conditions listed therein, wef 01.01.2021.These instructions
also applicable to Unified Payments Interface (UPI).
RBI/2020-21/74 DPSS.CO.PD.No.754/02.14.003/2020-21 dt December 4, 2020.
Card Transactions in Card Transactions in Contactless Mode - Relaxation in Requirement of Additional
Contactless Mode - Factor of Authentication :
Relaxation in Per transaction limit for AFA relaxation for contactless card transactions has been
increased to 5,000/-.
Requirement of
This will come into effect from January 1, 2021.
Additional Factor of
RBI/2020-21/71 DPSS.CO.PD.No.752/02.14.003/2020-21 dt December 4, 2020
Authentication
Authorisation of Authorisation of Entities for Operating a Payment System under the Payment and
Entities for Settlement Systems Act, 2007 (PSS Act) - Introduction of Cooling Period :
Operating a
Payment System - In terms of 'Oversight Framework for Financial Market Infrastructures and
Retail Payment Systems, issued on June 13, 2020', any person before
under the Payment
commencing or operating a payment system shall obtain authorisation from
and Settlement the Reserve Bank.
- RBI has decided to introduce the concept of Cooling Period in the following
Systems Act, 2007
situations –
(PSS Act) - - Authorised Payment System Operators (PSOs) whose Certificate of
Authorisation (CoA) is revoked or not-renewed for any reason; or
Introduction of
- CoA is voluntarily surrendered for any reason; or
Cooling Period - Application for authorisation of a payment system has been rejected by RBI.
- New entities that are set-up by promoters (as defined in Companies Act
2013) involved in any of the above categories.
The Cooling Period shall be for one year from the date of revocation / non-renewal
/ acceptance of voluntary surrender / rejection of application.
RBI/2020-21/73 DPSS.CO.OD.No.753/06.08.005/2020-21 dt December 4, 2020.
13
Perpetual Validity Perpetual Validity for Certificate of Authorisation (CoA) Issued to Payment System
for Certificate of Operators (PSOs) :
Authorisation (CoA) - Currently, RBI grants authorisation to new entities desirous of
Issued to Payment
operating a payment system for specified periods up to five years.
- To reduce licensing uncertainties and enable PSOs to focus on their
System business it has been decided to grant authorisation for all PSOs (both
Operators (PSOs) new and existing) on a perpetual basis, subject to the usual conditions.
- For existing authorised PSOs, grant of perpetual validity shall be
examined as and when the CoA becomes due for renewal subject to
their adherence to the terms and conditions.
- Existing PSOs who do not satisfy all conditions will be given one-year
renewals to enable them to comply; if any entity fails to do so in a
reasonable time, its authorisation may be withdrawn.
RBI/2020-21/72 DPSS.CO.AD.No.724/02.27.005/2020-21 dt December 4, 2020.
24x7 Availability of 24x7 Availability of Real Time Gross Settlement (RTGS) System :
Real Time Gross - RBI has decided to make RTGS available round the clock on all days of the
year with effect from 00:30 hours on December 14, 2020.
Settlement (RTGS)
- Members are advised as under :
System - RTGS shall be available for customer and inter-bank transactions round the
clock, except for the interval between 'end-of-day' and 'start-of-day'
processes, whose timings would be duly broadcasted through the RTGS
system.
- Intra-Day Liquidity (IDL) facility shall be made available to facilitate smooth
operations. The Intra-Day Liquidity (IDL) availed, if any, shall be reversed
before the 'end-of-day' process begins.
- Members are advised to put in place necessary infrastructure to provide
RTGS round the clock to their customers.
- RTGS transactions undertaken after normal banking hours are expected to
be automated using 'Straight Through Processing (STP)' modes.
RBI/2020-21/70 DPSS.(CO).RTGS.No.750/04.04.016/2020-21 dt December 4, 2020
Introduction of Introduction of Liquidity Adjustment Facility (LAF) and Marginal
Liquidity Standing Facility (MSF) for Regional Rural Banks (RRBs) :
Adjustment Facility RBI has decided that Liquidity Adjustment Facility (LAF) and Marginal Standing
(LAF) and Marginal Facility (MSF) will be extended to Scheduled RRBs meeting the following criteria:
Standing Facility i. Implemented Core Banking Solution (CBS)
(MSF) for Regional ii. There is a minimum CRAR of nine per cent and
Rural Banks (RRBs) iii. Fully compliant with the terms and conditions for availing LAF and MSF.
- The names of RRBs which meet the eligibility norms to participate in
LAF and MSF (Positive List) and of those RRBs found ineligible
(Negative List) will be intimated to the banks concerned.
- The eligibility status of the banks will be reviewed on an ongoing
basis.
RBI/2020-21/76 DOR.RRB.No.28/31.01.001/2020-21 dt December 4, 2020

Declaration of Declaration of Dividends by Banks :
- In view of the ongoing stress and heightened uncertainty on account of
14
Dividends by Banks COVID-19, it is imperative that banks continue to conserve capital to
support the economy and absorb losses.
- In order to further strengthen the banks' balance sheets, while at the
same time support lending to the real economy, it has been decided
that banks shall not make any dividend payment on equity shares
from the profits pertaining to the financial year ended March 31,
2020.
RBI/2020-21/75 DOR.BP.BC.No.29/21.02.067/2020-21 dt December 4, 2020

External Trade - External Trade - Facilitation - Export of Goods and Services :
Facilitation - Export With a view to further enhance the ease of doing business and quicken the approval
of Goods and process, it has been decided to delegate more powers to the Authorised Dealer
Services Category - I banks (AD banks) in the following areas :
1. Direct Dispatch of Shipping Documents

- AD banks have now been allowed to regularise cases of dispatch of shipping
documents by the exporter direct to the consignee or his agent resident in
the country of the final destination of goods without any upper cap ( Limit of
up to USD 1 million or its equivalent per export shipment has been done
away with).
- AD banks may regularize such direct dispatch of shipping documents
irrespective of the value of export shipment, subject to following conditions
:
a) The export proceeds have been realized in full except for
the amount written off, if any, in accordance with the
extant provisions for write off.
b) The exporter is a regular customer of AD bank for a period
of at least six months.
c) The exporter's account is fully compliant with KYC / AML
guidelines.
d) The AD bank is satisfied about the bonafides of the
transaction.
2. ''Write-off'' of unrealized Export bills

To provide greater flexibility to the AD banks and to reduce the time
taken for according such approvals, the extant procedure is revised as
under :
Particulars Limit Limit (%) In relation to
Self-write-off by an exporter 5% Total export proceeds realized

during the calendar year preceding
(Other than the Status Holder
the year in which the write-off is
Exporter) being done
Self-write-off by Status 10%

Holder Exporter
Write-off by AD Category-1 10%

Bank
15
Key Conditions :
a) The relevant amount has remained outstanding for more than
one year;
b) Satisfactory documentary evidence is furnished indicating that
the exporter had made all efforts to realise the export proceeds;
c) The exporter is a regular customer of the bank for a period of
at least 6 months, is fully compliant with KYC / AML guidelines and
AD Bank is satisfied with the bonafides of the transaction.
d) The case falls under any of the undernoted categories:
i. The overseas buyer has been declared insolvent and a
certificate from the official liquidator has been
produced.
ii. The goods exported have been auctioned or destroyed
by the Port / Customs / Health authorities in the
importing country;
iii. The overseas buyer is not traceable over a reasonably
long period of time.
iv. The unrealized amount represents the undrawn
balance of an export bill (not exceeding 10% of the
invoice value) remaining outstanding that turned out to
be unrealizable despite all efforts made by the
exporter;
v. The cost of resorting to legal action would be
disproportionate to the unrealized amount of the
export bill or where the exporter even after winning
the Court case against the overseas buyer could not
execute the Court decree due to reasons beyond his
control;
The following cases, however, would not qualify for the ''write-off'' facility
a) Exports made to countries with externalization problem i.e.
where the overseas buyer has deposited the value of export
in local currency but the amount has not been allowed to be
repatriated by the Central Bank authorities of the country
concerned.
b) EDF / Softex which are under investigation by agencies like,
Enforcement Directorate, Directorate of Revenue
Intelligence, Central Bureau of Investigation, etc. as also the
outstanding bills which are subject matter of civil / criminal
suit.
3. Set-off of Export receivables against Import payables :
The AD bank may allow set-off of outstanding export receivables

against outstanding import payables, subject to the following
conditions :
a. The arrangement shall be operationalized / supervised through
/ by one AD bank only.
b. AD bank is satisfied with the bonafides of the transactions,
there are no KYC / AML / CFT concerns;
c. The invoices under the transaction are not under investigation
by Directorate of Enforcement / Central Bureau of Investigation
or any other investigative agency;
d. The export / import transactions with ACU countries are kept
16
outside the arrangement;
e. Set-off of export receivables against goods shall not be
allowed against import payables for services and vice versa.
f. AD bank shall ensure that import payables / export receivables
are outstanding at the time of allowing set-off. Further, set-off
shall be allowed between the export and import legs taking
place during the same calendar year.
g. In case of bilateral settlement, the set-off shall be in respect of
same overseas buyer / supplier.
h. In case of settlement within the group / associates companies,
the arrangement shall be backed by a written, legally
enforceable agreement / contract.
i. AD bank may seek Auditors / CA certificate wherever felt
necessary.
j. Each of the export and import transaction shall be reported
separately (gross basis) in FETERS / EDPMS / IDPMS, as
applicable
Refund of Export Proceeds :
- AD banks, through whom the export proceeds were originally realised, were
allowed to consider requests for refund of export proceeds of goods
exported from India and being reimported into India on account of poor
quality.
- Henceforth AD banks, while permitting refund of export proceeds of goods
exported from India, shall Not insist on the requirement of re-import of
goods, where exported goods have been auctioned or destroyed by the Port
/ Customs / Health authorities / any other accredited agency in the
importing country subject to submission of satisfactory documentary
evidence and compliance of other conditions.
- In all other cases AD banks shall ensure that procedures as applicable to
normal imports are adhered to and that an undertaking from the exporter,
to re-import the goods within three months from the date of refund of
export proceeds, shall be obtained.
RBI/2020-21/77 A.P.(DIR Series) Circular No.08 dt December 4, 2020.
Establishment of Prohibition on Establishment of Branch Office (BO) / Liaison Office (LO) / Project
Branch Office (BO) / Office (PO) or Any Other Place of Business in India by Foreign Law Firms :
Liaison Office (LO) /
Project Office (PO) - RBI, October 29, 2015, instructed that no fresh permissions / renewal of
or Any Other Place permission shall be granted by the Reserve Bank / AD Category-I banks to
of Business in India any foreign law firm for opening of Liaison Office in India, till the policy is
by Foreign Law reviewed based on, among others, final disposal of the matter by the
Firms Hon'ble Supreme Court.
- The Hon'ble Supreme Court has held that advocates enrolled under the
Advocates Act, 1961 alone are entitled to practice law in India and that
foreign law firms / companies or foreign lawyers cannot practice
profession of law in India.
- As such, foreign law firms / companies or foreign lawyers or any other
person resident outside India, are not permitted to establish any branch
office, project office, liaison office or other place of business in India for the
purpose of practicing legal profession.
- Accordingly, AD Category - I banks are directed not to grant any approval to
any branch office, project office, liaison office or other place of business in
17
India under FEMA for the purpose of practicing legal profession in India.
RBI/2020-21/69 A.P. (DIR Series) Circular No.07 dt November 23, 2020.

Master Direction - Master Direction - Exemptions from the provisions of RBI Act, 1934 :
Exemptions from
the provisions of The Reserve Bank of India (the Bank), being satisfied that, exempts the categories of
RBI Act, 1934 non-banking financial companies as given below from certain provisions of the
Reserve Bank of India Act, 1934 (the RBI Act, 1934) as specified hereunder.
1. Exemption from provisions of Chapter III B of the RBI Act, 1934 to the
following:
- A Non-Banking institution which is authorized to operate a payment system
and to issue prepaid payment instruments under the Payment and
Settlement Systems Act, 2007 (Act 51 of 2007).
2. Exemption from sections 45-IA (Requirement of registration and net
owned fund), 45-IB (Maintenance of percentage of assets) and 45-IC (Reserve
fund) of the RBI Act, 1934 to the following:
(i) Micro Finance Companies i.e. any non-banking financial company
which is
a. engaged in micro financing activities, providing credit not
exceeding 50,000 for a business enterprise and 1,25,000 for
meeting the cost of a dwelling unit to any poor person for enabling
him to raise his level of income and standard of living; and
b. licensed under section 25 of the Companies Act, 1956; and
c. not accepting public deposits.
(ii) Securitisation and Reconstruction Companies.
(iii) Nidhi Companies.
(iv) Mutual Benefit Companies.
(v) Chit Companies
(vi) Mortgage Guarantee Companies.
(vii) Merchant Banking Companies i.e. a non-banking financial
company subject to compliance with the following conditions :
a. It is registered with the Securities and Exchange Board of India
as a Merchant Banker and is carrying on the business of
merchant banker.
b. acquires securities only as a part of its merchant banking
business;
c. does not carry on any other financial activity.
d. does not accept or hold public deposits.
(viii) Housing Finance Institutions.

3. Exemption from sections 45-IB and 45-IC of the RBI Act, 1934 to the
following:
Government Companies i.e. a non-banking financial company , being a
Government company as defined in Clause (45) of Section 2 of
Companies Act, 2013, is valid for the phased- in period as under:
Sec 45 IB Maintenance of March 31, 2019 - 5% of outstanding deposits
percentage of assets
March 31, 2020 - 10% of outstanding deposits
- 15% of the
outstanding
deposits
18
Sec 45 IC Reserve Fund March 31, 2019
4. Exemption from sections 45-IA, 45-IB, 45-IC, 45-MB and 45-MC of the RBI
Act, 1934 to the following:
(i) Insurance Companies.
(iii) Stock brokers or sub-brokers
5. Exemption from sections 45-IA and 45-IC of the RBI Act, 1934 to the
following:
Alternative Investment Fund (AIF) Companies.
6. Exemption from section 45-IA of the RBI Act, 1934 to the following:
Unregistered Core Investment Companies.
7. Exemption from section 45-IA(1)(b) of the RBI Act, 1934 to the following:
Core Investment Companies.
RBI/DoR(NBFC)/2016-17/40 DoR(NBFC).PD.001/03.10.119/2016-17 dt August 25,
2016
FAQs on Special FAQs on Special Non-Resident Rupee Accounts
SNRR account is allowed to be used for specified transactions in trade, foreign
Non-Resident
investments, External Commercial Borrowings, etc., in lieu of sending inward /
Rupee Accounts outward remittances by a person resident outside India in a convertible foreign
currency for each transaction with a resident or vice-versa.
All precautions need to be taken by Authorized Dealer (AD) banks to ensure
identification of the counterparty of such transactions.
Some of such precautions are listed out in FAQs.
The onus of ensuring the use and identification of SNRR transactions as per
guidelines falls on the AD banks.
) The provisions of these FAQs will not apply to the SNRR accounts of FPIs, FVCIs and
Depository Receipt / FCCB conversion accounts which are operated by a custodian
RBI Release dt 19.11.2020.
Maintenance of Maintenance of Escrow Account with a Scheduled Commercial Bank :
Escrow Account An authorised PPI Issuer or a PA is required to maintain an escrow account with a
with a Scheduled scheduled commercial bank on an ongoing basis. With a view to diversify risk and
Commercial Bank address business continuity concerns, it has been decided to allow one additional
escrow account in a different scheduled commercial bank.
RBI/2020-21/68 DPSS.CO.PD.No.660/02.14.008/2020-21 dt November 17, 2020.
Foreign Exchange Foreign Exchange Management Act, 1999 (FEMA)-
Management Act, Compounding of Contraventions under FEMA, 1999
1999 (FEMA)-
Compounding of
- The compounding powers stand delegated to the Regional Offices /
Sub Offices of the Reserve Bank to compound the following
Contraventions contraventions.
under FEMA, 1999 - FEM (Non -Debt Instruments) Rules, 2019 dated October 17, 2019
- Rule 2(k) read with Rule 5; Rule 21; Paragraph 3 (b) of Schedule I
(Issue of shares without approval of RBI or Government, wherever
required); Rule 4 (Receiving investment in India from non-resident or
taking on record transfer of shares by Investee Company); Rule 9(4)
and Rule 13(3)
- FEM (Mode of Payment and Reporting of Non-Debt Instruments)
19
Regulations dated October 17, 2019 :
- Regulation 3.1(I)(A); Regulation 4(1); Regulation 4(2); Regulation
4(3); Regulation 4(6); Regulation 4(7); and Regulation 4(11)
- Further, it has been decided to discontinue the classification of a
contravention as 'technical' ( of earlier classification : 'technical' or
'material' or 'sensitive/serious in nature).
Discontinuation of Discontinuation of Returns/ Reports under Foreign Exchange Management Act,
Returns / Reports 1999
under Foreign
List of 17 Discontinued Reports
Exchange
Management Act,
Reporting
1999 Sl No. Name of Report Frequency
Entity
1 Category-wise transaction where the AD Category-II Monthly

amount exceeds USD 5000 per
transaction
2 Category-wise, transaction-wise AD Category- II Monthly

statement where the amount exceeds
USD 25,000 per transaction
3 Statement of Purchase transactions of FFMCs and AD Monthly

USD 10,000 and above (including Category- II
transactions of their franchisees)
4 Extension of Liaison Offices (LOs) AD Category-I As and when

banks extension is granted
5 Extension of Project Offices (POs) AD Category-I As and when

banks extension is granted
6 FII / FPI daily: Daily inflow / outflow of AD banks Daily

foreign fund on account of investment
by FPIs
7 FII / FPI Return (Monthly): Data AD Category-I Monthly

relating to actual inflow / outflow of banks
remittances on account of
investments by Foreign Institutional
Investors (FIIs) in the Indian Capital
market
20
8 FVCI reporting: Inflows / outflows of AD Category-I Monthly
remittances on account of banks /
investments by Foreign Venture Custodian banks
Capital Investor (FVCIs) and Market
value of Investments made by FVCIs
9 Reporting of Inflow / Outflow details Asset Quarterly

in respect of Mutual Fund by Asset Management
Management Companies Companies
10 Market value of FII Investment in India AD Category-I Fortnightly

on fortnightly basis banks
11 Market value of FII Investment in India AD Category-I Monthly

on Monthly basis banks
12 FII holdings as percentage of floating AD Category-I Monthly

stock banks
13 Form DRR for Issue / transfer of Custodian At the time of issue /

sponsored / unsponsored Depository transfer of
Receipts (DRs)-Hardcopy@ depository receipts
14 ADR / GDR Movement Report- two AD Category-I Monthly

way fungibility banks
15 Repatriation of Sales proceeds of Custodian Monthly

underlying shares represented by
FCCBs / GDRs / ADRs
16 GDR / ADR underlying shares issued, Custodian Monthly

re deposited and released monthly
reporting
17 Monitoring of disinvestments by AD banks Monthly

Overseas Corporate Bodies
RBI/2020-21/66 A.P. (DIR Series) Circular No.05 dt November 13, 2020

Co-Lending by Co-Lending by Banks and NBFCs to Priority Sector :
Banks and NBFCs to
- To better leverage the respective comparative advantages of the banks and
Priority Sector
NBFCs in a collaborative effort, it has been decided to provide greater
operational flexibility to the lending institutions, while requiring them to
conform to the regulatory guidelines on outsourcing, KYC, etc.
- The primary focus of the revised scheme, rechristened as ''Co-Lending
Model'' (CLM), is to improve the flow of credit to the unserved and
21
underserved sector of the economy and make available funds to the
ultimate beneficiary at an affordable cost, considering the lower cost of
funds from banks and greater reach of the NBFCs. Detailed features of the
CLM are furnished in the Annex.
- In terms of the CLM, banks are permitted to co-lend with all registered
NBFCs (including HFCs) based on a prior agreement.
- The co-lending banks will take their share of the individual loans on a back-
to-back basis in their books. However, NBFCs shall be required to retain a
minimum of 20 per cent share of the individual loans on their books.
- The banks can claim priority sector status in respect of their share of credit
while engaging in the CLM adhering to the specified conditions.
- The CLM shall not be applicable to foreign banks (including WOS) with less
than 20 branches.
RBI/2020-21/63 FIDD.CO.Plan.BC.No.8/04.09.01/2020-21 dt November 5, 2020

Exim Bank's Exim Bank's Government of India Supported Line of Credit (LoC)
Government of of USD 20.10 Million to the Government of the Republic of Nicaragua :
India Supported
-Export-Import Bank of India (Exim Bank) has entered into an agreement
Line of Credit (LoC)
dated June 12, 2020 with the Government of the Republic of Nicaragua, for
of USD 20.10 Million making available to the latter, Government of India supported Line of Credit
(LoC) of USD 20.10 million (USD Twenty million One Hundred thousand
to the Government
only) for the purpose of reconstruction of Aldo Chavarria Hospital in the
of the Republic of Republic of Nicaragua.
- Under the arrangement, financing of export of eligible goods and services
Nicaragua
from India, would be allowed, if eligible for exports, and whose purchase
may be agreed to be financed by the Exim Bank under this agreement.
- Out of the total credit by Exim Bank under the agreement, goods, works and
services of the value of at least 75 per cent of the contract price shall be
supplied by the seller from India, and the remaining 25 per cent of goods
and services may be procured by the seller for the purpose of the eligible
contract from outside India.
- The Agreement under the LoC is effective from September 15, 2020. Under
the LoC, the terminal utilization period is 60 months after the scheduled
completion date of the project.
Opening of Current Opening of Current Accounts by Banks - Need for Discipline :
Accounts by Banks -
Banks may ensure compliance with the instructions by December 15, 2020.
Need for Discipline
RBI/2020-21/62 DOR.No.BP.BC.27/21.04.048/2020-21 dt November 2, 2020

Scheme for Grant of Scheme for Grant of Ex-gratia Payment of Difference Between Compound Interest
Ex-gratia Payment. and Simple Interest for Six Months to Borrowers in Specified Loan Accounts
(1.3.2020 to 31.8.2020) :
The Government of India has announced the Scheme for grant of ex-gratia payment
of difference between compound interest and simple interest for six months to
22
borrowers in specified loan accounts (1.3.2020 to 31.8.2020) (the 'Scheme') on
October 23, 2020, which mandates ex-gratia payment to certain categories of
borrowers by way of crediting the difference between simple interest and
compound interest for the period between March 1, 2020 to August 31, 2020 by
respective lending institutions.
RBI/2020-21/61 DOR.No.BP.BC.26/21.04.048/2020-21 dt October 26, 2020.
Digital Payment Digital Payment Transactions – Streamlining QR Code infrastructure :
Transactions –
Reserve Bank had constituted a Committee (Chairperson : Prof Deepak Phatak) to
Streamlining QR
review the current system of Quick Response (QR) Codes in India. After examining
Code infrastructure the recommendations and the feedback received, the following has been decided:
i. The two interoperable QR codes in existence – UPI QR and Bharat QR – shall

continue.
ii. Payment System Operators (PSOs) that use proprietary QR codes shall shift
to one or more interoperable QR codes; the process of migration shall be
completed by March 31, 2022.
iii. No new proprietary QR codes shall henceforth be launched by any PSO for
any payment transaction.
RBI/2020-21/59 DPSS.CO.PD.No.497/02.14.003/2020-21 dt 22.10.2020.
Framework for Framework for Recognition of a Self-Regulatory Organisation for Payment System
Recognition of a Operators :
Self-Regulatory RBI has finalised the Framework for Grant of Recognition as a SRO, which is
Organisation for at annex.
Payment System
Interested groups / association of PSOs (banks as well as non-banks) seeking
Operators
recognition as an SRO may apply to the Chief General Manager, Department of
Payment and Settlement Systems, Central Office, 14th Floor, Shahid Bhagat Singh
Marg, Fort, Mumbai – 400 001.
Over time, a bouquet of payment instruments has evolved to meet the expectations
of different segments of users. It has, therefore, been decided to encourage the
establishment of a Self-Regulatory Organisation (SRO) for Payment Systems
Operators (PSOs).
An SRO is a non-governmental organisation that sets and enforces rules and

standards relating to the conduct of member entities in the industry, with the aim of
protecting the customer and promoting ethical and professional standards. The SRO
is expected to resolve disputes among its members internally through mutually
accepted processes to ensure that members operate in a disciplined environment
and even accept penal actions by the SRO.
Characteristics of an SRO
An SRO is expected to have the following characteristics in order to gain the trust
and confidence of its members:
23
 Authority, derived from membership agreements, to set behavioural and
professional standards and enforce them on the members;
 Objective and well-defined processes to make rules and enforce them
among members;
 Standardised procedures for handling conflicts and disputes, as well as
methods to resolve them through a transparent and consistent dispute
resolution mechanism;
 Effective means of oversight over its members and ensuring that they
adhere to the rules and regulations of the industry as also mutually
accepted ethical and professional standards of behaviour; and
 Develop surveillance methods for effective monitoring.
Eligibility for Recognition of an SRO by RBI
- The SRO shall be set-up as a not-for-profit company under the Companies

Act, 2013.
- Only regulated payment system entities, viz, banks and non-bank PSOs can
be members of an SRO.
- The SRO shall be professionally managed with clear bye laws.
For details, please refer,

RBI/2020-21/58 DPSS.CO.PD.No.503/02.12.004/2020-21 dt 22.10.2020.
Individual Housing Individual Housing Loans – Rationalisation of Risk Weights :
Loans – RBI has decided to rationalise the risk weights, irrespective of the amount. The risk
weights for all new housing loans to be sanctioned on or after the date of this
Rationalisation of
circular (16.10.2020) and upto March 31, 2022 shall be as under:
Risk Weights LTV Ratio (%) Risk Weight (%)
≤ 80 35
> 80 and ≤ 90 50
The requirement of standard asset provision of 0.25% shall continue to apply on all
such loans.
The LTV ratios, Risk Weights and Standard Asset Provision for all loans sanctioned
prior to the date of this circular (16.10.2020) shall continue to be as prescribed in
terms of the circular dated June 7, 2017.
RBI/2020-21/56 DOR.No.BP.BC.24/08.12.015/2020-21 dt 16.10.2020.

SLR holdings in HTM SLR holdings in HTM category :
category - Banks are permitted to exceed the limit of 25 per cent of the total
investments under Held to Maturity (HTM) category provided the excess
comprises only of SLR securities and total SLR securities held under HTM
category is not more than 19.5 per cent of Net Demand and Time Liabilities
(NDTL) as on the last Friday of the second preceding fortnight.
- Banks are, vide our circular dated September 1, 2020, allowed to hold under
HTM category, SLR securities acquired on or after September 1, 2020 up to
an overall limit of 22 per cent of NDTL, up to March 31, 2021.
- It has now been decided to extend the dispensation of the enhanced HTM
limit of 22 percent, for SLR securities acquired between September 1, 2020
and March 31, 2021, up to March 31, 2022, i.e. banks may continue to hold
24
such excess SLR securities in HTM category upto March 31, 2022.
- The enhanced HTM limit shall be restored to 19.5 per cent in a phased
manner, beginning from the quarter ending June 30, 2022, as under :
a. 21.00 per cent as on June 30, 2022

b. 20.00 per cent as on September 30, 2022
c. 19.50 per cent as on December 31, 2022
- As per extant instructions, banks may shift investments to/from HTM with
the approval of the Board of Directors once a year and such shifting will
normally be allowed at the beginning of the accounting year.
- However, in order to enable banks to shift their excess SLR securities from
the HTM category to AFS/HFT to comply with the instructions as indicated
above, it has been decided to allow such shifting of the excess securities
during the quarter in which the HTM ceiling is brought down.
- This would be in addition to the shifting permitted at the beginning of the
accounting year.
BI/2020-2021/54 DoR.No.BP.BC.22/21.04.141/2020-21 dt 12.10.2020.

Regulatory Retail Regulatory Retail Portfolio – Revised Limit for Risk Weight :
Portfolio – Revised
Furher, in order to reduce the cost of credit for regulatory retail segment consisting
Limit for Risk
of individuals and small businesses (i.e. with turnover of upto Rs. 50 crore), and also
Weight
to harmonise with the Basel guidelines, RBI has decided that the threshold limit of
Rs. 5 crore for aggregated retail exposure to a counterparty shall stand increased to
Rs. 7.5 crore from 12.10.2020.
The risk weight of 75 per cent will apply to all fresh exposures and also to existing
exposures where incremental exposure may be taken by the banks upto the revised
limit of Rs. 7.5 crore. The other exposures shall continue to attract the normal risk
weights as per the extant guidelines. Illustrations are given below :
Borrower A B
Scenarios 1 2 3 4
Existing Exposure (in Rs. crore) as on
A 4.0 4.0 6.0 6.0
October 12, 2020
100
B Existing risk weight 75% 75% 100%
%
Additional exposure taken on or after
C 0 1.5 0 1.5
October 12, 2020 (in Rs. crore)
Total exposure on or after October
D 4.0 5.5 6 7.5
12, 2020 (in Rs. crore)
25
75
E Applicable risk weight on D 75% 75% 100%
%
RBI/2020-21/53 DOR.No.BP.BC.23/21.06.201/2020-21 dt 12.10.2020.

Sovereign Gold Sovereign Gold Bond Scheme (SGB) 2020-21- Series VII, VIII, IX, X, XI, XII
Bond Scheme (SGB)
Government of India has vide Notification dt 09.10.2020 has announced
2020-21- Series VII,
the Sovereign Gold Bond Scheme 2020-21, Series VII, VIII, IX, X. XI and XII. Under the
VIII, IX, X, XI, XII scheme there will be a distinct series (starting from Series VII) for every tranche. The
terms and conditions of the issuance of the Bonds shall be as per the above
notification.
2. Date of Issue
The date of issuances shall be as per the details given in the calendar below
Sr. No. Tranche Date of Subscription Date of Issuance

1. 2020-21 Series VII October 12 - 16, 2020 October 20, 2020
2. 2020-21 Series VIII November 09 - 13, 2020 November 18, 2020
December 28 2020 -
3. 2020-21 Series IX January 05, 2021
January 01, 2021
4. 2020-21 Series X January 11-15, 2021 January 19, 2021
5. 2020-21 Series XI February 01- 05, 2021 February 09, 2021
6. 2020-21 Series XII March 01- 05, 2021 March 09, 2021
3. Period of subscription.
The Subscription of the Gold Bonds under this Scheme shall be open (Monday to
Friday) on the dates specified above, provided that the Central Government may,
with prior notice, close the Scheme at any time before the period specified above.
RBI/2020-2021/52 IDMD.CDD.No.730/14.04.050/2020-21dt 09.10.2020.
Exim Bank's Exim Bank's Government of India supported Line of Credit (LoC) of
Government of USD 310 million to the Government of the Republic of Zimbabwe :
India supported Line
of Credit (LoC) of
- Export-Import Bank of India (Exim Bank) has entered into an
agreement dated February 24, 2020 with the Government of the
USD 310 million to Republic of Zimbabwe, for making available to the latter, Government
the Government of of India supported Line of Credit (LoC) of USD 310 million (USD
Three Hundred and Ten million only) for the purpose of financing
the Republic of repowering of Hwange Thermal Power Station in the Republic of
Zimbabwe Zimbabwe.
- Out of the total credit by Exim Bank under the agreement, goods,
works and services of the value of at least 75 per cent of the contract
price shall be supplied by the seller from India, and the remaining 25
per cent of goods and services may be procured by the seller for the
26
purpose of the eligible contract from outside India.
- The Agreement under the LoC is effective from September 30, 2020.
Under the LoC, the terminal utilization period is 60 months after the
scheduled completion date of the project.
RBI/2020-2021/49 A.P. (DIR Series) Circular No.02 dt 08.10.2020.
Basel III Framework Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR) :
on Liquidity In view of the continued uncertainty on account of COVID-19, on a review, it has
Standards – Net been decided to defer the implementation of NSFR guidelines by a further period of
Stable Funding six months. These guidelines shall now come into effect from April 1, 2021.
Ratio (NSFR) RBI/2020-21/43 DOR.BP.BC.No.16/21.04.098/2020-21 dt 29.09.2020.
Basel III Capital Basel III Capital Regulations - Review of transitional arrangements :
Regulations - - In view of the continuing stress on account of COVID-19, it has been decided
to defer the implementation of the last tranche of 0.625 per cent of the
Review of
Capital Conservation Buffer (CCB) from September 30, 2020 to April 1,
transitional 2021.
- Accordingly, the minimum capital conservation ratios shall continue to apply
arrangements
till the CCB attains the level of 2.5 per cent on April 1, 2021.
- The pre-specified trigger for loss absorption through conversion / write-
down of Additional Tier 1 instruments (Perpetual Non-Convertible
Preference Shares and Perpetual Debt Instruments), shall remain at 5.5 per
cent of risk weighted assets (RWAs) and will rise to 6.125 per cent of RWAs
from April 1, 2021.
RBI/2020-21/42 DOR.BP.BC.No15/21.06.201/2020-21 dt 29.09.2020.

Positive Pay System Positive Pay System for Cheque Truncation System :
for Cheque
Truncation System
- The concept of Positive Pay involves a process of reconfirming key
details of large value cheques.
- Under this process, the issuer of the cheque submits electronically,
through channels like SMS, mobile app, internet banking, ATM, etc.,
certain minimum details of that cheque (like date, name of the
beneficiary / payee, amount, etc.) to the drawee bank, details of which
are cross checked with the presented cheque by CTS.
- Any discrepancy is flagged by CTS to the drawee bank and presenting
bank, who would take redressal measures.
- National Payments Corporation of India (NPCI) shall develop the
facility of Positive Pay in CTS and make it available to participant
banks.
- Banks, in turn, shall enable it for all account holders issuing cheques
for amounts of Rs.50,000 and above.
- While availing of this facility is at the discretion of the account
holder, banks may consider making it mandatory in case of cheques
for amounts of Rs.5,00,000 and above.
- Positive Pay System shall be implemented from January 01, 2021.
RBI/2020-21/41 DPSS.CO.RPPD.No.309/04.07.005/2020-21 dt 25.09.2020.
Automation of Automation of Income Recognition, Asset Classification and Provisioning processes
27
Income Recognition, in banks :
Asset Classification - In order to ensure the completeness and integrity of the automated
and Provisioning
Asset Classification (classification of advances/investments as
NPA/NPI and their upgradation), Provisioning calculation and Income
processes in banks Recognition processes, banks are advised to put in place / upgrade
their systems to conform to the following guidelines latest by June 30,
2021.
- Coverage:
- All borrowal accounts, including temporary overdrafts, irrespective of
size, sector or types of limits, shall be covered in the automated IT
based system (System) for asset classification, upgradation, and
provisioning processes. Banks’ investments shall also be covered
under the System.
- Calculation of provisioning requirement shall also be System
based as per pre-set rules for various categories of assets, value of
security as captured in the System and any other regulatory stipulations
issued from time to time on provisioning requirements.
- In addition, income recognition/derecognition in case of impaired
assets (NPAs/NPIs) shall be system driven and amount required to
be reversed from the income account should be obtained from the
System without any manual intervention.
- The System shall handle both down-grade and upgrade of accounts
through Straight Through Process (STP) without manual
intervention.
- Frequency:
- Banks should ensure that the asset classification status is updated as
part of day end process.
- Banks should also be able to generate classification status report at any
given point of time with actual date of classification of assets as
NPAs/NPIs.
RBI/2020-21/37 DoS.CO.PPG./SEC.03/11.01.005/2020-21 dt 14.09.2020.

Compliance Compliance functions in banks and Role of Chief Compliance Officer (CCO) :
functions in banks
The following guidelines are meant to bring uniformity in approach followed by
and Role of Chief
banks, as also to align the supervisory expectations on CCOs with best practices.
Compliance Officer Policy –
- A bank shall lay down a Board-approved compliance policy.
(CCO)
- The quality assurance and improvement program shall be subject to
independent external review periodically (at least once in three years).
- The policy shall be reviewed at least once a year;
- Tenor for appointment of CCO –
- Minimum fixed tenure of not less than 3 years.
- Transfer / Removal of CCO - The CCO may be transferred / removed before
completion of the tenure only in exceptional circumstances.
- Eligibility Criteria for appointment as CCO -
- Rank - The CCO shall be a senior executive of the bank, preferably in the
rank of a General Manager or an equivalent position (not below two levels
from the CEO). The CCO could also be recruited from market;
- Age - Not more than 55 years;
28
- Experience - At least 15 years in the banking or financial services, out of
which minimum 5 years shall be in the Audit / Finance / Compliance / Legal /
Risk Management functions;
- Others - No vigilance case or adverse observation from RBI, shall be pending
against the candidate identified for appointment as the CCO.
- Selection Process – To be done on the basis of a well-defined selection
process.
- Reporting Requirements - A prior intimation to the Department of
Supervision, Reserve Bank of India, Central Office, Mumbai, shall be
provided before appointment, premature transfer/removal of the CCO.
- Reporting Line - The CCO shall have direct reporting lines to the MD & CEO
and/or Board/Board Committee (ACB) of the bank.
- Authority - The CCO and compliance function shall have the authority to
communicate with any staff member and have access to all records or files
that are necessary to enable him/her to carry out entrusted responsibilities
in respect of compliance issues. This authority should flow from the
compliance policy of the bank;
- The duties and responsibilities of the compliance function - These shall
include at least the following activities:
i. To apprise the Board and senior management on regulations, rules and

standards and any further developments.
ii. To provide clarification on any compliance related issues.
iii. To conduct assessment of the compliance risk (at least once a year) and to
develop a risk-oriented activity plan for compliance assessment. The activity
plan should be submitted to the ACB for approval and be made available to
the internal audit.
iv. To report promptly to the Board / ACB / MD & CEO about any major
changes / observations relating to the compliance risk.
v. To periodically report on compliance failures/breaches to the Board/ACB
and circulating to the concerned functional heads.
vi. To monitor and periodically test compliance by performing sufficient and
representative compliance testing. The results of the compliance testing
should be placed to Board/ACB/MD & CEO.
vii. To examine sustenance of compliance as an integral part of compliance
testing and annual compliance assessment exercise.
viii. To ensure compliance of Supervisory observations made by RBI and/or any
other directions in both letter and spirit in a time bound and sustainable
manner.
- Internal Audit - The compliance function shall be subject to internal audit;

- Dual Hatting - There shall not be any ‘dual hatting’ i.e. the CCO shall not be
given any responsibility which brings elements of conflict of interest,
especially the role relating to business.
RBI/2020-21/35 DoS.CO.PPG./SEC.02/11.01.005/2020-21 dt 11.09.2020.

Resolution Resolution Framework for COVID-19-related Stress – Financial Parameters :
Framework for
The Reserve Bank had accordingly set up an Expert Committee with Shri K. V.
COVID-19-related
Kamath as the Chairperson.
Stress – Financial
Accordingly, all lending institutions shall mandatorily consider the following key
29
Parameters ratios while finalizing the resolution plans in respect of eligible borrowers under Part
B of the Annex to the Resolution Framework:
Key Ratio Definition

Total Outside Liabilities / Addition of long-term debt, short term debt,
Adjusted Tangible Net current liabilities and provisions along with
Worth (TOL/ATNW) deferred tax liability divided by tangible net worth
net of the investments and loans in the group and
outside entities.
Total Debt / EBITDA Addition of short term and long-term debt divided
by addition of profit before tax, interest and finance
charges along with depreciation and amortisation.
Current Ratio Current assets divided by current liabilities
Debt Service Coverage For the relevant year addition of net cash accruals
Ratio (DSCR) along with interest and finance charges divided by
addition of current portion of long term debt with
interest and finance charges.
Average Debt Service Over the period of the loan addition of net cash
Coverage Ratio (ADSCR) accruals along with interest and finance charges
divided by addition of current portion of long term
debt with interest and finance charges.
- The sector-specific thresholds (ceilings or floors, as the case may be) for
each of the above key ratios that should be considered by the lending
institutions in the resolution assumptions with respect to an eligible
borrower are given in the Annex.
- For sectors where the sector-specific thresholds have not been specified,
lending institutions shall make their own internal assessments regarding
TOL/ATNW and Total Debt/EBITDA.
- However, the current ratio and DSCR in all cases shall be 1.0 and above, and
ADSCR shall be 1.2 and above.
- Lending institutions are free to consider other financial parameters as well
while finalizing the resolution assumptions in respect of eligible borrowers
apart from the above mandatory key ratios.
- Lending institutions are expected to ensure compliance to TOL/ATNW
agreed as per the resolution plan at the time of implementation itself.
Nevertheless, in all cases, this ratio shall have to be maintained as per the
resolution plan by March 31, 2022 and on an ongoing basis thereafter.
- However, wherever the resolution plan envisages equity infusion, the same
may be suitably phased-in over this period. All other key ratios shall have to
be maintained as per the resolution plan by March 31, 2022 and on an
ongoing basis thereafter.
- Other Clarifications - Applicability of ICA and Escrow account
- The various requirements of the Resolution Framework, especially the
30
mandatory requirement of ICA, wherever applicable, and maintenance of an
escrow account after implementation of a resolution plan, shall be
applicable at the borrower-account level, i.e. the legal entities to which the
lending institutions have exposure to, which could include a special purpose
vehicle having a legal-entity status, set up for a project.
- It is further clarified that signing of ICA is a mandatory requirement for all
lending institutions in all cases involving multiple lending institutions, where
the resolution process is invoked, and the requirement of additional
provisions if the ICA is not signed within 30 days of invocation does not
substitute for the mandatory nature of ICA.
- Compliance with this regulatory requirement shall be assessed for all
lending institutions as part of the supervisory review.
RBI/2020-21/34 DOR.No.BP.BC/13/21.04.048/2020-21 dt 07.09.2020.

Long Form Audit Long Form Audit Report (LFAR) – Review :
Keeping in view the large scale changes in the size, complexities, business model and
Report (LFAR) -
risks in the banking operations, a review of the LFAR formats, in consultation with
Review the stakeholders, including the Institute of Chartered Accountants of India (ICAI),
was undertaken and it has been decided to make the following changes.
3. The format of LFAR, as mentioned below, have been revised:
a. Annex I for Statutory Central Auditors (SCA)
b. Annex II for Branch Auditors
c. An Appendix as part of Annex II for the specialized branches and
d. Annex III on Large / Irregular / Critical accounts for branch auditors.
The revised LFAR formats are required to be put into operation for the period
covering FY 2020-21 and onwards.
Regarding other operational issues relating to submission of LFAR, we further advise
as under:
a. Timely receipt of LFARs from the auditors should be ensured;
b. The LFAR on the bank, after due examination, should be placed before the
ACB / Local Advisory Board of the bank indicating the action taken/proposed
to be taken for rectification of the irregularities, if any, mentioned therein;
and
c. A copy each of the LFAR (i.e. for the bank / all Indian Offices of foreign bank
as a whole) and the relative agenda note, together with the Board's views or
directions, should be forwarded to the concerned Senior Supervisory
Manager (SSM) in the Department of Supervision, Reserve Bank of India
within 60 days of submission of the LFAR by the statutory auditors.
RBI/2020-21/33 No.DOS.CO.PPG./SEC.01/11.01.005/2020-21 dt 07.09.2020.
31
Report on Trend and Progress of Banking in India 2019-20
The broad theme of this year’s report is the impact of COVID-19 on banking and non-banking sectors, and the
way forward. The highlights of the Report are set out below:
 During 2019-20 and first half of 2020-21, scheduled commercial banks (SCBs) consolidated the gains achieved
after the turnaround in 2018-19.
 SCBs’ gross non-performing assets (GNPA) ratio declined from 9.1 per cent at end-March 2019 to 8.2 per cent at
end-March 2020 and further to 7.5 per cent at end-September 2020.
 Capital to risk weighted assets (CRAR) ratio of SCBs strengthened from 14.3 per cent at end-March 2019 to 14.7
per cent at end-March 2020 and further to 15.8 per cent at end-September 2020, partly aided by
recapitalisation of public sector banks and capital raising from the market by both public and private sector
banks.
 Net profits of SCBs turned around in 2019-20 after losses in the previous two years; in H1:2020-21, their
financial performance was shored up by the moratorium, standstill in asset classification and ploughing back of
dividends.
 The Reserve Bank undertook an array of policy measures to mitigate the effects of COVID-19; its regulatory
ambit was reinforced by legislative amendments, giving it greater powers over co-operative banks, non-banking
financial companies (NBFCs), and housing finance companies (HFCs); and it also undertook a series of initiatives
to bolster its supervisory framework.
 The recovery process gained traction with the resolution of large accounts through the Insolvency and
Bankruptcy Code (IBC); the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 (SARFAESI) channel also aided the process of recovery.
 The balance sheet growth of Urban Co-operative Banks (UCBs) moderated in 2019-20 on lower deposit
accretion and muted expansion in credit; while their asset quality deteriorated, increased provisioning resulted
in net losses.
 The performance of state co-operative banks improved, both in terms of profitability and asset quality.
 The consolidated balance sheet of NBFCs decelerated in 2019-20 due to near stagnant growth in loans and
advances although some improvement became visible in H1:2020-21; notwithstanding a marginal deterioration
in asset quality, the NBFC sector remains resilient with strong capital buffers.
 The Report also offers some perspectives on the evolving outlook for India’s financial sector.
Highlights of Financial Stability Report Jan 2021
 In the initial phase of the COVID-19 pandemic, policy actions were geared towards restoring normal functioning
and mitigating stress; the focus is now being oriented towards supporting the recovery and preserving the
solvency of businesses and households.
 Positive news on vaccine development has underpinned optimism on the outlook, though it is marred by second
wave of the virus including more virulent strains.
 Policy measures by the regulators and the government have ensured the smooth functioning of domestic
markets and financial institutions; managing market volatility amidst rising spillovers has become challenging
especially when the movements in certain segments of the financial markets are not in sync with developments
in the real sector.
 Bank credit growth has remained subdued, with the moderation being broad-based across bank groups.
 Performance parameters of banks have improved significantly, aided by regulatory dispensations extended in
response to the COVID-19 pandemic.
 The capital to risk-weighted assets ratio (CRAR) of Scheduled Commercial Banks (SCBs) improved to 15.8 per
cent in September 2020 from 14.7 per cent in March 2020, while their gross non-performing asset (GNPA) ratio
declined to 7.5 per cent from 8.4 per cent, and the provision coverage ratio (PCR) improved to 72.4 per cent
from 66.2 per cent over this period.
 Macro stress tests incorporating the first advance estimates of gross domestic product (GDP) for 2020-21
released on January 7, 2021 indicate that the GNPA ratio of all SCBs may increase from 7.5 per cent in
September 2020 to 13.5 per cent by September 2021 under the baseline scenario; the ratio may escalate to
32
14.8 per cent under a severe stress scenario. This highlights the need for proactive building up of adequate
capital to withstand possible asset quality deterioration.
Network analysis reveals that total bilateral exposures among entities in the financial system increased
marginally during the quarter-ended September 2020. With the inter-bank market continuing to shrink and with
better capitalisation of banks, the contagion risk to the banking system under various scenarios declined as
compared to March 2020
Objectives of Reserve Management, Legal Framework, Risk
Management Practices, Transparency and Disclosure
1. Objectives of Reserve Management
The guiding objectives of foreign exchange reserve management in India are similar to those of many central
banks in the world. The demands placed on the foreign exchange reserves may vary widely depending upon a
variety of factors including the exchange rate regime adopted by the country, the extent of openness of the
economy, the size of the external sector in a country's GDP and the nature of markets operating in the country.
While safety and liquidity constitute the twin objectives of reserve management in India, return optimization is
kept in view within this framework.
2. Legal Framework and Policies
The Reserve Bank of India Act, 1934 provides the overarching legal framework for deployment of reserves in
different foreign currency assets and gold within the broad parameters of currencies, instruments, issuers and
counterparties. The essential legal framework for reserve management is provided in sub-sections 17(6A),
17(12), 17(12A), 17(13) and 33 (6) of the above Act. In brief, the law broadly permits the following investment
categories:
 deposits with other central banks and the BIS;

 deposits with commercial banks overseas;
 debt instruments representing sovereign/sovereign-guaranteed liability with residual maturity for the debt
papers not exceeding 10 years;
 other instruments / institutions as approved by the Central Board of the Reserve Bank in accordance with the
provisions of the Act; and
 dealing in certain types of derivatives.
3 Risk Management
The broad strategy for reserve management including currency composition and investment policy is decided in
consultation with the Government of India. The risk management functions are aimed at ensuring development
of sound governance structure in line with the best international practices, improved accountability, a culture of
risk awareness across all operations, efficient allocation of resources and development of in-house skills and
expertise. The risks attendant on deployment of reserves, viz., credit risk, market risk, liquidity risk and
operational risk and the systems employed to manage these risks are detailed in the following paragraphs.
3.1 Credit Risk
The Reserve Bank is sensitive to the credit risk it faces on account of the investment of foreign exchange
reserves in the international markets. The Reserve Bank's investments in bonds/treasury bills represent debt
obligations of highly rated sovereigns, central banks and supranational entities. Further, deposits are placed
with central banks, the BIS and commercial banks overseas. RBI has framed requisite guidelines for selection of
issuers/ counterparties with a view to enhancing the safety and liquidity aspects of the reserves. The Reserve
Bank continues to apply stringent criteria for selection of counterparties. Credit exposure vis-à-vis sanctioned
33
limit in respect of approved counterparties is monitored continuously. Developments regarding counterparties
are constantly under watch. The basic objective of such an on-going exercise is to assess whether any
counterparty's credit quality is under potential threat.
3.2 Market Risk
Market risk for a multi-currency portfolio represents the potential change in valuations that result from
movements in financial market prices, for example, changes in interest rates, foreign exchange rates, equity
prices and commodity prices. The major sources of market risk for central banks are currency risk, interest rate
risk and movement in gold prices. Gains/losses on valuation of FCA and gold due to movements in the exchange
rates and/or price of gold are booked under a balance sheet head named the Currency and Gold Revaluation
Account (CGRA). The balances in CGRA provide a buffer against exchange rate/gold price fluctuations. The dated
foreign securities are valued at market prices as on the last business day of each week and month and the
appreciation/depreciation arising therefrom is transferred to the Investment Revaluation Account (IRA). The
balance in IRA is meant to provide cushion against changes in the security prices over the holding period.
3.2.1 Currency Risk
Currency risk arises due to movements in the exchange rates. Decisions are taken on the long-term exposure to
different currencies, depending on the likely movements in exchange rates and other considerations in the
medium and long-term. The decision making procedure is supported by reviews of the strategy on a regular
basis.
3.2.2 Interest Rate Risk
The crucial aspect of the management of interest rate risk is to protect the value of the investments as much as
possible from adverse impact of interest rate movements. The interest rate sensitivity of the portfolio is
identified in terms of the benchmark duration and the permitted deviation from the benchmark.
3.2.3 Liquidity Risk
Liquidity risk involves the risk of not being able to sell an instrument or close a position when required without
facing significant costs. The reserves need to have a high level of liquidity at all times in order to be able to meet
any unforeseen and emergency needs. Any adverse development on the external front would pose a demand
on our forex reserves and, hence, the investment strategy needs a highly liquid portfolio. The choice of
instruments determines the liquidity of the portfolio. For example, in some markets, treasury securities could be
liquidated in large volumes without much distortion of the price in the market and, thus, can be considered as
liquid. Except fixed deposits with the BIS/ commercial banks overseas / central banks and securities issued by
supranationals, almost all other types of investments are highly liquid instruments which could be converted
into cash at short notice. The Reserve Bank closely monitors the portion of the reserves, which could be
converted into cash at a very short notice, to meet any unforeseen/ emergency needs.
3.3 Operational Risk and Control System
In tune with the global trend, close attention is paid to strengthen the operational risk control arrangements.
Key operational procedures are documented. Internally, there is total separation of the front office and the back
office functions and the internal control systems ensure several checks at the stages of deal capture, deal
processing and settlement. The deal processing and settlement system, including generation of payment
instructions, is also subject to internal control guidelines. There is a system of concurrent audit for monitoring
compliance in respect of the internal control guidelines. Further, reconciliation of accounts is done regularly. In
addition to internal audit and independent monitoring, the financial accounts are audited by external statutory
auditors. There is a comprehensive reporting mechanism covering significant areas of activity/ operations
relating to reserve management. These are provided to the senior management periodically, at frequent
34
intervals, depending on the type and sensitivity of information. The Reserve Bank uses SWIFT as the messaging
platform to settle its trades and send financial messages to its counterparties, custodians of securities and other
business partners. International best practices with respect to usage and security of SWIFT system are followed.
The SWIFT Alliance Access system has been upgraded to the latest version in line with the recommendations of
the SWIFT. Further, security cover was enhanced with the implementation of a tool provided by SWIFT called
payment control services (PCS).
Towards a Stable Financial System
Changing Contours of Financial Stability
Globally, the concept of financial stability has been evolving over time. With increasing complexity of
the financial system, the focus of financial stability has moved beyond commercial banks and providing
them liquidity during bank runs, to other segments like non-bank financial institutions, financial markets,
payment systems, etc. The focus area has thus widened to several other pressure points to prevent
financial instability. Not surprisingly, therefore, preservation of financial stability has steadily evolved to
become a major objective among central banks, implicitly or explicitly, alongside traditional and
evolving goals of monetary policy.
Since the global financial crisis (GFC) of 2008, financial stability has featured even more prominently in
the discourse of central banks. It has been well documented that central banks in many countries were
narrowly focused on price stability and perhaps overlooked the build-up of financial instability during
the great moderation period. The pre-crisis consensus was for unfettered financial sector growth and
minimal regulation that was supposed to deliver even more growth. The 2008 crisis made it abundantly
clear that financial strength of individual institutions does not add up to systemic stability. That was
evident because before the crisis happened, almost every financial institution reported substantial
capital adequacy. This made the policy makers realise that while micro-prudential regulations would
help determine the strength of a financial entity, they have to be complemented with adequate macro-
prudential regulations and anti-systemic risk measures. Preserving systemic stability thus emerged as
the cornerstone of central bank policies.
In the Indian context, maintaining financial stability remains one of the uppermost objectives of the
Reserve Bank, drawing from its wide mandate as the regulator of the banks, NBFCs and payment
systems; regulator of the money, forex, government securities and credit markets; and also as the
lender-of-the-last resort. This unique combination of responsibilities – monetary policy combined with
macroprudential regulation and micro-prudential supervision – has allowed the Reserve Bank to exploit
the synergies across various dimensions.
The conceptual underpinnings of financial stability, as it evolved post-GFC, entailed preserving and
nurturing a well-functioning financial architecture which includes not just the banks but also other
35
financial institutions along with efficient and secure payment and settlement systems. Recent
experience across countries during the pandemic suggests that even though banks, non-banks,
financial markets and payment systems remain at the core of financial stability issues, there is still a
need to look much closer at the system in its entirety. In this sense, the overall objective of financial
stability policies should be closely intertwined with the health of the real economy. More precisely,
given that the financial system works as a pivot between various sectors of the economy and given the
strong linkages across sectors, financial stability needs to be seen in a broader perspective and must
include not just the stability of the financial system and monetary stability (price stability), but also fiscal
sustainability and external sector viability. All these operate in a feedback loop; and disturbances in any
of the segments do get propagated to other segments with the potential of disrupting systemic stability.
When we look at financial stability from such a perspective, preserving and nurturing the same
becomes a public good, which should facilitate creation and nurturing of congenial underlying
conditions for sustained growth and development. In difficult circumstances, such as the current one, it
is important that all stakeholders recognise and partake in their shared responsibility for the collective
benefit of the society at large. History is replete with examples of such endeavours in response to
difficult situations and that, in essence, has been the story of human progress and modern economies.
II. Preserving Financial Stability during COVID-19
The idea of financial stability in this broader sense moulded the Reserve Bank’s approach during the
pandemic, which was a unique crisis, more challenging than the global financial crisis of 2008,
impacting both the real and financial sector in great severity. With conventional, unconventional and
new tools, the Reserve Bank responded through a series of measures to alleviate stress in various
segments of the economy and the financial sector, including the stress encountered by market players
and financial entities. Broadly speaking, our approach to the Covid situation included the following
measures:
(a) Measures to mitigate the immediate impact of the pandemic : loan moratoriums together with asset
classification standstill; easing of working capital financing and deferment of interest; restructuring of
MSME loans, etc.
(b) Liquidity augmenting measures: LTRO/ TLTRO/refinance schemes for various sectors including
stressed sectors; reduction in CRR, and other measures totalling about Rs.12.81 lakh crore (6.3 per
cent of nominal GDP of 2019-20).
(c) Countercyclical regulatory measures to ease stress on borrowers and the banking system –
relaxation in regulatory compliance; conservation of capital by banks; relaxation in group exposure
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norms, etc.
(d) Measures to ensure uninterrupted flow of credit - significant interest rate cuts (115bps); assuring
markets of easy financing conditions; exemption from CRR maintenance for incremental retail and
MSME loans; extension of priority sector classification for bank loans to NBFCs for on-lending;
rationalisation of risk weights for regulatory retail portfolio and individual housing loans, etc.
(e) Framework for resolution of Covid-related stress for individuals and businesses.
(f) Closer surveillance of supervised entities focusing on business process resilience and continuity,
proactive management of risks, stress tests and proactive raising of capital, etc.
Our principal objective during this pandemic period was to support economic activity; and looking back,
it is evident that our policies have helped in easing the severity of the economic impact of the
pandemic. I would like to unambiguously reiterate that the Reserve Bank remains steadfast to take any
further measures, as may be necessary, while at the same time remaining fully committed to
maintaining financial stability.
III. Adaptations and Learnings: Way Forward
The recent period has given us an opportunity to learn and adapt and decide on the way forward. In
today’s lecture, I would like to focus on three key areas: (i) stability of the banking and non-banking
financial sector; (ii) external sector stability; and (iii) fiscal stability. Let me first focus on the banking
and non-banking financial sectors.
Governance Reforms
Integrity and quality of governance are key to good health and robustness of banks and NBFCs.
Recent events in our rapidly evolving financial landscape have led to increasing scrutiny of the role of
promoters, major shareholders and senior management vis-à-vis the role of the Board. The RBI is
constantly focussed on strengthening the related regulations and deepening its supervision of financial
entities.
A good governance structure will have to be supported by effective risk management, compliance
functions and assurance mechanisms. These constitute the first line of defence in matters relating to
financial sector stability. Some of the integral elements of the risk management framework of banks
would include effective early warning systems and a forward-looking stress testing framework. Banks
and NBFCs need to identify risks early, monitor them closely and manage them effectively. The risk
management function in banks and NBFCs should evolve with changing times as technology becomes
all pervasive and should be in sync with international best practices. In this context, instilling an
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appropriate risk culture in the organisation is important. This needs to be driven by the Board and
senior management with effective accountability at all levels.
In addition to a strong risk culture, banks and non-banks should also have appropriate compliance
culture. Cost of compliance to rules and regulations should be perceived as an investment as any
inadequacy in this regard will prove to be detrimental. Compliance culture should ensure adherence to
not only laws, rules and regulations, but also integrity, ethics and codes of conduct.
A robust assurance mechanism by way of internal audit function is another important component of
sound corporate governance and risk management. It provides independent evaluation and assurance
to the Board that the operations of the entity are being performed in accordance with the set policies
and procedures. The internal audit function should assess and contribute to improvement of the
organisation’s governance, risk management and control processes using a systematic, disciplined,
and risk-based approach.
In all these areas, the RBI has already taken a number of measures and will continue to do so from
time to time. Recent efforts in this direction were geared towards enhancing the role and stature of the
compliance and internal audit functions in banks by clarifying supervisory expectations and aligning the
guidelines with best practices. Some more measures on improving governance in banks and NBFCs
are in the pipeline.
Supervisory Initiatives
In the last two years, the Reserve Bank has initiated a series of measures to strengthen its supervisory
framework over SCBs, UCBs as well as NBFCs. The supervisory functions pertaining to these sectors
are now integrated, with the objective of harmonising the supervisory approach. The possibility of
working in silos has been eliminated. We have developed a system for early identification of
vulnerabilities to facilitate timely and proactive action. We have been deploying advances in data
analytics to offsite returns so as to provide sharper and more comprehensive inputs to the onsite
supervisory teams. The thrust of the Reserve Bank’s supervision is now more on root causes of
vulnerabilities rather than dealing with symptoms. Bank-wise as well as system-wide supervisory stress
testing adds a forward-looking dimension for identification of vulnerable areas. A risk-based
supervision framework focussing on know your customer (KYC)/anti money laundering (AML) risk has
been created in line with global practices. Fintech initiatives are being embraced in the form of
innovative technologies for regulation (RegTech) and supervision (SupTech).
As regards regulatory intervention in banks to protect the interest of depositors, our approach in recent
times has been to first work closely with the management to find a workable solution. When this does
not work, we have intervened and put in place a new arrangement within a quick time schedule. With
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preservation of financial stability and depositors’ interest being uppermost in our agenda, we could
swiftly resolve the situation at two scheduled commercial banks. Notwithstanding improvements being
made, it is recognised that enhancing and refining the supervisory framework is a continuous process.
The RBI remains strongly committed to preserve the stability of the financial sector. We will do
whatever is necessary on this front.
Recapitalisation of Banks
Going ahead, financial institutions in India have to walk a tightrope in nurturing the economic recovery
within the overarching objective of preserving long-term stability of the financial system. The current
COVID-19 pandemic related shock will place greater pressure on the balance sheets of banks in terms
of non-performing assets, leading to erosion of capital. Building buffers and raising capital by banks –
both in the public and private sector – will be crucial not only to ensure credit flow but also to build
resilience in the financial system. We have advised all banks, large non-deposit taking NBFCs and all
deposit-taking NBFCs to assess the impact of COVID-19 on their balance sheet, asset quality, liquidity,
profitability and capital adequacy, and work out possible mitigation measures including capital
planning, capital raising, and contingency liquidity planning, among others.
Preliminary estimates suggest that potential recapitalisation requirements for meeting regulatory norms
as well as for supporting growth capital may be to the extent of 150 bps of Common Equity Tier-I
capital ratio for the banking system2. Prudently, a few large public sector banks (PSBs) and major
private sector banks (PVBs) have already raised capital, and some have plans to raise further
resources taking advantage of benign financial conditions. This process needs to be put on the fast
track.
External Sector Stability
Given that the domestic financial sector closely interacts with external sector through various channels,
it becomes a critical segment from a financial stability perspective. A weak external sector can pose a
threat to domestic financial stability in the face of swift changes in the global economic environment as
was the case during the GFC (2008) or the taper-tantrum period (2013). External sector conditions are
generally captured through movements in current account balances, capital flows, exchange rates,
foreign exchange reserves and external debt position. Sudden changes in any of these indicators due
to global shocks and/or domestic developments can impact the viability of external sector and its
interaction with the domestic economy.
Notwithstanding the worsening of both external and domestic demand conditions impinging on exports
and imports since the onset of COVID-19, India’s external sector has remained resilient. Lower trade
deficit driven by steeper fall in imports coupled with resilient net exports of services translated into a
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large current account surplus to the tune of 3.1 per cent of GDP in H1:2020-21. With surplus in the
current account, the scope of absorption of strong inflows of foreign direct investment and portfolio
investments by the economy was limited which led to a large accretion in foreign exchange reserves.
Sustained accretion to foreign exchange reserves has improved reserve adequacy in terms of
conventional metrics such as (i) cover for imports (18.4 months) and (ii) reserves to short-term debt in
terms of residual maturity (236 per cent). Sound external sector indicators augur well for limiting the
impact of spillovers of possible global shocks and financial stability concerns as investors and markets
are credibly assured of the buffer against potential contagion. While abundant capital inflows have
been largely driven by accommodative global liquidity conditions and India’s optimistic medium-term
growth outlook, domestic financial markets must remain prepared for sudden stops and reversals,
should the global risk aversion factors take hold. Under uncertain global economic environment, EMEs
typically remain at the receiving end. In order to mitigate global spillovers, they have no recourse but to
build their own forex reserve buffers, even though at the cost of being included in currency
manipulators list or monitoring list of the US Treasury. I feel that this aspect needs greater
understanding on both sides so that EMEs can actively use policy tools to overcome the capital flow
related challenges. At the Reserve Bank, we are closely monitoring both global headwinds and
tailwinds while assessing domestic macroeconomic situation and its resilience.
Fiscal Stability
The COVID-19 pandemic has further brought to the fore the need for governments to spend on merit
goods and public goods; in particular on improving human and social capital and on physical
infrastructure (IMF, 2020). As per IMF’s calculations, the total fiscal support in response to COVID-19
amounted to about 12 per cent of global GDP by mid-September 2020. Global public debt is said to
reach 100 per cent of GDP in 2020. As a result, most economies are expected to emerge from the
pandemic with higher deficits and debt vulnerabilities. Under these circumstances, and given the
expenditure requirements to support the process of economic revival, fiscal stability becomes an even
more important constituent of overall financial stability.
Although the scale of fiscal spending is expected to breach the quantitative targets of fiscal prudence
across most economies in the short-run, it was crucial in the context of the pandemic from the
perspective of welfare aspect of public expenditure. Expenditure on physical and social infrastructure
including human capital, science and technology is not only welfare-enhancing, it also paves the way
for higher growth through their higher multiplier effect and enhancement of both capital and labour
productivity. Under these circumstances and going forward, it becomes imperative that fiscal roadmaps
are defined not only in terms of quantitative parameters like fiscal balance to GDP ratio or debt to GDP
ratio, but also in terms of measurable parameters relating to quality of expenditure, both for center and
states. While the conventional parameters of fiscal discipline will ensure medium and long-term
sustainability of public finances, measurable parameters of quality of expenditure would ensure that
welfarism carries significant productive outcomes and multiplier effects. Maintaining and improving the
quality of expenditure would help address the objectives of fiscal sustainability while supporting growth
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Accelerating Financial Market Reforms in India
Macroeconomic Outlook
After witnessing a sharp contraction in GDP by 23.9% in Q1:2020-21 and a multi-speed normalisation
of activity in Q2, the Indian economy has exhibited stronger than expected pick up in momentum of
recovery. The global economy has also witnessed a stronger than expected rebound in activity in Q3.
The IMF has accordingly revised its assessment for global growth in 2020 to a less severe contraction
than what was assessed in June 2020.
Even as the growth outlook has improved, downside risks to growth continue due to recent surge in
infections in advanced economies and parts of India. We need to be watchful about the sustainability of
demand after festivals and a possible reassessment of market expectations surrounding the vaccine. The
monetary policy guidance in October emphasised the need to see through temporary inflation pressures
and also maintain the accommodative stance at least during the current financial year and into the next
financial year.
A key source of resilience in recent months has been the comfortable external balance position of India
supported by surplus current account balances over two consecutive quarters, resumption of portfolio
capital inflows on the back of robust FDI inflows, and sustained build-up of foreign exchange reserves.
The Government’s recent policy focus to enhance India’s participation in global value chains, including
through production linked incentives for targeted sectors, can leverage on the strong external balance
position of India.
Financial Market Developments
Let me now turn to financial markets. Domestic financial market conditions were benign at the start of
the year but witnessed severe stress and dislocation as the COVID-19 pandemic unfolded. Thinning out
of activity impacted market liquidity. Increased volatility of financial prices was observed across most
asset classes. Yields hardened in the government securities market and the yield curve steepened sharply
amidst concerns about fiscal slippage and sustained sell-off by FPIs. The financing conditions in the
commercial paper and corporate bond market also deteriorated, reflecting overall market conditions as
well as generalised risk aversion. The Rupee sharply depreciated, with increasing volatility and
heightened forward premia. The Reserve Bank acted proactively and nimble-footedly to ease financial
market conditions and mitigate risks with a slew of conventional and unconventional measures. Market
participants responded with alacrity and together we have been able to ensure stable and resilient
markets across all segments. The Reserve Bank remains committed to fostering orderly functioning of
financial markets and will continue to evaluate incoming information having a bearing on the financial
markets and act, as needed, to mitigate any downside risks.
Over the last three decades, the pace of financial market reforms has gathered momentum, albeit
occasionally interrupted by financial crises. A calibrated opening up of the Indian economy has
occurred since the 1990s. Alongside, the institutional architecture has been deepened keeping in view
the specifics of the country context. In the interregnum, the markets have traversed a long distance.
Over the years, the bond markets in the country have become broad-based in terms of participation,
availability of a variety of instruments and development of repo and derivative markets. The sovereign
yield curve now spans up to 40 years and provides a stable pricing backbone for the development of the
corporate bond market. The foreign exchange market has also come a long way, with increasing
diversity in instruments and participants, and a growing integration of the economy with the global
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economy. Alongside these changes, significant improvements in the market infrastructure have taken
place encompassing state-of-the-art primary issuance process for government securities, an efficient and
completely dematerialized depository system within the central bank, electronic trading platforms, trade
reporting and central counterparty settlement.
Even as the financial markets evolved, some imperfections became evident. Secondary market liquidity
in government securities increased but was confined to a few benchmark tenors. The participation base
grew but diversity of views remained limited with predominance of “buy and hold” and “long-only”
investors. Interest rate derivative markets grew but remained limited to one product – the Overnight
Indexed Swap – and to a small set of market participants. Domestic foreign exchange markets also grew
but so did the offshore markets, fragmenting the global market for the Indian Rupee and impairing
market efficiency. New product development remained constrained, in part, due to limited participation
and also due to regulatory restrictions which had developed in response to the past experience with
complex products and concerns about valuations and mis-selling. Meanwhile, episodes of misconduct
and abuse in global markets raised the imperative of improving governance frameworks to pre-
emptively safeguard domestic markets.
Notwithstanding these imperfections, the resilience and strong foundation of financial markets, nurtured
over time, also presented an opportunity. Markets with a small number of participants tend to become
‘closed user clubs’ with predictable behavioural attributes. Furthermore, speculative flows in thin
markets can create distortions. In deep markets, these very flows can add liquidity and make the markets
more resilient. A calibrated opening up of the economy can supplement domestic savings and help
finance growth and development.
Against this backdrop, the Reserve Bank has taken steps to usher in the next phase of reforms to
accelerate the pace of liberalisation. The recent reform measures, many of which are in the works, have
been fashioned around the four major themes of (i) liberalising financial markets and simplifying
market regulation; (ii) internationalising financial markets; (iii) safeguarding the “buy side” – user
protection; and (iv) ensuring resilience and safety. Let me discuss each of these themes.
Liberalising financial markets and simplifying market regulations
The broad approach driving the recent regulatory initiatives is that any person with a need to access
financial markets should be able to do so with ease at minimum cost. Principle-based regulations for
interest rate derivatives and foreign exchange derivatives aim at achieving this broad objective. Detailed
procedural prescriptions have been replaced with basic principles, thereby allowing - greater operational
flexibility for market participants. Earlier restrictions on design of derivative contracts and cancellation
and rebooking of foreign exchange derivatives have been dispensed with. Distinctions based on
residency have been removed or reduced, bringing foreign participants at par with domestic entities in
terms of market entry and exit. While retaining the existence of underlying exposures as the basis for
access, greater flexibility and ease of hedging have been brought in by allowing anticipated exposures to
be hedged. Users with limited/small hedging requirements have been allowed to enter into contracts
equivalent of USD 10 million without the need to establish the existence of underlying exposures.
Simplifying regulations and providing procedural flexibilities have also contributed to easing operating
conditions and thereby reducing costs and inefficiencies. While some operational constraints are
inevitable, especially those warranted by prudential considerations, our approach has been to ease
operating conditions within these considerations. Another example of this is the recent passing of the
Bilateral Netting of Qualified Financial Contracts Act, 2020, which addresses an important operating
constraint. The absence of legal recognition for bilateral netting had discouraged the use of derivatives
for effective risk management. The legislation provides the enabling framework for cash and derivative
market transactions to be off-set. This will enable optimization of capital requirement for financial
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institutions and will provide an impetus for the development of derivative markets.
Internationalisation of financial markets
Internationalisation of financial markets can lower transaction costs with efficiency gains. Over the last
three decades, India has undergone a transformation from being a virtually closed economy to one that
is globally connected and open to a much larger volume of international transactions and capital flows
than before. Today, the capital account is convertible to a great extent. Inward Foreign Direct
Investment (FDI) is allowed in most sectors and outbound FDI by Indian incorporated entities is
allowed as a multiple of their net worth. The external commercial borrowing framework has also been
significantly liberalised to include more eligible borrowers, even as maturity requirements have been
reduced and end-use restrictions have been relaxed.
Foreign portfolio investment in Indian debt markets has been expanded within calibrated macro-
prudential norms. Limits under the Medium-Term Framework for investment by Foreign Portfolio
Investors (FPIs) have been gradually increased and procedures rationalized. A Voluntary Retention
Route (VRR) has been introduced, which provides relaxations from macroprudential controls but
subject to a minimum retention period. In a major step towards greater internationalisation, the Fully
Accessible Route (FAR) was introduced under which non-residents can invest in specified government
securities without any restriction. Capital account convertibility will continue to be approached as a
process rather than an event, taking cognizance of prevalent macroeconomic conditions. A long term
vision with short and medium term goals is the way ahead.
As a major milestone towards opening up of markets, banks in India have been permitted to deal in the
offshore rupee derivative markets. The measure is expected to reduce the segmentation between onshore
and offshore markets, apart from reducing volatility and the cost of hedging. Banks have also been
permitted to undertake foreign exchange transactions beyond the usual onshore market hours, thus
fostering real time market activity. In a complementary measure, exchanges and banking units in the
GIFT City have been permitted to undertake Over the Counter (OTC) and exchange traded Rupee
derivatives.
Safeguarding the “buy side” – user protection
Safeguarding the interests of the users – the “buy” side of financial markets - is an imperative especially
in the context of liberalised markets and introduction of newer and more sophisticated products. A
number of initiatives have been taken in this regard, a few of which I would like to mention.
With a view to providing greater protection to less sophisticated users, a User Classification Framework
segregating users into ‘retail’ and ‘non-retail’ has been introduced for OTC foreign exchange and
interest rate derivative transactions. Retail users can be offered only non-complex derivative products
while product innovation has been permitted for non-retail users as per their business needs.
The issue of fair and transparent pricing of foreign exchange products, especially for MSMEs and other
smaller users, has been occupying our attention. Market-makers are now mandated to separately
disclose fees /charges when dealing with retail users. Also, an anonymous order matching electronic
trading platform, called FX-Retail, has been launched by the Clearing Corporation of India (CCIL), at
the behest of the RBI. This platform allows users with small transaction sizes to undertake transactions
at best available market rates. These measures are expected to ensure greater transparency and
protection of the retail user. Concerted efforts by banks will be needed if the benefits of transparent and
competitive pricing are to reach every user of the foreign exchange markets.
As derivative markets are liberalized, market conduct needs to be strengthened through robust
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assessment of product suitability and user appropriateness. Regulatory requirements in this regard are
being reviewed in consonance with the overall changes to the regulatory approach.
Ensuring resilience and safety
Financial market infrastructure in India has remained resilient even during various financial crises.
Learning from international episodes of market failure, several further initiatives have been taken to
ensure continued resilience.
Fair market conduct is critical to ensure efficient functioning and preserving trust in the financial
ecosystem. Hitherto, conduct codes prescribed by market bodies like FIMMDA and FEDAI guided
participants in the financial markets. To supplement and strengthen these, a regulatory framework for
market abuse has been put in place.
The Reserve Bank has been taking measures to implement the G20 over-the-counter (OTC) derivatives
market reforms. In line with global trends, electronic trading platforms (ETPs) have been brought under
regulatory purview to ensure efficiency of operations and address systemic risks. A draft framework for
variation margin for OTC derivatives aimed at reducing counterparty risks from non-centrally cleared
derivatives, has been recently issued.
Global efforts are underway to put in place a Legal Entity Identifier (LEI) which uniquely identifies
financial market participants and enables aggregation of risks. Reserve Bank has also mandated the use
of the LEI for participants in the markets it regulates. In fact, we are one of the few countries that has
implemented LEI beyond derivative markets to cover transactions in government securities and money
markets as well as the credit market (large loans).
A key issue which has been engaging global attention is the transition from the LIBOR to alternate
reference rates. In India, several measures have been taken to make financial benchmark processes more
transparent and robust. Most recently, the administrators of significant financial benchmarks were
brought under regulation to ensure robust governance frameworks and process controls. These reforms
will stand us in good stead as we prepare ourselves for the LIBOR transition. The Indian Banks’
Association has been working closely with market participants to facilitate the transition to alternate
benchmarks and create customer awareness. Achieving a smooth transition from a benchmark
entrenched in the financial system will require significant efforts from all stakeholders.
What Forces Could Drive the Recovery?

The global economy is estimated to have suffered the sharpest contraction in living memory in April-June 2020
on a seasonally adjusted quarter-on-quarter basis. World merchandise trade is estimated to have registered a
steep year-on-year decline of more than 18 per cent in Q2 of 2020, according to the Goods Trade Barometer of
the World Trade Organisation (WTO). High frequency indicators point to a trough in global economic activity in
April-June quarter and a subsequent recovery is underway in several economies, such as the USA, UK, Euro-
area and Russia. The global manufacturing and services PMIs rose to 51.8 and 51.9, respectively, in August from
50.6 for both in July. Yet, infections remain stubbornly high in the Americas and are increasing again in many
European and Asian countries, causing some of them to renew containment measures.
On the back of large policy stimulus and indications of the hesitant economic recovery, global financial markets
have turned upbeat. Equity markets in both advanced and emerging market economies have bounced back,
scaling new peaks after the ‘COVID crash’ in February-March. Bond yields have hardened in advanced
economies on improvement in risk appetite, fuelling shift in investor’s preferences towards riskier assets. Portfolio
flows to EMEs have resumed, and this has pushed up EME currencies, aided also by the US dollar’s weakness
following the Fed’s recent communication on pursuing an average inflation target. Gold prices moderated after
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reaching an all-time high in the first week of August 2020 on prospects of economic recovery.
Financial market conditions in India have eased significantly across segments in response to the frontloaded cuts
in the policy repo rate and large system-wide as well as targeted infusion of liquidity by the RBI. Despite
substantial increase in the borrowing programme of the Government, persistently large surplus liquidity conditions
have ensured non-disruptive mobilisation of resources at the lowest borrowing costs in a decade. In August 2020,
the yield on 10-year G-sec benchmark surged by 35 basis points amidst concerns over inflation and further
increase in supply of government papers. Following the RBI’s announcement of special open market operations
(OMOs) and other measures to restore orderly functioning of the G-sec market, bond yields have softened and
traded in a narrow range in September. Although bank credit growth remains muted, scheduled commercial
banks’ investments in commercial paper, bonds, debentures and shares of corporate bodies in this year so far
(up to August 28) increased by Rs.5,615 crore as against a decline of Rs.32,245 crore during the same period of
last year. Moreover, the benign financing conditions and the substantial narrowing of spreads have spurred a
record issuance of corporate bonds of close to Rs.3.2 lakh crore during 2020-21 up to August.
The immediate policy response to COVID in India has been to prioritize stabilization of the economy and support
a quick recovery. Polices for durable and sustainable high growth in the medium-run after the crisis, nevertheless,
are equally important, and in my address today I propose to dwell upon that issue squarely – what could
potentially lift up the Indian economy to trend growth as the recovery begins?
While interacting with members of the National Council of the Confederation of Indian Industry (CII) on July 27,
2020, I had covered five major dynamic shifts taking place in the economy: (i) fortunes shifting in favour of the
farm sector; (ii) changing energy mix in favour of renewables; (iii) leveraging information and communication
technology (ICT) and start-ups to power growth; (iv) shifts in supply/value chains, both domestic and global; and
(v) infrastructure as the force multiplier of growth. Today, I would like to touch upon five areas that, I feel , would
determine our ability to step up and sustain India’s growth in the medium-run: (i) human capital, in particular
education and health; (ii) productivity; (iii) exports, which is linked to raising India’s role in the global value chain;
(iv) tourism; and (v) food processing and associated productivity gains.
(i) Human Capital: The Importance of Education and Health
Investing in people adds to the stock of skills, expertise and knowledge available in a country, and that is critical
to maximise its future growth potential. The assignment of importance to education dates back to Plato, Aristotle,
Socrates and Kautilya. Its significance for economic development has received progressively increasing attention
in recent decades, especially in the work of several Nobel laureates, including T.W. Schultz, Gary Becker, Robert
Lucas and James Heckman. There has come about an explicit recognition of education as human capital in
endogenous growth theory, backed up by cross-country empirical evidence.
In India, states with higher literacy rates are found to have higher per capita income, lesser infant mortality, better
health conditions and also lower poverty. Education and skill development, however, contribute less than half a
percentage point to our overall labour productivity growth. In order to reap the demographic dividend, we have to
raise expenditure on education and acquisition of skills substantially. It is important to recognise that investment
in education pays by raising average wages. In its Global Education Monitoring Report 2012, the UNESCO
highlighted that every US$1 spent on education generates additional income of about US$10 to US$15. A World
Bank (2014) study showed that an additional year of schooling increases earnings by 10 per cent a year. Higher
education also contributes to economic development through greater sensitivity to environment/climate change,
energy use, civic participation and healthy lifestyle.
The New Education Policy 2020 (NEP), a historic and much needed new age reform, has the potential to
leverage India’s favourable demographics by prioritising human capital. The goal to increase public investment in
the education sector to 6 per cent of GDP must be pursued vigorously. Public-private partnerships (PPPs) can
develop necessary infrastructure, without jeopardising financial viability of private investment while ensuring
quality education at affordable costs. Indian banks and the financial system would need to respond proactively to
opportunities arising from the NEP for new financing.
Besides improving access to education, focus on quality of education and research will be critical to shape the
outcome of education on economic development. Skill acquisition is more important than mere mean years of
schooling. The assessment of quality aspect of education often requires a multi-dimensional approach: reading
and language proficiency; mathematics and numeracy proficiency; and scientific knowledge and understanding 1.
The emphasis on quality of education must begin at the foundation stage in schools up to plus 2 level. At another
level, the formation of the National Research Foundation as announced in the NEP is a welcome step to fund
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outstanding peer-reviewed research and to actively promote research in universities and colleges. The creation of
a National Educational Technology Forum as a platform for use of technology in education is a necessary step to
meet the requirement of rapidly changing labour market.
Health is another vital component of human capital. Good health increases life expectancy and productive
working years. In high income countries, per capita health expenditure in 2017 was about US$ 2937, as against
US$ 130 in low middle-income countries (which include India). Initiatives such as the Pradhan Mantri Bharatiya
Jan Aushadi Pariyojana (PMBJP) and Pradhan Mantri National Dialysis Programme (PMNDP), free drugs and
diagnostic service provision initiatives are expected to improve the quality and affordability of healthcare. The
most important step towards providing affordable healthcare has been the launch of the Ayushman Bharat Yojna,
which lays down the foundation of a 21st century health care system, covering both government and private
sector hospitals.
1COVID has brought to the fore the importance of easy access to health services to contain the mortality rate,
given significant inter-state and intra-state differences in healthcare infrastructure. While laudable crisis time
response to scale up health infrastructure has helped in dealing with the health emergency, a more
comprehensive approach similar to NEP for the health sector may be warranted, which must also cover deeper
penetration of insurance, given the high burden of out of pocket expenses in India, and also preventive care.
Greater attention is required to improve the health ecosystem by ensuring creation of new medical colleges,
higher number of PG seats and colleges for paramedics and nursing.
(ii) Productivity growth
By any reckoning, COVID-19 will leave long lasting scars on productivity levels of countries around the world.
According to a recent World Bank assessment2, COVID-19 could entail adverse effects on productivity because of
dislocation of labour, disruption of value chains and decline in innovations. During earlier episodes of epidemics
in the past – Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS), Ebola
and Zika – productivity is estimated to have declined by about 4 per cent over three years. The COVID impact on
productivity could be expected to be much larger.
KLEMS (capital; labour; energy; materials; and services), a database hosted by the RBI, shows that the Indian
economy experienced an overall productivity growth of 0.9 per cent per annum, on an average, over the period
1980-81 to 2017-18. In the immediate post-GFC period – from 2008-09 to 2012-13 – there was a decline in
productivity by 0.3 per cent annually, while the period thereafter upto 2017-18 recorded annual productivity
growth of 2.4 per cent. The contribution of productivity growth to the overall GDP growth of the Indian economy
over the period 1980-81 to 2017-18 was about 15 per cent. During 2013-14 to 2017-18, its contribution increased
significantly to about 34 per cent.
The share of patents applied and granted to India in total patents granted globally has been rising in recent years.
India’s share, however, continues to be low at less than 1 per cent. Globally, the private sector plays a major role
in R&D expenditure, while in India, a major part of R&D expenditure is incurred by the government, particularly on
atomic energy, space research, earth sciences and biotechnology. Stepping up R&D investment in other areas
would require more efforts by the private sector, with the government focusing on creating an enabling
environment.
With a view to further promoting innovations in financial services, the Reserve Bank has announced an
Innovation Hub with a focus on new capabilities in financial products and services that can help deepening
financial inclusion and efficient banking services. Ongoing efforts are yielding results. India has recently entered
the group of top 50 countries in the global innovation index (GII) list of 2020 for the first time. The India Innovation
Index, released by Niti Aayog last year, has been widely accepted as a major step in the direction of
decentralisation of innovation across all states of the country. Sustaining this process will be vital, given
particularly the trend decline in saving and investment rate in India.
(iii) Exports and Global Value Chains (GVCs)
In the post global financial crisis (GFC) period, a view has emerged that the era of export-led growth is over, and
India missed the opportunity by not prioritizing exports at the right time. Globally, the key impediments to exports
post-GFC include: (a) generalized increase in protectionism by trading partners; (b) weak global demand
conditions; (c) race to the bottom (to gain unfair competitive advantage, by using a policy mix of competitive
depreciation, subsidies, tax and regulatory concessions); and (d) automation, reducing the cost advantages
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stemming from cheap labour.
Notwithstanding these impediments, and also the significant decline in trade intensity of world GDP growth in the
post-GFC period, opportunities for expanding exports arise from the vastly altered global landscape for trade
where more than two thirds of world trade occurs through global value chains (GVCs) 3. The higher the GVC
participation of a country, the greater are the gains from trade as it allows participating countries to benefit from
the comparative advantage of others participating in the GVC. Services such as transportation, banking,
insurance, IT and legal services, branding, marketing and after sale services are integral to GVCs.
India’s participation in GVCs has been lower than many emerging and developing economies. India has global
presence in low GVC products such as gems and jewellery, rice, meat and shrimps, apparels, cotton, and drugs
and pharmaceuticals.
Among the sunrise sectors that offer potential for higher exports in the post-COVID period are drugs and
pharmaceuticals where India enjoys certain competitive advantages. With strong drug manufacturing expertise at
low cost, India is one of the largest suppliers of generic drugs and vaccines. Some Indian manufacturers have
already entered into new partnerships with global pharma companies to produce vaccines on a large scale for
both domestic and global distribution. The Government has also approved an investment package for promotion
of bulk drug parks and a production-linked incentive scheme is in place to enhance domestic production of drug
intermediates and active pharmaceutical ingredients. A sharp policy focus on other GVC intensive “network
products”, including equipment for IT hardware, electrical appliances, electronics and telecommunications, and
automobiles would also provide the cutting edge to India’s export strategy with considerable scope for higher
value additions.
Domestic policies need to focus on the right mix of local and foreign content in exports while aiming to enhance
participation in GVCs. Firms that engage in both imports and exports are found to be far more productive than
non-trading firms (World Bank, 2020)4. While choosing trade partners through free trade agreements (FTAs), it is
also important to learn from global experience and nurture those trade agreements that go beyond traditional
market access issues. Provisions relating to investment, competition, and intellectual property rights protection
have a larger positive impact on GVC trade and need to be assiduously cultivated and ingrained into India’s
export ecosystem.
(iv) Tourism as an Engine of Growth
Tourism has been one of the sectors in the economy most severely impacted by COVID-19. At the same time,
this is also a sector where pent up demand could drive a V shaped recovery when the situation normalises.
India has immense potential to meet a diverse range of tourist interests – religion; adventure; medical treatment;
wellness and yoga; sports; film making; and eco-tourism. We have four major biodiversity hotspots, 38 UNESCO
World heritage sites5, 18 biosphere reserves, over 7,000 km of coastline, rain forests, deserts, tribal habitation
and a multi-cultural population. The challenge nevertheless is to scale up our tourism market and enhance its
contribution to economic development.
As per the Third Report of Tourism Satellite Account for India (TSAI) 2018, the share of tourism in GDP was 5.1
per cent in 2016-17 and the share in employment was 12.2 per cent (with the direct and indirect shares at 5.32
per cent and 6.88 per cent, respectively). In 2018-19, tourism’s share in employment increased further to 12.8 per
cent, with the total size of employment at 87.5 million. The employment elasticity in this sector, thus, appears to
be high. India attracted 10.89 million foreign tourists in 2019, an increase of 3.2 per cent over the previous year.
The foreign exchange earnings generated by the sector during the same period was about Rs.2 trillion, a year-
on-year increase of more than 8 per cent. The country also jumped six positions to 34 out of 140 counties in the
Travel and Tourism Competitiveness Index 2019 of the World Economic Forum (WEF).
Recognising the potential of the sector, the Government has provided targeted policy support. The Ministry of
Tourism has two major schemes: Swadesh Darshan for Integrated Development of Theme-Based Tourist
Circuits; and PRASHAD as a Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive for
development of tourism infrastructure in the country, including historical places and heritage cities.
The multi-pronged supportive policy interventions in the sector may have to be reviewed and revamped, if tourism
has to contribute more to the economy matching its potential. A closer look at some of the global leaders in travel
and tourism such as France and Spain would suggest that these countries not only have excellent natural and
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cultural resources, but policies to support an exceptionally attractive tourist infrastructure, including a high hotel
density offering all range of choices, quality public transport systems, networked air connectivity with
considerable route capacity, and most importantly, safety and security.
Initiatives need to be taken in the direction of improving and integrating various modes of transportation (linking
air/train/metro/road/sea) with the provision for single point of booking, e-registration of service providers (travel
agents, transport operators, hotels, tourist guides, etc.). Strict provisions of penalty for non-compliance would
boost confidence of tourists, alongside an effective and speedy grievance redressal system for both domestic and
foreign tourists. Research conducted by a private agency6 suggested that if we can increase international tourist
arrivals to 20 million (i.e., about double of current arrivals), the incremental income would be US$19.9 billion,
benefiting an additional 1 million people in the travel and tourism industry.7
(v) Food Processing for Surplus Management
COVID has brought the importance of food security and food distribution or supply chain network to the forefront
of public policy debate in India. Successive years of record production of foodgrains and horticulture crops has
transformed India into a food surplus economy. Recognising this challenge, much of the policy attention in recent
years for the sector has focused on addressing post-production frictions, comprising agri-logistics, storage
facilities, processing and marketing. Greater focus on processed food is one option that could help in dealing with
multi-pronged challenges of surplus management. Development of the food processing industry is likely to benefit
the farm sector and the economy through greater value addition to farm output, reducing food wastages,
stabilising food prices, expanding export opportunities, encouraging crop diversification, providing direct and
indirect employment opportunities, increasing farmers’ income and enhancing consumer choices.
Food processing is a sunrise industry. Globally, its importance in the consumer basket has increased over time,
led by rising per capita incomes, urbanisation, and change in consumer perceptions regarding quality and safety.
Despite having huge growth potential, the food processing industry in India is currently at a nascent stage,
accounting for less than 10 per cent of total food produced in the country. As a result, despite being one of the
largest producers of several agricultural commodities in the world, India ranks fairly low in the global food
processing value chain.
There is a need to move up the value chain. Moreover, the food processing industry in India is largely
domestically oriented, with exports accounting for only 12 per cent of total output. India can move up in the global
agricultural value chain by increasing its share of processed food exports, for which quality standards will be a
critical factor.
Food processing also offers huge employment potential. In India, while the food processing industry’s contribution
to overall Gross Value Added (GVA) is only 1.6 per cent, it accounts for 1.8 million (12.4 per cent) and 5.1 million
(14.2 per cent) jobs in registered and un-incorporated sectors, respectively. Recognising this, the government
has set the target for raising the share of processed food to 25 per cent of the total agricultural produce by 2025.
The food processing sector was also opened up for 100 per cent FDI in 2016 under the automatic route. Further,
in 2017, 100 per cent FDI under the government route for retail trading, including through e-commerce, was
permitted in respect of food products manufactured and/or produced in India. For ensuring adequate credit flows,
the Reserve Bank has accorded priority sector status to the food processing industry in 2015.
It is Time for Banks to Look Deeply Within: Reorienting Banking Post-Covid
1. The COVID-19 pandemic still continues to keep the world on the edge. The pandemic has
so far infected more than 2.3 crore people and has claimed more than 8 lakh lives worldwide.
The world is struggling to find a vaccine and/or a cure to the deadly virus. In India also the
spread of pandemic continues unabated, though the fatality rate is much lower.
2. As the pandemic ravages on, the economic impact is hard to measure. While there are
green shoots and some businesses are getting back to pre-pandemic levels, the uncertainty
over the length and intensity of the pandemic and its impact on the economy continue to
cause concern. In the wake of the pandemic, RBI has stepped forward and has so far
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announced various liquidity, monetary, regulatory and supervisory measures in the form of
interest rate cuts, higher structural and durable liquidity, moratorium on debt servicing, asset
classification standstill and recently a special resolution window within our Prudential
Framework for Resolution of Stressed Assets.
3. This framework is a well thought out decision taken in consultation with stakeholders and is
aimed at striking a balance between protecting the interest of depositors and maintaining
financial stability on one hand, and preserving the economic value of viable businesses by
providing durable relief to businesses as well as individuals affected by the Covid-19
pandemic, on the other. We expect efficient and diligent implementation of the resolution plans
by the banks, keeping the above objectives in mind. While the moratorium on loans was a
temporary solution in the context of the lockdown; the resolution framework is expected to give
durable relief to borrowers facing Covid related stress.
4. RBI’s response to the situation arising out of Covid has been unprecedented. The measures
taken by the RBI are intended to deal with the specific situation of Covid and can not be
permanent. Post containment of COVID-19, I repeat, post containment of Covid, a very careful
trajectory needs to be followed for orderly unwinding of the various counter-cyclical measures
taken by the RBI and the financial sector should return to normal functioning without relying on
the regulatory relaxations and other measures as the new norm.
5. In my address today, I would like to dwell upon the following theme: It is Time for Banks to
Look Deeply Within: Reorienting Banking Post-Covid. Just like boosting immunity of the
population is the key to tackle pandemics, the key to long term financial stability would be to
foster tangible improvement in the inherent ability of the banks to withstand the exogenous
shocks like the current pandemic. As I have stated elsewhere, the causes of weak banks can
usually be traced to one or more of the following conditions: an inappropriate business model
given the business environment; quality or the lack of governance and decision making;
misalignment of internal incentive structures with external shareholder/stakeholder
interests1 and other factors. Accordingly, the core of resilient banks is made up of good
governance, effective risk management and robust internal controls. This is not to say that
Indian banks do not have sound governance and risk management systems in place. There is
always scope for improvement and these are the areas which need greater attention going
forward.
6. In recent years, the business landscape of banks has undergone significant change. Today
the banks need to look out for ‘sunrise’ sectors while supporting those which have the
potential to bounce back. For instance, Banks need to look at prospective business
opportunities in the rural sector which remain unexplored despite efforts to support it. They
need to look at start-ups, renewables, logistics, value chains and other such potential areas.
The banking sector has a responsible role to play not only as a facilitator of growth of the
economy but also to earn its own bread. Thus, a complete relook at the business strategy and
orientation is the immediate need of the hour.
7. Scale ignites the volume effect in business turnover; but that presupposes bigger size of the
banks. Despite several reforms in the banking sector since its nationalisation, lot more needs
to be done. With change in time, the nature of reforms needs to be reconfigured. The current
steps towards consolidation of public sector banks in line with the Narasimham Committee
recommendation is a step in the right direction. Indian banks this way can reap the benefits of
scale, and become partners in the newer business opportunities across the globe. Larger and
more efficient banks, both in public and private sector, can compete shoulder to shoulder with
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the global banks to get a decent space in the global value chains.
8. Size is essential, but efficiency is even more important. Efficiency, however, is a much
broader concept and requires several other factors to evolve and act along its side. The
prerequisite will be use of technology. The quality and ingenuity of technology should match
our aspirations of acquiring scale and diversion of business across the globe. The focus of use
of technology should shift from ‘transactions-based’ to ‘business-oriented’. We have a pocket
full of technological tools like big-data, artificial intelligence, machine learning to leverage upon
, in order to be able to compete with the global players in reaping the benefits of ‘creativity’
looming large all over.
9. While introspecting on newer ideas to improve the health of banks and quality of banking, it
is fundamental to reform the culture of governance and risk management systems. These two
areas lend inherent strength to the business of banking and good amount of work has been
done in this direction over the years. The RBI has issued a discussion paper on ‘Governance
in Commercial Banks’, for comments from various stakeholders. Ideally, efficiency should be
ownership-neutral. While it is natural that the capital-providers or investors would like to
remain alive to the aspects of how exactly a bank is run, it is worthwhile to allow sufficient
leeway to the Board and management of a bank to run the affairs of a bank in a professional
and autonomous manner. A decent distance between the owner and the professionally sound
management and Board would promote robustness of banking institutions.
10. There will be newer risks with newer business models. More so, when banks get bigger
and more connected across diverse jurisdictions. High growth by virtue of newer business
models can be achieved with clear understanding of one’s own strengths and weakness.
Remaining overly risk-averse may seem to be a measure of self-immunisation; but will be self-
defeating as it would affect the bottom lines adversely. Risk propensity should be in alignment
with the individual bank’s measured risk-appetite. The risk management system should be
sophisticated enough to smell vulnerabilities brewing within the various businesses well in
advance and should be dynamic enough to capture looming risks in sync with the changes in
external environment and best practices.
11. One visible area of concern in the arena of risk management is the inability to manage the
operational risk/s, more particularly controlling the incidence of frauds, both cyber-related and
otherwise. The higher incidence of frauds which have come to light in the recent times have
their origins in not so efficient risk management capacity of the banks, both at the time of
sanctioning of loans as well as in post sanction credit monitoring. It is observed that it takes
many months after a fraud is committed before it comes to light. Banks need to tighten their
underwriting and credit monitoring standards and ensure that incidences of frauds are reduced
by early detection and are followed up by initiating appropriate legal action against the
fraudsters. Here too, the need is to leverage on technology, namely, artificial intelligence, to
study the patterns of such incidences and the root cause behind their recurrence.
12. An effective early warning system and forward-looking stress testing framework should be
an integral part of the risk management framework of the banks. Banks should be able to pick-
up incipient signals of stress faced by their borrowers, and take proactive remedial action,
which may include a viable resolution of the credit facilities aimed at preserving the value of
the assets and not just aimed at reducing the short term burden on the balance sheet of the
banks.
13. In addition to a strong risk culture, banks should also have appropriate compliance culture.
Cost of compliance should be perceived as an investment, as inadequacy of the same will
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prove to be very costly. The compliance culture of banks should ensure adherence to laws,
rules, regulations and various codes of conduct. Compliance should go beyond what is legally
binding and attempt to embrace broader standards of integrity and ethical conduct 2. The
essential features of the compliance culture are broadly similar to the essential features of risk
culture. All these will also help to maintain a high degree of market reputation which is
imperative for retaining customers and commanding a higher valuation amongst the investors.
14. A good governance framework and effective risk and compliance culture should be
complemented by a robust assurance mechanism by way of internal audit function. This is an
integral part of sound corporate governance which should provide an independent assurance
to the Board of the bank as well as to external stakeholders that the operations of the entity
are performed in accordance with the set policies and procedures.
15. The competition in the Indian banking system has been increasing over the years and
unless banks meet the expectations of their target customers, even a well thought out
business model may not succeed. In this context, quality of customer service and redress of
customer grievances assume high importance. We have to recognize that banks exist for
customers viz. both depositors and borrowers.
16. India’s banking and financial system has displayed tremendous operational resilience in
the face of Covid and lockdowns. Going ahead, financial institutions in India have to walk a
tightrope of nurturing the recovery within the overarching objective of preserving long-term
stability of the financial system. The current pandemic related shock is likely to place greater
pressure on the balance sheets of banks leading to erosion of their capital. Proactive building
of buffers and raising capital will be crucial not only to ensure credit flow but also to build
resilience in the financial system - resilience of individual banks and financial entities as well
as resilience of the financial sector as a whole. We have already advised all banks, large non-
deposit taking NBFCs and all deposit-taking NBFCs to assess the impact of COVID-19 on
their balance sheet, asset quality, liquidity, profitability and capital adequacy. Based on the
outcome of such stress testing, banks and NBFCs should work out possible mitigation
measures including capital planning, capital raising, and contingency liquidity planning, among
others. Upfront capital infusion would also improve the sentiment of investors and other
stakeholders alike for the sector to continue remaining attractive for investors, both domestic
and foreign, over the medium to long-term. Some of the banks have already either raised or
announced capital raising. This process needs to be carried forward vigorously by Banks and
NBFCs, both in the public and private sector.
key highlights from the Economic Survey 2020-21:
According to the survey, India’s economy could contract 7.7 per cent in the financial year that
ends on March 31, pulled down mainly by the coronavirus pandemic and the weeks-long
nationwide lockdown to contain the disease. Real GDP growth could be 11 per cent in the next
financial year.
Saving Lives and Livelihoods amidst a Once-in-a-Century Crisis
 India focused on saving lives and livelihoods by its willingness to take short-term pain for
long-term gain, at the onset of the COVID-19 pandemic.
Response stemmed from the humane principle that:
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 Human lives lost cannot be brought back
GDP growth will recover from the temporary shock caused by the pandemic
 An early, intense lockdown provided a win-win strategy to save lives, and preserve
livelihoods via economic recovery in the medium to long-term
 V-shaped recovery, as seen in a 7.5% decline in GDP in Q2 and recovery across all key
economic indicators vis-à-vis the 23.9% GDP contraction in Q1
COVID pandemic affected both demand and supply:
 India was the only country to announce structural reforms to expand supply in the medium-
long term and avoid long-term damage to productive capacities
 Calibrated demand-side policies to ensure that the accelerator is slowly pushed down only
when the brakes on economic activities are being removed
 A public investment programme centred around the National Infrastructure Pipeline to
accelerate the demand push and further the recovery
 The upturn in the economy, avoiding the second wave of infections – a sui generis case
in strategic policymaking amidst a once-in-a-century pandemic
State of the Economy in 2020-21: A Macro View
 COVID-19 pandemic ensued global economic downturn, the most severe one since the
Global Financial Crisis
 The lockdowns and social distancing norms brought the already slowing global economy to a
standstill
 Global economic output estimated to fall by 3.5% in 2020 (IMF January 2021 estimates)
 Governments and central banks across the globe deployed various policy tools to support their
economies such as lowering policy rates, quantitative easing measures, etc.
 India adopted a four-pillar strategy of containment, fiscal, financial, and long-term structural
reforms.
 As per the advance estimates by NSO, India’s GDP is estimated to grow by (-) 7.7% in FY21 –
a robust sequential growth of 23.9% in H2: FY21 over H1: FY2
 India’s real GDP to record an 11.0% growth in FY2021-22 and nominal GDP to grow
by 15.4% – the highest since independence:
 Rebound to be led by the low base and continued normalization in economic activities as the
rollout of COVID-19 vaccines gathers traction
 Government consumption and net exports cushioned the growth from diving further down,
whereas investment and private consumption pulled it down
 The recovery in the second half of FY2020-21 is expected to be powered by government
consumption, estimated to grow at 17% YoY
 Exports expected to decline by 5.8% and imports by 11.3% in the second half of the FY21
 India expected to have a Current Account Surplus of 2% of GDP in FY21, a historic high
after 17 years
On the supply side, Gross Value Added (GVA) growth pegged at -7.2% in FY21 as
against 3.9% in FY20:
1. Agriculture set to cushion the shock of the COVID-19 pandemic on the Indian economy
in FY21 with a growth of 3.4%
2. Industry and services estimated to contract by 9.6% and 8.8% respectively during FY21
 India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst
global asset shifts towards equities and prospects of quicker recovery in emerging economies:
1. Net FPI inflows recorded an all-time monthly high of US$ 9.8 billion in November 2020, as
investors’ risk appetite returned
2. India was the only country among emerging markets to receive equity FII inflows in 2020
 Softening of CPI inflation recently reflects an easing of supply-side constraints that affected
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food inflation
 Mild contraction of 0.8% in investment (as measured by Gross Fixed Capital Formation) in
2nd half of FY21, as against 29% drop in 1st half of FY21
 Reignited inter and intrastate movement and record-high monthly GST collections have
marked the unlocking of industrial and commercial activity
 The external sector provided an effective cushion to growth with India recording a Current
Account Surplus of 3.1% of GDP in the first half of FY21:
 Strong services exports and weak demand leading to a sharper contraction in imports
(merchandise imports contracted by 39.7%) than exports (merchandise exports contracted by
21.2%)
1. Forex reserves increased to a level so as to cover 18 months worth of imports in December
2020
2. External debt as a ratio to GDP increased to 21.6% at end-September 2020 from 20.6% at
end-March 2020
 Ratio of forex reserves to total and short-term debt improved because of the sizable accretion
in reserves
 V-shaped recovery is underway, as demonstrated by a sustained resurgence in high-
frequency indicators such as power demand, e-way bills, GST collection, steel consumption,
etc.
 India became the fastest country to roll-out 10 lakh vaccines in 6 days and also emerged
as a leading supplier of the vaccine to neighbouring countries and Brazil
Does Growth lead to Debt Sustainability? Yes, But Not Vice- Versa!
Growth leads to debt sustainability in the Indian context but not necessarily vice-versa:
 Debt sustainability depends on the ‘Interest Rate Growth Rate Differential’ (IRGD), i.e., the
difference between the interest rate and the growth rate
 Negative IRGD in India – not due to lower interest rates but much higher growth rates –
prompts a debate on fiscal policy, especially during growth slowdowns and economic crises
 Active fiscal policy can ensure that the full benefit of reforms is reaped by limiting potential
damage to productive capacity
 Fiscal policy that provides an impetus to growth will lead to a lower debt-to-GDP ratio
 Given India’s growth potential, debt sustainability is unlikely to be a problem even in the
worst scenarios
 Desirable to use countercyclical fiscal policy to enable growth during economic downturns
 Active, counter-cyclical fiscal policy – not a call for fiscal irresponsibility, but to break the
intellectual anchoring that has created an asymmetric bias against fiscal policy
Does India’s Sovereign Credit Rating Reflect Its Fundamentals? No!
 The fifth-largest economy in the world has never been rated as the lowest rung of the
investment-grade (BBB-/Baa3) in sovereign credit ratings.
India’s sovereign credit ratings do not reflect its fundamentals:
 A clear outlier amongst countries rated between A+/A1 and BBB-/Baa3 for S&P/ Moody’s, on
several parameters
 Credit ratings map the probability of default and therefore reflect the willingness and ability
of the borrower to meet its obligations:
 India’s willingness to pay is unquestionably demonstrated through its zero sovereign
default history
 India’s ability to pay can be gauged by low foreign currency-denominated debt and forex
reserves
 Sovereign credit rating changes for India have no or weak correlation with macroeconomic
indicators
 India’s fiscal policy should reflect Gurudev Rabindranath Tagore’s sentiment of ‘a mind
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without fear’
 Sovereign credit rating methodology should be made more transparent, less subjective and
better attuned to reflect economies’ fundamentals
Inequality and Growth: Conflict or Convergence?
 The relationship between inequality and socio-economic outcomes vis-à-vis economic growth
and socio-economic outcomes is different in India from that in advanced economies.
 Economic growth has a greater impact on poverty alleviation than inequality
 India must continue to focus on economic growth to lift the poor out of poverty
 Expanding the overall pie – redistribution in a developing economy is feasible only if the size
of the economic pie grows
Healthcare takes centre stage, finally!
 COVID-19 pandemic emphasized the importance of the healthcare sector and its inter-
linkages with other sectors – showcased how a health crisis transformed into an economic and
social crisis
 India’s health infrastructure must be agile so as to respond to pandemics – healthcare
policy must not become beholden to ‘saliency bias’
 National Health Mission (NHM) played a critical role in mitigating inequity as the access of
the poorest to pre-natal/post-natal care and institutional deliveries increased significantly
 Emphasis on NHM in conjunction with Ayushman Bharat should continue
 An increase in public healthcare spending from 1% to 2.5-3% of GDP can decrease
the out-of-pocket expenditure from 65% to 35% of overall healthcare spending
 A regulator for the healthcare sector must be considered given the market failures
stemming from information asymmetry
 Mitigation of information asymmetry will help lower insurance premiums, enable the offering
of better products and increase insurance penetration
 Information utilities that help mitigate the information asymmetry in the healthcare sector will
be useful in enhancing overall welfare
 Telemedicine needs to be harnessed to the fullest by investing in internet
connectivity and health infrastructure
Process Reforms
 India over-regulates the economy resulting in regulations being ineffective even with relatively
good compliance with process
 The root cause of the problem of overregulation is an approach that attempts to account for
every possible outcome
 Increase in complexity of regulations, intended to reduce discretion, results in even more non-
transparent discretion
 The solution is to simplify regulations and invest in greater supervision which, by
definition, implies greater discretion
 Discretion, however, needs to be balanced with transparency, systems of ex-ante
accountability and ex-post resolution mechanisms
 The above intellectual framework has already informed reforms ranging from labour codes to
removal of onerous regulations on the BPO sector
Regulatory Forbearance an emergency medicine, not staple diet!
 During the Global Financial Crisis, regulatory forbearance helped borrowers tide over
temporary hardship
 Forbearance continued long after the economic recovery, resulting in unintended
consequences for the economy
 Banks exploited the forbearance window for window-dressing their books and misallocated
credit, thereby damaging the quality of investment in the economy
 Forbearance represents emergency medicine that should be discontinued at the first
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opportunity when the economy exhibits recovery, not a staple diet that gets continued for
years
 To promote judgement amidst uncertainty, ex-post inquests must recognize the role of
hindsight bias and not equate unfavourable outcomes to bad judgement or malafide intent
 An Asset Quality Review exercise must be conducted immediately after the forbearance is
withdrawn
 The legal infrastructure for the recovery of loans needs to be strengthened de facto
Innovation: Trending Up but Needs Thrust, Especially from the Private Sector
 India entered the top-50 innovating countries for the first time in 2020 since the inception
of the Global Innovation Index in 2007, ranking first in Central and South Asia, and third
amongst lower-middle-income group economies
 India’s gross domestic expenditure on R&D (GERD) is lowest amongst top ten economies
 India’s aspiration must be to compete on innovation with the top ten economies
 The government sector contributes a disproportionately large share in total GERD at
three times the average of top ten economies
 The business sector’s contribution to GERD, total R&D personnel and researchers is amongst
the lowest when compared to top ten economies
 This situation has prevailed despite higher tax incentives for innovation and access to equity
capital
 India’s business sector needs to significantly ramp up investments in R&D
 Indian resident’s share in total patents filed in the country must rise from the current 36%
which is much below the average of 62% in top ten economies
 For achieving higher improvement in innovation output, India must focus on improving its
performance on institutions and business sophistication innovation inputs
JAY Ho! PM‘JAY’ Adoption and Health outcomes
 Pradhan Mantri Jan Arogya Yojana (PM-JAY) – the ambitious program launched by
Government of India in 2018 to provide healthcare access to the most vulnerable sections
demonstrates strong positive effects on healthcare outcomes in a short time
 PM-JAY is being used significantly for high frequency, low-cost care such as dialysis and
continued during the Covid pandemic and the lockdown.
Bare Necessities
 Access to the ‘bare necessities’ has improved across all States in the country in 2018
as compared to 2012
 It is highest in States such as Kerala, Punjab, Haryana and Gujarat while lowest in Odisha,
Jharkhand, West Bengal and Tripura
 Improvement in each of the five dimensions viz., access to water, housing, sanitation,
micro-environment and other facilities
 Inter-State disparities declined across rural and urban areas as the laggard states have gained
relatively more between 2012 and 2018
 Improved disproportionately more for the poorest households when compared to the richest
households across rural and urban areas
 Improved access to the ‘bare necessities’ has led to improvements in health
indicators such as infant mortality and under-5 mortality rate and also correlates with future
improvements in education indicators
 The thrust should be given to reduce variation in the access to bare necessities across states,
between rural and urban and between income groups
 The schemes such as Jal Jeevan Mission, SBM-G, PMAY-G, etc. may design an appropriate
strategy to reduce these gaps
 A Bare Necessities Index (BNI) based on the large annual household survey data can be
constructed using suitable indicators and methodology at the district level for all/targeted
55
districts to assess the progress on access to bare necessities.
Fiscal Developments
 India adopted a calibrated approach best suited for a resilient recovery of its economy from
COVID-19 pandemic impact, in contrast with a front-loaded large stimulus package adopted
by many countries
 Expenditure policy in 2020-21 initially aimed at supporting the vulnerable sections but was
re-oriented to boost overall demand and capital spending, once the lockdown was unwound
 Monthly GST collections have crossed the Rs. 1 lakh crore mark consecutively for the last 3
months, reaching its highest levels in December 2020 ever since the introduction of GST
 Reforms in tax administration have begun a process of transparency and accountability and
have incentivized tax compliance by enhancing honest tax-payers’ experience
 Central Government has also taken consistent steps to impart support to the States in the
challenging times of the pandemic
External Sector
 COVID-19 pandemic led to a sharp decline in global trade, lower commodity prices and tighter
external financing conditions with implications for current account balances and currencies of
different countries
 India’s forex reserves at an all-time high of US$ 586.1 billion as on January 08, 2021,
covering about 18 months worth of imports
 India experiencing a Current Account Surplus along with robust capital inflows leading to
a BoP surplus since Q4 of FY2019-20
Improvement in debt vulnerability indicators:
 The ratio of forex reserves to total and short-term debt (original and residual)
 Ratio of short-term debt (original maturity) to the total stock of external debt.
 Debt service ratio (principal repayment plus interest payment) increased to 9.7% as at end-
September 2020, compared to 6.5% as at end-March 2020
Rupee appreciation/depreciation:
 In terms of the 6-currency nominal effective exchange rate (NEER) (trade-based weights),
Rupee depreciated by 4.1% in December 2020 over March 2020; appreciated by 2.9% in
terms of real effective exchange rate (REER)
 In terms of 36-currency NEER (trade-based weights), Rupee depreciated by 2.9% in
December 2020 over March 2020; appreciated by 2.2% in terms of REER
 RBI’s interventions in forex markets ensured financial stability and orderly conditions,
controlling the volatility and one-sided appreciation of the Rupee
Initiatives were undertaken to promote exports:
 Production Linked Incentive (PLI) Scheme
 Remission of Duties and Taxes on Exported Products (RoDTEP)
 Improvement in logistics infrastructure and digital initiatives
Money Management and Financial Intermediation
 Accommodative monetary policy during 2020: repo rate cut by 115 bps since March 2020
 Systemic liquidity in FY2020-21 has remained in surplus so far. RBI undertook various
conventional and unconventional measures like:
1. Open Market Operations
2. Long Term Repo Operations
3. Targeted Long Term Repo Operations
 Gross Non-Performing Assets ratio of Scheduled Commercial Banks decreased from 8.21%
at end-March, 2020 to 7.49% at end-September, 2020
 The monetary transmission of lower policy rates to deposit and lending rates improved during
56
FY2020-21
 The recovery rate for the Scheduled Commercial Banks through IBC (since its inception) has
been over 45%
Prices and Inflation
Headline CPI inflation:
 Averaged 6.6% during April-December, 2020 and stood at 4.6% in December 2020, mainly
driven by rising in food inflation (from 6.7% in 2019-20 to 9.1% during April-December, 2020,
owing to build up in vegetable prices)
 CPI headline and its subgroups witnessed inflation during April-October 2020, driven by the
substantial increase in price momentum – due to the initial disruptions caused by COVID-19
lockdown
 Moderated price momentum by November 2020 for most subgroups, coupled with positive
base effect helped ease inflation
The rural-urban difference in CPI inflation saw a decline in 2020:
 Since November 2019, CPI-Urban inflation has closed the gap with CPI-Rural inflation
 Food inflation has almost converged now
 Divergence in rural-urban inflation observed in other components of CPI like fuel and light,
clothing and footwear, miscellaneous etc.
 During April-December, 2019 as well as April-December, 2020-21, the major driver of CPI-C
inflation was the food and beverages group: Thali cost increased between June 2020 and
November 2020, however a sharp fall in the month of December reflecting the fall in the prices
of many essential food commodities
State-wise trend:
 CPI-C inflation increased in most of the states in the current year
 Regional variation persists
 Inflation ranged from 3.2% to 11% across States/UTs during June-December 2020 compared
to (-) 0.3% to 7.6% during the same period last year.
 Food inflation driving overall CPI-C inflation due to the relatively more weight of food items in
the index.
Steps were taken to stabilize the prices of food items:
 Banning of export of onions
 The imposition of a stock limit on onions
 Easing of restriction on imports of pulses
Gold prices:
 Sharp spike as investors turned to gold as a safe-haven investment amid COVID-
19 induced economic uncertainties
 Compared to other assets, gold had considerably higher returns during FY2020-21
Consistency in import policy warrants attention:
 Increased dependence on imports of edible oils poses the risk of fluctuations in import prices
 Imports impacting production and prices of the domestic edible oil market, coupled with
frequent changes in import policy of pulses and edible oils, add to confusion among
farmers/producers and delay imports
Sustainable Development and Climate Change
 India has taken several proactive steps to mainstream the SDGs into the policies, schemes
and programmes
 Voluntary National Review (VNR) presented to the United Nations High-Level Political
Forum (HLPF) on Sustainable Development
57
 The localisation of SDGs is crucial to any strategy aimed at achieving the goals under the
2030 Agenda
 Sustainable development remains core to the development strategy despite the
unprecedented COVID-19 pandemic crisis
 Eight National Missions under National Action Plan on Climate Change (NAPCC) focussed
on the objectives of adaptation, mitigation and preparedness on climate risks
 India’s Nationally Determined Contributions (NDC) states that finance is a critical enabler
of climate change action
 The financing considerations will therefore remain critical especially as the country steps up
the targets substantially
 The goal of jointly mobilizing US$ 100 billion a year by 2020 for climate financing by the
developed countries has remained elusive
 The postponement of COP26 to 2021 also gives less time for negotiations and other evidence-
based work to inform the post-2025 goal
 Despite overall growth in the global bond markets, green bond issuance in the first half of
2020 slowed down from 2019, possibly as a result of the on-going COVID-19 pandemic
 International Solar Alliance (ISA) launched two new initiatives – ‘World Solar
Bank’ and ‘One Sun One World One Grid Initiative’ – poised to bring about solar energy
revolution globally
Agriculture and Food Management
 India’s Agricultural (and Allied Activities) sector has shown its resilience amid the
adversities of COVID-19 induced lockdowns with a growth of 3.4% at constant prices
during 2020-21 (first advance estimate).
 The share of Agriculture and Allied Sectors in Gross Value Added (GVA) of the country at
current prices is 17.8% for the year 2019-20 (CSO-Provisional Estimates of National Income,
29th May 2020).
 Gross Capital Formation (GCF) relative to GVA showing a fluctuating trend from 17.7 % in
2013-14 to 16.4 % in 2018-19, with a dip to 14.7 % in 2015-16
 Total food grain production in the country in the agriculture year 2019-20 (as per Fourth
Advance Estimates), is 11.44 million tonnes more than during 2018-19.
 The actual agricultural credit flow was Rs.13,92,469.81 crores against the target of
Rs.13,50,000 crores in 2019-20. The target for 2020-21 was Rs.15,00,000 crores and a sum
of Rs. 9,73,517.80 crores was disbursed till 30th November 2020:
 1.5 crore dairy farmers of milk cooperatives and milk producer companies’ were targeted to
provide Kisan Credit Cards (KCC) as part of Prime Minister’s AatmaNirbhar Bharat Package
after the budget announcement of February 2020
 As of mid January 2021, a total of 44,673 Kisan Credit Cards (KCCs) have been issued to
fishers and fish farmers and an additional 4.04 lakh applications from fishers and fish farmers
are with the banks at various stages of issuance
The Pradhan Mantri Fasal Bima Yojana covers over 5.5 crore farmer applications year
on year:
 Claims worth Rs. 90,000 crore paid, as on 12th January 2021
 Speedy claim settlement directly into the farmer accounts through Aadhar linkage
 70 lakh farmers benefitted and claims worth Rs. 8741.30 crores were transferred during
COVID-19 lockdown period
 An amount of Rs. 18000 crore have been deposited directly in the bank accounts of 9 crore
farmer families of the country in December 2020 in the 7th instalment of financial benefit under
the PM-KISAN scheme
Fish production reached an all-time high of 14.16 million metric tons during 2019-20:
 GVA by the Fisheries sector to the national economy stood at Rs.2,12,915 crores constituting
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1.24% of the total national GVA and 7.28 % of the agricultural GVA
 Food Processing Industries (FPI) sector growing at an Average Annual Growth Rate
(AAGR) of around 9.99 % as compared to around 3.12 % in Agriculture and 8.25 % in
Manufacturing at 2011-12 prices during the last 5 years ending 2018-19.
Pradhan Mantri Garib Kalyan Anna Yojana:
 80.96 crore beneficiaries were provided foodgrains above NFSA mandated requirement free
of cost till November 2020.
 Over 200 LMT of foodgrains were provided amounting to a fiscal outgo of over Rs. 75000
Crores.
AatmaNirbhar Bharat Package:
 5 kg per person per month for four months (May to August) to approximately 8 crores migrants
(excluded under NFSA or state ration card) entailing subsidy of Rs. 3109 crores
approximately
Industry and Infrastructure
 A strong V-shaped recovery of economic activity further confirmed by IIP data
 The IIP & eight-core index further inched up to pre-COVID levels
 The broad-based recovery in the IIP resulted in a growth of (-) 1.9 % in Nov-2020 as
compared to a growth of 2.1 % in Nov-2019 and a nadir of (-) 57.3 % in Apr-2020
 Further improvement and firming up in industrial activities are foreseen with the Government
enhancing capital expenditure, the vaccination drive and the resolute push forward on long-
pending reform measures
 AatmaNirbhar Bharat Abhiyan with a stimulus package worth 15 % of India’s
GDP announced
Doing Business Report (DBR)
 India’s rank in the Ease of Doing Business (EoDB) Index for 2019 has moved upwards to
the 63rd position in 2020 from 77th in 2018 as per the
 India has improved its position in 7 out of 10 indicators
 Acknowledges India as one of the top 10 improvers, the third time in a row, with an
improvement of 67 ranks in three years
 It is also the highest jump by any large country since 2011
Services Sector
 India’s services sector contracted by nearly 16 % during H1: FY2020-21, during the COVID-19
pandemic mandated lockdown, owing to its contact-intensive nature
 Key indicators such as Services Purchasing Managers’ Index, rail freight traffic, and port
traffic, are all displaying a V-shaped recovery after a sharp decline during the lockdown
 Despite the disruptions being witnessed globally, FDI inflows into India’s services sector grew
robustly by 34% Y-o-Y during April-September 2020 to reach US$ 23.6 billion
 The services sector accounts for over 54 % of India’s GVA and nearly four-fifths of total FDI
inflow into India
 The sector’s share in GVA exceeds 50% in 15 out of 33 States and UTs, and is particularly
more pronounced (greater than 85%) in Delhi and Chandigarh
 Services sector accounts for 48% of total exports, outperforming goods exports in the recent
years
 The shipping turnaround time at ports has almost halved from 4.67 days in 2010-11 to 2.62
days in 2019-20
 The Indian start-up ecosystem has been progressing well amidst the COVID-19 pandemic,
being home to 38 unicorns – adding a record number of 12 start-ups to the unicorn list last
year
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India’s space sector has grown exponentially in the past six decades:
 Spent about US$ 1.8 billion on space programmes in 2019-20.
 Space ecosystem is undergoing several policy reforms to engage private players and attract
innovation and investment.
Social Infrastructure, Employment and Human Development
 The combined (Centre and States) social sector expenditure as % of GDP has increased in
2020-21 compared to last year.
 India’s rank in HDI 2019 was recorded at 131, out of a total 189 countries:
 India’s GNI per capita (2017 PPP $) has increased from US$ 6,427 in 2018 to US$ 6,681 in
2019
 Life expectancy at birth improved from 69.4 years in 2018 to 69.7 years in 201
 The access to the data network, electronic devices such as a computer, laptop, smartphone
etc. gained importance due to online learning and remote working during the pandemic
 Major proportion of workforce engaged as regular wage/salaried in the urban sector during the
period of January 2019-March 2020 (quarterly survey of PLFS)
 Government’s incentive to boost employment through AatmaNirbhar Bharat Rozgar
Yojana and rationalization and simplification of existing labour codes into 4 codes
Low level of female LFPR in India:
 Females spending disproportionately more time on unpaid domestic and caregiving services
to household members as compared to their male counterparts (Time Use Survey, 2019)
 Need to promote non-discriminatory practices at the workplace like pay and career
progression, improve work incentives, including other medical and social security benefits for
female workers
India’s fight against COVID-19:
 Initial measures of lockdown, social distancing, travel advisories, practising hand wash,
wearing masks reduced the spread of the disease
 The country also acquired self-reliance in essential medicines, hand sanitisers, protective
equipment including masks, PPE Kits, ventilators, COVID-19 testing and treatment facilities
 World’s largest COVID-19 vaccination drive commenced on 16th January 2021 using two
indigenously manufactured vaccines.
Key highlights of the Union Budget 2021-22

6 pillars of the Union Budget 2021-22:
1. Health and Wellbeing
2. Physical & Financial Capital, and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government and Maximum Governance
1. Health and Wellbeing
 Rs. 2,23,846 crore outlay for Health and Wellbeing in BE 2021-22 as against Rs. 94,452
crore in BE 2020-21 – an increase of 137%
 Focus on strengthening three areas: Preventive, Curative, and Wellbeing
 Steps being taken for improving health and wellbeing:
60
♦ Vaccines
√ Rs. 35,000 crore for COVID-19 vaccine in BE 2021-22
√ The Made-in-India Pneumococcal Vaccine to be rolled out across the country, from
present 5 states – to avert 50,000 child deaths annually
♦ Health Systems
√ Rs. 64,180 crore outlay over 6 years for PM AatmaNirbhar Swasth Bharat Yojana – a
new centrally sponsored scheme to be launched, in addition to NHM
√ Main interventions under PM AatmaNirbhar Swasth Bharat Yojana:

o National Institution for One Health

o 17,788 rural and 11,024 urban Health and Wellness Centers
o 4 regional National Institutes for Virology
o 15 Health Emergency Operation Centers and 2 mobile hospitals
o Integrated public health labs in all districts and 3382 block public health units in 11 states
o Critical care hospital blocks in 602 districts and 12 central institutions
o Strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches
and 20 metropolitan health surveillance units
o Expansion of the Integrated Health Information Portal to all States/UTs to connect all public
health labs
o 17 new Public Health Units and strengthening of 33 existing Public Health Units
o Regional Research Platform for WHO South-East Asia Region
o 9 Bio-Safety Level III laboratories
♦ Nutrition
√ Mission Poshan 2.0 to be launched:

o To strengthen nutritional content, delivery, outreach, and outcome

o Merging the Supplementary Nutrition Programme and the Poshan Abhiyan
o Intensified strategy to be adopted to improve nutritional outcomes across 112 Aspirational
Districts
♦ Universal Coverage of Water Supply
√ Rs. 2,87,000 crore over 5 years for Jal Jeevan Mission (Urban) – to be launched with an
aim to provide:
o 2.86 crore household tap connections
o Universal water supply in all 4,378 Urban Local Bodies
o Liquid waste management in 500 AMRUT cities
♦ Swachch Bharat, Swasth Bharat
√ Rs. 1,41,678 crore over 5 years for Urban Swachh Bharat Mission 2.0
√ Main interventions under Swachh Bharat Mission (Urban) 2.0:
o Complete faecal sludge management and waste water treatment
o Source segregation of garbage
o Reduction in single-use plastic
o Reduction in air pollution by effectively managing waste from construction-and-demolition
activities
o Bio-remediation of all legacy dump sites
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♦ Clean Air
√ Rs. 2,217 crore to tackle air pollution, for 42 urban centers with a million-plus population
♦ Scrapping Policy
√ Voluntary vehicle scrapping policy to phase out old and unfit vehicles 1′ Fitness tests in
automated fitness centres:
o After 20 years in case of personal vehicles
o After 15 years in case of commercial vehicles
2. Physical and Financial Capital and Infrastructure
♦ Production Linked Incentive scheme (PLI)
√ Rs. 1.97 lakh crore in next 5 years for PLI schemes in 13 Sectors
√ To create and nurture manufacturing global champions for an AatmaNirbhar Bharat
√ To help manufacturing companies become an integral part of global supply chains,
possess core competence and cutting-edge technology
√ To bring scale and size in key sectors
√ To provide jobs to the youth
♦ Textiles
√ Mega Investment Textiles Parks (MITRA) scheme, in addition to PLI:

o 7 Textile Parks to be established over 3 years

√ Textile industry to become globally competitive, attract large investments and boost
employment generation & exports
♦ Infrastructure
√ National Infrastructure Pipeline (NIP) expanded to 7,400 projects:

o Around 217 projects worth 1.10 lakh crore completed

√ Measures in three thrust areas to increase funding for NIP:
i. Creation of institutional structures
ii. Big thrust on monetizing assets
iii. Enhancing the share of capital expenditure
i. Creation of institutional structures: Infrastructure Financing

o Rs. 20,000 crore to set up and capitalise a Development Financial Institution(DFI) – to act
as a provider, enabler and catalyst for infrastructure financing
o 5 lakh crore lending portfolio to be created under the proposed DFI in 3 years
o Debt Financing by Foreign Portfolio Investors to be enabled by amending InvITs’ and REITs’
legislations
ii. Big thrust on monetizing assets
 National Monetization Pipeline to be launched
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 Important asset monetization measures:
a. 5 operational toll roads worth Rs. 5,000 crore being transferred to the NHAIInvIT
b. Transmission assets worth Rs. 7,000 crore to be transferred to the PGCILInvIT
c. Dedicated Freight Corridor assets to be monetized by Railways, for operations and
maintenance, after commissioning
d. Next lot of Airports to be monetized for operations and management concession
e. Other core infrastructure assets to be rolled out under the Asset Monetization
Programme:
o Oil and Gas Pipelines of GAIL, IOCL and HPCL
o AAI Airports in Tier II and III cities
o Other Railway Infrastructure Assets
o Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED
o Sports Stadiums
iii. Sharp Increase in Capital Budget
 Rs. 5.54 lakh crore capital expenditure in BE 2021-22 – sharp increase of 34.5% over Rs.
4.12 lakh crore allocated in BE 2020-21 :
o Over Rs. 2 lakh crore to States and Autonomous Bodies for their Capital Expenditure.
o Over Rs. 44,000 crore for the Department of Economic Affairs to provide for
projects/programmes/departments exhibiting good progress on Capital Expenditure
♦ Roads and Highways Infrastructure
√ Rs. 1,18,101 lakh crore, highest ever outlay, for Ministry of Road Transport and Highways –
of which Rs. 1,08,230 crore is for capital
√ Under the Rs. 5.35 lakh crore Bharatmala Pariyojana, more than 13,000 km length of
roads worth Rs. 3.3 lakh crore awarded for construction:

o 3,800 km have already been constructed

o Another 8,500 km to be awarded for construction by March 2022
o Additional 11,000 km of national highway corridors to be completed by March 2022
√ Economic corridors being planned:

o Rs. 1.03 lakh crore outlay for 3,500 km of NHs in Tamil Nadu
o Rs. 65,000 crore investment for 1,100 km of NHs in Kerala
o Rs. 25,000 crore for 675 km of NHs in West Bengal
o Over Rs. 34,000 crore to be allocated for 1300 km of NHs to be undertaken in next 3 years in
Assam, in addition to Rs. 19,000 crore works of NHs currently in progress in the State
√ Flagship Corridors/Expressways:

o Delhi-Mumbai Expressway – Remaining 260 km to be awarded before 31.3.2021

o Bengaluru-Chennai Expressway – 278 km to be initiated in the current FY; construction to
begin in 2021-22
o Kanpur-Lucknow Expressway – 63 km expressway providing an alternate route to NH 27 to
be initiated in 2021-22
o Delhi-Dehradun economic corridor – 210 km to be initiated in the current FY; construction to
begin in 2021-22
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o Raipur-Vishakhapatnam – 464 km passing through Chhattisgarh, Odisha and North Andhra
Pradesh, to be awarded in the current year; construction to start in 2021-22
o Chennai-Salem corridor – 277 km expressway to be awarded and construction to start in
2021-22
o Amritsar-Jamnagar – Construction to commence in 2021-22
o Delhi-Katra – Construction will commence in 2021-22
√ Advanced Traffic management system in all new 4 and 6-lane highways:

o Speed radars
o Variable message signboards
o GPS enabled recovery vans will be installed
♦ Railway Infrastructure
√ Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for capital expenditure
√ National Rail Plan for India (2030): to create a „future ready‟ Railway system by 2030
√ 100% electrification of Broad-Gauge routes to be completed by December, 2023
√ Broad Gauge Route Kilometers (RKM) electrification to reach 46,000 RKM, i.e. 72% by end
of 2021
√ Western Dedicated Freight Corridor (DFC) and Eastern DFC to be commissioned by June
2022, to bring down the logistic costs – enabling Make in India strategy
√ Additional initiatives proposed:

o The Sonnagar-Gomoh Section (263.7 km) of Eastern DFC to be taken up in PPP mode in
2021-22
o Future dedicated freight corridor projects –
 East Coast corridor from Kharagpur to Vijayawada
 East-West Corridor from Bhusaval to Kharagpur to Dankuni
 North-South corridor from Itarsi to Vijayawada
√ Measures for passenger convenience and safety:

o Aesthetically designed Vista Dome LHB coach on tourist routes for better travel
o High density network and highly utilized network routes to have an indigenously developed
automatic train protection system, eliminating train collision due to human error
♦ Urban Infrastructure
√ Raising the share of public transport in urban areas by expansion of metro rail
network and augmentation of city bus service
√ Rs. 18,000 crore for a new scheme, to augment public bus transport:
o Innovative PPP models to run more than Rs. 20,000 buses
o To boost automobile sector, provide fillip to economic growth, create employment
opportunities for our youth
√ A total of 702 km of conventional metro is operational and another 1,016 km of metro and
RRTS is under construction in 27 cities
√ ‘MetroLite’ and ‘MetroNeo’ technologies to provide metro rail systems at much lesser cost
with similar experience in Tier-2 cities and peripheral areas of Tier-1 cities.
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√ Central counterpart funding to:
a. Kochi Metro Railway Phase-II of 11.5 km at a cost of Rs. 1957.05 crore
b. Chennai Metro Railway Phase –II of 118.9 km at a cost of Rs. 63,246 crore
c. Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a cost of Rs. 14,788
crore
d. Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of Rs. 5,976 crore and Rs.
2,092 crore respectively.
♦ Power Infrastructure
√ 139 Giga Watts of installed capacity and Rs. 1.41 lakh circuit km of transmission lines
added, and additional 2.8 crore households connected in past 6 years
√ Consumers to have alternatives to choose the Distribution Company for enhancing
competitiveness
√ Rs. 3,05,984 crore over 5 years for a revamped, reforms-based and result-linked
new power distribution sector scheme
√ A comprehensive National Hydrogen Energy Mission 2021-22 to be launched
♦ Ports, Shipping, Waterways
√ Rs. 2,000 crore worth 7 projects to be offered in PPP-mode in FY21-22 for operation of
major ports
√ Indian shipping companies to get Rs. 1624 crore worth subsidy support over 5 years in
global tenders of Ministries and CPSEs
√ To double the recycling capacity of around 4.5 Million Light Displacement Tonne (LDT) by
2024; to generate an additional 1.5 lakh jobs
♦ Petroleum & Natural Gas
√ Extention of Ujjwala Scheme to cover 1 crore more beneficiaries
√ To add 100 more districts to the City Gas Distribution network in next 3 years
√ A new gas pipeline project in J&K
√ An independent Gas Transport System Operator to be set up for facilitation and
coordination of booking of common carrier capacity in all-natural gas pipelines on a non-
discriminatory open access basis
♦ Financial Capital
√ A single Securities Markets Code to be evolved
√ Support for development of a world class Fin-Tech hub at the GIFT-IFSC
√ A new permanent institutional framework to help in development of Bond market by
purchasing investment grade debt securities both in stressed and normal times
√ Setting up a system of Regulated Gold Exchanges: SEBI to be notified as a regulator and
Warehousing Development and Regulatory Authority to be strengthened
√ To develop an investor charter as a right of all financial investors
√ Capital infusion of Rs. 1,000 crore to Solar Energy Corporation of India and Rs. 1,500
65
crore to Indian Renewable Energy Development Agency
♦ Increasing FDI in Insurance Sector
√ To increase the permissible FDI limit from 49% to 74% and allow foreign ownership and
control with safeguards
♦ Stressed Asset Resolution
√ Asset Reconstruction Company Limited and Asset Management Company to be set up
♦ Recapitalization of PSBs
√ Rs. 20,000 crore in 2021-22 to further consolidate the financial capacity of PSBs
♦ Deposit Insurance
√ Amendments to the DICGC Act, 1961, to help depositors get an easy and time-bound
access to their deposits to the extent of the deposit insurance cover
√ Minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 proposed to be
reduced from Rs. 50 lakh to Rs. 20 lakh for NBFCs with minimum asset size of Rs. 100 crore
♦ Company Matters
√ To decriminalize the Limited Liability Partnership (LLP) Act, 2008
√ Easing Compliance requirement of Small companies by revising their definition under
Companies Act, 2013 by increasing their thresholds for Paid up capital from “not exceeding
Rs. 50 Lakh” to “not exceeding Rs. 2 Crore” and turnover from “not exceeding Rs. 2 Crore” to
“not exceeding Rs. 20 Cr”.
√ Promoting start-ups and innovators by incentivizing the incorporation of One Person
Companies (OPCs):
o Allowing their growth without any restrictions on paid up capital and turnover
o Allowing their conversion into any other type of company at any time,
o Reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days
and
o Allowing Non Resident Indians (NRIs) to incorporate OPCs in India.
√ To ensure faster resolution of cases by:
o Strengthening NCLT framework
o Implementation of e-Courts system
o Introduction of alternate methods of debt resolution and special framework for MSMEs
√ Launch of data analytics, artificial intelligence, machine learning driven MCA21 Version 3.0
in 2021-22
♦ Disinvestment and Strategic Sale
√ Rs. 1,75,000 crore estimated receipts from disinvestment in BE 2020-21
√ Strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container
Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited etc. to be
completed in 2021-22.
√ Other than IDBI Bank, two Public Sector Banks and one General Insurance company to be
privatized
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√ IPO of LIC in 2021-22
√ New policy for Strategic Disinvestment approved; CPSEs except in four strategic areas to
be privatized
√ NITI Aayog to work out on the next list of CPSEs to be taken up for strategic disinvestment
√ Incentivizing States for disinvestment of their Public Sector Companies, using central funds
√ Special Purpose Vehicle in the form of a company to monetize idle land
√ Introducing a revised mechanism for ensuring timely closure of sick or loss making
CPSEs
♦ Government Financial Reforms
√ Treasury Single Account (TSA) System for Autonomous Bodies to be extended for
universal application
√ Separate Administrative Structure to streamline the „Ease of Doing Business‟ for
Cooperatives
3. Inclusive Development for Aspirational India
♦ Agriculture
√ Ensured MSP at minimum 1.5 times the cost of production across all commodities.
√ With steady increase in the procurement, payment to farmers increased as under:
(in Rs. crore)
2013-14 2019-20 2020-21
Wheat Rs. 33,874 Rs. 62,802 Rs. 75,060
Rice Rs. 63,928 Rs. 1,41,930 Rs. 172,752
Pulses Rs. 236 Rs. 8,285 Rs. 10,530

√ SWAMITVA Scheme to be extended to all States/UTs, 1.80 lakh property-owners in 1,241
villages have already been provided cards
√ Agricultural credit target enhanced to Rs. 16.5 lakh crore in FY22 – animal husbandry,
dairy, and fisheries to be the focus areas
√ Rural Infrastructure Development Fund to be enhanced to Rs. 40,000 crore from Rs.
30,000 crore
√ To double the Micro Irrigation Fund to Rs. 10,000 crore
√ ‘Operation Green Scheme’ to be extended to 22 perishable products, to boost value
addition in agriculture and allied products
√ Around 1.68 crore farmers registered and Rs. 1.14 lakh crore of trade value carried out
through e-NAMs; 1,000 more mandis to be integrated with e-NAM to bring transparency and
competitiveness.
√ APMCs to get access to the Agriculture Infrastructure Funds for augmenting
infrastructure facilities
♦ Fisheries
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√ Investments to develop modern fishing harbours and fish landing centres – both marine and
inland
√ 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat to be
developed as hubs of economic activity
√ Multipurpose Seaweed Park in Tamil Nadu to promote seaweed cultivation
♦ Migrant Workers and Labourers
√ One Nation One Ration Card scheme for beneficiaries to claim rations anywhere in the
country – migrant workers to benefit the most

o Scheme implementation so far covered 86% of beneficiaries across 32 States and UTs
o Remaining 4 states to be integrated in next few months
√ Portal to collect information on unorganized labour force, migrant workers especially, to
help formulate schemes for them
√ Implementation of 4 labour codes underway

o Social security benefits for gig and platform workers too

o minimum wages and coverage under the Employees State Insurance Corporation applicable
for all categories of workers
o Women workers allowed in all categories, including night-shifts with adequate protection
o Compliance burden on employers reduced with single registration and licensing, and online
returns
♦ Financial Inclusion
√ Under Stand Up India Scheme for SCs, STs and women,

o Margin money requirement reduced to 15%

o To also include loans for allied agricultural activities
√ Rs. 15,700 crore budget allocation to MSME Sector, more than double of this year‟s BE
4. Reinvigorating Human Capital
♦ School Education
√ 15,000 schools to be strengthened by implementing all NEP components. Shall act as
exemplar schools in their regions for mentoring others
√ 100 new Sainik Schools to be set up in partnership with NGOs/private schools/states
♦ Higher Education
√ Legislation to be introduced to setup Higher Education Commission of India as an
umbrella body with 4 separate vehicles for standard-setting, accreditation, regulation, and
funding
√ Creation of formal umbrella structure to cover all Govt. colleges, universities, research
institutions in a city for greater synergy.

o Glue grant to implement the same across 9 cities
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√ Central University to come up in Leh for accessibility of higher education in Ladakh
♦ Scheduled Castes and Scheduled Tribes Welfare
√ 750 Eklavya model residential schools in tribal areas:

o Unit cost of each school to be increased to 38 crore

o For hilly and difficult areas, to 48 crore
o Focus on creation of robust infrastructure facilities for tribal students
√ Revamped Post Matric Scholarship Scheme for welfare of SCs

o Rs. 35,219 crore enhanced Central Assistance for 6 years till 20252026
o 4 crore SC students to benefit
♦ Skilling
√ Proposed amendment to Apprenticeship Act to enhance opportunities for youth
√ Rs. 3000 crore for realignment of existing National Apprenticeship Training Scheme
(NATS) towards post-education apprenticeship, training of graduates and diploma holders in
Engineering
√ Initiatives for partnership with other countries in skilling to be taken forward, similar to
partnership:

o With UAE to benchmark skill qualifications, assessment, certification, and deployment of

certified workforce
o With Japan for a collaborative Training Inter Training Programme (TITP) to transfer of skills,
technique and knowledge
5. Innovation and R&D
 Modalities of National Research Foundation announced in July 2019 –
o Rs. 50,000 crore outlay over 5 years
o To strengthen overall research ecosystem with focus on national-priority thrust areas
 Rs. 1,500 crore for proposed scheme to promote digital modes of payment
 National Language Translation Mission (NTLM) to make governance-and-policy related
knowledge available in major Indian languages
 PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil‟s Amazonia
Satellite and some Indian satellites
 As part of the Gaganyaan mission activities:
o 4 Indian astronauts being trained on Generic Space Flight aspects, in Russia
o First unmanned launch is slated for December 2021
 4,000 crore over five years for Deep Ocean Mission survey exploration and conservation of
deep sea biodiversity
6. Minimum Government, Maximum Governance
 Measures being undertaken to bring reforms in Tribunals to ensure speedy justice
 National Commission for Allied Healthcare Professionals already introduced to ensure
transparent and efficient regulation of the 56 allied healthcare professions
 The National Nursing and Midwifery Commission Bill introduced for the same in nursing
profession
 Proposed Conciliation Mechanism with mandate for quick resolution of contractual disputes
with CPSEs
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 3,768 crore allocated for first digital census in the history of India
 300 crore grant to the Government of Goa for the diamond jubilee celebrations of the state’s
liberation from Portuguese
 1,000 crore for the welfare of Tea workers especially women and their children in Assam and
West Bengal through a special scheme
Fiscal Position
Item Original BE 2020-21 RE 2020-21 BE 2021-22
Expenditure Rs. 30.42 lakh crore Rs. 34.50 lakh crore Rs. 34.83 lakh crore
Capital Expenditure Rs. 4.12 lakh crore Rs. 4.39 lakh crore Rs. 5.5 lakh crore
Fiscal Deficit (as % – 9.5% 6.8%

of GDP)
 RE for Expenditure is Rs. 34.50 lakh crore as against original BE expenditure of Rs. 30.42
lakh crore
o Quality of expenditure has been maintained as Capital Expenditure estimated as per RE
is 4.39 lakh crore in 2020-2021 as against Rs. 4.12 lakh crore in BE 2020-21
 Estimates of Rs. 34.83 lakh crore BE for expenditure in 2021-2022 including Rs. 5.5 lakh
crore as capital expenditure, an increase of 34.5% to give required push to economy
 The fiscal deficit in BE 2021-2022 is estimated to be 8% of GDP. The fiscal deficit in RE 2020-
21 is pegged at 9.5% of GDP – funded through Government borrowings, multilateral
borrowings, Small Saving Funds and short term borrowings
o Gross borrowing from the market for the next year to be around 12 lakh crore.
o Plan to continue on the path of fiscal consolidation, achieving a fiscal deficit level below 4.5%
of GDP by 2025-2026 with a fairly steady decline over the period
o It will be achieved by increasing the buoyancy of tax revenue through improved compliance,
and secondly, by increased receipts from monetisation of assets, including Public Sector
Enterprises and land
o Deviation Statement under Sections 4(5) and 7(3) (b) of the FRBM Act tabled necessitated by
this year’s unforeseen and unprecedented circumstances
o Amendment to FRBM Act proposed to achieve targeted Fiscal Deficit levels
 The Contingency Fund of India is to be augmented from 500 crore to Rs. 30,000
crore through Finance Bill
Net borrowing of the States:
 Net borrowing for the states allowed at 4% of GSDP for the year 2021-2022 as per
recommendation of 15th FC
o Part of this earmarked for incremental capital expenditure
o Additional borrowing ceiling of 0.5% of GSDP will be provided subject to conditions
 States expected to reach a fiscal deficit of 3% of GSDP by 2023-24, as recommended by
the 15th Finance Commission
Fifteenth Finance Commission:
 The final report covering 2021-26 was submitted to the President, retaining vertical shares of
states at 41%
 Funds to UTs of Jammu and Kashmir and Ladakh would be provided by Centre
 On the Commission‟s recommendation, Rs. 1,18,452 crore have been provided as Revenue
Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crore to 14 states in 2020-21
Tax Proposals
Vision of a transparent, efficient tax system to promote investments and employment in the
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country with minimum burden on tax payers
1. Direct Taxes
Achievements:
 Corporate tax rate slashed to make it among the lowest in the world
 Burden of taxation on small taxpayers eased by increasing rebates
 Return filers almost doubled to 6.48 crore in 2020 from 31 crore in 2014
 Faceless Assessment and Faceless Appeal introduced
Relief to Senior Citizens:
 Exemption from filing tax returns for senior citizens over 75 years of age and having only
pension and interest income; tax to be deducted by paying bank
Reducing Disputes, Simplifying Settlement:
 Time limit for re-opening cases reduced to 3 years from 6 years
 Serious tax evasion cases, with evidence of concealment of income of Rs. 50 lakh or more
in a year, to be re-opened only up to 10 years, with approval of the Principal Chief
Commissioner
 Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50
lakh and disputed income up to Rs. 10 lakh
 National Faceless Income Tax Appellate Tribunal Centre to be established
 Over 1 lakh taxpayers opted to settle tax disputes of over Rs. 85,000 crore through Vivad Se
Vishwas Scheme until 30th January 2021
Relaxation to NRIs:
 Rules to be notified for removing hardships faced by NRIs regarding their foreign retirement
accounts
Incentivising Digital Economy:
 Limit of turnover for tax audit increased to 10 crore from Rs. 5 crore for entities carrying out
95% transactions digitally
Relief for Dividend:
 Dividend payment to REIT/ InvIT exempt from TDS
 Advance tax liability on dividend income only after declaration/ payment of dividend
 Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors
Attracting Foreign Investment for Infrastructure:
 Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon Bonds
 Relaxation of some conditions relating to prohibition on private funding, restriction on
commercial activities, and direct investment
Supporting ‘Housing for All’:
 Additional deduction of interest, up to Rs. 1.5 lakh, for loan taken to buy an affordable house
extended for loans taken till March 2022
 Tax holiday for Affordable Housing projects extended till March 2022
 Tax exemption allowed for notified Affordable Rental Housing Projects
Tax incentives to IFSC in GIFT City:
 Tax holiday for capital gains from incomes of aircraft leasing companies
 Tax exemptions for aircraft lease rentals paid to foreign lessors
 Tax incentive for relocating foreign funds in the IFSC
 Tax exemption to investment division of foreign banks located in IFSC
Ease of Filing Taxes:
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 Details of capital gains from listed securities, dividend income, interest from banks, etc. to be
pre-filled in returns
Relief to Small Trusts:
 Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts
running schools and hospitals
Labour Welfare:
 Late deposit of employee‟s contribution by the employer not to be allowed as deduction to the
employer
 Eligibility for tax holiday claim for start-ups extended by one more year
 Capital gains exemption for investment in start-ups extended till 31st March, 2022
2. Indirect Taxes
GST:
 Measures taken till date:
o Nil return through SMS
o Quarterly return and monthly payment for small taxpayers
o Electronic invoice system
o Validated input tax statement
o Pre-filled editable GST return
o Staggering of returns filing
o Enhancement of capacity of GSTN system
o Use of deep analytics and AI to identify tax evaders
Custom Duty Rationalization:
 Twin objectives: Promoting domestic manufacturing and helping India get onto global value
chain and export better
 80 outdated exemptions already eliminated
 Revised, distortion-free customs duty structure to be put in place from 1st October 2021
by reviewing more than 400 old exemptions
 New customs duty exemptions to have validity up to the 31st March following two years from
its issue date
Electronic and Mobile Phone Industry:
 Some exemptions on parts of chargers and sub-parts of mobiles withdrawn 16
 Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate
Iron and Steel:
 Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy,
alloy, and stainless steels
 Duty on steel scrap exempted up to 31st March, 2022
 Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked on certain steel
products
 Duty on copper scrap reduced from 5% to 2.5%
Textiles:
 Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber & yarn reduced to 5%
Chemicals:
 Calibrated customs duty rates on chemicals to encourage domestic value addition and to
remove inversions
 Duty on Naptha reduced to 2.5%
Gold and Silver:
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 Custom duty on gold and silver to be rationalized
Renewable Energy:
 Phased manufacturing plan for solar cells and solar panels to be notified
 Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to
encourage domestic production
Capital Equipment:
 Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty of 2.5%
 Duty on certain auto parts increased to general rate of 15%
MSME Products:
 Duty on steel screws and plastic builder wares increased to 15%
 Prawn feed to attract customs duty of 15% from earlier rate of 5%
 Exemption on import of duty-free items rationalized to incentivize exporters of garments,
leather, and handicraft items
 Exemption on imports of certain kind of leathers withdrawn
 Customs duty on finished synthetic gem stones raised to encourage domestic processing
Agriculture Products:
 Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to
15%.
 Withdrawal of end-use based concession on denatured ethyl alcohol
 Agriculture Infrastructure and Development Cess (AIDC) on a small number of items
Rationalization of Procedures and Easing of Compliance:
 Turant Customs initiative, a Faceless, Paperless, and Contactless Customs measures
 New procedure for administration of Rules of Origin
Achievements and Milestones during the COVID-19 pandemic
 Pradhan Mantri Garib Kalyan Yojana (PMGKY):
o Valued at 2.76 lakh crore
o Free food grain to 80 crore people
o Free cooking gas for 8 crore families
o Direct cash to over 40 crore farmers, women, elderly, the poor and the needy
 AatmaNirbhar Bharat package (ANB 1.0):
 Estimated at 23 lakh crore – more than 10% of GDP
 PMGKY, three ANB packages (ANB 1.0, 2.0, and 3.0), and announcements made later were
like 5 mini-budgets in themselves
 27.1 lakh crore worth of financial impact of all three ANB packages including RBI‟s measures
– amounting to more than 13% of GDP
 Structural reforms:
o One Nation One Ration Card
o Agriculture and Labour Reforms
o Redefinition of MSMEs
o Commercialisation of the Mineral Sector
o Privatisation of Public Sector Undertakings
o Production Linked Incentive Schemes
 Status of India’s fight against COVID-19:
o 2 Made-in-India vaccines – medically safeguarding citizens of India and those of 100-plus
countries against COVID-19
o 2 or more new vaccines expected soon
o Lowest death rate per million and the lowest active cases
2021 – Year of milestones for Indian history
 75th year of India’s independence
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 60 years of Goa’s accession to India
 50 years of the 1971 India-Pakistan War
 Year of the 8th Census of Independent India
 India’s turn at the BRICS Presidency
 Year for Chandrayaan-3 Mission
 Haridwar MahaKumbh
Vision for AatmaNirbhar Bharat
 AatmaNirbharta – not a new idea – ancient India was self-reliant and a business epicentre of
the world
 AtmaNirbhar Bharat – an expression of 130 crore Indians who have full confidence in their
capabilities and skills
 Strengthening the Sankalp of:
o Nation First
o Doubling Farmer’s Income
o Strong Infrastructure
o Healthy India
o Good Governance
o Opportunities for Youth
o Education for All
o Women Empowerment
o Inclusive Development
 13 promises made in the Union Budget 2015-16, and resonating with the vision of
AatmaNirbharta, to materialise during the AmrutMahotsav of 2022 – on the 75th year of our
independence
Global Economic Scenario

US and Euro-area economies posted their strongest growth rates on record in the third
quarter, though activity is set to moderate for the remainder of the year,and possibly contract
in Europe. The improvement in US output exceeded the gains in GDP in Europe's biggest
economies, which are now implementing tighter restrictions after another surge in Covid-19
cases.
US in Q3 posted its fastest quarterly growth on record, though it comes after the worst
downturn ever as a result of the lockdown. GDP rebounded at a 33.1% annualized rate in
July-Sep quarter, following a historic shrinkage rate of 31.4% in Q2 (Apr-June). Personal
spending fueled the surge, climbing by an annualized 40.7%, business investment and
housing also registered strong increases. Government poured out more than $3
trillion worth of pandemic relief which fueled consumer spending earlier.
Recently, US lawmakers are edging closer to agreement on a $900 billion virus-relief spending
package. Fitch has forecasted US GDP to fall by 3.5% in 2020. A stronger-than anticipated
recovery in 3Q20 followed by high
-frequency data point to continued robust expansion in activity in October.
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Euro-area economy surged by a record in the third quarter that is now being derailed by
intensifying pandemic and new restrictions. GDP for the single-currency bloc jumped ~13%,
with France, Italy and Spain also posting gains of more than 10%. Recent indicators paint a
gloomier picture and the bloc's economy is now at risk of slipping back into recession. GDP is
expected to fall by 7.6% this year against 9% decline estimated in
September (Fitch).
Economic activity in Emerging Markets (EM) excluding China in the fourth week of
October was 18% below the pre-virus level. It is estimated that EM excl. China GDP will
experience contraction by 4.7% compared to
5.7% in earlier estimation (Fitch). This reflects upward revisions to India, Russia, Brazil Mexico
and Turkey.
China's economic recovery displayed mixed signals while remaining broadly steady in
October. GDP in China is now more than 3% above pre -virus levels and growing swiftly,
helped by on-balance-sheet fiscal easing and a pick-up in credit growth.
Global Forecast Summary

Annual
Average
% 2015-2019 2019 2020F 2021F 2022F
GDP Growth
US 2.5 2.2 -3.5 -1.5 3.5
Eurozone 1.9 1.3 -7.6 4.7 4.4
China 6.7 6.1 2.3 8.0 5.5
Japan 1.0 0.7 5.3 3.5 1.5
UK 1.7 1.3 -11.2 1.1 3.6
Developed a 2.0 1.6 -5.4 4.4 3.4
Emerging b 4.7 4.4 1.0 6.6 4.7
Worldc 3.0 2.6 -3.7 5.3 4.0
As per Fitch's Global Economic Outlook (GEO) for December 2020, world GDP in 2020
is expected to contract by 3.7%. Fitch has revised up world GDP growth forecast for
2021, to 5.3% from 5.2%.
B. India- Domestic GDP

India's economy contracted at a slower pace of 7.5% than expected in Q2 FY21, marking a
rebound from the dismal June quarter in which India recorded a contraction of 23.9% in GDP,
as manufacturing rode a festival
season boost.
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Manufacturing recorded a positive growth of 0.6% in Q2 FY21 as compared to 39.3%
contraction in Q1.
The construction activity continues in the contraction mode, but with sharp improvement over
Q1 contraction as it registered only an 8.6% decline in Q2 as compared to -50.3% in Q1.
Electricity & other utilities which grew by 4.4% and construction aided in the sharper-than-
expected slowing in the GDP contraction.
Agricultural Sector remains the silver lining. Agricultural GDP registered a growth of 3.4% in
Q2, the same as in April-June quarter. Agriculture is set to cushion the shock of the COVID
pandemic on the Indian economy in 2020-21 with a growth of 3.4 percent in both Q1 and Q2.
It is the only sector that has contributed positively to the overall Gross Value Added (GVA) in
both the quarters of 2020-21.
The trade related services sector showed slower-than-expected contraction at 15.6%.

Services sector has registered a slower contraction of 11.4% in Q2 from 20.6% in Q1.
On the demand side, the most important concern has somewhat abated. Private
consumption has sequentially improved in Q2 where it has contracted by 11.3% against a
26.7% fall in the previous quarter. The dip indicates that the demand is still far from normal
and that the supportive measures from the government should continue.
The loss of momentum in government spending in July-September 2020-21, has led to a

22.2% contraction in government final consumption expenditure.
As a result, this component turned into the worst performer on the expenditure -side in Q2
FY2021 from being the best performer with a 16.4% expansion in Q1 FY2021. Had this been
in positive territory, the GDP numbers would have been even better.
Gross fixed capital formation, an indicator of investment, showed a compression of 7.3% in

Q2 compared with 47.1% in Q1, mirroring the trend in capital goods. Continued contraction in
investment suggests poor domestic absorption and intermediate demand.
76
GDP
Projections:
RBI
Projection Q3FY21 Q4FY21 Fy21 H1FY22
GDP 0.1% 0.7% -7.5% 21.9%-6.5%
Latest GDP Previous GDP

Agency FY22
projections for FY21 projections for FY21
World Bank* -9.6% - .2% -
IMF* -10.3% - .5% 8.8%

OECD -9.9% - .2% 8%
ADB -8% -9% 8%
Fitch -9.4% -10.5% 11%

Moody’s -10.6% -11.5% 10.8%
Goldman -10.% -14.8% 13%
Sachs
Nomura - 8.2% -10.8% 9.9%
S&P - .7% -9% 10%
India Ratings - 1.8% -5.3% 9.9%
CRISIL -7.7% -9% 10%
ICRA -7.8% -11% -
Implications: Q2 GDP contraction at 7.5% suggests the economy fared better than-
expected. These numbers should improve full-year estimates but it remains to be seen if the
recovery momentum will be maintained. However, critical employment generating sectors like
construction, mining and services continue to stay weak.
The most comforting number is the positive growth of 0.6% in manufacturing in Q2 FY21. The
positive growth in the manufacturing sector can be attributed to the higher activity with the
easing of the lockdown restrictions as well as a favourable base effect combined with
aggressive cost-cutting measures, a pared down wage bill and benign raw material costs. We
expect that India's GDP will still see a contraction in FY21 at around 7-8%.
Inflation
CPI: Retail inflation measured by CPI decelerated to 6.93% in November, led by decline in
inflation in food & beverages, fuel & light and housing.
o CPI projections by RBI in its latest monetary policy on 4th December 2020 indicate gradual
easing going ahead.
RBI Projection Q3FY21 Q4FY21 H1FY22
CPI Inflation 6.8% 5.8% 5.2-4.6%
Implications: Softening of vegetable prices at the retail level indicates that the supply
77
challenges have eased moderately. CPI inflation is likely to witness some relief in the winter
months.
WPI: Wholesale inflation measured by WPI rose to highest in 9 months at 1.55% in
November 2020 as manufactured products turned costlier, with food articles inflation softening
in November 2020.
o Manufactured products inflation stood at 2.97% in November 2020 compared with an
inflation of 2.12% in October 2020.
o Prices of food articles declined to 3.94% in November 2020 from 6.37% in the previous
month.
o Prices in fuel and power basket contracted less by 9.87% against a contraction of 10.95% in
October 2020.
Implications: Retail and wholesale inflation continued to diverge in November with wholesale
inflation remaining positive for the fourth consecutive month. The substantial wedge between
wholesale and retail inflation points to the supply-side bottlenecks and large margins being
charged to the consumer. Going ahead, a rise in WPI inflation for manufactured products
would be partly offset by decline in food inflation, resulting in fairly stable wholesale inflation
for the month of December.
Trade
India's trade deficit touched 10-month high of $9.87 billion in November 2020 from $8.71
billion in October 2020.
India's exports contracted for the second consecutive month in November 2020 by 8.74%
YoY in November 2020 to $23.52 billion, as major overseas markets continued to witness
muted demand due to Covid-19 induced lockdowns.
Imports contracted by 13.32% to $33.39 billion in November 2020.
India's merchandise trade has been weakening even before the pandemic hit the economy
and external demand.
Exports have shown a positive growth only in February & September in the current calendar
year so far.
The contraction in exports in November 2020 was led by renewed restrictions in trading
partners, that outweighed the optimism related to an early availability of Covid-19 vaccines.
Implications: Going ahead, exports have been seeing signs of revival as order booking
position has continuously improved and more new orders are in the offing.
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Upcoming festive season may boost demand from the key export markets in December 2020.
Going by this trend, we expect that by the end of 2020-21, overall merchandise exports would
touch $290 billion from $173.66 billion during April- November FY21.
Output of 8- Core Sector Industries

India's 8 key infrastructure sectors (core sectors) contracted for the 8 th consecutive month in
October 2020, posting a decline of 2.5% YoY, weighed down by a fall in production of crude
oil, natural gas, petroleum refinery
production and steel.
The remaining sectors posted an increase in production in October, with coal at 11.6%,
fertilizer at 6.3%, cement at 2.8% and electricity at 10.5%.
In September 2020, the core sector contraction had narrowed to 0.1% giving hopes of
resurgence in manufacturing activity and economic revival. There were expectations that the
core sector growth rate may turn marginally positive in October 2020.
Implications: The core sector data suggests the industrial recovery is "still weak" and the
traction seen in IIP growth lately is triggered largely by the festival demand.
Fiscal Deficit (April-Oct'2020)

The Union Government's fiscal deficit widened to Rs.9.53 lakh crore in April -October 2020,
which is nearly 120% of the annual budget estimate.
The deficit widened mainly on account of poor revenue realisation. The lockdown imposed to
curb spreading of Covid-19 infections had significantly impacted business activities and in turn
contributed to sluggish revenue realisation.
The fiscal deficit at the end of September 2020 was about 114.8% of the annual budget
estimate. In the first seven months of last financial year, the deficit was at 102.4% of the
annual target.
Other Indicators
Forex Reserves: Forex reserves surged by $4.5 billion to touch a record high of $579.3
billion in the week ended December 4'2020. The increase in reserves was on account of a rise
in foreign currency assets (FCAs) by $3.9 billion to $537.4 billion. In the previous week ended
November 27, the reserves had declined by $469 million to $574.8 billion.
USD/INR: The Indian rupee ended flat at 73.59 against the US dollar on 17th December 2020
amid a firm trend in the domestic equity markets. USD was trading on a weak note after the
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US Federal Reserve disappointed investors expecting a shift toward more purchases of
longer-dated bonds.
Passenger vehicle sales: Retail sales of passenger vehicles grew 4.2% from the year-
earlier in November to 291,001 units, primarily due to festive demand during the key events of
Diwali and Dhanteras. Sales also rebounded from October's 249,860 units and 157,972 units
sold in September, showed data issued by the Federation of Automobile Dealers Associations
(Fada).
Power Generation: Power generation was up on 4% on average on YoY basis during the
week ended December 07'2020.
Rail Freight: Railway carried 26.53 million tonnes of cargo with an increase of 11.53% YoY
as at the end of December 07'2020.
Corporate sector back on track in Q2 2020-21: Corporate earnings results of 225 listed
banking and financial sector companies in India (representing around four-fifth of all the listed
banking and financial sector companies in terms of market capitalisation) reflected a robust
rise in operating profits by 23.2 per cent in Q2 of FY 2020-21 similar to profit levels in
September 2018.
Steel and cement: These 2 capital intensive sectors, crucial for infrastructure are witnessing
better sales since October 2020.
o Steel production has crossed previous year levels in the last three months with 1.9 per cent
and 0.4 per cent YoY growth in September and October respectively.
o Steel consumption has also been converging to previous levels with YoY contraction easing
to 3.2 per cent in September and 2.6 per cent in October compared to a contraction of 13.4
per cent in August.
80
World Economic Outlook Update
 Although recent vaccine approvals have raised hopes of a turnaround in the pandemic
later this year, renewed waves and new variants of the virus pose concerns for the
outlook. Amid exceptional uncertainty, the global economy is projected to grow 5.5
percent in 2021 and 4.2 percent in 2022. The 2021 forecast is revised up 0.3
percentage point relative to the previous forecast, reflecting expectations of a vaccine-
powered strengthening of activity later in the year and additional policy support in a few
large economies.
 The projected growth recovery this year follows a severe collapse in 2020 that has had
acute adverse impacts on women, youth, the poor, the informally employed, and those
who work in contact-intensive sectors. The global growth contraction for 2020 is
estimated at -3.5 percent, 0.9 percentage point higher than projected in the previous
forecast (reflecting stronger-than-expected momentum in the second half of 2020).
 The strength of the recovery is projected to vary significantly across countries,
depending on access to medical interventions, effectiveness of policy support,
exposure to cross-country spillovers, and structural characteristics entering the crisis
 Policy actions should ensure effective support until the recovery is firmly underway, with
an emphasis on advancing key imperatives of raising potential output, ensuring
participatory growth that benefits all, and accelerating the transition to lower carbon
dependence. As noted in the October 2020 World Economic Outlook (WEO), a green
investment push coupled with initially moderate but steadily rising carbon prices would
yield needed emissions reductions while supporting the recovery from the pandemic
recession.
 Strong multilateral cooperation is required to bring the pandemic under control
everywhere. Such efforts include bolstering funding for the COVAX facility to accelerate
access to vaccines for all countries, ensuring universal distribution of vaccines, and
facilitating access to therapeutics at affordable prices for all. Many countries,
particularly low-income developing economies, entered the crisis with high debt that is
set to rise further during the pandemic. The global community will need to continue
working closely to ensure adequate access to international liquidity for these countries.
Where sovereign debt is unsustainable, eligible countries should work with creditors to
restructure their debt under the Common Framework agreed by the G20.
GLOBAL GROWTH SET TO STRENGHTEN IN THE 2ND HALF OF 2021
The baseline forecast follows from the assumptions listed in the previous section. Global growth. After
an estimated 3.5 percent contraction in 2020, the global economy is projected to grow 5.5 percent in
2021 and 4.2 percent in 2022 (Table 1). The estimate for 2020 is 0.9 percentage point higher than
projected in the October WEO forecast. This reflects the strongerthan-expected recovery on average
across regions in the second half of the year. The 2021 growth forecast is revised up 0.3 percentage
point, reflecting additional policy support in a few large economies and expectations of a vaccine-
powered strengthening of activity later in the year, which outweigh the drag on near-term momentum
due to rising infections. The upgrade is particularly large for the advanced economy group, reflecting
additional fiscal support—mostly in the United States and Japan—together with expectations of earlier
widespread vaccine availability compared to the emerging market and developing economy group.
Global trade. Consistent with recovery in global activity, global trade volumes are forecast to grow
about 8 percent in 2021, before moderating to 6 percent in 2022. Services trade is expected to recover
81
more slowly than merchandise volumes, however, which is consistent with subdued cross-border
tourism and business travel until transmission declines everywhere. Inflation. Even with the anticipated
recovery in 2021–22, output gaps are not expected to close until after 2022. Consistent with persistent
negative output gaps, inflation is expected to remain subdued during 2021–22. In advanced economies it
is projected to remain generally below central bank targets at 1.5 percent. Among emerging market and
developing economies inflation is projected just over 4 percent, which is lower than the historical
average of the group.
I. State of the Economy

 2020 turned out to be a year in which everything changed. The year 2021 has commenced with countries across
the world in a massive vaccination drive.
 In India, recent shifts in the macroeconomic landscape have brightened the outlook, with GDP in striking distance
of attaining positive territory and inflation easing closer to the target.
 Financial markets remain ebullient with EMEs receiving strong portfolio inflows and India on track for receiving
record annual inflows of foreign direct investment.
II. Effective Exchange Rate Indices of the Indian Rupee

Structural changes in the Indian economy and shifts in pattern of India’s foreign trade warrant updates to the
broad (existing 36-currency-based) indices of nominal/real effective exchange rate (NEER/REER) of the Indian
rupee. This article presents the updated series, with two important innovations: the base year is shifted from
2004-05 to 2015-16; and the existing basket is expanded from 36 to 40 currencies, with the inclusion of eight new
currencies and exclusion of four currencies.
Highlights:
 The new REER indices have remained around the benchmark (i.e., base year value of 100) for most part of the
sample period from 2004-05 to 2019-20, reflecting India’s external competitiveness better than the old series.
 Inflation differentials between India and its major trading partners have declined and stabilised since the adoption
of flexible inflation targeting (FIT) framework, boding well for India’s external competitiveness.
 The new REER, on average, was 0.8 per cent above its base year level during 2016-17 to 2019-20, reflecting
moderate inflation observed under FIT regime.
III. Small Finance Banks: Balancing Financial Inclusion and Viability

Small Finance Banks (SFBs) are a new entrant into the Indian banking system. This article analyses the
performance of SFBs with specific reference to their objective of financial inclusion, while also highlighting salient
aspects about their financial viability. The key observations from this analysis are the following:
 SFBs are making their presence felt in certain under-banked states, including Madhya Pradesh and Rajasthan.
There is, however, a concentration of their branches in the relatively well-banked states, including Tamil Nadu,
Maharashtra and Karnataka. Their branches also display a concentration at semi-urban and urban centers.
 SFBs have been reasonably successful in reaching out to under-served sectors, such as Micro, Small and
Medium Enterprises (MSMEs) and agriculture. MSMEs accounted for about 41 per cent of the total SFB credit in
March 2020. Furthermore, the loan portfolio of SFBs is geared towards small-sized loans.
 The return on assets, an indicator of financial viability, has been high for SFBs. Their cost of funds has also been
high explained by a lower percentage of current and savings accounts (CASA) in their deposit base. However, a
high spread has enabled them to earn a high return on funds.
 The NPA ratio, another important indicator of financial viability, has remained moderate for SFBs since their
inception, in part reflecting the better management of credit risks by these institutions.

IV. Green Finance in India: Progress and Challenges
Green finance plays a pivotal role in resource allocations towards sustainable economic growth. This article
highlights the recent developments and challenges relating to green finance in India.
Highlights:
 World over, green finance has emerged as a priority for public policy. The Government of India, the Reserve
Bank of India and the Security and Exchange Board of India have taken several initiatives to promote green
finance in India, including, inter alia, implementation of mandatory sustainability disclosure and bringing the
production of renewable energy under priority sector lending scheme, measures that incentivise the production
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and usage of unconventional energy by firms and households.
 Our findings based on variety of data sources indicate that there have been improvements in public awareness
and financing options for green finance in India.
 Some of the major challenges could be high borrowing costs, false claims of environmental compliances, plurality
of green loan definitions, and maturity mismatches. In this vein, a reduction in asymmetric information through
better information management and increased coordination among the stakeholders could pave the way towards
greener and sustainable long-term economic growth.
Monetary Policy Highlights (04.12.2020)
Key Policy Announcements

 Repo rate left unchanged at 4 percent.
 MPC maintains an 'accommodative' stance at least during the current FY & into the next
year.
 All MPC members voted unanimously for a status quo.
 Repo rate left unchanged.
On Inflation
 CPI inflation projection at 6.8 percent Q3 FY21, and at 5.8 percent for Q4 FY21.
 CPI inflation is seen at 5.2 to 4.6 percent in H1 FY22, with risks broadly balanced.
 MPC is of the view that inflation is likely to remain elevated, barring transient relief in the
winter months.
 Monetary policy constrained at the current juncture from using the space available to act in
support of growth.
 Further efforts necessary to mitigate supply-side driven inflation pressures.
On Growth
 Real GDP growth projection for FY21 revised to -7.5 percent from -9.5 percent earlier.
 GDP growth is seen at 0.1 percent in Q3 FY21 and 0.7 percent in Q4 FY21.
 GDP growth is seen at 6.5-21.9 percent in H1 FY22, with risks broadly balanced.
 Signs of recovery far from being broad-based; dependent on sustained policy support.
 Recovery in rural demand expected to strengthen further.
 Urban demand recovery also gaining momentum.
 Positive impulses clouded by a possible rise in infections in some parts of the country.
 Private investment still slack and capacity utilization has not fully recovered.
 Prospects have brightened with the progress on the vaccines.
Non-Policy Announcements
 On-Tap TLTRO – Extension of sectors and synergy with ECLGS 2.0. Banks can avail
funds from RBI under TLRO to invest in sectors under ECLGS 2.0. Furthermor e, banks
can invest in papers, give loans to stressed sectors covered under ECLGS 2.0.
 Regional Rural Banks permitted to access LAF window, call money market.
 Commercial & cooperative banks to not make any dividend pay-out from the profits of
FY20.
 Different categories of NBFCs to be allowed to declare dividend as per a matrix of
parameters.
 Discussion paper on scale-based regulatory framework for NBFCs by Jan 15, 2021.
 Risk-based internal audit to be extended to UCBs, NBFCs.
 Harmonization of guidelines on the appointment of statutory auditors for commercial
banks, UCBs and NBFCs.
 RTGS will soon be made 24X7 in the next few days.
83
GENERAL BANKING
THE BANKING REGULATION ACT, 1949

An act to consolidate and amend the laws relating to banking
Came in to force w.e.f.16.03.1949. The act was passed as “The Banking companies Act,
1949” and later on the name changed to “The Banking Regulation Act, 1949, w.e.f.
01.03.1966.
Extends to the whole country (made applicable to the J&K in 1956)..
The act is not applicable to primary agricultural credit societies, cooperative land mortgage
banks and non-agricultural primary credit societies.
Salient provisions of the act are as under:-
Section Summary of salient provisions

5 Contains definition of Banking, Banking Company , secured loans or advances -
Banking means accepting for the purpose of lending or investment, of deposits of
money from the public, repayable on demand or otherwise, and withdrawal by
cheque, draft, order or otherwise.
Banking Company: means any company which transacts the

business of banking in India
Secured loan or advance: means a loan or advance made on the security of

asset the market value of which is not at any time less than the amount of such
loan or advance, and ‘unsecured loan or advance’ means a loan or advance not
secured.
6 Describes the forms of business in which a banking company may
engage in addition to the Banking Business.
7 Use of Word Banking: Banking company carrying on banking
business in India to use at least one word, bank, banker, banking, or
banking company in its name.
8 Prohibition of trading: restricts/prohibits business like trading for goods etc.
9 Holding of Immovable Property (other than for own Use):
No Banking company shall hold any immovable property howsoever acquired
except as is acquired for its own use for a period exceeding 7 years from the
date of acquisition. RBI can further grant extension for a period not exceeding 5
years.
11 Requirement as to minimum paid up Capital and Reserves
Domestic Banks – Min. – Rs. 5 lac
Foreign Banks - Min. - Rs.15 lac (Rs.20 lac for business in Mumbai
or Kolkatta)
12 Regulation of paid up capital, subscribed capital and authorized capital and
voting rights
Subscribed capital should not be less than ½ of its authorized capital
Paid up capital should not be less than ½ of its subscribed capital
(i.e. ratio of authorized capital, subscribed and paid up capital should be minimum
4:2:1)
No person shall have voting rights in excess of 10% of total voting rights of all the
shareholders.
17 Every banking company to create reserve fund and 20% of its profits should be
transferred to this fund before any dividend is declared. (RBI has directed the
banks to transfer not less than 25% of net profits to Reserve Funds). The
appropriation of any sum from the reserve fund or share premium account is to be
84
reported to Reserve Bank, within 21 days from date of appropriation.
18 Cash Reserve: Non scheduled banks to maintain 3% of the demand and time
liabilities by way of cash reserves with itself or by way of balance in a Current
Account with RBI.
19 Permits bank to form subsidiary company for certain purposes (vide section 6)
19(2) No banking company shall hold shares in any company, whether as pledgee,
mortgagee or absolute owners of an amount exceeding 30% of its own paid up
share capital + reserves or 30% of the paid up share capital of that company
whichever is less.
20 Restrictions on loans and advances:
Banks cannot grant loans against security of their own shares
21 Empowers the RBI to issue directives to banks to determine policy for

advances
21A Rate of interest charged by banks shall not be reopened by any court on the
ground that the rate of interest charged by banks is excessive
22 Empowers RBI to issue license for opening a bank.
23 Empowers RBI to grant license for opening of branches
24 Statutory Liquidity Ratio--Every bank has to maintain liquid assets in form of
cash, gold & unencumbered approved securities at the close of any business
which is minimum of certain percentage (Presently 18%) of its total demand and
time liabilities in INDIA as on last Friday of the second preceding fortnight.
(Minimum SLR is as per RBI discretion now, as against 25% earlier. Maximum is
40%)
26 Return of unclaimed deposits (10 years and above) within 30 days of close of
each calendar year
29 Every bank to prepare its Balance Sheet as on last working day of March every
year on Form `A’ and profit and loss a/c on Form `B’ of the 3rd schedule of the Act.
30(I) Balance Sheet should be got audited from qualified auditors
31 To publish Balance Sheet and Auditors report within 3 months from the end of
period to which they refer.
RBI may extend the period by further 3 months
45Z Returning a paid instrument to a customer after keeping true copy.
45(ZA to Nomination Facility
ZF)
Banking Regulation (Amendment) Bill, 2020:
1) The Bill allows the central bank to initiate a scheme for reconstruction or amalgamation of a bank
without placing it under moratorium.
2) If the central bank imposes moratorium on a bank, the lender can not grant any loans or make
investments in any credit instruments during the moratorium tenure, according to the Bill.
3) The co-operative banks will be allowed to issue equity, preference, or special shares on face value
or at a premium to its members, or to any other person residing within their area of operations. The
banks may also issue unsecured debentures or bonds or similar securities with maturity of ten or
more years to such persons. However, a prior approval from RBI is mandatory for such issuance.
85
4) No person will be entitled to demand payment towards surrender of shares issued to him by a co-
operative bank, the Bill states.
5) The Bill mentions that RBI may exempt a cooperative bank or a class of cooperative banks from
certain provisions of the Act through notification. These provisions are related to employment, the
qualification of the board of directors and, the appointment of a chairman.
6) RBI may supersede the board of directors of a multi-state co-operative bank for up to five years
under certain conditions. These conditions include cases where it is in the public interest for RBI to
supersede the Board, and to protect depositors.
7) The Bill discards the provision of Banking Regulation Act, 1949 that cooperative banks cannot
open a new place of business or change the location of the banks outside of the village, town, or city
in which it is currently located without permission from RBI.
(8) The changes will not affect the existing powers of the state registrars of co-operative societies
under state laws. "This Bill does not regulate cooperative banks. The amendment is not for central
govt to take over the cooperative banks,"
Exclusion: The Banking Regulation Amendment Bill, 2020 will not be applicable to a) Primary
agricultural credit societies, b) Cooperative societies whose principal business is long term financing
for agricultural development.
(Total 56 Sections as on date)
86
RESERVE BANK OF INDIA ACT 1934
Established on 1st April, 1935, under RBI Act, 1934 on the recommendations of John Hilton
Young Commission (known as Royal Commission on Indian Currency & Finance)
Nationalized on Jan. 1, 1949
Paid up capital – Rs. 5 crore
Management – Managed by a Central Board of Directors – (one Governor, 4 Dy.
Governors & 15 other Directors) and 4 Local Boards (at Mumbai, Chennai, Kolkatta & New
Delhi)
1st Governor – Mr. O Smith, 1st Indian Governor – Dr. C Desmukh, Present Governor – Dr.
Raghuram Rajan
Functions:
A) Issuance of Currency (Section 22 of RBI Act)

Sole authority to issue currency notes of various denominations under signatures of
Governor (except One rupee note, which is issued by Central Govt. under Signature of
Finance Secretary).
B) Banker to the Government

RBI transacts Govt. business & manages debt U/s 20 of RBI Act (for Central Govt. & U/s 21-
A (for State Govt.), advises Govt. on monetary policy matters, provides ways and means
advance (U/s 17(5) of RBI Act) to Govt. (Central / State) for meeting temporary mismatch /
shortfall in revenue.
C) Banker’s Bank
Acts as a banker to the Scheduled banks and the lender of the last resort by providing
financial assistance by way of refinance / rediscounting (Sec 17 (2) & (3) and Liquidity
Adjustment Facility (injection of liquidity through repo auctions & absorption of liquidity
through reverse repo auctions).
D) Controller of Banks
Grants licence to carry on banking business, issue directions, carries out inspection (onsite
as well as off site) and exercises management control.
E) Controller of Credit
U/s 21 & 35A of Banking Regulations Act, RBI can fix interest rates (including Bank rate)
and also exercises selective credit controls in order to control inflation and money supply for
ensuring growth of economy and price stability.
Various methods used by RBI for this purpose are:
Change in Cash Reserve Ratio,Statutory Liquidity Ratio
Stipulation of margin on securities
Directed credit guidelines
Open market operations (Sale and purchase of securities).
F) Collection of Information
RBI collects information on borrowers enjoying credit limits up to Rs.10 lac on secured basis
& Rs. 5 lac on unsecured basis (u/s 45C) and shares this information with other Banks (Sec.
45-D). It also collects information on BSR
(Basic Statistical Return); BSR-I – Part A: Containing particulars of borrowal a/cs enjoying
credit limits above Rs. 2 lac, Part B: aggregate figures of limits of Rs.2 lac and less), - BSR-II
(containing information on deposits with break up in to current, Savings and term deposits) &
also the information on suit filed accounts and willful defaulters.
G) Managing Payment System

Acts as a regulator of payment & settlement system, manages cheque clearing system
(introduced Magnetic Ink Character Recognition System (MICR), Cheque truncation system,
87
Electronic Clearing Service (ECS), National Electronic Fund Transfer (NEFT), Real Time
Gross Settlement (RTGS) system for faster cheque clearance / settlement.
H) Maintenance of value of Indian currency

RBI maintains and regulates foreign exchange transactions under the Foreign Exchange
Management Act (FEMA).
I) Supervision of Financial System

Board for Financial Supervision (BFS) has been set up u/s 58 of RBI Act on 16.11.1994, with
Governor, RBI as its ex-officio Chairman. Its functions include empanelment and selection
of statutory auditors and exercise of integrated supervision over commercial banks.
Financial Institutions & NBFCs and other para-banking financial institutions through onsite
inspection & off-site supervision through DSB Returns (eight Returns, DSB-I is monthly
return, DSB-VIII is daily return of structured liquidity) & other returns are quarterly returns.
(Salient Provisions of Some Important Sections )
Sec. 17 Defines various types of business which RBI may transact which include:
i. Accepting deposits of Central / State Governments free of interest
ii. Purchase Purchase/rediscount of Bills of Exchange from banks.
iii. Purchase/sale of Foreign Exchange to/from banks
iv. To give loans to banks, SFCs, etc.
v. To provide advances to Central/State Governments.
vi. To purchase/sale Government securities, etc.
Sec. 18 Grant of Emergency loan to banks on liberal terms
Sec. 19 Specifies business which RBI may not transact
Sec. 20 Banker to Govt.- Obligation of the Bank to transact Govt. business
Sec. 21 Confers right to transact govt. business in India
Sec.22 Exclusive right to issue bank notes.
Sec.24 Denomination of bank note may be maximum Rs.10, 000/-. Central Govt. may direct
discontinuance or non-issuance to bank note of any denomination
Sec.28 RBI can frame rules for refunding value of mutilated, soiled or imperfect notes as a
matter of grace.
Sec. 29 Bank note exempted from stamp duty under Indian Stamp Act
Sec.31 No Body other than RBI or Central Government is authorized to issue promissory note
payable to bearer on Demand. Similarly, except RBI and Central Government, no
body is authorized to draw/accept / make or issue Bills of Exchange payable to
bearer on demand (Exception: Cheques payable to bearer on demand can be drawn
by anybody).
Sec.33 Assets of the Issue department shall consist of gold coins, gold bullion and foreign
securities which will not be less than Rs.200 cr. at any time, of which gold coin and
bullion will not be less than Rs.115 crore.
Sec. 42 Maintenance of CRR by scheduled banks. (Presently 3%)
Sec. 45C Power to call for credit information from banks.
Sec. 48 Exemption to RBI from paying income tax and super tax
Sec. 49 Publication of Bank Rate. Standard rate at which RBI is prepared to buy or rediscount
bills of exchange or other commercial papers eligible for purchase under this Act.
Current rate is 6% (w.e.f. 29.4.03)
Sec. 58 RBI’s Central Board is empowered to make regulations consistent with the Act.
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CASH RESERVE RATIO
With a view to monitoring compliance of maintenance of statutory reserve requirements viz. Cash
Reserve Ratio and Statutory Liquidity Ratio by the Scheduled Commercial Banks (SCBs), the
Reserve Bank of India has prescribed statutory returns i.e.Form A return (for CRR) under
Section 42 (2) of the RBI Act, 1934 and Form VIII return (for SLR) under Section 24 of the
Banking Regulation Act, 1949. These guidelines applicable to all Scheduled Commercial Banks
excluding Regional Rural Banks.
The Reserve Bank In terms of Section 42 (1) of the Reserve Bank of India Act, 1934 having
regard to the needs of securing the monetary stability in the country, prescribes the CRR
for Scheduled Commercial Banks (SCBs) without any floor or ceiling rate.
CRR & SLR AT A GLANCE

CRR SLR
Statutory basis Sec. 42 (1) of RBI Act, 1934 Sec. 24 (2.a) of Banking Regulation Act,
1949
Minimum and RBI Discretion Minimum :RBI discretion
maximum percentage Maximum :40%
to NDTL
Rate 3.0% 18%
How maintained Cash balance with RBI Cash in hand, Gold/ investment in
approved Govt. Securities / net Bank
balance with scheduled commercial banks
Basis for computation %age of NDTL on fortnightly average %age of NDTL on daily basis on last
basis. (Min. 80% of average balance Friday of 2nd preceding fortnight
to be maintained on daily basis)
Interest No interest payable w.e.f. 31.3.2007 According to class of securities in which
investment is made
Penal interest for
default – 1st day 3% p.a. above bank rate 3% p.a. above bank rate
Next day 5% p.a. above bank rate 5% p.a. above bank rate
Return to RBI Form A (fortnightly) Form VIII (by 20th every month)
SOME IMPORTANT Policy / Reserve RATES

Bank Rate 4.25%
Repo Rate 4.00%
Reverse Repo Rate 3.35%
MSF Rate 4.25%
CRR 3.00%
SLR 18.00%
Base rate (PNB) 8.65%
Overnight One 3 Month 6 Monhts One Year 3 Year

MCLR Month
(01.02.2021) 6.65% 6.70% 6.90% 7.10% 7.35% 7.60%
RLLR w.e.f. 01.02.2021 : 6.80%

Repo Rate (4.00%) + Mark-up (2.80%)
89
NEGOTIABLE INSTRUMENTS ACT 1881
Came into force w.e.f. March 01, 1882.

It has 147 sections and 17 chapters
This Act is applicable to entire India.
. MEANING OF NEGOTIABLE INSTRUMENT

As per Sec. 13 of the Act, Negotiable Instruments (NI) means and includes promissory note, bill of
exchange and cheque payable to order or bearer. Bank Draft finds mention in Sec-85(a) of NI Act.
Apart from the aforesaid instruments defined in the NI Act, following instruments satisfy the features
of Negotiable Instruments.
Sr. Instrument Possessing feature of

No.
i Certificate of Deposit A promissory note
ii Commercial Paper A promissory note
iii Treasury Bill a promissory note
iv Share warrant a cheque
v Dividend warrant a cheque
Also u/s 137 of Transfer of Property Act, documents of title to goods are also negotiable, which
include:
Bill of lading Railway Receipts

Dock warrant Warehouse receipt
GRs approved by IBA Wharfinger Certificate
Some of the important definitions of the Act are:
Section 4 - Promissory note: A "promissory note" is an instrument in writing (not being a bank-
note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay a
certain sum of money only to, or to the order of, a certain person, or to the bearer of the
instrument.
Section 5 - Bill of exchange: A "bill of exchange" is an instrument in writing containing an

unconditional order, signed by the maker, directing a certain person to pay a certain sum of
money only to, or to the order of, a certain person or to the bearer of the instrument.
Section 6 - Cheque: A cheque is bill of exchange drawn on a specified banker and not
expressed to be payable otherwise than on demand and it includes the electronic image of a
truncated cheque and a cheque in the electronic form.
Explanation: I. - For the purposes of this section, the expressions-
(a) a cheque in the electronic form means a cheque which contains the exact mirror image of a
paper cheque, and is generated, written and signed in a secure system ensuring the minimum
safety standards with the use of digital signature (with or without biometrics signature) and
asymmetric crypto system;
(b) a truncated cheque means a cheque which is truncated during the course of a clearing
cycle, either by the clearing house or by the bank whether paying or receiving payment,
immediately on generation of an electronic image for transmission, substituting the further
physical movement of the cheque in writing.
Bearer or Order Cheque: Where nothing is mentioned about a cheque being order or bearer, it
should be treated to be a payable to order. Its conversion from order to bearer should be with
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full signatures. IF both words bearer as well as order is written and none of these is deleted, the
cheque would be considered to be a bearer cheque.
Cheques drawn in different inks, scripts and handwritings would be paid, if otherwise in order
and the paying bank is in a position to read and understand the instructions of the drawer.
Cheque without a date: to be returned by the Bank, but a holder can complete an inchoate
cheque by filling the date and take the payment of the cheque. Cheque bearing a date being
holiday can be paid on next working day.
Cheque bearing impossible date( eg November 31 , may be paid on November 30/ date being
February 30 may be paid on February 29/28 as the case may be )
Ante Dated Cheque: A cheque bearing a date prior to actual date of signing the cheque or
opening of an account is called an ante dated cheque which is valid and can be paid till it
becomes stale cheque.
Stale Cheque: On date of presentation, if the validity period of a cheque has already expired, it
is called stale cheque and it cannot be paid.
Validity Period : Section 138 of NI Act states the cheques should be presented for payment
within 6 months from date on which it is drawn or within its validity, whichever is
earlier.However As per RBI directions date 04/11/2011 ( U/s 35 A BR Act ) w.e.f 01.04.2012 ,
cheques , demand draft & bankers cheque , presented after 3 months from their date,
cannot be paid by the Banks.
Revalidation of cheques: After a cheque becomes stale, it can be revalidated, any no of

times. The fresh validity runs from the date of revalidation.
Post dated cheque : The cheque which bears a date subsequent to the date on which it is
drawn and the date has not fallen due till presentation are called post dated cheques. Such
cheques become effective on the date mentioned on the body of the cheque and the drawer of
such cheque can be sued by the holder after the mentioned date only.
RBI advised Banks to accept cheques bearing a date as National Calendar (SakaSamvat) for
payment, if otherwise in order. Bank should ascertain the Gregorian calendar date corre
CTS – 2010 STANDARD On the recommendations of a working group, RBI Decided to

prescribe certain benchmarks towards achieving standardisation of cheques known as
achieving standardisation of cheque known as ‖ CTS- 2010 standard ― . Mandatory features
applicable w.e.f 1.12.2010 is as follow:
1. Paper: paper should have protection against alteration by having chemical sensitivity to
acids, alkalis, bleaches and solvents giving visible results after a fraudulent attack, CTS-2010
standard paper should not glow under UV light i.e., it should be UV dull.
2. Watermark: All cheques shall carry a standardised watermark, with the words ―CTS-
INDIA” .It should be oval in shape and diameter should be 2.6 to 3.0 cms. Each cheque must
hold at least one full watermark.
3. VOID Pantograph: Pantograph with hidden/embedded ―COPY‖ or ―VOID ―feature shall

be included in the cheques. This feature should be clearly visible in photocopies and scanned
colour images as a deterrent against colour photocopy or scanned colour images of a cheque.
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4. Bank‟s LOGO: Bank‘s Logo shall be printed in ultra-violet (UV) ink. The Logo will be
captured by/visible in UV- enabled scanners/ lamps. It will establish in genuineness of a
cheque.
5. Mandating colours and background:Light/Pastel Colours so that print/ dynamic contrast
ratio (PCR/ DCR) is more than 60% for ensuring better quality and content of images.
6. Prohibiting alterations/ corrections on cheque: No changes / corrections should be
carried out on the CTS cheques (other than for date validation purpose, if required). For any
change in payee‘s name, courtesy amount (amount in figures),legal amount ( amount in words )
, etc, fresh cheque should be used. This requirement is for cheques issued under CTS only and
not other cheques.
7. Printing of account field: Cheques used in current accounts and corporate customers,
should be issued with the account number field pre- printed.
8. Circulation of non- CTS cheques: Banks have been advised to stop circulation of such
cheques.
9. Preservation: CTS instruments (including govt. Cheques) are to be preserved for 10 years
by presenting banks. In case of investigation, enquiry etc, these are to be preserved beyond 10
years.
Cheque and Bill of exchange

Cheque Bill of Exchange
It could be made payable to bearer or Cannot be made payable to bearer.
order
It can be drawn on bank i.e. drawee could Could be drawn on any person competent to
be bank only. contract
No acceptance for payment is required . Without acceptance for payment, the drawee is
not liable
No grace period is allowed before payment. It Grace period could be allowed upto 3 days
is payable on demand
It can be crossed It cannot be crossed

Can be made payable on demand only Can be made payable on demand or after
some days
Section 7 - Drawer, Drawee. The maker of a bill of exchange or cheque is called the drawer ";
the person thereby directed to pay is called the" drawee‖.Drawee in case of need. When in the
bill or in any endorsement thereon the name of any person is given in addition to the drawer
tobe resorted to in case of need, such person is called a ―drawee incase of need ".
Section 8 - "Holder”:The ―holder" of a promissory note, bill of exchange or cheque means

any person entitled in his own name to the possession thereof and to receive or recover the
amount due thereon from the parties there to. Where the note, bill or cheque is lost or destroyed,
its holder is the person so entitled at the time of such loss or destruction.
Section 9-"Holder in due course”: Holder in due course ―means any person who for consideration
became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee
or endorsee thereof, if payable to order, before the amount mentioned in it became payable, and without
having sufficient cause to believe that any defect existed in the title of the person from whom he derived
his title.
Section 10-"Payment in due course" : "Payment in due course" means payment in accordance with the
apparent tenor of the instrument in good faith and without negligence to any person in possession thereof
undercircumstances which do not afford a reasonable ground for believing that he is not entitled to
receive payment of the amount therein mentioned.
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Section 13 - Negotiable Instruments (1) Negotiable instrument. A Negotiable Instrument means a
promissory note, bill of exchange or cheque payable either to order or to bearer. Explanation (i).-A
promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or
which is expressed to be payable to a particular person, and does not contain words prohibiting transfer
or indicating an intention that it shall not be transferable. Explanation (ii).-A promissory note, bill of
exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last
endorsement is an endorsement in blank. Explanation (iii).-Where a promissory note, bill of exchange or
cheque, either originally or by endorsement, is expressed to be payable to the order of a specified person,
and not to him or his order, it is nevertheless payable to him or his order at his option. (2) A negotiable
instrument may be made payable to two or more payees jointly, or it may be made payable in the
alternative to one of two, or one or -some of several payees.
Section 14 - Negotiation. When a promissory note, bill of exchange or cheque is transferred to any
person, so as to constitute that person the holder thereof, the instrument is said to be negotiated.
Section 15 Endorsing means signing on the face or backside of an instrument (or even on a paper
called Allonageor stamped paper), for the purpose of negotiating (transferring to next person) a
negotiable instrument.
Sec 16(1)”Endorsement in blank”: If endorser signs his name only, is said to be blank endorsement.
Endorsement in full: When in addition to signature, endorser adds the words ―Pay to‖ or ―pay to
order of‖ RestrictiveEndorsement (Section 50): Which restrict further endorsement e.g. Pay to ―X‖
only. Partial Endorsement: (Section 56): When an endorser transfers only a part of the amount of the
NI to the endorsee. It is not valid for negotiation.
Conditional Endorsement: If some condition mentioned e.g. pay to X if he returns from

abroad. The paying bank is not bound to verify compliance of such condition. The conditions
are binding between endorser and endorsee only.
Facultative endorsement: Endorser by express words abandons some right or increases his
liability by endorsement e.g. ―Notice of dishonor not required‖ Sans recourse endorsement
(section 52): Endorser by express words excludes his liability e.g.‖Pay to X without recourse to
me‖
Section 18 - Where amount is stated differently in figures and words. Ifthe amount
undertaken or ordered to be paid is stated differently in figures and in words, the amount stated
in words shall be the amount undertaken or ordered to be paid. Section 19 - Instrument
payable on demand: When no time given in instrument for payment, instrument said to be
payable on demand.
Section 20 -Inchoate stamped instruments: Holder has a right to complete for any amount
but not exceeding the amount covered by the stamp. The person so signing the NI will be liable
to any holder in due course for such amount and other than holder in due course cannot
recover in excess amount intended to be paid by the signor.
Section 21: “At Sight”, “on presentment”, “After sight” In a P/N or BoE the expressions:-
(a) ―At sight‖ or ―on presentation‖ means on demand (B)‖After sight‖ means,
In a P/N, after presentment for sight.
In a BoE after acceptance, or noting for non acceptance, or protest for non-acceptance.
Sec 22:“Maturity” is of a P/N or BoE is date at which it falls due. Days of Grace: Every P/N or
BoE which is not payable on demand, at sight or on presentment is at maturity on the 3rd day
after the day on which it is expressed to be payable.
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Section 23: Calculating maturity of bill or note payable so many months after date or
sight: If payable at stated no. of months: terminate on the day of month, which corresponds
with the day on which the instrument is dated/ presented or the event happens. If the month in
which the period would terminate has no corresponding day, the period shall be held to
terminate on the last day of such month.
Section 24: Calculating maturity of bill or note payable so many days after date or sight:
the day of the date of NI, or of presentment for acceptance or sight, or of protest for non
acceptance, or on which the event happens, shall be excluded.
Section 25: When day of maturity is a holiday (Declared by Central Govt or Sunday): the
instrument shall be deemed to be due on the next preceding business day.
Section 26: Capacity to make promissory note etc: Every person capable of contracting can
be a part. * Minor:A minor may draw, endorse, deliver and negotiate such instruments so as to
bind all parties except himself.
* A corporation is not empowered to make, endorse or accept such instruments except specially
permitted by law.
Section 35-Liability of endorser: is bound to compensate every subsequent holder.
Section 36- Liability of prior parties to holder in due course everyparty is liable
Section40- Discharge of endorser‟s liability: Where the holder of a negotiable instrument, without the
consent of the endorser, destroys or impairs the endorser‘s remedy against a prior party, the endorser is
discharged from liability to the holder to the same extent as if the instrument had been paid at maturity.
Section 45- Holder‟s right to duplicate of lost bill (before it is overdue): Holder may apply to
drawer to give another bill of same tenor giving indemnity. Drawer is bound to issue duplicate bill.
Section -50 –Effect of Endorsement: The endorsement followed by delivery has the effect of transfer of
property therein to the transferee, with right of further negotiation. The Endorsee acquires a right to
negotiate the instrument to any one and sue all prior parties whose signature appears on it.
Section 54- Effect of Blank Endorsement: An order cheque or bill becomes payable to the bearer, if it
bears a blank endorsement.
Section 85(1) Protection to Payee banker for Cheque payable to order: Where a cheque payable to
order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due
course.
Section 85(2) Protection to Payee banker for Cheque payable to Bearer (once bearer – always
bearer) : Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by
payment in due course to the bearer thereof,
Section 85A. Drafts drawn by one branch of a bank on another payable to order:-purports to be
endorsed by or on behalf of the payee, the bank are discharged by payment in due course.
Section 87: Effect of material alteration: Instrument renders the same void as against anyone who is a
party thereto at the time of making such alteration
Section 88: Acceptor or endorser bound notwithstanding previous alteration: - An acceptoror

endorser is bound by this acceptance or endorsement notwithstanding any previous alteration of the
instrument.
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Section 89: Payment of instrument on which alteration is not apparent: If payment in due course
shall discharge such a person or banker from all liability thereon.
Section 123 - Cheque Crossed Generally:Where a cheque bears across its face an addition of the words
and company or any abbreviation thereof, between two parallel transverse lines, or of two parallel
transverse lines simply, either with or without the words,
not negotiable, that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed
generally.
Section 124 - Cheque crossed specially :Where a cheque bears across its face an addition of the name of
a banker, either with or without the words not negotiable, that addition shall be deemed a crossing, and
the cheque shall be deemed to be crossed specially, and to be crossed to that banker.
Section 126- Cheque crossed specially: Where a cheque is crossed generally, the banker, on whom it is
drawn, shall not pay it otherwise than to a banker. Payment of cheque crossed specially. - Where a
cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker
to whom it is crossed, or his agent, for collection.
Section 127:Payment of cheque crossed specially more than one banker:(except when crossed to an
agent for the purpose of collection,) :Refuse payment
Section 128: Payment in due course of crossed cheque:Paying Banker gets protection if a crossed
cheque is paid in due course,
Section 129: Payment of crossed cheque out of due course: Bank shall be liable to the true owner of
the cheque to whom it is crossed, or his agent for collection.
Section 130 -Cheque bearing Not Negotiable : A person taking a cheque crossed generally or specially,
bearing in either case the words not negotiable, shall not have, and shall not be capable of giving, a better
title to the cheque than that which the person from whom he took it had.
Section 131: Protection to collecting banker (or Non- liability of banker receiving payment of
cheque):A banker who has in good faith and without negligence received payment for a customer of a
cheque crossed to himself shall not, in case the title to the cheque proves defective, incur any liability to
the true owner of the cheque by reason only of having received such payment.
Section 138 - Dishonour of cheque for insufficiency, irregular signature, alterations, stale cheque,
stop payment etc., of funds in theaccount: Where any cheque drawn by a person on an account
maintained by him with a banker for payment of any amount of money to anotherperson from out of that
account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank
unpaideither because of the amount of money standing to the credit of thataccount is insufficient to
honour the cheque or that it exceeds theamount arranged to be paid from that account by an agreement
madewith that bank, such person shall be deemed to have committed anoffence and shall, without
prejudice to any other provision of thisAct, be punished with imprisonment for a term which may extend
to two years, or with fine which may extend to twice the amount of the cheque, or with both. The
complaint is to be made within one month of the cause of action arising i.e. expiry of notice period.
Summary Proceedings : Fine upto Rs 5000 or imprisonment upto 1 year or both.
Regular Proceedings : Punishment is fine upto double the amount of cheque or imprisonment upto 2 year
or both. Provided that nothing contained in this section shall apply unless- (a)The cheque has been,
presented to the bank within a period of three months from the date on which it is drawn or within the
period of its validity, whichever is earlier; (b)The payee or the holder in due course. of the cheque asthe
case may be, makes a demand for the payment of the said amount of money by giving a notice, in
writing, to the Drawer of the cheque, within thirty days of the receipt ofinformation by him from the bank
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regarding the return of the cheque as unpaid; and (c)The drawer of such cheque fails to make the
payment ofthe said amount of money to the payee or, as the case may be to the holder in due course of
the cheque, within fifteendays of the receipt of the said notice.
Section139: Presumption in favor of holder: It shall be presumed, that the holder of a cheque received
the cheque for the discharge, in whole or in part, or any debt or other liability.
Section 140:Defence which may not be allowed in any : Prosecution under section 138It shall not be a
defense that the drawer had no reason to believe when he issued the cheque that the cheque may be
dishonored on presentment for the reasons stated in that section.
SECTION PARTICULARS
NO.
1 Short title
2 Repeal of enactments
3 Interpretation clause
4 "Promissory note
5 "Bill of exchange"
6 "Cheque"
7 "Drawer", "drawee"
8 Holder
9 "Holder in due course"
10 "Payment in due course"
11 "Inland instrument"
12 "Foreign instrument"
13 "Negotiable instrument"
14 Negotiation
15 Endorsement
16 Endorsement "in blank" and "in full"-"endorsee"
17 Ambiguous instruments
18 Where amount is stated differently in figures and words
19 Instruments payable on demand
20 Inchoate stamped instruments
21 At sight, On presentment, After sight
22 "Maturity"
23 Calculating maturity of bill or note payable so many months after date or sight
24 Calculating maturity of bill or note payable so many days after date or sight
25 When day of maturity is a holiday
26 Capacity to make, etc., promissory notes, etc.
27 Agency
28 Liability of agent signing
29 Liability of legal representative signing
30 Liability of drawer
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31 Liability of drawee of cheque
32 Liability of maker of note and acceptor of bill
33 Only drawee can be acceptor except in need or for honor
34 Acceptance by several drawees not partners
35 Liability of endorser
36 Liability of prior parties to holder in due course
37 Maker, drawer and acceptor principals
38 Prior party a principal in respect of each subsequent party
39 Suretyship
40 Discharge of endorser's liability
41 Acceptor bound, although endorsement forged
42 Acceptance of bill drawn in fictitious name
43 Negotiable instrument made, etc. without consideration
44 Partial absence or failure of money-consideration
45 Partial failure of consideration not consisting of money
45A Holder's right to duplicate of lost bill
46 Delivery
47 Negotiation by delivery
48 Negotiation by endorsement
49 Conversion of endorsement in blank into endorsement in full
50 Effect of endorsement
51 Who may negotiate
52 Endorser who excludes his own liability or makes it conditional
53 Holder deriving title from holder in due course
54 Instrument endorsed in blank
55 Conversion of endorsement in blank into endorsement in full
56 Endorsement for part of sum due
57 Legal representative cannot by delivery only negotiate instrument endorsed by deceased
58 Instrument obtained by unlawful means or for unlawful consideration
59 Instrument acquired after dishonor or when overdue
60 Instrument negotiable till payment or satisfaction
61 Presentment for acceptance
62 Presentment of promissory note for sight
63 Drawee's time for deliberation
64 Presentment for payment
65 Hours for presentment
66 Presentment for payment of instrument payable after date or sight
67 Presentment for payment of promissory note payable by installments
68 Presentment for payment of instrument payable at specified place and not elsewhere
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69 Instrument payable at specified place
70 Presentment where no exclusive place specified
71 Presentment when maker, etc., has no known place of business or residence
72 Presentment of cheque to charge drawer
73 Presentment of cheque to charge any other person
74 Presentment of instrument payable at demand
75 Presentment by or to agent, representative of deceased, or assignee of insolvent
76 When presentment unnecessary
77 Liability of banker for negligently dealing with bill presented for payment
78 To whom payment should be made
79 Interest when rate specified
80 Interest when no rate specified
81 Delivery of instrument on payment or indemnity in case of loss
82 Discharge from liability
83 Discharge by allowing drawee more than forty-eight hours to accept
84 When cheque not duly presented and drawer damaged thereby
85 Cheque payable to order
85A Drafts drawn by one branch of a bank on another payable to order
86 Parties not consenting discharged by qualified or limited acceptance
87 Affect of material alteration
88 Acceptor or endorser bound notwithstanding previous alteration
89 Payment of instrument on which alteration is not apparent
90 Extinguishment of rights of action on bill in acceptor's hands
91 Dishonor by non-acceptance
92 Dishonor by non-payment
93 By and to whom notice should be given
94 Mode in which notice may be given
95 Party receiving must transmit notice of dishonor
96 Agent for presentment
97 When party to whom notice given is dead
98 When, notice of dishonor is unnecessary
99 Noting
100 Protest
101 Contents of protest
102 Notice of protest
103 Protest for non-payment after dishonor by non-acceptance
104 Protest of foreign bills
104A When noting equivalent to protest
105 Reasonable time
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106 Reasonable time of giving notice of dishonor
107 Reasonable time for transmitting such notice
108 Acceptance for honor
109 How acceptance for honor must be made
110 Acceptance not specifying for whose honor it is made
111 Liability of acceptor for honor
112 When acceptor for honor may be charged
113 Payment for honor
114 Right of payer for honor
115 Drawee in case of need
116 Acceptance and payment without protest
117 Rules as to compensation
118 Presumptions as to negotiable instruments Until the contrary is proved, the following
presumption shall be made
119 Presumption on proof of protest
120 Estoppel against denying original validity of instrument
121 Estoppel against denying capacity of payee to endorse
122 Estoppel against denying signature or capacity of prior party
123 Cheque crossed generally
124 Cheque crossed specially
125 Crossing after issue
126 Payment of cheque crossed generally
127 Payment of cheque crossed specially more than once
128 Payment in due course of crossed cheque
129 Payment of crossed cheque out of due course
130 Cheque bearing not negotiable
131 Non-liability of banker receiving payment of cheque
131A Application of chapter to drafts
132 Set of bills
133 Holder of first acquired part entitled to all
134 Law governing liability of maker, acceptor or endorser of foreign instrument
135 Law of place of payment governs dishonor
136 Instrument made, etc. out of India, but in accordance with the law of India
137 Presumption as to foreign law
Section 138 to 142 were added in 1988 (came into effect from 1.4.1989). Section 143 to 147
were added in Dec. 2002
138 Dishonor of cheque for insufficiency, etc., of funds in the accounts
139 Presumption in favor of holder
140 Defense which may not be allowed in any prosecution under section 138
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141 Offences by companies
142 Cognizance of offences
143 Section 143 is intended to achieve speedy trial. By applying provisions of Sections 262 to
265 CrPC it enables a Judicial Magistrate or Magistrate of the First Class to conduct the
trial. Then it contemplates summary trial and provides for continuous day-to-day hearing
of the case till its conclusion and further stipulates that the trial is to be completed within 6
months from the date of filing of the complaint. It further empowers the Magistrate to pass
a sentence for imprisonment for a term not exceeding one year or a fine not exceeding
twice the amount of the cheque
144 Section 144 deals with the service of summons. It would now enable the Magistrate not to
follow the elaborate procedure for serving summons as required by Sections 61 to 90
CrPC.
145 Section 145 contemplates evidence on affidavit. According to this section the complainant
can give his evidence by way of an affidavit and the same may be attached with the
complaint and if the accused wants to contradict the contents of the affidavit the
complainant may be called for examination.
146 Section 146 provides for presumption to bank memorandums. Earlier whenever a question
arose whether there was insufficient funds in the account of the drawer of the cheque, it
was conceived to be a matter of evidence being a question of fact and onus was placed on
the complainant and for discharging this onus the bank personnel was to be examined. This
naturally delayed things. It has therefore been provided that based on the bank slip the
Court would presume the fact of dishonour, unless and until such fact is disproved.
147 Section 147 provides for compounding of offences under this Act. There was a difference
of opinion in different High Courts on the question whether offences under the provisions
of the Act were compoundable or not. The Kerala High Court's view was in the negative
whereas the view of the Andhra Pradesh High Court was in the affirmative. Unfortunately
the matter did not reach the Apex Court. Parliament therefore has resolved the controversy
and provided that offences under the Act would be compoundable.
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BANKER CUSTOMER RELATIONSHIP
BANKER: Sec 5 (b) of Banking Regulation Act-1949: A banker is a person undertaking

business of banking. Banking means (Sec. 6 of BR Act) accepting deposits from public, for the
purpose of lending, repayable on demand or otherwise withdraw able by cheque, draft, order or
otherwise.
CUSTOMER: No legal/statutory definition of the customer but from various judgements based
on section 131/131 A of NI Act 1881, a customer means a person who seeks to open account
which bank accepts with proper introduction. As per the KYC policy (RBI, Dec. 2004), a
customer may be defined as:
A person or entity that maintains an account with the Bank and /or has a business
relationship with the Bank;
one on whose behalf the a/c is maintained (the beneficial owner)
Beneficiaries of transactions conducted by professional intermediaries, such as Stock
Brokers, Solicitors etc. as permitted by the Law, and
Any person or entity connected with a financial transaction which can pose significant
reputational or other risks to the bank, for example - a wire transfer or issue of a high value
demand draft as a single transaction
BANKER – CUSTOMER RELATIONSHIP in different transactions: The primary relationship

between a banker and customer is that of a debtor and creditor (Reason: on opening the
SF/CA/Term/any deposit account the banker becomes a debtor). However a banker is different
from an ordinary debtor on two counts, viz.
The banker is required to pay the customer only when payment is demanded within business
hours of a working day at the branch (An ordinary debtor should search for his creditor and
repay the debt).
For a normal debt, the period of limitation start from the date of debt. However, in case of
bank deposits, it starts from the date of demand, by the depositor.
Apart from the primary relationship, there can be other legal relationship between a banker and
customer depending up to the transaction some of which are given
BANKER – CUSTOMER RELATIONSHIP:
Sr. No. Type of transaction Relationship

Bank Customer
1. Acceptance of Deposits Debtor Creditor

2 Loan from bank Creditor Debtor
3 Collection of cheque on behalf of customer Agent Principal
Sale/purchase of securities/shares on behalf of
4 customer Agent Principal
5 Safe Custody of articles
6 Safe deposit locker Bailee Bailor
Lessor Lessee
7 Payee of a Draft & Issuing Bank ( Licensor) (Licensee)
8 Money tendered to bank pending Trustee Beneficiary
instruction for its disposal Trustee Beneficiary
9 Articles left by Mistake
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10 Carrying on standing instruction Trustee Beneficiary
Purchase of draft
11 Debtor Creditor
Mortgage Mortgagee Mortgagor
12
Hypothecation Hypothecate Hypothecator

13
Assignment Assignee Assignor
14
TYPE OF CUSTOMERS
MINOR
 Minor is defined in Section 3 of Indian Majority Act, 1875
 A minor (of Indian domicile) is a person who has not completed 18 years of age.
 Even when a guardian is appointed by the Court (for the person, or property or
both) or a Court of ward is appointed as guardian a person attains majority on
completion of 18 years of age.
 Agreement by Minor : A minor is not competent to enter into a contract. An
agreement with a minor is void ab-initio (i.e. invalid from the very beginning). A
bank can not sue a minor for recovering loans due from him/ her.[ Sec 11 of
Indian Contract Act, 1872].
 In case a bank sanctions a loan, or opens deposit account in the name of a
minor, it cannot legally compel him to perform his part of the contract (since
there cannot be a contract with a minor). For this reason, banks never sanction
loans/overdraft to minors. However, they open deposit accounts in the name of
minors, after taking necessary precautions. As long as the account is in credit,
the banks run no risk in such accounts.
 Supply of Necessaries to minor : Exception to above rule : A contract for the
supply of necessaries suitable to the life of a minor is, however, valid. (Section
68 of Indian Contract Act).
 No Ratification :A minor upon attaining majority cannot ratify (confirm) a
contract entered during his minority. As such, a loan taken by the minor during
his/ her minority can not be rcovered even if it is ratified ( confirmed) by him/ her
after attaining majority.
 Rule of Estoppel : A minor who obtains loan by falsely representing himself/
herself as a major is not stopped from pleading minority. The bank can not
proceed to recover the loan on the strength of the rights to estoppels.
 Securities : any asset given as security by a minor towards debts/ dues/ loans
can not be enforced by bank for recovery of dues. the assets should be
returned to the minor excepting the loans extended to minors for necessaries/
necessaties of a minor’s survival.
 Third Party Guarantee : A major who guarantees a loan given to a minor is not
liable to pay the amount. However, if guarantee is so worded that it amounts to
an indemnity, the guarantor can be made liable. ( Contract of Indemnity is a
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primary contract while contract to guarantee is a secondary contract or
subsidiary one).
 Immovable Property : The guardian of a Hindu minor can not, without prior
permission of the court, sell, mortgage or transfer any part of immovable
property owned by a minor.
 Minor as a partner : As per section 30 of Indian Partnership Act, a minor can
be admitted to the benefit of partnership but he/ she is not a partner proper.
 Minor as Agent : A minor can act as an agent, but unlike other agents, he is
not liable to the principal for his/ her acts ( Sec 184 of Indian Contract Act).
 A minor can draw, endorse, negotiate instruments so as to bind all other parties
to the instrument except himself/ herself. Minor is not personally liable for
drawing, endorsing or negotiating instruments.
 Since a minor is incapable to contract, he can be represented by his lawful
guardian. A lawful guardian, like a trustee, has the power to represent the
minor in dealing with his property. He has got a fiduciary relationship and can
lawfully deal with this property only for the “benefit of the minor”.
WHO IS THE GUARDIAN OF A MINOR?
 The guardian to a minor can be a: (a) Testamentary Guardian, or (b) Legal
Guardian, or (c) Natural Guardian.
Testamentary Guardian
 Guardian appointed by the will of the minor's father is called testamentary
guardian.
 Such guardian acts only after the death of the father & mother of the minor
child.
Legal Guardian
 Where there is no natural guardian, or testamentary guardian, the Court can
appoint a guardian i.e. legal guardian as per the provisions of Guardian and
Wards Act, 1890.
Natural Guardian
 In case of Hindus, the guardianship of minor is determined as per the provisions
of Hindu Minority & Guardianship Act, 1956.
 Section 6 of the Act provides that in case of a minor boy or unmarried girl, the
father and after his death the mother shall be the guardian of both person and
property of the minor. Opening of Fixed Deposit, Recurring & Savings Deposit
account under the guardianship of mother has been allowed by RBI (provided
accounts are not allowed to be overdrawn).
 After the death of both father and mother, a minor can be represented only
through a legal guardian.
 Step father/step mother cannot act as natural guardian.
 For a minor married girl, her husband (if major) is the natural guardian. In case
the husband is a minor, her father (or mother, if the father is dead) may
continue to be natural guardian.
 For a minor married girl, who has become a widow, her husband’s father
(mother, if father is dead) is to act as natural guardian.
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 In case of an illegitimate minor child, his/her mother is the natural guardian.
 The natural guardian of an adopted son is his adoptive father/mother.
 For a Muslim minor, father is the natural guardian (for property only). After
father, guardianship lies with (i) executor appointed by father’s will and after him
(ii) father’s father (iii) the executor appointed by the will made by the father’s
father.
 Where none of these persons is alive, the minor can be represented only by a
legal guardian.
In case of Christians and Persons of other Religions
 The father, and on his death, mother acts as natural guardian.

 Where both are dead, a person appointed by Court can alone act as guardian.
OTHER IMPORTANT POINTS ON GUARDIANSHIP

 Even after conviction, the natural guardian continues to be the natural guardian.
 A guardianship can be for the person, or for the property or for both. A legal
guardian appointed for person (and not for the property) is not entitled to
open, operate and receive deposit on behalf of the minor.
 In case of Muslims, the natural guardian is guardian only for the property and
not the person of the minor.
TYPE OF DEPOSIT ACCOUNT FOR MINORS

 Account can be opened in the name of a minor are broadly the following: (I)
Minor’s Account to be operated by guardian (ii) Minor’s Account to be operated
by mother. (iii) Minor’s Account to be operated by himself/herself.
Minor’s Account Opened and Operated by Guardian
Single or Joint A/c.
 The guardian can open a deposit account in sole name of the minor to be
operated by him on behalf of the minor. Alternatively he can open a joint
account in the name of the minor and himself.
Guardian’s Power
 He can operate the account on behalf of the minor.
 He can foreclose the term deposit or avail loan against the same for the benefit
of the minor.
 His power to operate account/foreclose deposit/borrow against deposit ceases
as soon as the minor attains majority.
When Minor Attains Majority
 From the date the minor becomes a major, he has the sole right to operate the
account (not theguardian).
 For term deposits maturing for payment on or after a date on which the minor
attains majority, the guardian has no power to foreclose the same. The amount
should be paid to the minor upon his attaining majority.
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Advance against Minor’s Deposit
 Should be sanctioned only for the benefit of the minor.
Death of Minor
 Balance is payable as a claim case.
Death of Guardian
 The balance is treated as a Trust and is paid to the minor upon his attaining
majority. During his minority it can be paid only to his guardian appointed by
Court.
Self Operated Minor Account
 Minors who have completed 10 years of age, who are literates and can sign
uniformly are permitted to open S.F. or F.D./RD account (not Current Account)
in their own name and operate the same.
Term Deposits
 Opening of Term deposits including R.D. can be allowed for any amount.
 No advance can be given against such deposits.
HINDU UNDIVIDED FAMILY (HUF)
 Ancestral common ownership
 Hindus, Sikhs & Jains can form HUF
 Male/Female Members by Birth of adoption are coparceners
 Senior most member is the karta (Male or Female)
 Is not governed by partnership act.
 Advance should be given for ancestral family business and not new ones.
 Though Karta can borrow and charge HUF Property, it is better to take documents
signed by Karta and all co parceners. An undertaking/ letter/ affidavit must be obtained
from co-parceners to the effect that (i) purpose of loan is to run family business. (ii) co
parceners are jointly and severally liable, (iii) they will continue to be liable even after
separation of HUF until the notice of separation is received by the bank.
 Documents to be signed by the karta as ‘karta’ and coparceners in the personal
capacity.
 Karta is liable personally as well as Jointly, but coparceners are not unless specifically
agreed.
 Karta can
1. Compromise & refer to arbitration
2. Give valid discharge to debt and make part payment.
3. Enter into partnership & delegate authority to operate the account to any one
 Karta can not revive a time-barred debt
 A coparcener can not countermand a cheque unless specifically authorized
 The death of a coparcener does not dissolve a HUF. The balance to be paid as claim
case.
 In case of death, insolvency or insanity of a coparcener / karta, fresh AOF & HUF
declaration should be taken.
 As per Hindu Succession Amendment Act, 2004, a female member can become Karta
or Coparcener.
 Bank gives loan only if documents are signed by Karta and all the coparceners which
make all of these personally liable.
 In Assam & Bengal, Dayabhag school of Thought is applicable whereas in other parts
of the country, MITAKSHRA school of thought is applicable. In difference between the
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two is that in the former, even a son has no right in case father is alive. Whereas
under MITAKSHARA school of thought, all members of family including conceived
child have right to become coparceners and right in the property of the family.
ADVANCES TO HINDU UNDIVIDED FAMILIES (HUF) (LA 43.2020)
 The Karta of a HUF has implied authority to borrow money and pledge securities of
the family for the ordinary purpose of the family business or for the benefit of the joint
family.
 Thus, advances against stocks should be limited to goods and commodities which
are regularly dealt with by the HUF during the course of family business.
 Sometimes a collateral security of an immovable property in the name of HUF may
have to be offered.
 Although the Karta is competent to bind the family, yet in practice, the loan
documents should be signed by the Karta & all major co-parceners of a HUF. By
Signing the documents, the major co-parceners will become personally liable.
 In terms of the Hindu Succession (Amendment) Act, 2005 the daughter of a
coparcener has been made by birth, a co-parcener in her own right, in the same
manner as the son. So, while assessing loan proposal as well as while obtaining
documents, the existence of female coparcener should also be kept in view.
 Karta/all major male and female coparceners have to execute the documents.
 While creating mortgage of the properties of HUF, all the major coparceners
(including female coparceners) have to create the mortgage.
- The loan documents will be signed in the following form:

For self and M/s_______ (HUF)
1. A. Karta
2. B._____]
3. C._____]
Major co-parceners .
MARRIED WOMEN
A separate legal entity.
 Sec 14 of Hindu succession act provides that property of a Hindu female is her
absolute property
 Can raise loans against her own property.
 Solvency not related to her husband
 Husband is liable for her debts if
a. he has consented and stands surety
b. Loan is availed for necessities of her life
 Can be an executor or administrator without any help or guidance.
 As per sec 56 of CPC, a woman can not be arrested or imprisoned for non payment of
judgement debt.
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PARDANASHIN LADY
 A pardanasheen lady remains in seclusion and does not transact with persons other
than her family members.
 Presumption of undue influence. Contract with her is not free from all defects. A
contract by a pardanasheen lady is voidable ( liable to void) at the option of the lady
on account of undue influence.
 The onus of proving the absence of undue influence is on the bank ( the other party to
contract). Besides, it is difficult to ascertain the person signing the document which
may lead to impersonation.
 Generally discourage accounts in her name as her identity can not be ascertained
 Absolute care to be taken while dealing with her.
ILLITERATE PERSONS
 Get introduction and witness.
 Photograph to be changed every 3 years
 Take identification marks
 Payment only in person through cashier only
 In case of any dispute or explanation of rules, take independent witness
 Noting ‘ILLITERATE A/C’ to be made on ledger folio/A O F.
Joint account of illiterate person with illiterate/ literate person (RMD 44/2013)
 Jointly with other illiterate person subject to compliance of KYC norms.

 No cheque book will however be issued in the joint account of illiterate persons.
 Jointly with another literate person who is closely related to him which Can be
operated E/S, F/S or jointly. Cheque book can be issued in such accounts.
BLIND PERSONS
 Get introduction & witness
 Photograph to be changed every 3 years
 Take identification marks
 Payment/ receipt to be got witnessed by an independent person which can also be a
bank employee other than the person who passes the payment.
 In case of any dispute or explanation of rules, take independent witness
 Noting BLIND PERSON to be made on ledger folio/A O F.
 Advised to open joint account
 Cheque book can be given to Blind after deleting the word “Bearer” and after affixing
stamp “Blind Person” on the face of each cheque.
INSOLVENT PERSONS
 Undischarged insolvents are incompetent to contract as they are prohibited to enter
into any contract with respect to the disposal of their property.
 When a person is adjudicated insolvent, his property, wherever locatd, vests with
Official Reciever/ Official Assignee, who has authority to sell the same. He can
mortgage the insolvent’s property with leave of court. No stamp duty or registration fee
is payable on sale/ mortgage deeds executed by official assignee.
 All transactions made subsequent or during last six months are invalid.
 Can not obtain credit for more than Rs. 50.
 Minors/ lunatics can not be declared insolvent
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 Account of a person declared insolvent should be stopped and balance disposed as
per instructions of the official receiver
 Insolvent person can act as an agent under INDIAN CONTRACT ACT sec.201
LUNATICS ( Persons of unsound mind)
 Persons of unsound mind are incompetent to contract ( Sec 11, Indian Contract Act).
Agreements by them are void. Same rule applies to persons who are heavily drunk or
intoxicated. Contacts made by a person in drunken state are void.
 On notice of lunacy operations to be stopped & balance disposed off as per court’s
directions.
 In case of temporary disorder payment to be made after obtaining a certificate from
two approved doctors reg. Mental soundness at the time of payment.
 Payment to an intoxicated person is to be made only after taking two independent
witnesses regarding the condition of the person.
Convicts :Convicts can not enter into contract during imprisonment period.
OLD/SICK/INCAPACITATED PERSONS
 These are the persons who are unable to sign the cheque and visit the bank to
withdraw money.
 Bank can obtain thumb impression or an identified mark in presence of two identified
witnesses (one of them should be bank official) and make payment. Such customer
will identify the person in the presence of witnesses to whom payment is to be made.
The identified person will put his signatures/thumb impression on the
cheque/withdrawal slip.
MENTALLY ILL PERSONS AND PERSONS SUFFERING FROM DISABILITIES LIKE

AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND MULTIPLE DISABILITIES
 In case guardian of such person suffering from above said disabilities is appointed
by the court under Mental Health Act, 1987 or some other act approaches the bank
to open/ operate the accounts of mentally ill person (SF, RD and FD a/cs only),
opening/ operation be allowed. The rules are same as in case of accounts of Minor
under guardianship.
 The guardian shall furnish a certificate at least once in a year from the appointing
authority that he continues to be the guardian of such mentally ill person. He will also
submit an affidavit with the bank that he will inform the bank about any change in the
guardianship.
PARTNERSHIP FIRMS
 In terms of Section 464, Companies Acty, 2013, No association or partnership
consisting of more than such number of persons as may be prescribed shall be formed
for the purpose of carrying on any business, provided that the number of persons
which may be prescribed under this sub-section shall not exceed 100 (one hundred).
These provisions do not apply to : Hindu undivided family carrying on any business; or
an association or partnership, if it is formed by professionals who are governed by
special Acts..
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 The Central Government has prescribed maximum number of partners in a firm to
be 50 vide Rule 10 of the Companies (Miscellaneous) Rules,2014. Thus, in effect,
a partnership firm cannot have more than 50 members".
 In case of contravention, fine Rupees one lakh rupees may be imposed, besides,
personal liable for all liabilities incurred in such business.
 Registration not mandatory, but only registered firms can file suits to enforce a
contract
 Minor can be admitted only to the benefits
 A partner can bind the firm by doing usual business on behalf of the firm
 A partnership is not treated as a separate entity from the partners
 Death of a partner/ admission of a partner dissolves the partnership firm
 Implied authority of the partner does not cover
1. Submission of a dispute to arbitration
2. Open a/c in his name for firm’s business
3. Promise/ relinquish claim of the firm
4. Withdrawal of suit filed on behalf of the firm
5. Admit any liability in a suit against the firm
6. Acquire/ transfer immovable property
7. Enter into partnership on behalf of the firm
JOINT STOCK COMPANIES
The Companies Act – 2013 Effective from 12.9.2013

 TYPES OF COMPANIES 
 A Private Ltd. Co is a company which by its articles (I) restricts transfer of its shares
(ii) prohibits itself from inviting subscription of shares/debentures from public, (iii)
limits the number of its members to 200. Minimum number of directors can be 2.
 A Public Ltd. Co does not have such restrictions. Minimum directors : 3.
 A Government Co. is a company where not less than 51% of the share capital is held
by government (central/state/both).
 Company Limited by the guarantee: A company limited by guarantee is a registered
company having the liability of its members limited by its memorandum of
association to such amount as the members may respectively undertake to pay if
necessary on liquidation of the company.
1. Small Company: It is a company other than public company where paid up capital
does not exceed 50 lacs or such higher amount as may be prescribed which shall
not be more than 5.00 crore Rupees.
OR
Turnover of the company does not exceed 2 crore or such higher amount as may be
prescribed which shall not be more than 20 crore Rupees.
2. Dormant Company is a company without significant financial transaction formed for
some future project.
3. One Person Company is a company formed by one person as Private Company.
 Maximum number of members in a Private Company has been raised to 200
members.
 No association or partnership consisting of more than such number of persons as may
be prescribed shall be formed for the purpose of carrying on any business, but the
number of persons which may be prescribed shall not exceed 100.
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- Central Govt., vide notification dt 31.03.2014 has prescribed the maximum number of
partners as 50.
- These provisions do not apply to a Hindu undivided family carrying on any business; or
(b) an association or partnership, if it is formed by professionals who are governed by
special Acts.
- Every member of an association or partnership carrying on business in contravention,
shall be punishable with fine up to Rs.100000.00 and shall also be personally liable
for all liabilities incurred in such business.
 Object clause in MOA is not required to be divided into main, ancillary and other
objects.
 CIN (Certificate Identification Number) to be allotted to the company on and from
date of incorporation.
 Certificate of commencement will no longer be issued by ROC.
 A notice of not less than 7 days in writing is required to call a board meeting.
 In terms of Section 149, of Companies Act, 2013,
 Minimum 3 directors in the case of a public company,
 Minimum 2 directors in the case of a private company,
 and one director in the case of a One Person Company; and
 (b) a maximum of fifteen directors:
 However, a company may appoint more than 15 directors after passing a special
resolution.
 Such class or classes of companies as may be prescribed, shall have at least one
woman director.
 Every company shall have at least one director who stays in India for not less than
182 days during the financial year:
 Every listed public company shall have at least one-third of the total number of
directors as independent directors.
 Now, a person can hold directorships of up to 20 companies of which public
companies should not be more than 10 (Section 165 of Companies Act, 2013).
 Private Limited Companies:
o Min 2 and max 200
o Directors; min 2 ,
o Name must end with “private limited”
 Public Limited Companies
 Min: Directors 3,
 Share holders Min. 7, max- no limit
 Name must end with “Limited”
 Govt Companies; 51% or more share held by Govt.
Documents reqd. for opening account
 Memorandum of Association (also known as charter of the company

or document of outdoor management)
 Articles of Association (Document of indoor management)
 Certificate of incorporation
Omnibus Resolution :
 A resolution (passed by Board) authorizing to open account in the name of the company
with any bank at any place is called Omnibus resolution.
 An omnibus resolution can be accepted for opening current account. No credit/overdraft
facility is sanctioned in the account, based on such resolution.
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OPERATION OF COMPANY ACCOUNT :
 Cheque signed by an authorized person can be paid even after his death or insolvency.
 Cheques payable to a limited company should not be collected in personal account
of any director, employee/ official of the payee company.
 Cheques issued by a company in favour of a third party and endorsed by the payee
in favour of a director/employee of the company should not be collected without
proper enquiry. Third party cheques drawn by the company should not be
collected/ credited to the personal accounts of the directors.
 Insolvency : A company cannot be declared insolvent. Where a company cannot
pay its debts it can be liquidated/wound up.
 Where one of the directors becomes insolvent, it does not affect operation of
account. Cheques signed by him can be paid. However, after insolvency he cannot
act as director.
 If one of the two directors of a Private. Ltd. Co. is adjudged insolvent; the operation
in the company‘s account should be stopped till a fresh director is appointed.
NON-PROFIT MAKING COMPANY :
 A limited company need not add the word limited to its name if it is a non-profit making
association formed for the promotion of art, literature, religion and licensed by Central
Government under Sec. 25 of Companies Act, 1956.
 The word ―limited‖ in the name of a company indicates that the liability of a share
holder is limited to the extent of the face value of shares held by him.
ACCOUNTS TO COLLECT SUBSCRIPTION

 When a newly formed public limited company wants to open a bank account for the
purpose of collection of subscription money for its shares/debentures, banks should
note the following points :
 It is the responsibility of banker to ensure that the money is not withdrawn/utilized till the
company obtains the Certificate of Commencement of Business.
 For opening subscription account the bank, therefore, should not insist upon
―Certificate of Commencement of Business.
 No cheque book can be issued in such account.
 No drawl can be allowed until the company obtains certificate to commence business.
 However, bank can transfer the amount or part thereof for investing in short term
deposits.
WINDING UP OF COMPANY :
 Winding up or Liquidation is the process by which a company is dissolved.
 Winding up can be (I) voluntary, either by shareholders or by creditors (ii) compulsory by
Court, or (iii) through Court supervision.,
 On the appointment of a liquidator, all the powers of Board of Directors cease to operate
except when it is otherwise permitted in general body meeting resolution.
 In case of death/ resignation of the liquidator the company in general body meeting
appoints the next liquidator.
 Order of payment on debts :In case of winding up, the debts of the company are paid in
the following order (I) Workmen dues, (ii) Secured Creditors, (iii) Cost and charges of
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winding up, (iv) Preferential debts (taxes etc.) (v) Floating charges, (vi) Unsecured
Creditors.
 The unsecured Creditors are paid paripassu their claim..
Common Seal (LAW 3.2018)
 Pursuant to the Companies (Amendment) Act, 2015 the provisions relating to Common
Seal of a Company have been drastically amended, thereby taking away the essentiality
of having Company Seal. Earlier, under Section 9 of the Companies Act, 2013, it was
mandatory for every company to have a Common Seal. The use of Common Seal was
required for a Company to provide various authorizations and attestations on behalf of
the Company. A brief overview of the said amendment Act pertaining to the requirement
of Common Seal of a Company, may summarized as under:
 The essentiality of having a Common Seal has been dispensed with. It is optional now.
 Companies now to have their name engraved on their Common seal, if it has a common
seal.
 The Company may under its common seal, if any, authorize any person as its attorney
to execute deeds other than Bills of Exchange, etc. on its behalf. In case, the company
does not have Common Seal, then the authorization shall be made by either 2 (two)
directors, or a director and the Company Secretary.
 In case a Company has a Common Seal, then it terms of Section 22(2) of Companies
Act 2013, it can authorize a person under its Common Seal to act as its attorney to
execute deeds other than Bills of Exchange, Hundi, and Promissory Note on its behalf.
 In light of the abovesaid amendments in statutory provisions, it is no more mandatory

for a company to have a Common Seal, and consequently there cannot be a
mandatory requirement of affixing Common Seal of the Company on Loaning and
Security Documents, and other documents.
Registration of Charge :
 As per Section 77 of the Companies Act, 2013, it is the duty of every company to
register the creation/ modification of charges within 30 days of such
creation/modification. After the prescribed time period, the form can be filed after
paying additional fee was as per the Companies (Registration Offices and Fees)
Third Amendment Rules, 2014.
 MCA vide the Ordinance dated 02nd November, 2018 and notification dated
30th April, 2019 modified the timeline on the Charges created or modified.
 Post Amendment Regime:
 Charges created/ modified before the commencement of the Ordinance

Amendment i.e. 2nd November, 2018:
 Any charge created/modified before 02nd November, 2019 shall be filed by the
Company within 30 days of such creation/modification. If the same is not filed
within the said time limit then the Registrar may on application allow to file within 300
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days of such creation. However, if the registration has not been completed within
300 days of creation, then the same shall be filed within 6 months of the
Commencement of the Amendment provisions i.e. from 02nd November, 2019 after
paying the advalorem fee as prescribed.
 Maximum Time limit to register charge = 300 days + 6 months from

02nd November, 2019 for charges created/ modified on or before 02.11.2018.
 Post Amendment Regime:
 Charges created/ modified on or after 02nd November, 2019
 If the Charges created/modified on or after 02nd November, 2019 and not filed
within 30 days of creation/ modification, then the Registrar can allow to file the
form within 60 days of such creation.
 If the Registration is not made within 60 days, the Registrar can allow to register
such creation within further 60 days with the payment of prescribed advalorem
fee.
 Maximum Time limit for registration = 30+30+60=120 days from the date of
creation/modification for charges created / modified after 02.11.2018.
 Where a company fails to 1[register the charge within the period specified in section 77
(30 days), the person in whose favour the charge is created may apply to the Registrar
for registration of the charge along with the instrument created for the charge, within
such time and in such form and manner as may be prescribed.
 and the Registrar may, on such application, within a period of fourteen days after
giving notice to the company, unless the company itself registers the charge or shows
sufficient cause why such charge should not be registered, allow such registration on
payment of such fees, as may be prescribed:
Commencement of business, etc. (WEF 02.11.2018)

 In terms of section 10A, a company shall not commence any business or exercise any
borrowing powers unless :
 a declaration is filed by a director within 180 days of the date of incorporation.
 If any default is made in complying with the requirements of this section, the company
shall be liable to a penalty of Rs.50000.00 and every officer who is in default shall
be liable to a penalty of Rs.1000.00 for each day during which such default
continues but not exceeding an amount of Rs.100000.00.
 Where no declaration has been filed within 180 days from the date of incorporation , the
Registrar MAY initiate action for the removal of the name of the company from the
register of companies under Chapter XVIII.
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Declaration in respect of beneficial interest in any share (WEF 21.12.2020).
 Beneficial interest in a share includes, directly or indirectly, through any contract,
arrangement or otherwise, the right or entitlement of a person alone or together with any
other person to—
 exercise or cause to be exercised any or all of the rights attached to such share; or
 receive or participate in any dividend or other distribution in respect of such share.
Limited Liability Partnership Act 2008 (LLP)
LLP is viewed as an alternative corporate business vehicle that provides the benefits
of limited liability but allows its members the flexibility of organizing their internal
structure as a partnership based on a mutually arrived agreement.
 Government passed the Limited Liability Partnership Act, 2008, which came into
force w.e.f. 9th January, 2009.
LEGAL STATUS OF LLP
 LLP is a body corporate formed and incorporated under the LLP Act which is a
distinct legal entity separate from that of its partners. It has perpetual succession.
Any change in the partners will not affect the existence, rights or liabilities of the LLP.
 On Registration, a LLP would be capable of suing and being sued, acquiring,
owning, holding and developing or disposing of property moveable or immoveable.
The Act provides for entry of new partners in accordance with LLP agreement and
exit of existing partners both with due notice to the Registrar of Companies.
MINIMUM NUMBER OF PARTNERS
 LLP shall have at least two partners but there is no prescribed limit on the maximum
number of partners in an LLP.
 Any individual or body corporate may be a partner in LLP.
 There is no specific provision to admit minor as a partner in firm.
 If at any time the number of partners of a LLP is reduced below two and the LLP
carries on business for more than 6 months while the number is so reduced, the
person who is the only partner of the LLP during the time that it so carries on
business after those 6 months and has the knowledge of the fact that it is carrying on
business with him alone, shall be liable personally for the obligation of the LLP
incurred during that period.
DESIGNATED PARTNERS AND THEIR OBLIGATIONS
 There is a concept of ‘Designated Partner’, which is defined as a partner designated
as such.
 Every designated partner of the LLP must obtain a Designated Partner Identification
No. (DPIN) from the Central Govt.
 Every LLP must have at-least two designated partners. Both the designated
partners must be individuals and at-least one of them must be a resident in India.
 If all the partners in LLP are bodies corporate, they must nominate their respective
individuals who are to act as ‘Designated Partners’ (DP) and one of the nominee
shall be a resident of India.
 DP is liable to all penalties imposed on LLP for any contravention of those
provisions.
 Every LLP shall file with Registrar of companies the particulars of every individual
who has given his consent to Act as DP.
 This is similar to provisions relating to Director in Companies Act.
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TRUSTS
 Trust deed to be examined
 Insolvency of trustee does not affect trust property
 Transfer of funds from trust account to personal account of the trustee be investigated
 Trustees must act jointly as they have no authority to delegate unless specifically
mentioned
 On death of one trustee trust property passes to the other trustees, court order
required
 Any trustee can stop payment .
 Allow loans only if allowed in the trust deed and after taking personal guarantee of the
trustee. If there are more than one trustee, they must join together in executing
documents. They can not delegate authority to any other person.
 The trustees have no implied power to borrow against trust property.
 All Public Trusts/ Charitable Trusts are formed under Public Trust Act of the state
concerned and are controlled by Charity Commissioner of the state. Private Trusts are
formed as per Indian Trust Act, 1882.
 While granting loan to a Public Trust against registered mortgage of Trust property,
prior permission must be obtained from Charity commissioner.
SOCIETIES & CLUBS

 By-laws to be obtained and read carefully
 Registration certificate
 Resolution passed regarding opening & conduct of account
 In case of death of a authorised signatory operation stopped till new resolution is
received
 Bank can open accounts of unregistered clubs, institutions, societies, association,
schools etc after satisfying themselves about reputation, responsibility & standing of
the office bearers .
JOINT ACCOUNTS
 Appointment of an agent should be confirmed by all.
 Operations to be stopped in case of death, insolvency/ insanity of any one. Payment to
be made to survivors & a the legal heirs of the deceased
 Any one can stop payment.
 Alteration in a cheque drawn should be confirmed by the drawer itself (not other
account holder)
EXECUTORS & ADMINISTRATORS

 The person named in the will of the deceased person is the executor and account can
be opened on production of probate.
 Before obtaining the probate, the executors can borrow only on their personal
guarantee. After the probate is issued, the executors can borrow provided they are
authorized to do so. The executors should be made jointly and severally liable.
 Person appointed by the court is an administrator and must produce letter of
administration.
 Payment can be stopped by any one but withdrawal is possible when both join.
 On death of one executor powers are vested in the surviving executor
 Can borrow for the immediate needs of the property
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LIQUIDATOR, RECEIVER /ASSIGNEE :
 liquidator is appointed in case of a company in liquidation
 Receiver / Assignee to manage the property of an insolvent person
 Letter of probate/ administration to be taken
 Style & status to be mentioned in the Title of the account
 No loan can be granted .
DIFFERENCE BETWEEN A PVT. LTD. CO. AND A PUBLIC LTD. CO.
Points of Difference Private Ltd. Co. Public Ltd. Co.

i) Minimum number of shareholders 2 7
ii) Maximum number of shareholders 200 No limit
iii) Transfer of share Restricted Freely
Transferable
iv)Invitation to public for shares & debentures Prohibited Permitted
and fixed deposits
v) Certificate of commencement of Business Not required Required
vi) Minimum Directors 2 3
vii) Minimum paid up capital Rs. 1 lac Rs. 5 lac
DIFFERENCE BETWEEN PARTNERSHIP AND A COMPANY
PARTNERSHIP COMPANY
The company has a separate legal entity. It
A partnership firm is the sum total of persons
needs to be incorporated. A public company
(minimum 2 and maximum 100) who have come
may have as many members as it desires subject
together to share the profits of the business
to a minimum of 7 members. A private
carried on by them or any of them. It does not company can‟t have more than 200 members
have a separate legal entity. and less than 2.
Liability of partners is unlimited. Liability of shareholders of a limited company
is limited to the extent of unpaid shares or
unpaid
Property of the firm belongs to the partners and In case of a company the property belongs to
they are collectively entitled to it. the company and not to its shareholders.
A partner cannot transfer his shares in a Shares may be transferred without the
partnership firm without the consent of all other permission of the other members due to the
partners. absence of provision to contrary in the articles
of
On the death of a partner, the partnership is On the death of the shareholder the company‟s
dissolved unless there is provision to the existence is not affected.
contrary in the Deed of Partnership.
GARNISHEE ORDER
 Order issued by court on the banker (GARNISHEE) of the (JUDGEMENT debtor)
maintaining credit balance to pay the (JUDGEMENT creditor)
 Order nisi-direct to stop payment and asks the bank why the funds should not be paid
to the creditor
 Order absolute—Entire of specific balance attached
 Applicable to credit balance at the time when order is served.
 Not applicable---
o cheques sent for collection / Uncleared effects
o Amounts deposited after the order is received
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o Payments made before the order is received
 Applicable to debt due or accruing due(FD)
 Not applicable to monies held abroad items in safe custody & safe deposit vaults
 Joint accounts cannot be attached but individual accounts can be attached in case of
joint debtors
 Personal / partnership accounts
CLAYTON’s Rule
IN case of Multiple Debts credits will be appropriated
o To discharge of the particular debt as per the instructions of the debtor
o If debtor does not intimate or the circumstances do not indicate , as per the
discretion of the creditor
o When neither party indicates, to discharge of debts in order of time
o First to discharge of intt and then principal in chronological order.
INCOME TAX ATTACHMENT ORDER

Issued under Sec.226 (3) of Indian Income Tax Act, 1961, by an Income Tax Officer.
Section 226(3)
This section authorizes the ITO “to require, by notice in writing, any person from whom
money is due or may become due, to the assessee, or any person holds or may
subsequently hold money for or on account of assessee, to pay the Income Tax Officer an
amount equal to the amount of arrears of tax”.
It is not only debts due and payable (as is the case with a garnishee order), but also any
money held on account of assessee is attached by an Income Tax Attachment Order.
Accordingly, it can attach: (I) Saving Fund and Current Account, (ii) Term Deposit (however,
amount is payable on maturity), (iii) Proceeds of Collection item not credited to account
Joint Account
Even though the order is received in a single name, it attaches balance (pro-rata) in any
joint account maintained by such person. Unless it is proved otherwise, the share of the
joint account holders is considered to be equal (Section 226(3)(iii)).
Procedure before attaching joint account

Account in joint name can be attached only where there is a mention in the order that a
copy of the same is sent to the other joint account holders. In case no such remark is
made, the Income Tax Department should be advised. “You have not sent the notice to
both/all depositors as provided in Sec. 226(3)(iii) of the Act. We are, therefore, unable to
comply with your demand without references to the other joint depositors”.
The joint account holders should be asked to establish their claim, if any, to the entire
balance to the exclusion of the person named; in the order. In case they fail to produce
Court order/stay order, within a reasonable time, the bank should act on the presumption
made by the Act and pay proportionate amount to Income Tax Authority.
Account in the name of a deceased or insolvent person

An I.T. attachment order attaches the funds held on account of a deceased or insolvent
depositor. (Garnishee Order does not attach the same).
Attachment of joint account towards the dues payable by a deceased depositor
Where the attachment order relates to the arrears of tax dues on the estate of the deceased
depositor, the balance in the joint account in his name need not be attached.
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Accounts in other capacities
If the order is individual name, it does not attach accounts in the name of partnership firms
(where he is a partner) or in the name of a trust (where he is a trustee).
Money held subsequent to receipt of order

As per the Act, the order attaches the money held or that may be subsequently held.
Accordingly if an order is received at 10 AM and an amount is deposited at 11 AM, this
amount should also be attached by the order.
Right of Set Off

The bank is entitled to first exercise its right of set off before acting on the order.
Penalty
Where a bank fails to attach the amount it would be deemed to be an assessee in default.
Action to be taken on receipt of the order

1. On receipt of the order, the customer must be given notice.
2. The account holder must be informed about the payment to I.T.O.
3. Like Income Tax Attachment Order, attachment orders can also be issued under Wealth Tax
Act, The Recovery of Debts due to Banks & Financial Institutions Act, 1993 and also Sales
Tax Acts of different States.
Garnishee vis-à-vis I T attachment order

Particulars Garnishee IT attachment order
Authority Court Revenue/Tax authority
Amount May be specific Must be specific, else it is a not valid
order.
Applicable amount At the time of receipt At the time of receipt and all credits
after receipt
Joint Accounts Not applicable Applicable pro-rata
Order Single name
Order Joint Names
Applicable Applicable
Order in name of Not applicable Not applicable
Partner, Trustee,
executor, director etc
Deceased accounts Applicable Applicable
Insolvents Not applicable Applicable
Undrawn CC or OD Not applicable Not applicable
balances
Proceeds of Not attached Attached
cheques/Bills on
collection
Future Credits Not attached Attached
Right to set off Available Available
Both received Preference to Preference to attachment being State
simultaneously or attachment being dues
pending for payment State dues.
Limitation 12 Years being 30 years being Govt dues.
execution of decree
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Right of Set Off:
Banker has a right to combine two or more accounts, of a customer in the same name and
same right, if one of them is showing debit balance
This is a statutory right arising on account of contractual obligations between the Bank and
its customers.
Different branches of the bank are treated as one unit for exercising this right. This right is
not available if there is an agreement (express or implied) for not exercising this right.
This right can only be exercised, when debit balance is certain, determined and due ( & not a
future or contingent debt) , after sending notice to the customer and satisfying the condition
that the account must be in the same name and in the same capacity / right.
(ii) An account in the individual capacity of the Customer showing debit balance cannot be
combined with one in fiduciary capacity (i.e. trustee etc.) showing credit balance.
(iii)Accounts really belonging to same persons, but in different names can be combined.
iv) Two a/cs, of a solicitor, one in his personal name and other marked clients a/ c cannot be
combined.
(v) Two A/cs, one belonging to an individual and other jointly with someone, can‟t be
combined. The right can‟t be exercised if the deposit is in the firm‟s name and debt due
is in partner‟s name, and also when deposit is in the dividend account of company and
borrowing is in the Co‟s name. But if deposit is in the single name and borrowing is in
the joint name with joint and severally liability, and deposits are in partner‟s name and
borrowing by firm and also deposit in joint names payable to former or survivor and
borrowing is in the name of former, this right can be exercised.
(vi) The right should be exercised after giving due notice, unless a contract to the contrary
exists.
POSITION OF AVAILABILITY OF RIGHT OF SET OFF IS SUMMARISED IN THE FOLLOWING
TABLE:
Right to Set Off

Deposit in name of Loan in name of Status of Availability
Single PERSON Same person Available
Single PERSON Same person, jointly with others Available
Joint Name One of the Joint a/c Holder Not available
Single Person Same name but with different Not available
capacity i.e. trustee
Proprietor Prop Firm Available
Prop Firm Proprietor Available
Partner in a firm Partnership Firm Available
Partnership Firm Partner Not available
Trust Trustee Not available
Trustee Trust Not available
Minor( Under guardianship) Guardian Not available
Dividend account of the Loan a/c of the co. Not available.
company
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KYC Guidelines and Compliance thereof
Reserve Bank of India, at times, imposes penalty on banks for non compliance of KYC guidelines. To avert
such penalties in future, it is pertinent to understand the concept of money laundering, KYC Guidelines and
Compliance Tools and Measures. An attempt has been made in this note on how to ensure compliance of
KYC guidelines through the use of CBS, EDW reports, AML alerts etc., besides explaining the basics of
money laundering, RBI’s KYC Guidelines.
1.0 History of Money Laundering :

In ancient times, people used to hide wealth from the Governments to avoid taxation or confiscation or both.
And for this purpose, people used to take the money out of the country avoiding state scrutiny, generally
through hawala system.
In the 1980s, the war on drugs and terrorism compelled many governments again to turn to money-laundering
rules to try and seize proceeds of drug crime to catch the criminals/ conspirators running drug empires.
Normally, law enforcing authorities, as a matter of natural justice, have to prove an individual to be guilty to
get a conviction. But with stringent money laundering laws, money earned through illegal means can be
confiscated and it is up to the individual to prove that the source of funds is legitimate if he wants the funds
back.
Keeping in view the huge rise in money transfers earned through illegal means, G7 countries in 1989 formed
FATF (Financial Action Task Force) as an intergovernmental body for developing and promoting an
international response to combat money laundering.
The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and
operational measures for combating money laundering, terrorist financing and other related threats to the
integrity of the international financial system. The FATF is therefore a “policy-making body” which works to
generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
The FATF has developed a series of Recommendations that are recognised as the international standard for
combating of money laundering and the financing of terrorism and proliferation of weapons of mass
destruction. They form the basis for a co-ordinated response to these threats to the integrity of the financial
system and help ensure a level playing field. First issued in 1990, the FATF Recommendations were revised
subsequently to ensure that they remain up to date and relevant, and they are intended to be of universal
application.
The FATF monitors the progress of its members in implementing necessary measures, reviews money
laundering and terrorist financing techniques and counter-measures, and promotes the adoption and
implementation of appropriate measures globally. In collaboration with other international stakeholders, the
FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system
from misuse.
The September 11 attacks in 2001, which prompted the Patriot Act in the US and similar legislations
worldwide, led to a new emphasis on money laundering laws to combat terrorism financing. FATF members
used the Financial Action Task Force on Money Laundering to put pressure on governments around for
upgrading money laundering laws and surveillance and monitoring systems of financial transactions. In 2002,
the Parliament of India passed the Prevention of Money Laundering Act, 2002. The main objectives of this act
are to prevent money-laundering as well as to provide for confiscation of property either derived from or
involved in, money-laundering.
1.1 : Money Laundering - Concept :
Money laundering is the process of transforming the proceeds of funds earned through illegal means (like
Drug trafficking, Gun smuggling, corruption etc.) into ostensibly legitimate assets. Now, the term money
laundering is not confined only to unearthing of the source of illegally earned money. If the money is earned
through legitimate means (source of funds), but is used for terrorism financing and evasion of international
sanctions, it will come under the purview of money laundering. As such, most anti-money laundering laws
openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is
concerned with destination of funds) when regulating the financial system. Reverse Money Laundering is a
process that disguises a legitimate source of funds that are to be used for illegal purposes.
Money laundering involves three steps:
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The first stage involves the Placement of proceeds derived from illegal activities – the movement of proceeds,
frequently currency, from the scene of the crime to a place, or into a form, less suspicious and more
convenient for the criminal.
The second stage is Layering – the substantive stage of the process in which the property is ‘washed’ and its
ownership and source is disguised. It involves the separation of proceeds from illegal source through the use
of complex transactions designed to obscure the audit trail and hide the proceeds. The criminals frequently
use shell corporations, offshore banks or countries with loose regulation and secrecy laws for this purpose.
A shell corporation is a company which serves as a vehicle for business transactions without itself having
any significant assets or operations.
The third final stage is Integration. At this stage, the ‘laundered‘ property is re-introduced into the
legitimate economy. It represents the conversion of illegal proceeds into apparently legitimate business
earnings through normal financial or commercial operations. Integration creates the illusion of a legitimate
source for criminally derived funds and involves techniques as numerous and creative as those used by
legitimate businesses.
For example, false invoices for goods exported, domestic loan against a foreign deposit, purchasing of
property and co-mingling of money in bank accounts.
1.2 : Combating Money Laundering :
Anti-money laundering (AML) measures refer to the legal controls that require financial institutions and other
regulated entities to prevent, detect, and report money laundering activities. Anti-money laundering guidelines
came into prominence globally as a result of the formation of the Financial Action Task Force(FATF) and the
promulgation of an international framework of anti-money laundering standards. An effective AML programme
requires a judicial system to criminalize money laundering, giving the relevant regulators and police the
powers and tools to investigate; be able to share information with other countries as appropriate; and require
financial institutions to identify their customers, establish risk-based controls, keep records, and report
suspicious activities.
2.0 KYC Guidelines In India :
The Reserve Bank of India has issued guidelines on KYC for compliance of PMLA 2002 and other related
acts. In terms of PMLA 2002, The person who attempts to indulge or knowingly assists or is party i.e. guilty of
offence is liable for Rigorous imprisonment of not less than 3 years up to 10 years Or Fine (without any
limit) or both.
2.1 Purpose :
- To put in place customer identification procedures, monitoring transactions in the accounts for
detection of transactions of suspicious nature for reporting to Financial Intelligence Unit-India [FIU-
IND] .
- To know the true identity and beneficial ownership of the accounts, permanent address, registered &
administrative address, source of funds, nature of customers’ business. “Customer Due Diligence
(CDD)” means identifying and verifying the customer and the beneficial owner using ‘Officially Valid
Documents’ as a ‘proof of identity’ and a ‘proof of address’. “Customer identification” means
undertaking the process of CDD.
 To follow certain customer identification procedures while undertaking a transaction either by
establishing an account-based relationship or otherwise and monitor their transactions.
2.2 Definitions
- Authentication", in the context of Aadhaar authentication, means the process as defined under sub-
section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits
and Services) Act, 2016.
- Beneficial Owner (BO)
- A) Where the customer is a company, the beneficial owner is the natural person(s), who, whether
acting alone or together, or through one or more juridical person, has / have a controlling ownership
interest or who exercise control through other means. "Controlling ownership interest" means
ownership of / entitlement to more than 25 per cent of the shares or capital or profits of the
company. "Control" shall include the right to appoint majority of the directors or to control the
management or policy decisions.
- If the customer or the owner of the controlling interest is a company listed on a stock exchange, or is
a subsidiary of such a company, it is not necessary to identify and verify the identity of any
shareholder or beneficial owner of such companies.
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- B) Where the customer is a partnership firm, the beneficial owner is the natural person(s), who,
whether acting alone or together, or through one or more juridical person, has / have ownership of /
entitlement to more than 15 per cent of capital or profits of the partnership.
- C) Where the customer is an unincorporated association or body of individuals (including
societies), the beneficial owner is the natural person(s), who, whether acting alone or together, or
through one or more juridical person, has / have ownership of / entitlement to more than 15 per cent
of the property or capital or profits of the unincorporated association or body of individuals.
- Where no natural person is identified under (a), (b) or (c) above, the beneficial owner is the relevant
natural person who holds the position of senior managing official.
- Where the customer is a trust, the identification of beneficial owner(s) shall include identification of
the author of the trust, the trustee, the beneficiaries with 15% or more interest in the trust and any
other natural person exercising ultimate effective control over the trust through a chain of control or
ownership.
- "Central KYC Records Registry" (CKYCR) means an entity defined under Rule 2(1) of the Rules, to
receive, store, safeguard and retrieve the KYC records in digital form of a customer.
- Designated Director means a person designated by the RE to ensure overall compliance with the
obligations imposed under chapter IV of the PML Act and the Rules and shall include:
- a) the Managing Director or a whole-time Director, duly authorized by the Board of Directors, if the RE
is a company,
- b) the Managing Partner, if the RE is a partnership firm,
- c) the Proprietor, if the RE is a proprietorship concern,
- d) the Managing Trustee, if the RE is a trust,
- e) a person or individual, as the case may be, who controls and manages the affairs of the RE, if the
RE is an unincorporated association or a body of individuals, and
- f) a person who holds the position of senior management or equivalent designated as a 'Designated
Director' in respect of Cooperative Banks and Regional Rural Banks.
- Digital KYC" means the capturing live photo of the customer and officially valid document or the proof
of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and
longitude of the location where such live photo is being taken by an authorised officer of the RE as
per the provisions contained in the Act.
- Equivalent e-document" means an electronic equivalent of a document, issued by the issuing
authority of such document with its valid digital signature including documents issued to the digital
locker account of the customer as per rule 9 of the Information Technology (Preservation and
Retention of Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016.
- Know Your Client (KYC) Identifier" means the unique number or code assigned to a customer
by the Central KYC Records Registry.
- Non-profit organisations" (NPO) means any entity or organisation that is registered as a trust or a
society under the Societies Registration Act, 1860 or any similar State legislation or a company
registered under Section 8 of the Companies Act, 2013.
- "Officially Valid Document" (OVD) means the passport, the driving licence, proof of possession of
Aadhaar number, the Voter's Identity Card issued by the Election Commission of India, job card
issued by NREGA duly signed by an officer of the State Government and letter issued by the National
Population Register containing details of name and address.
- If the OVD furnished by the customer does not have updated address, the following documents
or the equivalent e-documents thereof shall be deemed to be OVDs for the limited purpose of proof of
address:-
i. utility bill which is not more than two months old of any service provider (electricity,
telephone, post-paid mobile phone, piped gas, water bill);
ii. property or Municipal tax receipt;
iii. pension or family pension payment orders (PPOs) issued to retired employees by
Government Departments or Public Sector Undertakings, if they contain the address;
iv. letter of allotment of accommodation from employer issued by State Government or Central
Government Departments, statutory or regulatory bodies, public sector undertakings,
scheduled commercial banks, financial institutions and listed companies and leave and
licence agreements with such employers allotting official accommodation;
v. the customer shall submit OVD with current address within a period of three months of
submitting the above documents.
 If the OVD presented by a foreign national does not contain the details of address, in such case the
documents issued by the Government departments of foreign jurisdictions and letter issued by the
Foreign Embassy or Mission in India shall be accepted as proof of address.
 "Person" has the same meaning assigned in the Act and includes:
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a. an individual,
b. a Hindu undivided family,
c. a company,
d. a firm,\
e. an association of persons or a body of individuals, whether incorporated or not,
f. every artificial juridical person, not falling within any one of the above persons (a to e),
and
g. any agency, office or branch owned or controlled by any of the above persons (a to f).
 Principal Officer means an officer nominated by the RE, responsible for furnishing information.
 Suspicious transaction means a "transaction" as defined below, including an attempted transaction,
whether or not made in cash, which, to a person acting in good faith :
a. gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence
specified in the Schedule to the Act, regardless of the value involved; or
b. appears to be made in circumstances of unusual or unjustified complexity; or
c. appears to not have economic rationale or bona-fide purpose; or
d. gives rise to a reasonable ground of suspicion that it may involve financing of the
activities relating to terrorism.
 Transaction means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof
and includes :
a. opening of an account;
b. deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in cash
or by cheque, payment order or other instruments or by electronic or other non-physical
means;
c. the use of a safety deposit box or any other form of safe deposit;
d. entering into any fiduciary relationship;
e. any payment made or received, in whole or in part, for any contractual or other legal
obligation; or
f. establishing or creating a legal person or legal arrangement.
 Video based Customer Identification Process (V-CIP)": a method of customer identification by

undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer to
obtain identification information including the documents required for CDD purpose, and to ascertain
the veracity of the information furnished by the customer. Such process shall be treated as face-to-
face process.
 Customer means a person who is engaged in a financial transaction or activity with a Regulated
Entity (RE) and includes a person on whose behalf the person who is engaged in the transaction or
activity, is acting.
 Walk-in Customer means a person who does not have an account-based relationship with the RE,
but undertakes transactions with the RE.
 Customer Due Diligence (CDD) means identifying and verifying the customer and the beneficial
owner.
 Customer identification" means undertaking the process of CDD.
 FATCA means Foreign Account Tax Compliance Act of the United States of America (USA) which,
inter alia, requires foreign financial institutions to report about financial accounts held by U.S.
taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.
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 IGA means Inter Governmental Agreement between the Governments of India and the USA to
improve international tax compliance and to implement FATCA of the USA.
 Non-face-to-face customers means customers who open accounts without visiting the branch /
offices of the REs or meeting the officials of REs.
 On-going Due Diligence means regular monitoring of transactions in accounts to ensure that they
are consistent with the customers' profile and source of funds.
 Politically Exposed Persons (PEPs) are individuals who are or have been entrusted with prominent
public functions in a foreign country, e.g., Heads of States / Governments, senior politicians, senior
government / judicial / military officers, senior executives of state-owned corporations, important
political party officials, etc.
 Shell bank means a bank which is incorporated in a country where it has no physical presence and is
unaffiliated to any regulated financial group.
 Wire transfer means a transaction carried out, directly or through a chain of transfers, on behalf of an
originator person (both natural and legal) through a bank by electronic means with a view to making
an amount of money available to a beneficiary person at a bank.
 Domestic and cross-border wire transfer: When the originator bank and the beneficiary bank is the
same person or different person located in the same country, such a transaction is a domestic wire
transfer, and if the 'originator bank' or 'beneficiary bank' is located in different countries such a
transaction is cross-border wire transfer.
3.0 The KYC policy shall include following four key elements :
(a) Customer Acceptance Policy;

(b) Risk Management;
(c) Customer Identification Procedures (CIP); and
(d) Monitoring of Transactions
4.0 Money Laundering and Terrorist Financing Risk Assessment by REs :
- REs shall carry out 'Money Laundering (ML) and Terrorist Financing (TF) Risk Assessment' exercise
periodically to identify, assess and take effective measures to mitigate its money laundering and
terrorist financing risk for clients, countries or geographic areas, products, services, transactions or
delivery channels, etc.
- Further, the periodicity of risk assessment exercise shall be determined by the Board of the
RE, in alignment with the outcome of the risk assessment exercise. However, it should be reviewed
at least annually.
5.0 Compliance of KYC policy
 REs shall ensure compliance with KYC Policy through :
(i) Specifying as to who constitute 'Senior Management' for the purpose of KYC compliance.
(ii) Allocation of responsibility for effective implementation of policies and procedures.
(iii) Independent evaluation of the compliance functions of REs' policies and procedures,
including legal and regulatory requirements.
(iv) Concurrent / internal audit system to verify the compliance with KYC / AML policies and
procedures.
(v) Submission of quarterly audit notes and compliance to the Audit Committee
 REs shall ensure that decision-making functions of KYC compliance are not outsourced.
6.0 Customer Acceptance Policy
REs shall frame a Customer Acceptance Policy.
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Without prejudice to the generality of the aspect that Customer Acceptance Policy may contain, REs shall
ensure that :
a) No account is opened in anonymous or fictitious / benami name.

b) No account is opened where the RE is unable to apply appropriate CDD measures, either due to non-
cooperation of the customer or non-reliability of the documents / information furnished by the
customer.
c) No transaction or account-based relationship is undertaken without following the CDD procedure.
d) The mandatory information to be sought for KYC purpose is specified.
e) Optional / additional information, is obtained with the explicit consent of the customer.
f) REs shall apply the CDD procedure at the UCIC level. Thus, if an existing KYC compliant
customer of a RE desires to open another account with the same RE, there shall be no need
for a fresh CDD exercise.
g) CDD Procedure is followed for all the joint account holders, while opening a joint account.
h) Circumstances for permitting a customer to act on behalf of another person / entity, is clearly spelt
out.
i) Suitable system is put in place to ensure that the identity of the customer does not match with any
person or entity, whose name appears in the sanctions lists circulated by Reserve Bank of India.
Customer Acceptance Policy shall not result in denial of banking / financial facility to members of the
general public, especially those, who are financially or socially disadvantaged.
7.0 Risk Management
For Risk Management, REs shall have a risk based approach which includes the following.
 Customers shall be categorised as low, medium and high risk category.

 Risk categorisation shall be based on customer's identity, social / financial status, nature of business
activity, and information about the clients' business and their location etc.
 Provided that various other information collected from different categories of customers relating to the
perceived risk, is non- intrusive and the same is specified in the KYC policy.
7.1 INDICATIVE LIST OF HIGH RISK CUSTOMERS
 Individuals and entities in various United Nations' Security Council Resolutions (UNSCRs) such as
UNSC 1267 & 1988 [2011] linked to Al Qaida & Taliban.
 Individuals or entities listed in the schedule to the order under section 51A of the Unlawful Activities
(Prevention) Act, 1967 relating to the purposes of prevention of, and for coping with terrorist activities
 Individuals and entities in watch lists issued by Interpol and other similar international organizations
 Customers with dubious reputation as per public information locally available or commercially
available.
 Individuals and entities specifically identified by regulators, FIU and other competent authorities as
high-risk
 Customers conducting their business relationship or transactions in unusual circumstances, such as
significant and unexplained geographic distance between the institution and the location of the
customer, frequent and unexplained movement of accounts to different institutions, frequent and
unexplained movement of funds between institutions in various geographic locations etc.
 Customers based in high risk countries/jurisdictions or locations
 Politically exposed persons (PEPs) of foreign origin, customers who are close relatives of PEPs and
accounts of which a PEP is the ultimate beneficial owner;
 Non-resident customers and foreign nationals
 Accounts of Embassies / Consulates;
 Off-shore (foreign) corporation/business
 Non face-to-face customers
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• High Net Worth Individual (HNI), as approved
High net worth individuals [HNIs].
by PNB, for the purpose of Risk classification, : “All connected deposit
accounts of an individual customer having balance of Rs. 1.00
crore and above”
 Firms with 'sleeping partners'
 Companies having close family shareholding or beneficial ownership
 Complex business ownership structures, which can make it easier to conceal underlying beneficiaries,
where there is no legitimate commercial rationale
 Shell companies. The existence simply of a local agent or low level staff does not constitute physical
presence
 Investment Management / Money Management Company/Personal Investment Company.
 Accounts for "gatekeepers" such as accountants, lawyers, or other professionals for their clients
where the identity of the underlying client is not disclosed to the financial institution.
 Client Accounts managed by professional service providers such as law firms, accountants, agents,
brokers, fund managers, trustees, custodians, etc
 Trusts, charities, NGOs/NPOs (especially those operating on a crossborder basis), unregulated clubs
and organizations receiving donations (excluding NPOs/NGOs promoted by United Nations or its
agencies)
 Money Service Business: including seller of: Money Orders / Travelers‟ Checks / Money
Transmission /Check Cashing / Currency Dealing or Exchange xxiii. Business accepting third party
checks (except supermarkets or retail stores that accept payroll checks/cash payroll checks).
 Gambling/gaming including ―Junket Operators‖ arranging gambling tours xxv. Dealers in high value
or precious goods (e.g. jewel, gem and precious metals dealers, art and antique dealers and auction
houses, estate agents and real estate brokers).
 Customers engaged in a business which is associated with higher levels of corruption (e.g., arms
manufacturers, dealers and intermediaries.
 Customers engaged in industries that might relate to nuclear proliferation activities or explosives.
 Customers that may appear to be Multi-level marketing companies etc.
7.2 INDICATIVE LIST OF MEDIUM RISK CUSTOMERS :

 Non-Bank Financial Institution
 Stock brokerage
 Import / Export
 Gas Station
 Car / Boat / Plane Dealership
 Electronics (wholesale)
 Travel agency
 Used car sales
 Telemarketers
 Providers of telecommunications service, internet café, IDD call service, phone cards, phone center
 Dot-com company or internet business
 Pawnshops
 Auctioneers
 Cash-Intensive Businesses such as restaurants, retail shops, parking garages, fast food stores, movie
theaters, etc.
 Sole Practitioners or Law Firms (small, little known)
 Notaries (small, little known)
 Secretarial Firms (small, little known)
 Accountants (small, little known firms) xix. Venture capital companies
7.3 LIST OF HIGH / MEDIUM RISK PRODUCTS & SERVICES

 Electronic funds payment services such as Electronic cash (e.g., stored value and payroll cards),
funds transfers (domestic and international), etc
 Electronic banking
 Private banking (domestic and international)
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 Trust and asset management services
 Monetary instruments such as Travelers‘ Cheque
 Foreign correspondent accounts
 Trade finance (such as letters of credit)
 Special use or concentration accounts
 Lending activities, particularly loans secured by cash collateral and marketable securities
 Non-deposit account services such as Non-deposit investment products and Insurance
 Transactions undertaken for non-account holders (occasional customers)
 Provision of safe custody and safety deposit boxes
 Currency exchange transactions
 Project financing of sensitive industries in high-risk jurisdictions
 Trade finance services and transactions involving high-risk jurisdictions
 Services offering anonymity or involving third parties
 Services involving banknote and precious metal trading and delivery xviii. Services offering cash,
monetary or bearer instruments; cross-border transactions, etc.
8.0 Customer Identification Procedure (CIP)
REs shall undertake identification of customers in the following cases :
a. Commencement of an account-based relationship with the customer.

b. Carrying out any international money transfer operations non account holder of the bank.
c. When there is a doubt about the authenticity or adequacy of the customer identification data.
d. Selling third party products as agents, selling their own products, payment of dues of credit cards / sale
and reloading of prepaid / travel cards and any other product for more than rupees fifty thousand.
e. Carrying out transactions for a walk-in customer, where the amount involved is equal to or
exceeds rupees fifty thousand, whether conducted as a single transaction or several transactions
that appear to be connected. Provided, that this limit on balance shall not be considered while
making deposits through Government grants, welfare benefits and payment against
procurements.
f. When a RE has reason to believe that a customer is intentionally structuring a transaction into a
series of transactions below the threshold of rupees fifty thousand.
g. REs shall ensure that introduction is not to be sought while opening accounts.
For verifying the identity of customers at the time of commencement of an account-based relationship, Res
may rely on customer due diligence done by a third party. Key conditions for CDD through third party :
a. Records or the information of the customer due diligence carried out by the third party is obtained
within two days from the third party or from the Central KYC Records Registry.
b. The third party is regulated, supervised or monitored for, and has measures in place for, compliance
with customer due diligence and record-keeping requirements in line with the requirements and
obligations under the PML Act.
c. The third party shall not be based in a country or jurisdiction assessed as high risk.
d. The ultimate responsibility for customer due diligence and undertaking enhanced due diligence
measures, as applicable, will be with the RE.
9.0 Customer Due Diligence (CDD) Procedure
9.1 Customer Due Diligence (CDD) Procedure in case of Individuals
For undertaking CDD, REs shall obtain the following from an individual while establishing an account-based
relationship or while dealing with the individual who is a beneficial owner, authorised signatory or the
power of attorney holder related to any legal entity :
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(a) the Aadhaar number where,he is desirous of receiving any benefit or subsidy under any scheme notified
under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services)
Act, 2016 (18 of 2016); or he decides to submit his Aadhaar number voluntarily to RE.
(b) the Permanent Account Number or the equivalent e-document thereof or Form No. 60 as defined in
Income-tax Rules, 1962; and
(c) such other documents including in respect of the nature of business and financial status of the
customer, or the equivalent e-documents thereof as may be required by the RE :
Provided that where the customer has submitted, Aadhaar number, RE shall carry out authentication of the
customer's Aadhaar number using e-KYC authentication facility provided by the Unique Identification Authority
of India.
a) If customer wants to provide a current address, other than available in the Central Identities Data
Repository, he may give a self-declaration to that effect to the RE.
b) In case e-KYC authentication cannot be performed owing to injury, illness etc., REs shall,
apart from obtaining the Aadhaar number, perform identification preferably by carrying out
offline verification or alternatively by obtaining the certified copy of any other OVD or the
equivalent e document thereof from the customer. CDD done in this manner shall
invariably be carried out by an official of the RE.
Biometric based e-KYC authentication can be done by bank official / business correspondents / business
facilitators.
9.1.2 Accounts opened using OTP based e-KYC, in non-face-to-face mode, are subject to the following
conditions :
i. There must be a specific consent from the customer for authentication through OTP.
ii. the aggregate balance of all the deposit accounts of the customer shall not exceed rupees one
lakh. In case, the balance exceeds the threshold, the account shall cease to be operational, till
CDD as mentioned is complete.
iii. the aggregate of all credits in a financial year, in all the deposit accounts taken together, shall not
exceed rupees two lakh.
iv. As regards borrowal accounts, only term loans not exceeding rupees sixty thousand in a year
shall be sanctioned.
v. Accounts, both deposit and borrowal, opened using OTP based e-KYC shall not be allowed for
more than one year within which identification is to be carried out.
vi. If the CDD procedure as mentioned above is not completed within a year, in respect of deposit
accounts, the same shall be closed immediately. In respect of borrowal accounts no further debits
shall be allowed.
vii. A declaration shall be obtained from the customer to the effect that no other account has been
opened nor will be opened using OTP based KYC in non face- to-face mode with any other RE.
viii. REs shall have strict monitoring procedures including systems to generate alerts in case of any non-
compliance / violation, to ensure compliance with the above mentioned conditions.
9.1.3 REs may undertake live V-CIP, to be carried out by an official of the RE, for establishment of an
account based relationship with an individual customer, after obtaining his informed consent and shall adhere
to the following stipulations :
i. The official of the RE performing the V-CIP shall record video as well as capture photograph of the
customer present for identification and obtain the identification information as below:
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* Banks: banks/ BCs can use either OTP based Aadhaar e-KYC authentication or Offline Verification
of Aadhaar for identification. REs other than banks: can only carry out Offline Verification of Aadhaar
for identification.
ii. RE shall capture a clear image of PAN card except if e-PAN is provided.
iii. Live location of the customer (Geotagging) shall be captured to ensure that customer is physically
present in India.
iv. The official of the RE shall ensure that photograph of the customer in the Aadhaar / PAN details
matches with the customer undertaking the V-CIP and the identification details in Aadhaar / PAN shall
match with the details provided by the customer.
v. The official of the RE shall ensure that the sequence and / or type of questions during video
interactions are varied in order to establish that the interactions are real-time and not pre-recorded.
vi. In case of offline verification of Aadhaar using XML file or Aadhaar Secure QR Code, it shall be
ensured that the XML file or QR code generation date is not older than 3 days from the date of
carrying out V-CIP.
vii. All accounts opened through V-CIP shall be made operational only after being subject to
concurrent audit, to ensure the integrity of process.
viii. RE shall ensure that the process is a seamless, real-time, secured, end-to-end encrypted audio visual
interaction with the customer and the quality of the communication is adequate to allow identification
of the customer beyond doubt. RE shall carry out the liveliness check in order to guard against
spoofing and such other fraudulent manipulations.
ix. To ensure security, robustness and end to end encryption, the REs shall carry out software
and security audit and validation of the V-CIP application before rolling it out.
x. The audio visual interaction shall be triggered from the domain of the RE itself.
xi. REs shall ensure that the video recording is stored in a safe and secure manner and bears the date
and time stamp.
xii. RE shall ensure to redact or blackout the Aadhaar number in terms of Section 16.
xiii. BCs can facilitate the process only at the customer end and as already stated above, the official at the
other end of V-CIP interaction should necessarily be a bank official. Banks shall maintain the details
of the BC assisting the customer, where services of BCs are utilized. The ultimate responsibility for
customer due diligence will be with the bank.
9.1.4 Small accounts :
As an alternative, in case an individual who desires to open a bank account, banks shall open a 'Small
Account', which entails the following limitations:
i. the aggregate of all credits in a financial year does not exceed rupees one lakh;
ii. the aggregate of all withdrawals and transfers in a month does not exceed rupees ten
thousand; and
iii. the balance at any point of time does not exceed rupees fifty thousand.
Provided, that this limit on balance shall not be considered while making deposits through
Government grants, welfare benefits and payment against procurements.
Further, small accounts are subject to the following conditions :
a) The bank shall obtain a self-attested photograph from the customer.
b) The designated officer of the bank certifies under his signature that the person opening the account
has affixed his signature or thumb impression in his presence.
c) Provided that where the individual is a prisoner in a jail, the signature or thumb print shall be
affixed in presence of the officer in-charge of the jail and the said officer shall certify the same
under his signature and the account shall remain operational on annual submission of certificate of
proof of address issued by the officer in-charge of the jail.
d) Such accounts are opened only at Core Banking Solution (CBS) linked branches or in a branch where
it is possible to manually monitor and ensure that foreign remittances are not credited to the
account.
e) The account shall remain operational initially for a period of twelve months which can be extended
for a further period of twelve months, provided the account holder applies and furnishes
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evidence of having applied for any of the OVDs during the first twelve months of the opening of
the said account.
f) The entire relaxation provisions shall be reviewed after twenty four months.
g) Notwithstanding anything contained in clauses (e) and (f) above, the small account shall remain
operational between April 1, 2020 and June 30, 2020 and such other periods as may be notified by
the Central Government.
9.1.5 Simplified procedure for opening accounts by Non-Banking Finance Companies (NBFCs):
In case a person who desires to open an account is not able to produce documents, NBFCs may at their
discretion open accounts subject to the following conditions:
a) The NBFC shall obtain a self-attested photograph from the customer.

b) The designated officer of the NBFC certifies under his signature that the person opening the account
has affixed his signature or thumb impression in his presence.
c) The account shall remain operational initially for a period of twelve months, within which CDD shall
be carried out.
d) Balances in all their accounts taken together shall not exceed rupees fifty thousand at any
point of time.
e) The total credit in all the accounts taken together shall not exceed rupees one lakh in a year.
f) The customer shall be made aware that no further transactions will be permitted until the full KYC
procedure is completed in case Directions (d) and (e) above are breached by him.
g) The customer shall be notified when the balance reaches rupees forty thousand or the total credit
in a year reaches rupees eighty thousand that appropriate documents for conducting the KYC
must be submitted otherwise the operations in the account shall be stopped when the total balance in
all the accounts taken together exceeds the limits prescribed in direction (d) and (e) above.
KYC verification once done by one branch / office of the RE shall be valid for transfer of the account to any
other branch / office of the same RE, provided full KYC verification has already been done for the concerned
account and the same is not due for periodic updation.
9.2 CDD Measures for Sole Proprietary firms
 For opening an account in the name of a sole proprietary firm, CDD of the individual (proprietor) shall
be carried out.
 In addition to the above, any two of the following documents or the equivalent e documents thereof
as a proof of business / activity in the name of the proprietary firm shall also be obtained :
a. Registration certificate
b. Certificate / licence issued by the municipal authorities under Shop and Establishment Act.
c. Sales and income tax returns.
d. CST / VAT / GST certificate (provisional / final).
e. Certificate / registration document issued by Sales Tax / Service Tax / Professional Tax
authorities.
f. IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT or
Licence / certificate of practice issued in the name of the proprietary concern by any
professional body incorporated under a statute.
g. Complete Income Tax Return (not just the acknowledgement) in the name of the sole
proprietor where the firm's income is reflected, duly authenticated / acknowledged by the
Income Tax authorities.
h. Utility bills such as electricity, water, landline telephone bills, etc.
In cases where the REs are satisfied that it is not possible to furnish two such documents, REs may, at their
discretion, accept only one of those documents as proof of business / activity. Provided REs undertake
contact point verification.
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9.3 CDD Measures for Legal Entities
 For opening an account of a company, certified copies of each of the following documents or the
equivalent e-documents thereof shall be obtained :
a. Certificate of incorporation
b. Memorandum and Articles of Association
c. Permanent Account Number of the company
d. A resolution from the Board of Directors and power of attorney granted to its managers,
officers or employees to transact on its behalf
e. Documents, relating to beneficial owner, the managers, officers or employees, as the
case may be, holding an attorney to transact on the company's behalf.
 For opening an account of a partnership firm, the certified copies of each of the following
documents or the equivalent e-documents thereof shall be obtained:
(a) Registration certificate

(b) Partnership deed
(c) Permanent Account Number of the partnership firm
(d) Documents relating to beneficial owner, managers, officers or employees, as the case may
be, holding an attorney to transact on its behalf.
 For opening an account of a trust, certified copies of each of the following documents or the
equivalent e-documents thereof shall be obtained:
a) Registration certificate
b) Trust deed
c) Permanent Account Number or Form No.60 of the trust
d) Documents, relating to beneficial owner, managers, officers or employees, as the case may
be, holding an attorney to transact on its behalf.
 For opening an account of an unincorporated association or a body of individuals, certified

copies of each of the following documents or the equivalent e-documents thereof shall be obtained:
a) Resolution of the managing body of such association or body of individuals

b) Permanent Account Number or Form No. 60 of the unincorporated association or a body of
individuals
c) Power of attorney granted to transact on its behalf
d) Documents relating to beneficial owner, managers, officers or employees, as the case may
be, holding an attorney to transact on its behalf and
e) Such information as may be required by the RE to collectively establish the legal existence
of such an association or body of individuals.
- Unregistered trusts / partnership firms shall be included under the term 'unincorporated association'.
- Term 'body of individuals' includes societies.
- For opening accounts of juridical persons not specifically covered in the earlier part, such as
societies, universities and local bodies like village panchayats, certified copies of the following
documents or the equivalent e-documents thereof shall be obtained :
a) Document showing name of the person authorised to act on behalf of the entity;
b) Documents of the person holding an attorney to transact on its behalf and
c) Such documents as may be required by the RE to establish the legal existence of such an
entity / juridical person.
9.5 Identification of Beneficial Owner
For opening an account of a Legal Person who is not a natural person, the beneficial owner(s) shall be
identified and all reasonable steps to verify his / her identity shall be undertaken keeping in view the following :
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a) If the customer or the owner of the controlling interest is a company listed on a stock exchange, or is
a subsidiary of such a company, it is not necessary to identify and verify the identity of any
shareholder or beneficial owner of such companies.
b) In cases of trust / nominee or fiduciary accounts, satisfactory evidence of the identity of the
intermediaries and of the persons on whose behalf they are acting, as also details of the nature of the
trust or other arrangements in place shall be obtained.
10.0 On-going Due Diligence
- REs shall undertake on-going due diligence of customers to ensure that their transactions are
consistent with their knowledge about the customers, customers' business and risk profile; and the
source of funds.
- Without prejudice, following types of transactions shall necessarily be monitored:
a) Large and complex transactions inconsistent with the normal and expected activity of the
customer, which have no apparent economic rationale or legitimate purpose.
b) Transactions which exceed the thresholds prescribed for specific categories of accounts.
c) High account turnover inconsistent with the size of the balance maintained.
d) Deposit of third party cheques, drafts, etc. in the existing and newly opened accounts followed
by cash withdrawals for large amounts.
The extent of monitoring shall be aligned with the risk category of the customer.
- A system of periodic review of risk categorisation of accounts, with such periodicity being at least
once in six months, and the need for applying enhanced due diligence measures shall be put in
place.
- The transactions in accounts of marketing firms, especially accounts of Multi-level Marketing (MLM)
Companies shall be closely monitored.
- Cases where a large number of cheque books are sought by the company and / or multiple small
deposits (generally in cash) across the country in one bank account and / or where a large number of
cheques are issued bearing similar amounts / dates, shall be immediately reported to Reserve Bank
of India and other appropriate authorities such as FIU-IND.
11.0 Periodic Updation
Periodic updation shall be carried out at least
- once in every two years for high risk customers,

- once in every eight years for medium risk customers and
- once in every ten years for low risk customers.
- CDD, at the time of periodic updation.
- However, in case of low risk customers when there is no change in status with respect to
their identities and addresses, a self-certification to that effect shall be obtained.
- In case of Legal entities, RE shall review the documents sought at the time of opening of
account and obtain fresh certified copies as per extant requirement.
- REs may not insist on the physical presence of the customer.
- Normally, OVD / Consent forwarded by the customer through mail / post, etc., shall be
acceptable.
- REs shall ensure to provide acknowledgment with date of having performed KYC updation.
- The time limits prescribed above would apply from the date of opening of the account / last
verification of KYC.
- In case of existing customers, RE shall obtain the Permanent Account Number or equivalent e-
document thereof or Form No.60, failing which RE shall temporarily cease operations in the
account till the time the Permanent Account Number or equivalent edocuments thereof or Form
No. 60 is submitted by the customer.
- Before temporarily ceasing operations for an account, the RE shall give the customer an
accessible notice and a reasonable opportunity to be heard.
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- If a customer having an existing account-based relationship with a RE gives in writing to the RE
that he does not want to submit his Permanent Account Number or equivalent e-document
thereof or Form No.60, RE shall close the account.
12.0 Enhanced Due Diligence Procedure
Accounts of non-face-to-face customers (other than Aadhaar OTP based on-boarding):
REs shall ensure that the first payment is to be effected through the customer's KYC-complied account
with another RE, for enhanced due diligence of non-face-to-face customers.
13.0 Accounts of Politically Exposed Persons (PEPs)
REs shall have the option of establishing a relationship with PEPs provided that:
A) sufficient information including information about the sources of funds accounts of family members
and close relatives is gathered on the PEP;
B) the identity of the person shall have been verified before accepting the PEP as a customer;
C) the decision to open an account for a PEP is taken at a senior level.
D) all such accounts are subjected to enhanced monitoring on an on-going basis;
E) in the event of an existing customer or the beneficial owner of an existing account subsequently
becoming a PEP, senior management's approval is obtained to continue the business
relationship;
F) These instructions shall also be applicable to accounts where a PEP is the beneficial owner
14.0 Client accounts opened by professional intermediaries:
REs shall ensure while opening client accounts through professional intermediaries, that :
a) Clients shall be identified when client account is opened by a professional intermediary.

b) REs shall have option to hold 'pooled' accounts managed by professional intermediaries on
behalf of entities like mutual funds, pension funds or other types of funds.
c) REs shall not open accounts of such professional intermediaries who are bound by any client
confidentiality that prohibits disclosure of the client details to the RE.
d) All the beneficial owners shall be identified where funds held by the intermediaries are not co-mingled
at the level of RE, and there are 'subaccounts', each of them attributable to a beneficial owner, or
where such funds are co-mingled at the level of RE, the RE shall look for the beneficial owners.
e) REs shall, at their discretion, rely on the 'customer due diligence' (CDD) done by an intermediary,
provided that the intermediary is a regulated and supervised entity and has adequate systems in
place to comply with the KYC requirements of the customers.
f) The ultimate responsibility for knowing the customer lies with the RE.
15.0 Simplified Due Diligence Procedure
15.1 Simplified norms for Self Help Groups (SHGs)
a) CDD of all the members of SHG not required while opening the savings bank account of the SHG.
b) CDD of all the office bearers shall suffice.
c) No separate CDD as per the CDD procedure of the members or office bearers shall be necessary at
the time of credit linking of SHGs.
15.2 Procedure to be followed by banks while opening accounts of foreign students
- Banks shall, at their option, open a Non Resident Ordinary (NRO) bank account of a foreign student
on the basis of his / her passport (with visa & immigration endorsement) bearing the proof of identity
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and address in the home country together with a photograph and a letter offering admission from the
educational institution in India.
- A declaration about the local address shall be obtained within a period of 30 days of opening the
account and the said local address is verified.
- Pending the verification of address, the account shall be operated with a condition of allowing foreign
remittances not exceeding USD 1,000 or equivalent into the account and a cap of rupees fifty
thousand on aggregate in the same, during the 30-day period.
- Students with Pakistani nationality shall require prior approval of the Reserve Bank for opening the
account.
15.3 Simplified KYC norms for Foreign Portfolio Investors (FPIs)
Accounts of FPIs which are eligible / registered as per SEBI guidelines, for the purpose of investment
under Portfolio Investment Scheme (PIS), shall be opened by accepting KYC document as specified.
Provided that banks shall obtain undertaking from FPIs or the Global Custodian acting on behalf of the
FPI that as and when required, the exempted documents as detailed in Annex III will be submitted.
16.0 Record Management
The following steps shall be taken regarding maintenance, preservation and reporting of customer account
information, with reference to provisions of PML Act and Rules. REs shall,
a) maintain all necessary records of transactions between the RE and the customer, both domestic and
international, for at least five years from the date of transaction;
b) preserve the records pertaining to the identification of the customers and their addresses obtained
while opening the account and during the course of business relationship, for at least five years after
the business relationship is ended;
c) maintain records of the identity and address of their customer, and records in respect of transactions
referred to in Rule 3 in hard or soft format.
17.0 Reporting Requirements to Financial Intelligence Unit - India
While furnishing information to the Director, FIU-IND, delay of each day in not reporting a transaction or
delay of each day in rectifying a mis-represented transaction beyond the time limit as specified in the
Rule shall be constituted as a separate violation.
Reports to be furnished to Financial Intelligence Unit – India.

17.1 Cash Transaction Report (CTR).
-
Report of all cash transactions of the value of more than rupee ten lakhs or its equivalent in foreign
currency and all series of cash transactions , where such series of transactions have taken place
within a month and the aggregate value of such transaction exceeds Rupees ten lakh.
- However, individual entries below Rs. 50,000/- will not be reported in the Cash Transaction Report.
The CTR for each month will be submitted to FIU-IND by 15th of the succeeding month.
Monthly CTR submitted is available at the concerned branch under SENSRPT – 5/7 & 5/7a).
17.2 Suspicious Transaction Reports (STR) :

Defined under PMLA rules.
"Suspicious transaction" means a "transaction", including an attempted transaction, whether or not made in
cash, which, to a person acting in good faith:
a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in
the Schedule to the Act, regardless of the value involved; or
b) appears to be made in circumstances of unusual or unjustified complexity; or
c) appears to not have economic rationale or bona-fide purpose; or
d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to
terrorism.
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- STR to be submitted within seven days of arriving at a conclusion by the Principal Officer of
the Bank that any transaction or a series of transactions integrally connected are of suspicious nature.
- Bank will ensure not to put any restrictions on operations in the accounts where an STR has
been filed.
- The submission of STR will be kept strictly confidential, as required under PML Rules and it will be
ensured that there is no tipping off to the customer at any level.
- The primary responsibility for monitoring and reporting of suspicious transaction shall be of the
branch.
- For effective monitoring of transactions of the customers, Bank has implemented an AML system for
generation of AML alerts on day to day basis based on the pre-defined scenarios.
- An indicative list of behavioral/observation based scenarios has been circulated.
- In case any suspicious transaction is detected, the same be reported to Centralised AML Cell for
onward submission of Suspicious Transaction Report (STR) to Financial Intelligence Unit – India
(FIU-IND) through FINnet Gateway after getting the approval of Principal Officer of the Bank.
17.3 Counterfeit Currency Report (CCR) :

Cash transactions were forged or counterfeit currency notes have been used as genuine or where any forgery
of a valuable security or document has taken place facilitating the transactions will be reported to Financial
Intelligence Unit-India in the specified format by 15th of the succeeding month.
17.4 Non Profit Organisations Transaction report [NTR] :

Bank will report all transactions involving receipts by non-profit organizations of value more than rupees ten
lakh or its equivalent in foreign currency to the Director, Financial Intelligence Unit-India by the 15th
of the succeeding month.
17.5 Cross-border Wire Transfer [CWTR] :

Bank will file Cross-Border Wire Transfer Report (CWTR) to the Director, Financial Intelligence Unit-India by
15th of succeeding month for all cross border wire transfers of the value of more than Rs 5 lakh or its
equivalent in foreign currency where either the origin or destination of fund is in India.
18.0 Secrecy Obligations and Sharing of Information:
 Banks shall maintain secrecy regarding the customer information which arises out of the contractual
relationship between the banker and customer.
 Information collected from customers for the purpose of opening of account shall be treated as
confidential and details thereof shall not be divulged for the purpose of cross selling, or for any other
purpose without the express permission of the customer.
 While considering the requests for data / information from Government and other agencies, banks
shall satisfy themselves that the information being sought is not of such a nature as will violate the
provisions of the laws relating to secrecy in the banking transactions.
 The exceptions to the said rule shall be as under :
i. Where disclosure is under compulsion of law

ii. Where there is a duty to the public to disclose,
iii. the interest of bank requires disclosure and
iv. Where the disclosure is made with the express or implied consent of the customer.
19.0 CDD Procedure and sharing KYC information with Central KYC Records Registry (CKYCR)
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 In terms of provision of Rule 9(1A) of PML Rules, the REs shall capture customer's KYC records and
upload onto CKYCR within 10 days of commencement of an account-based relationship with the
customer.
 Operational Guidelines for uploading the KYC data have been released by CERSAI.
 REs shall capture the KYC information for sharing with the CKYCR as per the KYC templates
prepared for 'Individuals' and 'Legal Entities' (LEs).
 The 'live run' of the CKYCR started from July 15, 2016 in phased manner beginning with new
'individual accounts'. Accordingly, Scheduled Commercial Banks (SCBs) are required to invariably
upload the KYC data pertaining to all new individual accounts opened on or after January 1,
2017, with CKYCR.
 REs shall upload KYC records pertaining to accounts of LEs opened on or after April 1, 2021, with
CKYCR in terms of the provisions of the Rules ibid. The KYC records have to be uploaded as per the
LE Template released by CERSAI.
 Once KYC Identifier is generated by CKYCR, REs to communicate the same to the individual / LE
as the case may be.
 In order to ensure that all KYC records are incrementally uploaded on to CKYCR, REs shall upload /
update the KYC data pertaining to accounts of individual customers and LEs opened prior to the
above mentioned dates (01.01.2017 for individuals and 01.04.2021 for Legal entities), at the time
of periodic updation, or earlier, when the updated KYC information is obtained / received from the
customer.
 REs shall ensure that during periodic updation, the customers are migrated to the current CDD
standard.
 Where a customer, for establishing an account based relationship, submits a KYC Identifier to a RE,
with consent to download records from CKYCR, then such RE shall retrieve the KYC records online
from the CKYCR using the KYC Identifier and the customer shall not be required to submit the same
KYC records or information or any other additional identification documents or details, unless -
i. (there is a change in the information of the customer as existing in the records of CKYCR;
ii. the current address of the customer is required to be verified;
iii. the RE considers it necessary in order to verify the identity or address of the customer, or
to perform enhanced due diligence or to build an appropriate risk profile of the client.
20.0 Reporting requirement under Foreign Account Tax Compliance Act (FATCA) and Common
Reporting Standards (CRS)
Under FATCA & CRS, REs shall take following steps for complying with the reporting requirements :
 Register on the related e-filling portal of Income Tax Department as Reporting Financial Institutions.
 Submit online reports by using the digital signature of the 'Designated Director' by either uploading the
Form 61B or 'NIL' report.
 REs shall refer to the spot reference rates published by FEDAI for carrying out the due diligence
procedure for the purposes of identifying reportable accounts.
 Develop Information Technology (IT) framework for carrying out due diligence procedure and for
recording and maintaining the same.
 Develop a system of audit for the IT framework and compliance.
 Constitute a "High Level Monitoring Committee" under the Designated Director or any other
equivalent functionary to ensure compliance.
21.0 Period for presenting payment instruments
Payment of cheques / drafts / pay orders / banker's cheques, if they are presented beyond the period
of three months from the date of such instruments, shall not be made.
22.0 Operation of Bank Accounts & Money Mules
 The instructions on opening of accounts and monitoring of transactions shall be strictly adhered to, in
order to minimise the operations of "Money Mules".
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 If it is established that an account opened and operated is that of a Money Mule, it shall be deemed
that the bank has not complied with these directions.
23.0 Collection of Account Payee Cheques
 Account payee cheques for any person other than the payee constituent shall not be
collected.
 Banks MAY collect account payee cheques drawn for an amount not exceeding rupees fifty
thousand to the account of their customers who are co-operative credit societies, provided the
payees of such cheques are the constituents of such co-operative credit societies.
 A Unique Customer Identification Code (UCIC) shall be allotted while entering into new relationships
with individual customers as also the existing customers by banks and NBFCs.
 The banks / NBFCs shall, at their option, not issue UCIC to all walkin / occasional customers such as
buyers of pre-paid instruments / purchasers of third party products provided it is ensured that there is
adequate mechanism to identify such walk-in customers who have frequent transactions with them
and ensure that they are allotted UCIC.
24.0 Introduction of New Technologies - Credit Cards / Debit Cards / Smart Cards / Gift Cards / Mobile
Wallet / Net Banking / Mobile Banking / RTGS / NEFT / ECS / IMPS etc.
 REs shall ensure that appropriate KYC procedures issued from time to time are duly applied before
introducing new products / services / technologies. Agents used for marketing of credit cards shall
also be subjected to due diligence and KYC measures.
25.0 Correspondent Banks
Banks shall have a policy approved by their Boards, to lay down parameters for approving correspondent
banking relationships subject to the conditions stipulated by RBI.
 The responsibilities of each bank with whom correspondent banking relationship is established shall
be clearly documented.
 Correspondent relationship shall not be entered into with a shell bank.
 It shall be ensured that the correspondent banks do not permit their accounts to be used by shell
banks.
26.0 Wire transfer
REs shall ensure the following while effecting wire transfer :
- All cross-border wire transfers including transactions using credit or debit card shall be accompanied
by accurate and meaningful originator information such as name, address and account number
or a unique reference number.
- Interbank transfers and settlements where both the originator and beneficiary are banks or financial
institutions shall be exempt from the above requirements.
- Domestic wire transfers of rupees fifty thousand and above shall be accompanied by
originator information such as name, address and account number.
- Customer Identification shall be made if a customer is intentionally structuring wire transfer below
rupees fifty thousand to avoid reporting or monitoring. In case of non-cooperation from the
customer, efforts shall be made to establish his identity and STR shall be made to FIU-IND.
- Complete originator information relating to qualifying wire transfers shall be preserved at least for a
period of five years by the ordering bank.
- The receiving intermediary bank shall transfer full originator information accompanying a cross-border
wire transfer and preserve the same for at least five years if the same cannot be sent with a related
domestic wire transfer, due to technical limitations.
- Beneficiary bank shall report transaction lacking complete originator information to FIU-IND as a
suspicious transaction.
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27.0 Issue and Payment of Demand Drafts, etc.,
- Any remittance of funds by way of demand draft, mail / telegraphic transfer / NEFT / IMPS or
any other mode and issue of travelers' cheques for value of rupees fifty thousand and
above shall be effected by debit to the customer's account or against cheques and not
against cash payment.
- The name of the purchaser shall be incorporated on the face of the demand draft, pay order,
banker's cheque, etc., by the issuing bank.
28.0 Quoting of PAN
- Permanent account number (PAN) or equivalent e-document thereof of customers shall be

obtained and verified while undertaking transactions as per the provisions of Income Tax Rule
114B applicable to banks, as amended from time to time. Form 60 shall be obtained from
persons who do not have PAN or equivalent e-document thereof.
29.0 Hiring of Employees and Employee training
On-going employee training programme shall be put in place so that the members of staff are
adequately trained in AML / CFT policy.
30. PNB’s Internal Control System :

- At each Zonal Office, an Officer in the rank of AGM/CM be designated as Nodal Officer for
compliance of KYC Policy.
- Dy. Money Laundering Reporting Officer (DMLRO) cum Circle Compliance Officer (DMLRO
cum CCO).
- DMLRO cum CCO would be responsible for compliance of KYC Policy in all the branches under the
allotted Circle Office.
- Centralized AML Cell: Monitoring, analysis & closure of AML alerts, including Trade Based Money
Laundering (TBML) alerts, shall be done at Centralized AML Cell on day to day basis. Makers/
Checkers at Centralized AML Cell will analyze alerts pertaining to their respective assigned Zones /
Circles on day to day basis and will close the alerts after thorough analysis of the transactions / alerts
and ensuring that all the transactions are genuine in nature & match with the business profile of
customers.
- Post-closure scrutiny of closed alerts (@20%) shall be undertaken at Centralized AML Cell by
officers upto Scale-III.
- Further, Chief Managers at Centralized AML Cell will also review / scrutinize atleast 5% of the
closed alerts, pertaining to their respective assigned Zones / Circles, on sample basis.
- During analysis of alerts, special attention shall be given to alerts pertaining to TBML, High Risk
Customers, Politically Exposed Persons & High Value Transactions.
- Incumbent Incharge of branches will allocate duties and responsibilities for opening of accounts
through an Office Order to the staff members.
30.1 Digital KYC Process :

A. The Bank shall develop an application for digital KYC process which shall be made available at
customer touch points for undertaking KYC of its customers and the KYC process shall be undertaken
only through this authenticated application of the Bank.
B. The Application shall be accessed only through login-id and password or Live OTP or Time OTP
controlled mechanism given by Bank to its authorized officials.
C. The customer, for the purpose of KYC, shall visit the location of the authorized official of the Bank or
vice-versa. The original OVD shall be in possession of the customer.
D. The Bank must ensure that the Live photograph of the customer is taken by the authorized officer and
the same photograph is embedded in the Customer Application Form (CAF). Further, the system
Application of the Bank shall put a watermark in readable form having CAF number, GPS coordinates,
authorized official‘s name, unique employee Code (assigned by Bank) and Date (DD:MM:YYYY) and
time stamp (HH:MM:SS) on the captured live photograph of the customer.
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31.0 Implementation of Section 51A of the Unlawful (Prevention) Act, 1967 (Since 14.03.2019).
 The Unlawful Activities (Prevention) Act, 1967 (UAPA) was amended and notified on 31.12.2008,
which, inter-alia, inserted Section 51A to the Act.
 51A. For the prevention of, and for coping with terrorist activities, the Central Government shall have
power to —
 (a) freeze, seize or attach funds and other financial assets or economic resources held by, on behalf
of or at the direction of the individuals or entities Listed in the Schedule to the Order, or any other
person engaged in or suspected to be engaged in terrorism;
 (b) prohibit any individual or entity from making any funds, financial assets or economic resources or
related services available for the benefit of the individuals or entities Listed in the Schedule to the
Order or any other person engaged in or suspected to be engaged in terrorism:
 (c) prevent the entry into or the transit through India of individuals Listed in the Schedule to the Order
or any other person engaged in or suspected to be engaged in terrorism".
 The UAPA Nodal Officer for CTCR Division would be the Joint Secretary (CTCR), Ministry of Home
Affairs. His contact details are 011-23092736 (Tel), 011-23092569 (Fax) and jsctcr-mha@gov.in (e-
mail id).
 The Ministry of External Affairs, Department of Economic Affairs, Foreigners Division of MHA, FIU-
IND; and RBI, SEBI, IRDA (hereinafter referred to as Regulators) shall appoint a UAPA Nodal Officer
and communicate the name and contact details to the CTCR Division in MHA.
 The States and UTs should appoint a UAPA Nodal Officer preferably of the rank of the Principal
Secretary/Secretary, Home Department and communicate the name and contact details to the CTCR
Division in MHA.
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NOMINATION ENACTMENT
 The Banking Regulation Act was amended in 1984 and sections 45ZA to 45ZF were added to
 the Act for providing nomination facility in Banks. 
 In 1985, the Central Govt. made the “Banking Companies (Nomination) Rules (As per powers 
conferred on it in section 52 of the BR Act 1949) which was notified in official Gazette of India
on 29th March 1985. Nomination facility was introduced in banks with effect from this date. 
SCOPE
 Banks can provide nomination facility for deposit accounts, safe custody of articles and safe
deposit lockers. 

 Sec. 45ZA and 45ZB deal with the provisions for nomination deposit accounts section 45ZC
and 45ZD for safe custody and section 45ZE and 45ZF for safe deposit lockers. 

 Banks cannot provide nomination facility in respect of Jewel Loans, Cash Credit Account or
any such account other than the three mentioned above. 
NOMINATION FACILITY FOR DEPOSIT ACCOUNTS
 What Type of Accounts: Nomination facility is available only in respect of a deposit account
held in individual capacity (including sole prop. CA account) of the depositor(s) and not in any
representative capacity. As such no nomination can be made in case of accounts in the name of a
company, firm HUF, association trust, etc. 

 Minor’s Account: Where the deposit is the name of a minor, the nomination will be made by
his legal guardian. In case of self operated minor accounts no nomination can be accepted. 

 Non-resident Accounts: Nomination facility is available. 
 Joint Account: Nomination should be made jointly by all joint account holders even if the
account is operated by either or survivor or former or survivor. 
Who can be appointed as nominee?

 Only Individuals can be appointed as nominee. Nomination cannot be made in favour of
firms/companies/H U F or any representative body. 

 In case of deposits,only one person can be appointed as nominee; for a particular account . (This
provision is different in safe deposit locker accounts). 

 A minor can be appointed as nominee. However in such cases another adult (not necessarily
his/her guardian or relative) must be named to receive the deposit on behalf of the minor, in case
of the death of depositor(s) during the minority of the nominee. 

 Nonresidents including foreign nationals can be appointed as nominee. However, on the death of
depositor the deposit proceeds cannot be repatriated without obtaining prior permission from
Reserve Bank. 

 A lunatic cannot be appointed as nominee. 
How to Nominate
 In case of joint accounts all depositors must join together to nominate. 

 Nomination is required to be made in Form DA1 (PNB-819 A) must be attested by one witness
and in case the depositor(s) is illiterate the thumb impression (in form DA1) must be attested by
two witnesses. 

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 Separate nominations need be obtained in respect of different deposit accounts. 

 The bank should brand the pass book/receipt and relative ledger folio with the stamp
“
NOMINATION OBTAINED”. 

 RBI has advised that at the written request of a customer the bank may mention the name of the
nominee in SB pass book/term deposit receipt. 
Cancellation and Variation of Nomination

 An existing nomination can be cancelled by the sole depositor (or by all the depositors in a joint
 account). The form to be used is DA 2(PNB-819 B) 
 The variation of nomination can be made by all depositors, by using form DA3 (PNB-819 C) 

 In case of the death of one of the joint depositors, the cancellation or variation can be made
under the signature of all surviving depositors/depositor. 
Renewal of Deposit Account
 No fresh nomination need be made when a deposit account is renewed. The existing nomination
does not cease to operate merely by reason of the renewal of the deposit. 
Change in the style of the account
 Where the style of the account is changed, or some addition/deletion in the name of depositors is
made, the nomination stands cancelled. 
Payment to Nominee
 Nominee‟s right to receive payment arises only on the death of the sole depositor or on the death
of all depositors in a joint account. 
 Nominee has the only right to receive the deposit proceeds on the depositor‟s) death. He has no
right to operate the account, to renew the same or to avail loan against it or to substitute his name
in place of depositor or to add his name in the deposit. 

 A term deposit can be paid (at the request of the nominee) before its maturity. No penalty (1%)
 need be charged in case of such foreclosure. 
 Before paying the amount to the nominee the bank must ask for the Death Certificate and take
identification of nominee on the prescribed form (PNB- 831).and must ensure that there is no
restraint order from court.(IAD cir 28/11 dated 8.6.11) 
Legal position on Payment to Nominee
 On the death of the depositor(s) the nominee is entitled to receive the balance. The bank need not
take into account any other notice or claim except the order of a competent Court. 

 The nominee does not become the owner of the proceeds by virtue of his right to receive the
payment. Any person having a right over the balance can claim it from the nominee.So, nominee
will receives the payment as trustee of legal heirs. 
Miscellaneous
 The formats for nominations; alteration of nominations, and variation of nomination are
prescribed in Banking Companies (Nomination) Rules 1985 

 A depositor can be allowed to split his deposit for the purpose of appointing different nominees.
This will not be considered as a premature closure. 

 In case of deposit accounts under Capital Gains Accounts Scheme 1988 a maximum of three
nominations under both schemes Account- A (Savings Fund), Account-B (Term Deposit) is
permitted. 

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 In case of pension accounts there should be two types of nominations; one for payment of
pension arrears which is made under “Arrears of Pension (Nomination) Rule 1983”. The other is
made under Banking Companies Nomination Rules 1985. 

 If the nominee does not turn up even after 6 months from the death of the depositor/locker
holder, a notice should be sent by the bank to the nominee. 
NOMINATION FACILITY FOR ARTICLES KEPT IN SAFE CUSTODY

 Nomination facility is available only where the articles are held in single name of individuals. In
other words Safe Custody (Account) in Joint Names is not eligible for nomination. (Note the
differences from deposit account and lockers where nomination is acceptable in account in joint
names). Like deposit accounts nomination is also not available on safe custody deposits made in
representative capacity. 

 Where a minor delivers the goods for safe custody, the nomination will be made by his lawful
guardian. 

 Only one individual can be appointed as nominee. Where the nominee is a minor, any other adult
should also be appointed to receive the articles in the event of the death of the depositor during
the minority of the nominee. 

 The nomination will be made by using form SC-I (PNB-820 A) while cancellation and variation
of nomination are to be made by using form SC-2 and SC-3 (PNB-820 B, 820-C) respectively. 

 Separate nomination form should be obtained for each lodgement. 
 All other terms and conditions of nomination in safe custody account are same of those
applicable to deposit accounts. 
NOMINATION FACILITY IN SAFE DEPOSIT LOCKER ACCOUNTS

 The main points of difference between nomination facility in deposit account and that of
Safe Deposit Locker Account are the following: 
Number of Nominees
 In case of safe deposit locker account in joint names more than one person can be
appointed as nominee.Each hirer can have its own nominee. However, the maximum
number of nominees will be restricted to the number of joint account holders. 
Others:
 Nomination is a rule rather than exception. 

 BM has full powers to make payment, release articles and handover contents of
locker to nominee after death of depositor/locker hirer. 

 Acknowledgement must be sent to the customer. 

 Guardian will sign Nomination forms in the account of Minor. 

 Pass book must contain remarks” Nomination Registered”(IAD cir 28/11 dated 8.6.11) 
While making nomination, cancellation or change thereof, it is not required to be attested
by witnesses. However, in case of thumb impression of the account holders obtained on
nomination forms, are required to be attested by two witnesses.(RMD Cir. 33/15 dt
12.08.2015)
Forms to be Used
 Form SL 1 (PNB-821 A) is to be used by a sole hirer for making nomination. 
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  Form SL 1A (PNB-821 B) is to be used where the locker is hired in joint names. 
 Form SL 2 (PNB-821 C) is to be used for cancellation of nomination. 
 Form SL 3 (PNB-821 D) is to be used for variation of nomination by a sole hirer. 
 Form SL 3A (PNB-821 E) is to be used for variation of nomination by joint hirer. 
Delivery of Locker Content in Case of Joint Accounts
 In the event of the death of one or more joint hirers the contents of the locker are
 deliverable to the nominees along with the surviving joint hirer/hirers. 
 In case of lockers with either or survivor clause or former or survivor clause, on the event
of death of one of the hirers the survivor can take delivery of goods only along with the
nominee(s). In other words, where there is a nomination, the survivors have no right to
 take delivery of the contents without the consent of nominees. 
 They also cannot change the nominations unlike deposit accounts. 
Preparation of an Inventory of the contents of the Locker
 Before permitting the removal of the content of a locker by the nominee (or by nominees
along with surviving hirers) an inventory of the content of the locker must be prepared. 
  Sealed/closed packets, if any, need not be opened. 
  It should be signed by the nominee(s) surviving heirs. 
 The nominee(s) and survivors are entitled for a copy of the inventory. 
Particulars Deposit accounts Safe custody Safe deposit vault (locker)

Section 45ZA 45ZC 45ZE,45ZF
Nomination 819A 820A 821A ,821B*
Cancellation 819B 820B 821C
Substitution/ 819C 820C 821D
Variation 821 E*
* To be used for nomination/variation for more than one person.
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CUSTOMER SERVICE AND GRIEVANCE REDRESSAL
CUSTOMER SERVICE
The most crucial measure of performance of a service industry is the level of satisfaction of
its customers.
Some of the important measures, pursuant to the recommendations of the working group on
Customer service in Banks (Talwar Committee recommendations, 1977 {176
recommendations}, Goiporia committee recomedations, 1991, 97 recommendations and
S.S.Tarapore committee on Procedures and performance audit on Public services) are as
under:
The important recommendations of the working groups/ committees on customer service in
the banks are as under: looked in to the aspect of customer service

Opening & Closing of bank counters in time and prompt commencement of customer
service: It must be ensured that all counters begin their work in time and no counter is left
 unattended during the customer hours. Incumbent Incharge may consider starting of office
hours 15 minutes prior to banking hours, at theirs. This would facilitate the staff to
settle on counters well in time and cash would also be available to the cashiers/SWO‟s.
All the customers
 who enter the banking hall before the close of business hours should
 be attended to.

Cleanliness & Upkeep of premises & provision of adequate facilities to make the
 customer's waiting time comfortable. 

Sitting plan and uninterrupted service to the customers: Sitting plan of the office
should be functional and designed to facilitate smooth and speedy flow of work. Work
 allocation in such a way that no counter is closed  during the working hours and
uninterrupted service is rendered to the customers.

MAY I HELP YOU' counters/Display of indicator boards: display of indicator e
 Boards at all the workcounters, enabling the customers to be guided about the actual
work being transacted.

MAY I HELP YOU' counters, in the branches with a staff strength of 10 or above , to

be manned by suitable persons. At smaller branches, provision must  exist for an
enquiry window for attending to the enquiries and help the customers.

Display of time norms and adherence thereto: The poster of norms for important
services must be conspicuously displayed in the banking hall for guidance of
customers. Endeavour must be made to provide services to clientele within the time
norms prescribed given below. The time norms prescribed for various important
services may be taken as a guiding factor and our endeavour should be to complete the
transactions as speedily as possible and taking the norms as a maximum limit. In this
 
regard, particular care must be exercised in rendering more common services like
encashment of cheques and issuance of drafts etc.
Norms for important services at the branch: (1) For encashment of a cheque: (a)
through SWO/Teller -- 3 to 8 minutes; (b) through Cashier -- 8 to 15 minutes. (2)
Receipt of cash (depending upon the denomination --10 to 20 minutes (3) For issuance
of demand draft/ remittances/traveller cheques/ term deposit receipt --- 15 to 25
minutes. (4) Payment of demand drafts -- 10 to 20 minutes. (5) Payment of term deposit
receipts -- 15 to 20 minutes. (6) Opening of an account -- 20 to 25 minutes (7)
Retirement of bills --20 to 30 minutes (8) Completion of pass books (for a few entries) -
- 5 to 15 minutes. (9) Statement of accounts - Within 7 days from due date. (10)
Collection of Cheques (a) Local - 1 to 3 days (b) Outstation -- 10 to 14 days. (11)
Issuance of cheque book -- Within 15 minutes
Customer Service Committee

Customer Service Committee is to be set up at branches for reviewing the quality of customer
service on an ongoing basis; their constitution will be as under:
144
1. CM/Manager : Chairman
2. Sub Manager/AM/Officer : Member (Convener)
3. Other Officer(s) : Member
4. Clerical Cadre : Member
Members under 3 & 4 category will be rotated after an interval of 6 months. Minimum 2
required to hold meetings.
Periodicity – at least monthly
Bank union representative may be included.
Customers to be invited once in quarter.
Minutes to be recorded & copies be sent to CO.
BANKING OMBUDSMAN SCHEME -2006
- Scheme has been framed and notified under Sec 35A of Banking Regulation Act 1949
- It is applicable to all banks (as defined in Part I of BR Act 1949) throughout India, whether
incorporated in or outside India.
OBJECTIVE :-To enable resolution of complaints relating to provision of Banking Services and to
resolve disputes between a bank and its constituent as well as between one bank and another.
APPOINTMENT:-RBI may appoint one or more persons to carry out the functions entrusted under
the scheme.
JURISDICTION:- As specified by RBI from time to time
QUALIFICATION:-A person of high-standing in legal/banking/financial services/ public

administration/ management sector. If such person is a civil servant he should be in the rank of Joint
Secretary or above in Govt. of India.
POWERS & DUTIES

  To receive complaints relating to provision of banking services. 
 To facilitate satisfaction or settlement by agreement, through conciliation and mediation or
 by passing award in accordance with this scheme. 
 To resolve by away of arbitration such disputes between banks or between bank and its
constituents as may be agreed upon by the contesting parties provided the value of the claim
in such disputes is within Rs. 20 lacs (Rs. One lakh for credit card cases). 
PROCEDURE OF FILING THE COMPLAINT

 The consumer should first give a written representation to the bank, in question. If the bank
rejects the claim or does not reply or the reply is unsatisfactory, the complainant is free to
write to the banking Ombudsman, but after 1 month and before one year since lodgement
of the complaint with the bank. The complaint should not be in respect of the same subject
matter which was settled or dealt with on merits by the Banking Ombudsman in any previous
proceedings whether or not received from the same complainant or along with one or more
 complainants or one or more of the parties concerned with the subject matter. 
145
 The complaint should not pertain to the same subject matter, for which any proceedings
before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or
order has been passed by any such court, tribunal, arbitrator or forum. 
  The complaint is not frivolous or vexatious in nature. 
 The complaint can be made in electronic mode too. 
APPEAL
Any person aggrieved by the Award or rejection of the complaint may, within 30 days of the date of
receipt of the Award / rejection of complaint, may prefer an appeal against the Award before the
Appellate Authority i.e. Dy. Governor of RBI. In case of appeal by the bank, the period of 30 days
for filing an appeal shall commence from the date of receipt of acceptance of the award by the
complainant.
The Appellate Authority may, if he is satisfied that the applicant had sufficient cause for not
making the appeal within time, allow a further period not exceeding 30 days.
CONSUMER PROTECTION ACT 1986
EXTENT/COVERAGE:
All goods & services including Banking, insurance, transport, processing, electricity, physicians etc.
All sector - private, public & cooperative. The act extends to whole of India except J&K. J&K has a
separate act on similar lines.
WHO CAN FILE A COMPLAINT?

� A consumer, individually or jointly, representative or legal heir of the consumer.
� Any voluntary consumer organization.
� Central & State Government.
WHO IS A CONSUMER?
A person who buys goods for a consideration, which has been paid or promised to be paid or partly
paid and partly promised to be paid or a person who buys under any system of deferred payment; and
includes any user of such goods who uses the goods with the approval of the purchaser. Persons
buying for resale or for any commercial purposes are not consumer. One who hires services for
consideration.
The Complaint means any allegation in writing made by a complainant alleging adoption of any
unfair trade practice or restrictive trade practice by any service provider or deficiency in service
hired or availed of or excess charging for any services with a view to obtaining any relief under the
Act.
WHAT IS THE LIMITATION PERIOD FOR FILING COMPLAINT?

Two years from the date of cause of action (Sec 24A). Cause of action arises on the date on which
the consumer comes to know of the deficiencies in service or the defect in goods or the thing
complained of.
146
WHAT IS THE JURISDICTION FOR COMPLAINT?
OFFICE VALUE/COMPENSATION
NationalConsumerDisputesRedressal Claim is above Rs.10 Crore
Commission (National Commission)
Claim is above Rs.1 cr but does not exceed
State Consumer Disputes Redressal Commission Rs.10 Crore
(State Commission)
Complaints in which the value of the
services and the compensation, if any,
District Consumer Disputes Red ressal Commission claimed does not exceed Rs.1 cr
(District Forum)
WHAT IS THE TIME LIMIT FOR DECIDING COMPLAINTS/APPEALS?

Without analysis/testing of commodities : 3 months
With analysis/testing of commodities : 5 months
National & State Commissions : 3 months
WHICH IS THE OFFICE FOR APPEAL?
DECISION OF WHOM TO APPEAL

District Forum State Commission
State Commission National Commission
National Commission Supreme Court
Appeals are to be made within 30 days of receipt of decree from lower forum/commission.
IS THERE ANY PENALTY FOR NON-COMPLIANCE OF ORDERS OF THE

FORUM/COMMISSION OR FOR COMPLAINTS OF FRIVOLOUS NATURE?
If any person fails or omits to comply with any order made by a Forum/Commission, he shall be
punishable with imprisonment for a term, which shall not be less than one month, but may extend to
three years, or with fine, which shall not be less than Rs. Twenty Five Thousand, but may extend to
Rs. One lakh, or with both.
147
RIGHT TO INFORMATION ACT 2005
Right to information Act (RTI), 2005 has come into force in India (except J&K) w.e.f. October, 13,
2005.
What is RTI: U/s 2-j, It is right to information available to Indian citizens to access the
information (including inspection) under control of the public authorties.
Who can get the information: Only citizens of India can get information from Public authorities.
Hence, the information seeker will have to give his citizen status while seeking the information.
Information (Sec2-f): It means the material in any form i.e. records, documents, memos, e-mail,
opinions, advices, press releases, circulars, orders , log books, contracts, reports, papers, samples,
models, data material held in any private body that can be accessed by a Public Authority under any
law for the time being, in force, Sections 8 & 9, provide for certain categories of information that is
exempt from disclosure.
Coverage/Public Authority (Sec 2-h): Public Authority under RTI Act, means any authority or
institution established under the Constitution, law made by Parliament/ State Legislature or by
notification issued or order made by the appropriate Government. It includes large departmental
undertakings including Railways, Telecom, Postal Services, Passport and Banking.
Obligations to maintain and publish information (Section 4): Every Public Authority is required
to maintain all its records duly catalogued and indexed in a manner and in the form which facilitates
the right to information under this Act and ensure that all records that are appropriate to be
computerized are, within a reasonable time and subject to availability of resources.
Who is to provide information: Each organization will have Public Information Officer to provide
this information who is to route the requests to the relevant departments.
Banks obligation under the Act: Reserve Bank of India and public sector Banks are a pubic
authority as defined in the Right to Information Act, 2005. As such, they are obliged to provide
information to members of pubic.
How to make an application under the Act: Citizens of India will have to make the request for
information in writing, clearly specifying the information sought under the RTI Act, 2005. The
application for request should give the contact details (postal address, telephone number, fax
number, email address) so that the applicants can be contacted for clarifications or the information.
Fee for seeking information: A request for obtaining information under Section 6(1) is to be
accompanied by an application fee of Rs. 10.
Reply: Requests for information will be way of letters or eMail to be sent to PIO. Response must
come in 30 days. For cases concerning life and liberty, it must come within 48 hours.
Rejections: Rejection has to be in writing, giving reasons.
148
SETTLEMENT OF CLAIM CASES
To provide prompt and efficient customer service, early settlement of deceased claims in deposit
accounts is very much important. On receipt of information that a depositor has died, a note may be
made on the ledger sheet in writing/system with date and source of information, a line should be
drawn below the last debit entry and operation in the account be stopped. The information should be
noted under the initials of the official.
As part of efficient customer service, steps should be taken to ensure expeditious settlement of claim
cases in deceased accounts. As per the recommendations of Goiporia Committee on Customer
service in view of avoiding difficulties in disposal of claim cases, nomination should be encouraged.
With the view of minimizing the hardship to the legal heirs of the deceased, as per the new
guidelines, bank should not insist upon the legal representation (succession certificate, letter of
administration etc.). No limit is prescribed below or beyond which legal heirs be asked to
produce succession certificate (refer Law Divn.Cir.5/2015 dated 13.10.2015).
Therefore, if Incumbent is satisfied that legal heirs are identifiable and there is no dispute in respect
of claim with bank, amongst legal heirs, there is no necessity of requiring production of legal
representation.
Chapter II: Settlement of claim in nominated accounts.
Chapter III: Whenever it comes to the notice of the branch that a depositor has died, caution should
be maked on the following documents:
- AOF
- Specimen Signatures Slip
The operation in the account should be stopped immediately. Nominee should be advised to produce
following documents:
1. Death Certificate (issued by competent authority)
2. Claim form – PNB 831 Annex.E
3. Claim form should be verified by Magistrate or Notary Public or Gazetted Officer or
Bank Officer
4. Pass Book and/or FDR
5. Acknowledgement of nomination (if any)
After the identification of nominee balance in account may be paid. The Incumbents have full
powers to sanction of payment/delivery of articles in accounts where nomination is available
including lockers. (For details refer the chapter of nomination)
Settlement of claim in Non-nominated Accounts

On receipt of the information that depositor has died the caution should be marked on AOF,
Specimen Signatures lip/system. The operation in the account should be stopped (if nothing
contrary to it is there in case of partnership accounts).
List of documents
- Death certificate (issued by competent authority)
- PNB 46-47 claim form (claim form can be signed by one major legal heir)
- PNB 46-47 should be duly verified by Magistrate or Notary Public
- Power of Attorney in case of more than one claimants, duly verified by Magistrate or Notary
Public
- Indemnity bond by claimant (if required)
- Will/succession certificate (if required)
- Stamped full and final receipt
- Probate letter in case of will
Other guidelines
149
Value of claim not exceeding Rs. 5000/-: In far flung rural areas and where settlement of claim
cases involving small amount, claimant may find it difficult to get the claim form attested by a
Notary or Magistrate. In such cases where total amount does not exceed Rs. 5000/- and no legal
representation is produced, attestation of claim form need not be insisted upon. Instead claimant be
asked to obtain certificate from Sarpanch verifying the legal heirs.
Value of claim not exceeding Rs. 50000/-
In claim cases involving an amount/ value not exceeding Rs. 50000/- payment may be made to the
legal heirs of the deceased customer, after relying on the declaration made in the claim form about
the legal heirs of the deceased, duly attested by Notary/Magistrate. Payment can be made to legal
heirs/ claimants against execution of an agreement of indemnity In such cases, payment may be
made to legal heirs, relying on the declaration made in claim form duly attested by
Magistrate/Notary Public.
Payment can be made to the legal heirs on the execution of indemnity bond, Gold ornaments or other
security held against advances may be released on adjustment of advances
No confidential enquiry is needed.
Value of claim exceeding Rs. 50000/-

In claim cases involving amount exceeding Rs. 50000/-, confidential enquiry be made by the
Incumbent Incharge about the legal heirs of the deceased as disclosed in the form. Claim may be
settled and paid to the legal heirs of the deceased against indemnity bond and surety to the
satisfaction of the Incumbent.
Legal representation
No limit is prescribed below or beyond which legal heirs be asked to produce legal representation.
So, if the Incumbent is satisfied those legal heirs are identifiable and there is no dispute amongst the
legal heirs, there is no need of asking succession certificate. Claim may be settled on the basis of
indemnity bond and surety to the satisfaction of the bank. As a rule surety worth double the amount
of claim need not be insisted.
Death, Insolvency and Insanity of a customer: Notice or knowledge of death, insolvency or

insanity of a customer precludes the bank from paying further cheques on his account even though
these are dated prior to death, insolvency or insanity.
Joint Accounts
In case of joint accounts where operation is allowed by way of Either or survivor/Former or survivor,
the account will continue to run and payments can be made to survivors, unless at or before the time
of payment, order of court or other competent authority has been received prohibiting the payment to
the survivors. The survivor should be requested to transfer the balance into a new account in his own
name, singly or jointly.
When due to any reason if payment has been prohibited by competent authority, the balance in
account is not payable to survivor, the operation in the account must be stopped and treated as claim
case.
Partnership accounts:
Upon the death of a partner in a partnership, the operation in the account will be stopped. However,
if there is contract contrary to it (in the account opening form PNB-38 and/or partnership deed), the
account will continue to run. In case of termination of operations, the account will be treated as claim
case and legal heirs/partners will be asked to settle the claim.
Joint Hindu Family: In case of Joint Hindu Family account, when a death of a major co-parcener
occurs, the operation in the account will be stopped and dealt with as a claim case.
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Power of Attorney
It happens many a time that all the legal heirs are not able to join in for execution of documents and
receiving payments. In such circumstances, those legal heirs who cannot join may execute power of
attorney in favour of one of the prescribed proforma for deposit accounts or locker accounts. The
Power of Attorney should be stamped as per the Stamp Act in force and duly notarized.
Power of Attorney if executed abroad, is required to be stamped in India within three months after
the same is received in India.
In case of Power of Attorney, the holder will sign execute the receipt and indemnity on behalf of self
and on behalf of the legal heirs who have authorized him. The name of executors should be
specified.
Any modification in the Performa, if required, may be got done in consultation and bank‟s
counsel/Law Officer at CO.
Settlement of Claim cases of the deceased customers of the Bank – Further simplification of the
procedure
As per the extant guidelines the claims of the deceased customers may be settled in favour of one of
the legal heirs of the deceased if the other legal heirs execute a Power of Attorney (duly notarised) in
his favour on the basis of which such authorized legal heir can sign the Claim Application Form for
himself and for and on behalf of other legal heirs as also execute Indemnity Bond / Letter and give
valid discharge to the bank by signing the Receipt in token of having received the proceedis of the
claim / contents of the locker. This facilitates smooth settlement of the claims as all the legal heirs
need not to join the claim settlement process and visit the branch. The purpose of obtaining the
duly notarized Power of Attorney is that there is a presumption in law that such a Power of
Attorney has been duly executed and the chances of raising dispute in respect of its due
execution are minimized.
Accordingly, it is advised that in respect of claims upto the value of Rs. 2.00 lac in place of existing
requirement of execution of Power of Attornery, a Power of Attorney or a Letter of Consent-cum-
Relinquishment, duly notarized /attested, may be executed by the legal heirs in favour of one of the
major legal heirs to lodge claim, to execute documents, to receive claim amount, etc. However, the
Branch Manager will verifiy the identity of the executants of the Letter to his satisfaction before
acting on the Letter of Consent-cum-relinquishment..
151
CHEQUE COLLECTION POLICY
On the recommendations of IBA and BCSBI and directives of RBI, bank
formulated a policy on cheque collection and placed the same on website so
Background the public in general can have of the policy
Our commitment to provide better customer service

Set higher standards of performance
Transparency and fairness in treatment of customers
Objectives
Quick collection service to customers.
• Collection of cheques payable locally
• Time norms for collection of instruments
Coverage • Payment of interest in cases of delay beyond time norms
• Dealing with collection instruments lost in transit
Cheques/Negotiable instruments deposited at the counter or put in the boxes

within branch premises before cut-off time will be presented on the same day
and other cheques received after cut-off time will be presented in next
clearing cycle..
Credit will be afforded on the day clearing settlement takes
place. Withdrawals will be permitted as per Cheque Return Schedule of the
Clearing House. Wherever applicable Facility of same day credit can be
Local cheques provided to High Value customers.
Outstation Collection will be made through bank‟s own branches at the center. But in
Cheques case there is no branch, the cheque will be collected through other banks‟
branches.
Bank will also use National Clearing Service offered by RBI at specified centers.
Branches connected on CBS network will pay the cheques on the same day.
Outstation Speed clearing of RBI is available in all MICR centres. Cheques payable at any
Cheques CBS branches of any banks of any centres to be collected through local clearing
and not through outstation collection.
Collection will be made through bank‟s own branches at the center. But in case
there is no branch, the cheque will be collected through other banks‟ branches.
Collection of third Bank will also use National Clearing Service offered by RBI at specified centers.
Party cheque
Bank will not collect account payee cheques for any person othr than the
payee constituents.However,
1. Banks may consider collecting account payee cheques drawn for an
amount not exceeding Rs.50,000/- to the account of their customers who
are Co-operative Credit Societies, if the payees of such cheques are the
constituents of such Co-Operative credit societies.
2. While collecting the cheques as aforesaid, Banks should have a clear
representation in writing given by the Co-operative Credit Societies
concerned that upon realization, the proceeds of the cheques will be
credited only to the account of the member of the Co-operative Credit
Society, who is the payee named in the cheque.
3. This shall , however be subject to the fulfillment of the requirements of the
provisions of Negotiable Instruments Act 1881, including section 131thereof.
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Cheques payable In case the bank has branch at the foreign center, cheque will be collected
in Foreign through that office.
Countries
The services of correspondent banks will be utilized in countries/centers where
correspondent bank has presence.
Otherwise cheques will be sent directly to the drawee banks for collection. The
proceeds will be received through Nostro account of the bank maintained with
one of the correspondent banks.
Immediate All branches and Extension Counters are authorized to consider providing
immediate credit for 3rd party cheques up to aggregate value of Rs.15000/-
Credit (Outstanding at any given point of time) tendered by:
Up to 15000/- • Individual account holders
• Staff members are also allowed.
• NRIs are excluded
• Minors are excluded
The facility is available for SF/CA & CC accounts of the customers.
Pre-Requisites:
The account should be opened at least 6 months earlier
KYC norms have been complied with
Conduct of account has been satisfactory.
 No cheques returned unpaid for which immediate credit was afforded
during past 3 months.
 There was no difficulty in recovery on account of cheques returned in the
past.
Bank to charge normal collection charges and out of pocket expenses
Bank shall levy normal collection charges and out of pocket expenses while
providing immediate credit against outstation instruments tendered for
collection. Exchange charges applicable for cheque purchase will not, however
be charged.
Interest on cheques retuned unpaid
SF/CA: No interest will be payable on the amount so accounts credited.
Charging of
Returning charges and interest @ Clean overdraft rate will be charged on per
Interest on
day basis from the date of return till date of re-imbursement to the
cheques
bank/liquidation of OD.
returned unpaid
CC/OD. The interest applicable to the account will be accounts recovered from
where Instant
the date of affording such credit till date of return of the cheque. Further
Credit was
returning charges and interest @ clean overdraft rate or applicable rate to the
given
account whichever is higher will be charged till the reimbursement of the
amount or liquidation of Overdraft.
Time Frame Credit arising out of local cheques shall be given to the customer‟s accounts
for immediately after closure of the relative return clearing and withdrawal shall be
Collection of allowed on the same day or maximum within an hour of commencement of
Local Cheques business on the next working day, subject to usual safeguards.
The time Drawn on CBS branch and presented in Instant credit CBS branch Drawn on
frame for branches/other banks in Within 7 days Metro/state capitals Drawn on branches
collectio of in Other areas Within 10 days Drawn on other banks at other areas Within 14 days
outstation For delay over above periods interest to be paid.
Cheques Such instruments are drawn on best of efforts basis. Bank may enter into
153
drawn on specific collection arrangement with correspondent bank for speedy
foreign collection. Bank would give credit to the party on credit of proceeds to the
countries bank‟s Nostro Account with the correspondent bank after taking into account
cooling periods as applicable to countries concerned. The Above time norms are
maximum and applicable whether cheques/instruments are drawn on Bank‟s own
branches or other branches.
154
Interest on delayed collection will be paid without any demand from the
customer in all types of accounts.
Saving/Current accounts
• SF rate for the period of delay beyond 7/10/14 days as the case may
be.
•FD rate as applicable for the period if delay is beyond 14 days but up
to 90 days.
•2% above FD rate if there is delay exceeding 90 days.
Overdraft/Loan accounts
•Interest at rate applicable to loan account if delay is up to 90 days.
Delayed
•2% above loan rate if delay is beyond 90 days
Collection
Payment of Interest to be paid if it amounts Rs. 10/- or more and instruments
Interest
Sent for collection in India.
Non CTS cheques:
Customer should be notified that in case of Non CTS cheques, there may be delay
in realization . Bank‟s is making efforts to withdraw the Non-CTS cheques in
circulation. However, there is still a large volume of Non-CTS-2010 format
cheques being presented in image ased clearing. In view of this, RBI has
decided to put in place the separate clearing session for clearing of these
cheques in CTS Centres. This separate clearing session will initially operate
thrice a week. Thereafter, the frequency of such separate session will be
reduced to twice a week and further to weekly once.
Instruments The instrument can be lost in transit or during clearing process or at the payee
L bank/branch, the bank shall take following steps:
ost • The loss will be brought to the notice of account holder immediately to
in Transit enable him to get the payment stopped.
• All assistance will be provided to the customer to obtain duplicate cheque
from the drawer.
Compensation
• In case intimation of loss is given to the customer beyond stipulated period
of 7/10/14 days, interest will be paid for the period in excess of stipulated
period.
• In addition, interest will be paid for further period of 15 days to provide for
further delay in obtaining duplicate cheque and collection thereof.
• The bank will also compensate to the customer any reasonable Charges
incurred in recording of Stop Payment instructions and getting a duplicate
cheque upon production of receipt.
Other Provisions • Bank will not pay any compensation if delay is due to reasons beyond Control
e.g lockouts, strikes, disturbances, accidents, natural disasters or any other
event.
• Customer need not make request for compensation.
• Incumbent In charge has full powers to pay compensation.
155
COMPENSATION POLICY OF PNB
Objective To establish a system, whereby the customer is compensated for

the financial loss due to deficiency in service or an act of
omission or commission directly attributable to the Bank
Coverage The customer as far as possible will be compensated without
having to ask
for it. The policy covers compensation only for financial losses
which can be

Areas and Level of Unauthorized Debit

Compensation Payment of cheques after stop payment instructions

Standing Instructions not compiled for

Delay in Remittance

Delay in issuance of duplicate draft

Delay in collection of cheques

Instruments lost in transit

ATM Failure to dispense cash/short cash
Unauthorized Erroneous Debit Bank will reverse the entry immediately on being informed,
after verifing the position, maximum within 7 days (within 1
month if third party is involved. Any financial loss due to
returning of cheque or interest loss or charging of penalty for
not maintaining minimum balance on this account will be
compensated.
Incase, where neither bank nor customer is at fault, but fault lies
elsewhere (hacking/phishing) the compensation will be limited
upto Rs. 5000/- only.
Erroneous transactions reported by customers in respect of
Credit Card operations which require specific reference to a
merchant establishment will be handled as per rules laid down
by card association.
Where it is established that bank had issued and activated a

credit card without written consent of the recipient, the bank
would not only reverse the charges immediately but also pay a
penalty without demur to the recipient amounting to twice the
value of charges reversed as per regulatory guidelines in this
regard.
Payment of cheques after stop The bank will reverse such debit within 2 days of error coming
Payment instructions to notice. Besides, any financial loss due to returning of cheque
or charging of penalty for not maintaining minimum balance on
this account will be compensated
ECS Directo debits/other The bank will compensate the customer to the extent of financial
debits to a/c loss incurred on account of delay in carrying out the standing
instructions. In such case, charges debited in account will also
be reversed.
Delay in Collection of Interest for delayed collection shall be paid at the following
Outstation Cheques in India rates without any demand from customers:
156
If the proceeds to be credited to Savings Bank or Current
account:
SF rate for delay up to 14 days.
TD rate for applicable period if delay is beyond 14 up to
90 days.
2% above TD rate if delay is beyond 90 days.
If proceeds were to be credited to OD/loan account:
Interest at rate applicable to loan account.
2% above loan rate if delay is beyond 90 days.
Interest will be paid only if the amount calculated is Rs. 10/- or
more. Rounding of up to the nearest rupee.
Delay in Collection of Cheques / The compensation on account of delays in collection of
Instruments/Bills (Payable instruments would be as per the FEDAI Rules
Outside India)
Delay in payment of Inward Banks are liable to compensate the beneficiary for delayed
Remittance payment of inward remittance in terms of FEDAI guidelines.
Bank will compensate the account holder in a way as indicated
Instruments lost in in Cheque Collection Policy. Further 15 days interest on the
Transit/in clearing house amount at SB rate to provide for likely further delay in
obtaining duplicate instrument. Compensate any reasonable
Delay in issuance Duplicate draft will be issued within 15 days from date of
of duplicate draft receipt of request from the applicant. In the event of
delay, interest @ FD rate of the corresponding period will be
paid.
Bank to reimburse the customer, the amount wrongfully
debited on account of failed ATM within a maximum period of
7 working days from the receipt of the complaint. For any
failure to re-credit the customer’s account within 7 working
days from the date of receipt of the complaint, bank shall pay
compensation of
ATM Failure to Rs.100/- per day. This compensation shall be credited to the
dispense cash/short cash Customer’s account, on the same day when bank affords the
credit for the failed ATM transactions. Customer is entitled to
receive such compensation only if claim is lodged within 30
days of the date of transaction. Further, this is applicable for
domestic ATM transactions only. Details of charge back in
case of ATM transaction by a customer of the bank when he
uses other bank ATM may be included.
All the pensioners are compensated for the delayed period, if
delay is on the part of the bank, beyond the due date at the
Delay in disbursement of
bank rate + 2% penal interest. Compensation shall be credited
revised pension and arrears
automatically without any claim from the pensioner on the
same day when the bank affords the credit.
Violation of the Code by Matter to be investigated and informed the finding to customer
bank‟s agent within 7 days from the date of complaint and if justified,
compensation to be paid for any financial loss to customer.
157
GRIEVANCE REDRESSAL POLICY
Background On the recommendations of IBA and BCSBI and directives of RBI, bank
formulated a Grievance Redressal policy and placed the same on website
www.pnbindia.in so the public in general can have view of the policy.
Principals of • Fair treatment to customers
policy • Prompt redressal of customers‟ complaints
• Information about avenues to escalates grievances by customers within
the organization.
• Rights of customers to alternative remedy
Complaint A complaint is expression of dissatisfaction with regard to products/services
offered by the organization. The complaint may arise due to :
• Attitudinal aspects in dealing with customers.
Deficiency of service
Misbehaviour/rude behavior with customers
• shall be treated at Zero Tolerance Level
Internal 1. Customer Service Committee of Board

Machinery to Customer Service Committee of Board will be ultimately responsible
handle for rendering compliant free customer service in the bank to both depositor and
complaints borrower. The sub-committee would formulate different policies, conduct
surveys and audit of customer service at branch level. This committee will also
review functioning of Standing Committee on customer service.
2. Standing Committee on Customer Service

This committee will be chaired by ED of the bank. The committee would
include
2-3 senior executives of the bank besides 2-3 public representatives. The
committee will perform the following functions:
• Evaluation of feedback on quality of customer service
• Implementation of commitments in Code of Bank‟s commitment to
Customers
• Ensuring that all regulatory instructions regarding customer service are
being followed.
• Consideration of un-resolved complaints and offering advice.
• Submission of report on its performance to Customer service
Committee of Board on quarterly basis.
Nodal Officer A nodal officer appointed at HO/Circle level is responsible for implementation
and other of customer service and handling of complaints. The names, addresses and e-
Officers mail contact numbers of all nodal officers will be made public.
Code Our bank has adopted BCSBI‟s code of bank‟s commitment The copy of code
Compliance is being provided to each customer and displayed at website. Bank has
Officer designated
a GM as Principal Code Compliance Officer at HO level and code compliance
officer at each controlling office. The name and address of code compliance
officer will be displayed at each branch.
158
Registration of A customer may lodge complaint either in writing or over telephone or through
Compliant e-
mail. The record of the complaint will be kept for 3 years and
due acknowledgement will be sent to the complainant.
Written complaint
The complaint may be made in writing on simple paper or on complaint form
(available with branches). The complaint forms have also been provided at
bank‟s website www.pnbindia.in. The customer can also obtain complaint book
from the BM and record its grievances. The complaint-cum suggestion box can
also be used by the customer.
Telephonic complaint: The customer can ring the BM or the Chief Host of
controlling office whose name, address and phone no. will be displayed at the
branch.
Customer Relationship Center: The customer can approach the Customer
Relationship Center of the bank in Gurgaon over Toll Free Number 1800 180
2222 assessable over landline BSNL 24 hours a day. The contact number for
Mobile Users as well as for Landline users other than BSNL is 0120-2490000
which is a paid number.
E-mail complaints: The customer can submit complaints on e-mail also to
Nodal Officer whose e -mail address is displayed at each branch.
Resolution of The BM is ultimately responsible for resolution of the complaint. Consequent

Grievances & upon his failure to do so, next higher authority will find suitable solution to
Education to address the issue within a reasonable time. The acknowledgement will be
the customer sent within maximum period of 1 week. Bank’s endeavor will be to resolve
the issue at earliest possible. However if it requires some time to examine the
matter, final response will be submitted within 6 weeks of receipt of the
complaint. In case, the customer is not satisfied with the remedial action
taken by the bank, he will be informed to adopt any of the following
recourse.
1. Directorate of Public Grievances, Govt. of India located at Cabinet

Secretariat, Sansad Marg, New Delhi
2. Banking Ombudsman located in state capitals. The customer may
approach if his grievances are not redressed by the bank and 1 month has
elapsed since lodging of complaint with the bank.
Interaction The bank will arrange personal interaction with the customers to remove their
with the misgivings as under:
Customer 1. Personal Hearings
On 10th of every month between 3 to 5 PM, any customer can meet BM
without any prior appointment.
2.Customer Service Committees
The customer service Committees have been set up at branch level, Circle
level
and HO level. Customer meets are arranged once in a month and customers
are
invited therein once in a quarter.
3. Customer Relationship Programmes
159
’
CODE OF BANK S COMMITMENT TO CUSTOMERS BY BCSBI
The Banking Codes and Standard Board of India ( BCSBI) has been established
Concept as an independent and autonomous body to watch, monitor and ensure that banking code and
standards adopted by different banks in India are in accordance
with the prescribed standards and these are being adhered to in true spirit.
• To promote fair banking practices by setting minimum standards in dealing
with the customers.
• To enhance transparency so that better understanding between banker and
Objectives customer can be achieved.
• To encourage market forces through competition.
• To promote air and cordial relationship with the customers.
• To create confidence of the customers in the system.
1. Applicability Although it is a voluntary code, yet PNB has adopted it for implementation so that
higher standards of Customer Service can be attained. This code underlines the
rights of a customer and their reasonable expectations from the bank. Our
GM(OPSD) is principal Code Compliance Officer. The branches have been
provided with sufficient copies of the Code for distribution thereof
among the customers. The code is also available on website
www.pnbindia.in In the code, “you” denotes the customers and “we” denotes the
bank.
2.Commitments • To act fairly and reasonably in all our dealings with the customers.
• To help the customers understand how our financial products and services
work.
• To help the customers use the accounts and services.
• To deal quickly and sympathetically with things those go wrong.
• To treat all personal information as private and confidential.
• To publicize the code.
3. Information The customer can get information on Notice Board, Telephone, Website or
from branch officials regarding:
• Interest rates
• Tariffs, fees and charges
• Changes in fees and charges
• Terms and conditions and changes therein.
The persons who intend to become customers are also welcome to get information
about our products and services.
For the existing customers, if bank has made any change without notice, the same
will be notified within 30 days. If such change is to the disadvantage of the
customer, he/she may close the account within 60 days without notice or switch it
without having to pay any extra charges or interest.
4.Advertising, The bank will ensure that all the advertising material for promotion of business is
Marketing and clear, understandable and not misleading. A separate code for Direct Selling
Sales Agents (DSAs)
5. Privacy And The information relating to customers‟ accounts will be treated as private and
Confidentiality confidential except in the cases where the disclosure is compulsory under law or
where bank‟s interest is involved e.g. in fraud. The information can be passed on
to credit information agencies provided there is written consent from the customer
and there is due intimation to the customer.
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6.Collection Of Whenever a loan is given to the customers, repayment process and schedule is
Dues And intimated to the customers. If a customer does not adhere to the schedule, bank
Repossession Of
Security will follow the procedure of recovery as per law of land. But the recovery process
will be courteous and fair with privacy. Sufficient notices will be served before
taking any legal action. Security Repossession policy will be followed in
consonance of law.
7.Complaints, There is proper procedure of lodging complaint over telephone to Call Center, by
Grievances and post to branch/administrative office or through website. The grievances will be
Feedback. redressed quickly and fairly. Final response will be sent to the customer without
delay. In case the issue is not addressed within 30 days,
the complainant will be free to approach the Banking Ombudsman of the area
whose name and address will be displayed on the Notice Board.
8.Products and There is complete information with regard to different products of the bank as
Services. under:
• Types of deposit a/cs such as Current, Savings, FD & RD.
• Mode of Operation i.e. Single, Joint or other.
• Procedure regarding opening of accounts and operation thereof.
• Changing and transfer of account of the customers
• Minimum balances charges and Statement of accounts.
• Pre-mature withdrawal and renewal of Overdue FDs.
• Advance against deposits
• Accounts of Minors and other special accounts
• No Frills accounts and accounts of Senior Citizens.
• Inoperative and Dormant accounts and Closure thereof.
• Clearing Cycle and Collection services.
• Cash Transactions.
• Standing Instructions and Stop Payment Facility.
• Branch Closure and shifting of premises.
• Settlement of deceased claims
• Safe Deposit Lockers & Forex services
• Lending, Loan Products , Guarantees and Credit Cards
If customer is not happy about choice of current or saving account within 14
days, bank will help him switch to another of bank‟s accounts or money will be
returned with interest applicable and without levying any charges. Under normal
circumstances, the account will not be closed without giving notice of 30 days.
Examples of circumstances, which are not normal include improper conduct of
the account. In such cases, the customer will be required to make alternative
arrangement for cheques already issued and desist from issuing further cheques in
the account.
Notice of 3 months will be given if bank plans to close the branch. However
notice period will be reduced to 2 months if any other bank/branch is
operating in the area.
Time limit for settlement of claims is 15 days from date of submission of claim
forms.
Bank will take all reasonable steps to protect the accounts of the customers
9. Protecting through reliable banking and payment system. The customer is also required to
Accounts of adopt following precautions.
Customers • Keep the bank Up-to-date with regard to name, address, phone no. and E-
mail address.
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• Check Statement of Account/ Passbook regularly and inform the bank
about any discrepancy.
• Not to keep cheque book and cards together and refrain from keeping
blank
cheque leaves signed.
• Not to write down any PIN, password or security information.
• Choosing of PIN carefully and keeping them secret.
• Inform the bank immediately about any loss of Card/Cheque book.
• Take care of Cheque books/cards and Passbooks and other security
information.
• Visit Internet Banking site directly and do not use any other link site to
open IBS. Ignore any E-mail asking PIN/password. Also do not use Cyber
Cafe for IBS.
• Change Password frequently and log off PC when not in use.
10. Monitoring BSBI having directors from the Governing Council will monitor implementation
of the Code in different banks. The BCSBI is situated in RBI Building at
Mumbai.
11. Getting Help The customers having any enquiry may call at toll free number 1800-180-2222
of Call Center Noida or IBA office situated at Mumbai.
The code will be reviewed by BCSBI with in a period of 3 years in a
12.Review of transparent
Code manner.
Lockers shall be issued to the customers to the extent of 80% of total on the
13. Lockers basis
of First Come First Serve and the remaining 20% would be issued as
per
discretion of the BM. All the applications received for issuance of lockers will
be
acknowledged. Waiting list will be prepared and waiting list number be
allocated
to the applicants as per the code approved.
The customer will be at liberty to continue the account with the branch/bank at
Closure of his
Deposit account will. However, if he requests for closure of account, the same will be complied
immediately. In case, the request for closure of the account through any other
branch of the bank or other bank, the account will be closed within maximum 5
working days.
Transfer of If the customer makes request to transfer the account to another branch of our
Account bank, the bank will do so and ensure that the account may be
operationalised within 2 weeks.
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FORENSIC AUDIT POLICY ( FRMD CIRCULAR NO: 03/ 2021)
Applicabilit Forensic Audit Policy would be applicable in all such accounts which have
y been recommended by ZO/ ELCB/ LCB/ Overseas Branch (OB) level
Fraud Risk / RFA Monitoring Committee and approved by CGM level
Fraud Risk / RFA Monitoring Committee at Head Office.
Process of Main steps in the process of Forensic Audit are: determining the issues,
Forensic
planning the investigation, obtain relevant evidence, analysis of documents
Audit
& data and preparing the report. In addition to this, it may be necessary to
formulate framework for legal proceedings
RBI i) In case of bank as a sole lender, the bank may use external auditors,
GUIDELINE including forensic experts or an internal team for investigations before
S ON taking a final view on the Red Flag Account. At the end of this time line,
LARGE which cannot be more than six months, banks would either lift the RFA
VALUE status or classify the account as a fraud.
LOAN
FRAUDS ii) In Consortium or multiple banking arrangements, the Red Flag Account
will be subjected to Forensic audit commissioned or initiated by the
consortium leader or the largest lender under MBA. All banks, as part of
the consortium or multiple banking arrangements, would share the costs
and provide the necessary support for such an investigation.
Check list a) Firms/ Corporates who display exceptional professional competence in
for Forensic Auditing of the accounts with exposure of ₹ 50 crore and above.
selection of b) Having in-depth knowledge and extensive experience in accounting and
Forensic should be aware of the various practices existing in cross section of
auditor firm industries including Digital Forensic Audit.
c) At least 2 qualified Fellow of Chartered Accountants (i.e. minimum
experience of 10 years) as Members & must be registered with Institute of
Chartered Accountants of India (ICAI). At least one Partner/Director with
experience of minimum 10 years, preferably having exposure in banking
sector law and practice. The firm/Corporate should be at least 10 years
old.
Forensic Audit report should be signed by qualified professionals who fulfill
the above criteria.
d) The firm should be empaneled with RBI for conducting bank audits.
Average professional receipt from audit as shown in the income tax return
should be ₹50 lakh in last three years.
e) One of the partner/director of the firm /corporate should be Certified
Fraud Examiner (CFE) or has done Forensic Audit and Fraud Prevention
(FAFP) course of The Institute of Chartered Accountants of India (ICAI).
f) Proven track record of conducting a number of Forensic and
Investigative audits and exposed/established frauds and malpractices.
Time Limit Forensic audit must be completed within a maximum period of 75 days
from authorizing the audit.
15 days’ notice to be issued to Forensic auditor firm / company if Forensic
Audit report not submitted within stipulated time i.e. 75 days from
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authorizing the audit. Penalty will be as under:-
Penalty a. If delay is less than fifteen days beyond 90 days of given time limit and
notice period (75 days stipulated + 15 days’ notice period), 10% of total
fees to be deducted in respect to delay time.
b. More than 15 days but less than a month, 25% of total fees to be
deducted in respect to delay time.
c. More than a month, 50% of total fees to be deducted in respect to delay
time.
POLICY FOR FRAUD RISK MANAGEMENT AND INVESTIGATION

( FRMD MASTER POLICY CIRCULAR NO: 02/2021)
DEFINITIO “A bank fraud is a deliberate act of omission or commission by any person

N carried out in the course of a banking transaction or in the books of account
maintained manually or under computer system in banks, resulting into
wrongful gain to any person for a temporary period or otherwise, with or without
any monetary loss to the bank”.
Authority i. The fraud case of amount less than ₹1 lakh would be approved by Head of
to approve Zonal Audit Office.
for
reporting ii. The fraud case of ₹1 lakh & above but less than ₹3 crore would be approved
fraud by Chief General Manager, FRMD & note would be placed through Divisional
Head, FRMD. GM (FRMD) shall approve in absence of CGM (FRMD).
iii. The fraud case of ₹3 crore & above but less than ₹50 crore would be
approved by Executive Director & note would be placed through Chief General
Manager, FRMD/ GM (FRMD) in absence of CGM, FRMD.
iv. The fraud case of ₹50 Crore and above would be approved by MD & CEO &
note would be placed through domain ED.
Authority i. Amount involved below ₹1 lakh (to Local Police Station) – Branch Head.
to permit
lodging of ii. Amount involved ₹1 lakh & above but below ₹3 crore (To CID/ EOW of State
complaint Police) – Circle/ Controlling Head.
with law
enforcing iii. Amount involved ₹3 crore & above (Cases referred to CBI) – As per the
agencies approving authority as stated in para 2.4.1.
iv. Complaint to ED/ DRI/ other Govt. agencies – MD & CEO.
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Reporting Name of Amount Mediu To whom it Timeline Remarks
of Frauds the return involved m should be for
in the in reported reporting
fraud which
to
FMR - All frauds So XBRL Within
Report on irrespecti ftc system of three
actual or ve of op RBI weeks of
suspected amount y detection
frauds involved
Flash report For H 1. Through Within Should

(in addition ar a include
frauds a DO letter
to FMR) d week amount
involving co addressed of involved,
py such nature of
₹500 to the
frauds fraud, modus
lakh and PCGM/ comin operandi in
g to brief, name
above CGM-in-
the of the
Charge, notice branch/
of the office, names
DBS RBI,
bank’s of parties
central head involved,
office their
Office,
constitution
Mumbai. names of
proprietors/
2. Copy to
partners and
CFMC,
directors,
Bengalaru.
names of
officials
involved and
lodging of
complaint
with police/
CBI.
Developme FMR Soft XBRL As and

nts in Update copy System of when
reported Applicati RBI. reported.
FMRs on (FUA)
A monthly certificate, is to be submitted by the bank to CFMC, Bengaluru with a

copy to the SSM of the bank, within seven days from the end of the month.
165
Reporting The fraud cases are monitored by the MD & CEO, Audit Committee of the
to Board Board (ACB), Fraud Review Council (FRC), Audit Committee of Executives
of (ACE) and the Special Committee of the Board (SCBF). The SCBF is
Directors monitoring the cases with special attention to large value frauds involving ₹1
crore and above.
Every new fraud case of ₹1.00 lakh & above is to be put up as mentioned
above narrating therein the modus operandi, brief facts, causative factors &
remedial measures to avoid occurrence of frauds.
Reporting FRMD, HO will ensure that all frauds of ₹1.00 lakh & above are reported to
of Frauds Board of Directors promptly on their detection (on monthly basis).
FRMD, HO will place a quarterly review of frauds for the quarters ended June,
September and December of every year before the Audit Committee of Board
during the month following the quarter to which it pertains
Fraud A Fraud Review Council comprising of General Managers of FRMD

Review (Convener), SASTRA (Recovery) Division, I&AD, HRMD, ITD, ORMD, Credit &
Council at Operation Division and special invitee from Vigilance Department, Law Division
Head & CISO would meet every quarter to review fraud trends and preventive steps
Office for taken by the bank and place the important decisions/ observations of FRC
review before the Special Committee of Board (SCBF). It shall also review progress in
and respect of staff side action, recovery status, position of investigation by Police/
monitorin CBI in all the fraud cases of ₹1.00 lakh and above on quarterly basis, in such a
g of fraud way that all cases are covered during a year.
cases.
Frauds at The guidelines of Central Vigilance Commission/ RBI for reporting of fraud
Domestic cases to Police/ CBI are as under:
Branches/ Amount involved Agency to Remarks
Offices in the fraud whom
complaint
should be
lodged
Above ₹10,000/- but State Police To be lodged by the bank branch

below ₹1 Lakh, only To the local concerned.
if staff of the bank police station
involved.
₹1 Lakh and above To the State To be lodged by the officer

and Below ₹300 CID/Economi designated by CO/ZO.
Lakh involving c Offences
outsiders and bank Wing of the
staff State
concerned
₹300 Lakh and CBI #To be lodged by the officer

above and up to designated by CO/ZO with Anti-
₹2500 lakh Corruption Branch of CBI (where
staff involvement is prima facie
evident). Economic Offences Wing of
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CBI (where staff involvement is
prima facie not evident)
More than ₹2500 CBI #To be lodged by the officer

Lakh and up to designated by CO/ZO with Banking
₹5000 Lakh Security and Fraud Cell (BSFC) of
CBI (irrespective of the involvement
of a public servant).
More than ₹5000 CBI #To be lodged by the officer

Lakh designated by CO/ZO & authorized
by CVO with the Joint Director
(Policy) CBI, HQ New Delhi.
#Bank Official not below the rank of Chief Manager or Sr. Manager, if he/ she is
branch head.
SETTLEM The delegated powers to various levels of functionaries are as under:
ENT OF (₹ In lakh)
CUSTOME At HO level - HOCAC-I HOCAC-II HOCAC-III MC
RS’
CLAIMS IN
FRAUD Delegated 100.00 300.00 500.00 Full
CASES Power -
Committee Scale IV Scale V Scale VI Scale VII/VIII

at CO /LCB/ (GM/CGM)
ELCB/ZO
level
headed by
5.00 10.00 20.00 30.00
Cloud Security Policy

Cloud computing is a way of delivering IT enabled capabilities to users in the form of 'services'
with elasticity and scalability, where users can make use of resources, platform, or software
without having to possess and manage the underlying complexity of the technology.
According to the National Institute of Standards and Technology (NIST), Cloud computing is a
model for enabling convenient, on-demand network access to a shared pool of configurable
computing resources (e.g., networks, servers, storage, applications, and services) that can be
rapidly provisioned and released with minimal management, effort or service provider
interaction.
Integrated Risk Management Division (IRMD): HO shall be responsible for articulating the
Cloud Security Policy/ guidelines and creating awareness amongst all the stakeholders
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through circulars and conducting regular trainings and seminars
Need of Cloud Security in Bank

Privileged User Access: Cloud computing allows the processing of the confidential data of
user by personnel outside the organization, so non-employees could possibly have full access
to it. Consumer should ask providers to supply specific information on the hiring and oversight
of privileged administrators, and the controls over their access.
Regulatory Compliance: Bank is ultimately responsible for the security and integrity of their
own data, even when it is held by a service provider. Traditional service providers are
subjected to external audits and security certifications
Data Location: When a customer uses the Cloud, customer probably would not know exactly
where his data is hosted. It is required to ask providers if they will commit to storing and
processing data in specific jurisdictions, and whether they will make a contractual commitment
to obey local privacy requirements on behalf of their customers.
Data Segregation: Data in the Cloud is typically in a shared environment alongside data from
other customers. Encryption is effective but is not a cure-all. Encryption accidents can make
data totally unusable, and even normal encryption can complicate availability.
Recovery: Even if the consumer does not know where his data is, a Cloud provider should tell
to his consumer what will happen to data and service in case of a disaster. Any offering that
does not replicate the data and application infrastructure across multiple sites is vulnerable to
a total failure.
Investigative support: Cloud services are especially difficult to investigate, because logging
and data for multiple Customers may be co-located and may also be spread across an ever-
changing set of hosts and data centres.
Long-term viability: Ideally, Cloud computing provider will never go broke or get acquired and
swallowed up by a larger company. But the consumer must ensure that his data will remain
available even after such an event. It is essential to know from providers how he would get
his data back and if it would be in a format that could import into a replacement application.
Data separation and segregation:
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1)In cloud environments, multiple parties’ data and services may exist on a single physical
platform running virtual services for its customers. This creates several problems for security,
privacy, compliance and audit, including:
• Limited ability to control data and applications
• Limited knowledge and no visibility into the degree of segmentation and security controls
between those collocated virtual resources
• Audit and control of data in the public cloud with no visibility into the provider’s systems and
controls
Frequently Asked Questions

1. Why Cloud Security is needed?
The traditional methods of banking resulted in huge queues at the banks. Technology has
paved way for a new age of banking and made life easier for customers as well as banks. The
widespread reach of the internet all over the world has enabled customers to address their
banking needs anywhere anytime. With the help of cloud computing technology, banks, and
financial institutions can reap immense benefits. 2. What is Cloud Computing? Cloud
computing is a way of delivering IT enabled capabilities to users in the form of 'services' with
elasticity and scalability, where users can make use of resources, platform, or software
without having to possess and manage the underlying complexity of the technology.
3. How Cloud computing is secure? Cloud service providers use a combination of methods to
protect your data. Firewalls are a mainstay of cloud architecture. Firewalls protect the
perimeter of your network security and your end-users. Firewalls also safeguard traffic
between different apps stored in the cloud.
4. Why Cloud security is required? Cloud security is important for both business and personal
users. Everyone wants to know that their information is safe and secure and businesses have
legal obligations to keep client data secure, with certain sectors having more stringent rules
about data storage.
5. How does cloud based security works?

The role of cloud based security solutions is to ensure that customer's information is safe at
all time. A cloud service filters information and restricts unwarranted access. It offers back up
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for the client's information and offers data recovery in case of any data loss.
6. What is function of Cloud Security? The Cloud security function is to be adequately

resourced in terms of the number of staff, level of skills and tools or techniques like risk
assessment, security architecture, vulnerability assessment, forensic assessment, etc.
7. What is the need of Cloud Security in Bank? There are a number of security
issues/concerns associated with Cloud computing;
➢ Privileged User Access ➢ Regulatory Compliance ➢ Data Location ➢ Data Segregation
➢ Recovery ➢ Investigative support ➢ Long-term viability ➢ Virtualization ➢ Identity and
Access Control Management ➢ Legal Issues ➢ Isolation of Roles ➢ Encryption and Key
Management ➢ Browser Vulnerabilities
8. What is Cloud Security Framework? Framework of Cloud Security is given below: We have
developed a set of guidelines and best practices based upon the IDRBT Cloud Security
Framework as a practical, simple and easy to use guidebook that will help banks to
understand and explore security concerns in the Cloud environment.
9. What are the main factors to be considered in Cloud adoption decisions? Following are the
main factors that can be considered in Cloud adoption decisions:
➢ Technical adequacy for porting the application to the Cloud – Assess the application profile
to ensure it is a right fit to be ported to the Cloud. ➢ Cost Efficiency ➢ Risk including
availability requirements, regulatory, compliance and statutory requirements, data sensitivity
➢ Control over intrusion decisions, vulnerability monitoring, denial of service attacks.
10. What are the data and information security for Cloud Security?
➢ Data Classification ➢ Data Migration ➢ Data Privacy ➢ Data Assurance ➢ Data
Redaction ➢ Data Retention ➢ Data Disposal ➢ Data breach notification
Credit Risk Mitigation & Collateral Management Policy
The bank is under parallel run of Foundation based IRB approach with existing Standardized
Approach and has placed notice of intention to RBI for implementing Advanced Internal
Rating Based (AIRB) Approach vide letter dated 05th October 2015. The policy for “Credit
Risk Mitigation & Collateral Management” fulfills the requirements of Standardized as well as
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both IRB approaches.
The guidance note of BCBS on “Principles for the Management of Credit Risk” interalia
defines the use of risk mitigants as under:
“Bank can utilize transaction structure, collateral and guarantees to help mitigate risks (both
identified and inherent) in individual credits but transactions should be entered into primarily
on the strength of the borrower’s repayment capacity. Collateral can neither be a substitute for
a comprehensive assessment of the borrower / counterparty nor it can compensate for the
insufficient information. It should be recognized that any credit enforcement actions (e.g.
foreclosure proceedings) can eliminate the profit margin on the transaction. In addition, Banks
need to be mindful that the value of collateral may well be impaired by the same factors that
ha Objective Of Collateral Management: The collateral management addresses the following
basic
objectives of credit management:
• Mitigation of credit risk & enhancing awareness on identification of appropriate collateral

• Optimizing the benefit of credit risk mitigation in computation of Capital Charge
• Mitigation of risks attendant to the use of credit Risk Mitigation techniques, e.g. legal risk
and the documentation risk and to take timely action for seizure and realization of the
collaterals by initiating legal action, if required, against the counterparty/ guarantor on his
refusal to repay the bank‟s dues. led to the diminished recoverability of the credit.”
Type of collaterals:
The collaterals commonly used by the Bank as the risk mitigants comprise of the Financial
Collateral (i.e. bank deposits, Government/Postal securities, Equity shares, Life Policies,
Gold/silver jewellery, Units of mutual funds etc.), various categories of movable and
immovable assets/landed properties etc.
Under Standardized Approach: For the purpose of the calculation of capital required under
Standardized Approach, certain specific financial collaterals and specific guarantors have
been recognized as eligible collateral and guarantors, details of which are given in following
Paras of Standardised Approach, along with the methodology of their treatment in the capital
calculation process.
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Under IRB Approach: In addition to eligible financial collaterals recognized for adjustment of
exposure, certain specific collaterals have been recognized as eligible IRB collaterals (i.e.
eligible Financial Receivables, Commercial or Residential Real Estate (CRE/RRE), other
physical Collaterals) for the purpose of the calculation of LGD required under IRB Approach.
Details of these collaterals along with the methodology of their treatment as well as treatment
of other CRM techniques such as Guarantees/ Credit Derivatives in the LGD calculation
process as per FIRB and AIRB Approach
Eligible Financial Collateral

i. Cash (as well as certificates of deposit or comparable instrument including fixed
deposit receipts, issued by lending bank) on deposit with the Bank,
ii. Gold (both bullion and jewellery): The value of collateralized jewellery should be
arrived at after notionally converting to 99.99% purity.
iii. Securities issued by Central and State Governments.
iv. KissanVikasPatra and National Savings Certificates provided no lock in period is
operational and they can be encashed within the holding period.
v. Life Insurance Policies with declared surrender value of an insurance company
which is regulated by an insurance sector regulator.
vi. Debt securities rated by a recognized External Credit Rating Agency in respect of
which the bank is sufficiently confident about the market liquidity1where these are
either:
Volatility Adjusted Amount of The Collateral: Concept of Haircuts
The bank needs to calculate adjusted value of collateral to take account of possible future
fluctuations occasioned by market movements. These adjustments are referred to as
„Haircuts‟. The application of haircuts gives the volatility adjusted amount for both exposure
and collateral.
The credit exposures acquired by the bank are through „Cash transaction‟, and hence these
would not be subject to market volatility. However, the exposures of the bank, arising out of
the repo-style transactions would require upward adjustment for volatility thus attracting
„Haircut‟.
It is prescribed by RBI that Banks in India will use only the standard supervisory haircuts for
collateral.
In cases where the collateral and the exposures are in the different currencies, additional
downward adjustment is to be made to the volatility adjusted collateral amount to take
account of the possible future fluctuations in the exchange rates. The standard supervisory
haircut for currency risk where exposure and collateral are denominated in different
currencies, Hfx, is 8%.
General Guidelines for credit risk mitigation
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Credit risk mitigation is allowed only on an account-by-account basis and capital relief through
CRM Techniques will be available on fulfillment of the following minimum conditions stipulated
in BASEL guidelines:
All documentation used in collateralized transactions and for documenting on balance sheet
netting, guarantees and credit derivatives must be binding on all parties and legally
enforceable in all jurisdictions, which is required to be verified by conducting sufficient legal
reviews and continuing enforceability be ensured through further reviews.
Legal mechanism for pledge /transfer of the collateral must ensure that the bank has the right
to liquidate or take legal possession of the same in a timely manner. All steps necessary to
fulfill those requirements under the law applicable to the bank‟s interest in the collateral for
obtaining and maintaining an enforceable interest i.e. by registering of charge with a registrar
should be observed.
Credit quality of the counterparty and the value of the collateral should not have a material
positive correlation e.g. Securities issued by the counter party or by any related group entity
will not be eligible for providing protection/ capital relief.
There should be clear and robust procedures for the timely liquidation of the collateral.
Where the collaterals are held by a custodian it should be ensured that the custodian
segregates the collateral from its own assets.
Cyber Crisis Management Plan
Types of Cyber Crisis
a) Targeted Scanning, Probing and Reconnaissance of Networks and IT Infrastructure:

Publicly available reconnaissance techniques, including web and newsgroup searches,
WHOIS querying, and Domain Name System (DNS) probing, are used to collect data about
the structure of the target network from the Internet without actually scanning the network or
necessarily probing it directly.
b) Large scale defacement and semantic attacks on websites: A website defacement is when
a Defacer breaks into a web server and alters the contents of the hosted website. Attackers
change the content of a web page subtly, so that the alteration is not immediately apparent.
As a result, false information is disseminated.
c) Malicious Code attacks (Virus/Worm/Trojans/Botnets): Malicious code or malware is

software designed to infiltrate or damage a computer system without the owner's informed
consent. Malicious code is hostile, intrusive, or annoying software or program code.
Commonly known malware are virus, worms, trojans, spyware, adware and Bots.
d) Malware affecting Computing devices: Malicious code and malicious applications (apps)
affecting operating systems/platforms used for mobile devices such as Symbian, Android,
iOS, Windows Mobile and Blackberry OS.
e) Large scale SPAM attacks: Spamming is the abuse of electronic messaging systems to
indiscriminately send unsolicited bulk messages. SPAM mails may also contain virus, worm
and other types of malicious software and are used to infect Information Technology systems.
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f) Spoofing: Spoofing is an attack aimed at ‘Identity theft’. Spoofing is a situation in which one
person or program successfully masquerades as another by falsifying data and thereby
gaining an illegitimate advantage.
g) Phishing attacks: Phishing is an attack aimed at stealing the ‘sensitive personal data that
can lead to committing online economic frauds. Phishers attempt to fraudulently acquire
sensitive information, such as usernames, passwords and credit card details, by
masquerading as a trustworthy entity in an electronic communication.
h) Social Engineering: Art of manipulating people into performing disclosure actions or

divulging confidential information for using the same for monetary or defacing an individual or
corporate image.
i) Denial of Service (DoS) attacks and Distributed Denial of Service (DDoS) attacks: DoS is an
attempt to make a computer resource unavailable to its intended users. A distributed denial of
service attack (DDoS) occurs when multiple compromised computer systems flood the
communication link (called bandwidth) or resources of a targeted system.
j) Application Level Attacks: Exploitation of inherent vulnerabilities in the code of application

software such as web/mail/databases.
k) Infrastructure attacks: Attacks such as DoS, DDoS, corruption of software and control
systems such as Supervisory Control, Data Acquisition (SCADA) and Centralized/Distributed
Control System (DCS), Gateways of ISPs and Data Networks, Infection of Programmable
Logic Control (PLC) systems by sophisticated malware.
l) Compound attacks: By combining different attack methods, hackers could launch an even
more destructive attack. The Compound attacks magnify the destructiveness of a physical
attack by launching coordinated cyberattack.
m) Router level attacks: Routers are the traffic controllers of the Internet to ensure the flow of
information (data packets) from source to destination. Routing disruption could lead to
massive routing errors resulting in disruption of Internet communication.
n) Attacks on Trusted infrastructure: Trust infrastructure components such as Digital

certificates and cryptographic keys are used at various levels of cyber space ranging from
products, applications and networks.
o) High Energy Radio Frequency Attacks: Use of physical devices like Antennas to direct
focused beam which can be modulated from a distance to cause RF jamming of
communication systems including Wireless networks leading to attacks such as Denial of
Service
p) Cyber Espionage and Advanced Persistent Threats: Targeted attacks resulting in

compromise of computer systems through social engineering techniques and specially crafted
malware.
Protection and resilience of Bank’s infrastructure
To build cyber resiliency, Bank need to work for the following:

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Identification of key information and technology assets that support the services of the Bank
by the concerned divisional head.
Implementation of controls to protect those assets from cyber-attack.
Implementation of controls to sustain the ability of those assets to operate under disruptive
events and recover rapidly from disruption.
Development of processes to maintain and repeatedly carry out the protection and recovery
activities.
Development of appropriate measures to drive these activities.
Develop a plan for protection of Bank’s IT Infrastructure and its integration with business
plan and implement such plan. The plans shall include establishing mechanisms for secure
information flow (while in process, handling, storage & transit), guidelines and standards,
crisis management plan, proactive security posture assessment and forensically enabled
information infrastructure.
Closely interact with 24x7 National Critical Information Infrastructure Protection Centre
(NCIIPC) by providing it the necessary and timely information.
To ensure identification, prioritization, assessment, remediation, and protection of Bank’s IT
infrastructure and key resources based on the plan for organization Information Infrastructure.
To ensure compliance to global security best practices, Business Continuity Management
and Cyber Crisis Management Plan by all entities within domain of Bank, to reduce the risk of
disruption and improve the security posture.
1. What is cyber crisis management plan?

Ans. Cyber Crisis Management Plan - The purpose of this plan is to establish the strategic
framework and guide actions to prepare for, respond to, and begin to coordinate recovery
from a Cyber incident.
2. What do you do in the event of a Cyber-attack??
Ans. Do Not Panic. You or your team may already be panicking. Do Not Pay a Ransom.
Form a Response Team. Use Your Backup Servers. Isolate the Breach. Investigate
& Manage. Documenting both process and findings. Contact Clients Prevent Future
Attacks Preparing for a Cyber Attack
3. How do you write an incident response plan?

Ans. Take Stock of What's at Stake. Evaluate Your Risk Potential. Start Building an
Action Plan. Form an Incident Response Team. Get Your Workforce Involved. An
Incident Response Plan: Your Best Line of Defense.
4. What is the most common way in which user gets infected with ransomware? Ans. Phishing
Emails
The most common method for hackers to spread ransomware is through phishing emails.
Hackers use carefully crafted phishing emails to trick a victim into opening an attachment or
clicking on a link that contains a malicious file.
5. What are the six steps of an incident response plan?
Ans. The six stages of incident response that we should be familiar with are;
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Preparation, Identification, Containment, Eradication, Recovery and Lessons
learned.
6. What is response plan?
Ans. Emergency Response Plan. The actions taken in the initial minutes of an emergency are
critical. A prompt warning to employees to evacuate, shelter or lockdown can save lives. The
emergency plan should be consistent with your performance objectives.
7. What is an Incident Management Plan?
Ans. An incident management plan (IMP), sometimes called an incident response plan or
emergency management plan, is a document that helps an organization return to normal as
quickly as possible following an unplanned event. Incident management may be part of an
organization's overall Business Continuity Management.
8. What is an Incident Response Procedure?
Ans. Incident response (IR) is a structured methodology for handling security incidents,
breaches, and cyber threats. A welldefined incident response plan allows you to effectively
identify, minimize the damage, and reduce the cost of a Cyber-attack, while finding and fixing
the cause to prevent future attacks.
9. What are the steps of incident management?
Ans. Following are the incident management process, follow these steps:
Incident identification Incident logging. Incident categorization. Incident prioritization.

Incident response. Initial diagnosis. Incident escalation. Investigation and diagnosis.
Resolution and recovery. Incident closure.
10. What are the steps of incident management?
Ans. An emergency plan specifies procedures for handling sudden or unexpected situations.
The objective is to be prepared to: Prevent fatalities and injuries. Reduce damage to
buildings, stock, and equipment.
Cyber Security Policy

Cyber Security Function
To avoid the conflict of interest, the formulation of policies is to remain segregated from
implementation / compliance of the policy. Therefore, Information Security Department under
HO: IRMD to give recommendations regarding the Cyber Security risk and is responsible for
maintenance / review of the Cyber Security Policy & get it approved from Board. This is in line
with the three lines of defence suggested in Board approved Operational Risk Management
Policy of the Bank
The Cyber security function is to be adequately resourced in terms of the number of staff,
level of skills and tools or techniques like risk assessment, security architecture, vulnerability
assessment, forensic assessment, etc.
Type of Threats
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1. Hacktivists: These are individuals or groups who seek to disrupt systems and networks for
a variety of motives, including notoriety, financial gain or political agendas. They connect
across borders to overwhelm targeted websites and access sensitive information. They may
seek to harm their enemies by either shaming them or disabling their services. Hacktivists
typically launch distributed denial of service (DDoS) attacks, deface websites, access
sensitive government data and publish the personal information of high-ranking persons and
business leaders.
2. Advanced Persistent Threats (APT): These occur when malicious actors use complex and
unique malware to quietly gain access to proprietary or personal information and sensitive
government information. They may also use customized solutions to take advantage of
insiders, social engineering, network hardware and third-party software to cause various
malfunctions, destroy data and disable networks.
3. Cyber Crime Syndicates: These organizations seek account information to make fraudulent
transactions or to siphon-off money. Information theft is also common, as cyber criminals will
sell sensitive corporate information to unauthorized individuals or groups. Cyber criminals
leverage various methods to achieve their objectives, such as distributing massive amounts of
e-mails while posing as banks or other authorities to obtain customer identification and
financial information. They may also use large-scale DDoS attacks to overwhelm Internet
dependent enterprises.
4. Malicious Insiders: These are trusted individuals who are motivated to compromise the
confidentiality, integrity or availability of an organization’s information and information
systems. Their motives may include financial gain, revenge or ideology. Insiders do not need
to infiltrate perimeter network defenses because they have trusted access to information and
information systems and can use various methods to damage or destroy government and
business systems.
5. Rootkit: Itis a collection of tools that are used to obtain administrator-level access to a
computer or a network of computers. Rootkit could be installed on any computer by a
cybercriminal exploiting a vulnerability or security hole in a legitimate application on the
computer and may contain spyware that monitors and records keystrokes.
6. Botnet: Also called a “zombie army” is a collection of software robots or bots that run
automated tasks over the Internet. It is a group of computers connected to the Internet that
have been compromised by a hacker using a computer virus or Trojan horse. An individual
computer in the group is known as a “zombie” computer.
The Botnet is under the command of a “Bot Herder” or a “Bot Master,” usually to perform
nefarious activities by running programs such as worms Trojan horses or backdoors. This
could include distributing spam to the email contact addresses on each zombie computer,
e.g., if the Botnet is sufficiently big in number, it could be used to access a targeted website
simultaneously in which’s known as a denial-ofservice (DoS) attack. The goal of a DoS attack
is to bring down a web server by overloading it with access requests.
7. Trojan horse: Users can infect their computers with Trojan horse software simply by
downloading an application they thought was legitimate but was in fact malicious. Once inside
the computer of a user, a Trojan horse can do anything from recording his/her passwords by
logging keystrokes (known as a keystroke logger) to hijacking the webcam to watch and
record his/her every move.
8. Spam: is electronic junk email. The amount of spam has now reached to about 90 billion
messages a day. Email addresses are collected from chat rooms, websites, newsgroups and
by Trojans which harvest users’ address books. SPIM is spam sent via instant messaging
systems such as Yahoo! Messenger, MSN Messenger and ICQ.
Its Danger level is Low but Prevalence is Extremely High.
Spam can clog a personal mailbox, overload mail servers and impact network performance.
On the other hand, efforts to control spam such as by using spam filters run the risk of filtering
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out legitimate email messages. Perhaps the real danger of spam is not so much in being a
recipient of it as inadvertently becoming a transmitter of it. Spammers frequently take control
of computers and use them to distribute spam, perhaps the use of a Botnet. Once a user’s
computer is compromised, their personal information may also be illegally acquired.
9. SQL Injection: Such attack involves the alteration of SQL statements that are used within a
web application using attacker-supplied data. Insufficient input validation and improper
construction of SQL statements in web applications can expose them to SQL injection
attacks. SQL injection is such a prevalent and potentially destructive attack that this has
become the number one threat to web applications. The types of SQL injections are:
Authentication Bypass: This attack allows an attacker to log on to an application, potentially
with administrative privileges, without supplying a valid username and password.
Information Disclosure: This attack allows an attacker to obtain, either directly or indirectly,
sensitive information in a database.
Compromised Data Integrity: This attack involves the alteration of the contents of a
database. An attacker could use this attack to deface a web page or more likely to insert
malicious content into otherwise innocuous web pages.
Compromised Availability of Data: This attack allows an attacker to delete information with
the intent to cause harm or delete log or audit information in a database.
Remote Command Execution: Performing command execution through a database can
allow an attacker to compromise the host operating system. These attacks often leverage an
existing, predefined stored procedure for host operating system command execution.
10. Ransomware: is a type of malware that prevents or limits users from accessing their
system, either by locking the system's screen or by locking the users' files unless a ransom is
paid. More modern ransomware families, collectively categorized as crypto-ransomware,
encrypt certain file types on infected systems and forces users to pay the ransom through
certain online payment methods to get a decrypt key.
11. Website defacement: is an attack on a website that changes the visual appearance of the
site or a webpage. These are typically the work of system crackers, who break into a web
server and replace the hosted website with one of their own.
12. Spoofing: It is an attack situation in which one person or program successfully
masquerades as another by falsifying data, thereby gaining an illegitimate advantage. E-mail
spoofing is the forgery of an e-mail header so that the message appears to have originated
from someone or somewhere other than the actual source. The e-mail often contain malicious
software as attachment, whichare used to get unauthorized access to the user’s computer.
13. Session Hijacking: Sometimes it is also known as, cookie hijacking is the exploitation of a
valid computer session to gain unauthorized access to information or services in a computer
system. Once the user's session has been accessed, the attacker can masquerade as that
user and do anything the user is authorized to do on the computer.
14. Man in the Middle Attack: It is an attack where the attacker secretly relays and possibly
alters the communication between two parties who believe they are directly communicating
with each other. Online banking and e-commerce sites are frequently the target of such
attacks. The attacker can capture login credentials and other sensitive data from the user’s
computer with this type of attacks
1. What is Cyber Security Policy and how it is different from Information Security policy?
Information Security refers to all aspects of protection covering information and information
systems from unauthorised access, use, disclosure, disruption, modification, or destruction.
The aim is to provide confidentiality, integrity, and availability of information systems and the
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information within.
a) Confidentiality b) Integrity c) Availability
The Cyber Security is a subset of Information Security.
2. What is IT Security? This term is generally used to refer to protection/safety of IT

infrastructures, information systems and related resources with respect to confidentiality,
integrity and availability.
3. Why Cyber Security policy is required in the Bank? Cyber Security Policy to be distinct from
the broader IT policy / IS Security Policy of a bank. Bank uses encryption, firewalls and other
technology and security procedures to help protect the accuracy and security of sensitive
personal information and prevent unauthorised access or improper use.
4. How can I identify my Bank’s Cyber security requirements? As a business owner, you/We
should consider the value of your information systems and other IT assets in terms of the
daily business of the bank in order to determine the appropriate level of security. The impact
of any security incident to your reputation, as well as the proper continuity of your business,
should be considered. A process called risk analysis is normally used to identify what assets
to protect, their relative importance to the proper operation and business of the organisation,
and the priority ranking or level of security protection. The result should be a well-defined list
of security requirements for your organisation.
5. What is a Cyber security policy? How is it related to security standards, guidelines and
procedures?
A security policy sets the standards for a set of security specifications. It states what aspects
of Information Security are of paramount importance to the organisation, and thus a Cyber
Security Policy can be treated as a basic set of mandatory rules that must be observed. The
policy should be observed throughout the organisation and should be in accordance with
your security requirements, and your organisation's business objectives and goals.
6. What was considered while designing a cyber security policy? Cyber security policy should
be practical, and work for the organisation. The following should be considered:
The sensitivity and value of the IT assets that need to be protected The legal
requirements, regulations and laws of the Government in our jurisdiction Our bank's goals
and business objectives. The practicalities in implementation, distribution and enforcement
International best practices in the industry to the extent applicable/feasible Cyber
Security Framework of RBI
7. How can I develop a security policy for my organisation? First, identify a group of personnel
who should be involved in developing the security policy. Second, make all necessary plans
for activities, resources required and schedules. Third, determine the core security
requirements, and establish the organisation’s security policy accordingly.
As technologies, business environments and security requirements change over time, the
security policy should be reviewed periodically (e.g. once every two years) in order to keep
abreast of changes.
8. What should be included in a security policy? A Cyber Security Policy must address
procedures and behaviours that can be changed. It is also important to recognize that there
are always exceptions to every security rule. Keep the policy as flexible as possible in order
that it remains viable for a longer time.
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9. What are the benefits of a security policy? With a security policy in place, all staff will be
able to clearly understand what is and is not permitted in the organisation relating to the
protection of information assets and resources. This helps raise the level of security
consciousness of all staff. In addition, a security policy provides a baseline from which
detailed guidelines and procedures can be established. It may also help to support any
decision to prosecute in the event of serious security violations.
Doorstep Banking Services (DSBS) Policy
Eligibility:
i. Senior Citizens of more than 70 years of age and differently abled or infirm persons (having
medically certified chronic illness or disability) including those who are visually impaired.
ii. Fully KYC compliant account holders.
iii. Valid Mobile number should be registered with the account.
iv. Single account holders and Joint account holders with E or S, F or S, only.
The DSBS for senior citizens of more than 70 years of age and differently abled persons to be
offered in a cluster approach within a radius of 5 KMs of (2 KMs for hilly/ difficult areas).
Service Charges:
Nature of Service Service Charges# (Through Service Charges # (Through
Branch) Authorized 3rd Party Agent)
Non-Financial Rs. 100/- + GST* 75/- + GST
Financial Rs. 100/- + GST 75/- + GST
#- The service charges are subject to change from time to time. The charges will be displayed
on the website. Any change in the charges will be notified to customers in advance at least 30
days before implementation.
*- Rs. 60/-+GST for Life Certificate Pick-Up from pensioners/family pensioners.
H. Turnaround Time:
The delivery of DSBS would be completed on best effort basis but not later than T+2
working days (holidays excluded).
Services will be offered only within banking hours and no request shall be entertained after
03.00PM
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Whistle Blower Policy of the Bank
OBJECTIVE
This Policy aims to establish a mechanism to receive protected disclosure relating to any
allegation of corruption or wilful misuse of power or wilful misuse of discretion against any
employee of the bank and to inquire or cause an inquiry into such disclosure and to provide
adequate safeguards against victimization of the person making such protected disclosure
and for matters connected therewith and incidental thereto
COMPETENT AUTHORITY
The Chairman of Audit Committee of Board will be the Competent Authority to deal with the
protected disclosure received under provisions of this Policy.
ELIGIBILITY
Various stake holders of the bank are eligible to make Protected Disclosures under this policy.
These stakeholders may fall into any of the following broad categories:
(i) Directors of the Bank (ii) Employee of the bank (iii) Employees of other agencies deployed
for the bank activities, whether working from any of the bank’s offices or any other location.
(iv) Contractors, vendors, suppliers or agencies (or any of their employee) providing any
material or service to the Bank. (v) Any other stakeholder.
Though an exhaustive list of activities that constitute such misconduct/ malpractice / violations
cannot be enumerated, it is expected that the following acts may be reported under this
Policy:
(i) Criminal offence (e.g. frauds, corruption or theft) committed / likely to be committed. (ii)
Failure to comply with legal / regulatory provision (iii) KYC/AML violations to provide some
undue advantage to anyone. (iv) Breach of client promises by the Bank (v) Bank funds used
in an unauthorised manner (vi) Sexual or physical abuse of a member of staff, service
recipient or service provider. (vii) Any other form of improper action or conduct (viii)
Information relating to any of the above deliberately concealed or attempts being made to
conceal the same (ix) Fraudulent activity in an account.
PROCEDURAL GUIDELINES FOR HANDLING PROTECTED DISCLOSURE MADE BY

WHISTLE BLOWER
i. All the protected disclosures received under this Policy will be opened in the presence of the
Chairman, Audit Committee of Board by an authorized official designated by the Chairman,
Audit Committee of Board.
ii. Once, the Chairman, ACB decides that this disclosure can be considered under the Whistle
Blower Policy, the authorised official will enter it in a Corporate Register containing brief
particulars of the disclosure received under this Policy. He / she shall assign a Unique
Reference Number (URN) to each disclosure.
iii. All inter-office correspondence in respect of disclosure received under Whistle Blower
Policy will be done citing only Unique Reference Number (URN) and not the name of Whistle
Blower.
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iv. For disclosure received through email at whistleblower@pnb.co.in, password shall be
allotted to the Chairman, Audit Committee of Board. After examining the email, if he decides
that this disclosure can be considered under the Whistle Blower Policy, he will forward mail to
the authorised official for entering in the Corporate Register and assigning a Unique
Reference Number.
v. Within a reasonable period of receipt of a disclosure the Authorised official shall provide an
acknowledgement, followed by an initial response to the Whistle Blower on a selective basis.
vi. The authorised official of Board & Coordination Division will furnish a brief note covering all
details about the matter that Whistle Blower wishes to report. Authorised Official should not
mention in this note the name or any other particulars that may identify the Whistle Blower.
vii. Copies of documents that may help in establishing the veracity of the report may
preferably be attached to the note. However, care may be taken that these paper do not
contain the name or any other particulars indicating the Whistle Blower’s identity.
viii. The aforesaid note along with instruction of Chairman of ACB should be sent along with a
forwarding letter / email message to Fraud Risk Management Division (FRMD) for further
investigation in the matter and to take appropriate action.
ix. HO:FRMD/ Vigilance (for matters referred to CVO) may investigate the disclosure at its
own / may assign the investigation to any official in the field or may request HO:IAD to get the
investigation done from any Auditor / Senior Official. FRMD will put-up status to the ACB on
quarterly basis.
x. The Chairman, ACB may recommend the matter for Disciplinary action or administrative
action.
xi. The Board Division will include the confirmation in Annual Disclosures that no person has
been denied access to the Chairman of the Audit Committee of Board.
xii. If there is any serious issue involved in any type of disclosure, the matter shall be brought
to the notice of MD & CEO.
xiii. ACB will monitor all cases of Whistle Blower disclosures regularly and keep the Board
informed through the minutes of ACB meeting / or as deemed appropriate.
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CREDIT MANAGEMENT & RISK POLICY FOR THE YEAR 2020-21(IRMD-LA 40/2020)
OBJECTIVE
• This policy of the bank at the macro level
• is an embodiment of the Bank's approach to understand, measure and manage the
credit risk
• aims at ensuring sustained growth of healthy loan portfolio
• This would entail reducing exposures in high risk areas,
• emphasizing more on the promising industries/ productive sectors/ segments of the
economy,
• optimizing the return by striking balance between the risk and the return on assets and
• striving towards maintaining/ improving market share
Definition of “Credit Risk”

• “Credit risk” is the possibility of loss associated with changes in the credit quality of the
borrowers or counter parties
• The counter parties may include an individual, small & medium enterprise, corporate,
bank, financial institution, or a sovereign
• In a bank's portfolio, losses stem from outright default due to inability or unwillingness
of a borrower or counter party to honor commitments in relation to lending, settlement
and other financial transactions.
Credit Risk Management Structure
At HO Level:
• Risk Management Committee (RMC): Sub-committee of Board for managing all types
of risks
• Credit Risk Management Committee (CRMC): Top management committee, for
implementation of Credit Risk Policy
• Integrated Risk Management Division (IRMD): Headed by GCRO, to frame and
implement credit risk related policies/ framework and to discharge integrated risk
management functions
At Field Level:
• Zonal Risk Management Cell (ZRMC): Two tier Risk Management structure: i) ZRMC
and ii) HO: IRMD (extended arm of HO: IRMD). ZRMC shall vet ratings of loans above
1 cr. To 10 cr., whereas ZRMC shall initiate ratings of loans above 10 cr., to be vetted
by IRMD, HO. Besides ratings, ZRMC shall also handle ‘Credit Portfolio Monitoring’
and ‘Risk Side Review (Go – NoGo)
Credit Approval Committees (CACs)
CAC at MCC/ ZO/ Headed By Credit Proposals

HO level
MCC-CAC AGM Within vested loaning powers of Branch

Heads in Scale - V
ZOCAC-I* DGM/ GM Above Rs. 10 Cr. And upto Rs. 30 Cr.
ZOCAC-II* GM/ CGM Above Rs. 30 Cr. And upto Rs. 50 Cr.
HOCAC Level - I CGM-Credit Above Rs. 50 Cr. And upto Rs. 100 Cr.
HOCAC Level - II Headed by Senior Most ED Above Rs. 100 Cr. And upto Rs. 300 Cr.
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HOCAC Level - III MD & CEO and all EDs Above Rs. 200 Cr. And upto Rs. 800 Cr.
Management Directors on Board Above Rs. 800 Cr.

Committee
*ZOCAC-I shall be headed by DGM in case of GM headed zones and GM in case of CGM
headed zones. Similarly, ZOCAC-II shall be headed by GM or CGM, as the incumbent of
Zone may be.
Capital Charge for Credit Risk

Credit Risk Policy
• aims to provide a basic framework for implementation of sound credit risk management
system in the bank
• deals with various areas of credit risk, goals to be achieved, current practices and
future strategies
• Bank has implemented the Basel III guidelines w.e.f. 01.04.2013 on the basis of
regulatory prescription
• Bank has implemented (w.e.f. 31.3.2008) system for adopting Standardized Approach
for ‘regulatory capital calculation for credit risk’
• However, the bank is also allowed to participate in the parallel run process for
Foundation Internal Rating Based (FIRB) approach
Under Standardised Approach, loan assets have been classified into different categories. The
major categories are:
1. Claims on Domestic/ Foreign Sovereigns
2. Claims on Public Sector Entities (PSEs)
3. Claims on Banks
4. Claims on Corporates
5. Claims on NBFCs
6. Claims included in the Regulatory Retail Portfolio
7. Claims secured by Residential Properties
8. Claims under Specified Categories
9. Other Assets (Staff Loans)
10. NPA
11. Off Balance Sheet Items
The credit exposures in the above categories are assigned different Risk Weights (as
prescribed by RBI) to calculate Risk Weighted Assets for Credit Risk, which forms a basis for
computation of Capital Charge
External Risk Rating (IRMD 26/2020)

• All borrowers of our Bank with total exposure (both Fund Based & Non Fund Based) of
up to Rs.25 Crore., be exempted from securing External Risk Ratings.
• For borrowers having IRR PNB-B2 and exempted from requirement of ERR up to
Rs.25 Crs., ZOCAC-II can sanction proposal for fresh/enhancement/additional/adhoc
limits where exposure is secured by the eligible collaterals of at least 50% or more.
Collaterals (Eligible)
I. Cash & Cash Equivalents like FDR, NSC, KVP etc.

II. II. LIC Policies (Surrender Value)
III. III. Immovable Properties in the form of Residential/ Industrial/ Commercial
Properties
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Surplus value of primary securities of Land & Building, if available, can also be considered for
the purpose.
In event of Non-availability of External Risk Ratings in case of new borrowers, the sanctioning
authority shall provide a suitable time of 3 to 6 months to the new borrowers for obtaining
external risk rating in terms of sanction.
Credit Risk Mitigation Techniques

• Eligible financial collaterals help the bank in reducing the exposure amount by
permitting offset of such collaterals against the exposure
• Under Standardised Approach, the following securities (either primary or secondary)
are eligible for treatment as credit risk mitigants:
i. Cash or the deposit with the bank taking exposure
ii. Gold
iii. Securities issued by Central/ State Govt.s
iv. KVP/ NSC
v. LIC Policies (Surrender Value)
vi. Certain specified Debt Securities
vii. Certain specified Mutual Fund instruments
Statutory, Regulatory and Other Restrictions

Statutory Restrictions:
• Bank can not grant any loan on the security of its own shares [Sec. 20(1) of BR Act]
• Certain restrictions on loans to the Directors and their firms [Sec. 20(1) of BR Act]
• Restrictions on holding shares in companies [Sec. 19(2) and 19(3) of BR Act]
• Restriction on credit to companies to buy back their securities (Companies Act, 2013)
Regulatory Restrictions:
• Granting loans and advances to relatives of Directors
• Lending to directors and their relatives on reciprocal basis
• Restrictions on Grant of Loan & Advances to Officers and Relatives of Senior Officers
(Scale IV & above) of the Bank
• Restrictions on Grant of Financial Assistance to Industries Producing/ Consuming
Ozone Depleting Substances (ODS)
• Restrictions on Advances against Sensitive Commodities under Selective Credit
Control (SCC)
•
Restrictions on other Loans and Advances:
• Loans and Advances against Shares, Debentures and Bonds
• Advances against Fixed Deposit Receipts (FDRs) issued by other banks
• Advances to Agents/Intermediaries based on Deposit Mobilization
• Loans against Certificate of Deposits (CDs)
• Finance against Indian Depository Receipts (IDRs)
• Advances for purchase of Bullion/Primary Gold
• Loans & advances to Real Estate Sector
• Grant of Loans for acquisition of Kisan Vikas Patras (KVPs)
• Bridge Loans against receivables from Government
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Exposure Norms
Adherence to Prudential Exposure Norms
1. Prudential Exposure Limit under Large Exposure (LE) Framework: As per RBI
guidelines:
• Single counterparty: 20% of Bank’s Capital Base
(additional 5% by Board)
• Group counterparty: 30% of Bank’s Capital Base
• Single NBFC: 20% of Bank’s Capital Base
• Connected NBFCs: 25% of Bank’s Capital Base
Capital Base = Tier 1 Capital
Internal Exposure Ceilings

Within the ceilings prescribed by RBI – (For Single Borrower – Other than NBFC):
Internal/ Ceilings (% of Tier 1 Capital)

External Credit Risk Rating
A1/ A2/ PSUs/AAA/ AA 20
A3/A 17
A4/ B1/ B2/BBB/ BB 15
B3/ C1/B 12
C2/ C3/C 9
Similarly, internal exposure ceilings, within the overall regulatory ceilings have been laid down
in respect of following major segments:
• Single borrower – NBFC
• Proprietorship, partnership, LLP, Society, Trust and HUF
• Prudential limit for substantial exposure
• Maximum Industry-wise Exposure Limit
• Unsecured Exposure Ceiling
• Exposure Limit for Advances to Traders
• Lending to State Govt. Undertakings/ PSUs – Exposure Limits
• Film Industry Sector
• Real Estate (excluding residential mortgages)
• Capital Market Sector
• Renewable Energy – Exposure Limit
• Exposures to entities with Un-hedged Foreign Currency Exposure
• Exposure to certain Joint Ventures/ subsidiaries of Indian Corporates
•
Decision on Risk Acceptance Levels
Linking loaning powers with Risk Rating: CACs/ officials shall exercise loaning powers
linked to risk rating of borrower/ rating of the industry.
Hurdle rate for external risk rating: ERR of BBB and above is considered
Investment Grade. For consideration as Investment Grade, both the conditions w.r.t. internal
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and external rating shall be fulfilled.
Other Loaning Powers:
a) Sanction of limits in anticipation of approval by MC: by HOCAC-III
b) In Principle Consent: For MC power cases, HOCAC-III
c) Sanction of limits to NBFCs: ZOCAC-II and above
Credit Risk Strategy – Decision on Risk Acceptance Levels

d) Advance to Real Estate Sector: Prior administrative clearance required
e) Other restrictions of loaning powers: Rubber Industry, Tea Industry, sponge
iron units, cement, civil aviation, NBFCs, Bridge loans etc., PSU disinvestment, Windmill
power, purchase of Gold/ bullion, Educational institutions, Gems and Jewellery sector,
Infrastructure projects. The powers to sanction such loans are not granted to field below
ZOCAC-II
f) Adhoc Limits: T.O.Ds and Adhoc Facilities
g) Confirmation of Action: Reporting within max. 3 days
h) Take over of Accounts from other banks: With prior approval of next
higher authority, with certain exemptions
Pricing:
a) Linking of pricing with credit risk rating: In respect of borrowal accounts
availing limits over Rs. 20 lac, interest rates have been linked with the credit risk rating with
certain exceptions.
b) Risk Adjusted Return on Capital (RAROC) Framework: For analysing risk
adjusted return and providing a consistent view of profitability across loans. Used for
proposing concession on applicable card rates for limits above Rs. 5 Cr.
c) Reference Lending Rate:
i) MCLR
ii) RLLR
iii) RLPLR
Credit Risk Rating Models
S. No. Name of Rating Coverage

Model
A PNB Trac Covers the risk rating models, including default risk rating
and Transaction/ Facility Rating models
B PNB Score Scoring Model for Retail segment
C PNB Score SME Scoring Model for MSME segment
D PNB Farm Score Scoring Model for Farm Sector
IRMD Consolidated Circular No. 37 dated 31.12.2019
Credit Risk Rating Models:

The bank has developed the following models:
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Sr. No. Credit Risk Rating Model Total Exposure Turnover
1 Large Corporate Above 15 crore Above 100 crore
OR
except trading
concerns.
2 Mid Corporate Above 5 Crore upto 15 Above 25 crore upto
crore OR 100 crore
All trading falling under Large Corparte shall
also be rated under this Model
3 Small Above 50 lac upto 5 AND upto 25 crore
crore
4 NBFC All NBFC shall be rated under this model
5 Credit Risk Rating models for All banks and Financial Institutions
Banks/ FI
6 New Project Rating Model Above Rs. 5.00 crore Cost of Project above
OR Rs. 15.00 crore
7 Entrepreneur New Business Model Above 50 lac Upto Rs. Cost of project upto
5.00 crore Rs. 15.00 crore
All new NBFC/MFI,
New borrower entities, setting up new business
requiring only working capital/NFB limits of
above ₹5 crore but not involving setting up of
any project as such.
Projects already completed with own finance,
audited results for first year of operations are
not yet available and proposal is only for
sanction of WC/NFB/TL facilities.
All new trading business irrespective of limits.
Dynamic Review of Ratings. Mandatory for borrowers having exposure more
8.
than 50 crore and for all listed borrowers
irrespective of exposure to be reviewed under
this model on expiry of 5 months from the date
of regular rating.
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Rating Risk Significance Description
Grade
PNB-A1 Minimum Risk Excellent business credit
PNB-A2 Marginal Risk Very good business credit
PNB-A3 Modest Risk Good business credit
PNB-A4 Lower Risk Satisfactory business credit
PNB-B1 Average Risk Acceptable business credit with average risk
PNB-B2 Marginally Acceptable An obligor is less vulnerable in the near term. However, it
Risk faces major ongoing uncertainties
PNB-B3 Cautiously Acceptable More vulnerable than B2

Risk
PNB-C1 High Risk Not creditworthy; generally acceptable on case to case

basis
PNB-C2 Very High Risk Not creditworthy; minimal margin of principal and interest
payment protections
PNB-C3 Exceptionally High Risk Unacceptable business credit
"Investment Grades” - Rating grades B2 and above (With score of more than 46.00)
"Borderline Risk Grade" - B3 (Having score more than 40.00 and upto 46.00)
"High Risk Grades" - C1, C2 and C3 (Having score up to 40.00)
Rating and vetting authority for Credit Risk Rating
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Loan Amount (Rs.) Credit Risk Rating Authority Vetting/ Confirming Authority
Upto 10 Lac Officer/ Manager at GBB Designated officer, not connected wi

that loan proposal
> 10 Lac <= 1 Cr. Risk Rating Officer, RAM Designated independent officer
> 1 Cr. <= 10 Cr. Risk Rating Officer, RAM/ MCC Head, ZRMC
> 10 Cr. <= 30 Cr. ZRMC DGM, Industry Desk, IRMD, HO
> 30 Cr. ZRMC GM, Industry Desk/ Credit Risk/ IRM

HO
Irrespective of Loan Overseas branches GM, Industry Desk/ Credit Risk/ IRM
Amount HO
PNB SCORE
8 Scoring models for all the retail schemes except i) PNB Baghban Scheme (Scheme for
Reverse Mortgage) and ii) Loan against Gold Jewellery & Gold Coins have been developed
under the name PNB SCORE. applicable to all Retail Loan applications (except exempted
categories) for loan upto₹50.00 lac, however, for retail loan schemes namely Housing Loan,
Education Loan and Vehicle Loan (loans to individuals), the same is applicable irrespective of
amount
PNB SME SCORE:-

For SME, following models have been developed, which can cater to the requirements of the
schemes under SME sector:
1. SME Manufacturing (New Cases including takeover) - Above ₹10 Lacs up to ₹50 Lacs.
2. SME Service (New Cases including takeover) - Above ₹10 Lacs up to ₹50 Lacs.
3. SME Manufacturing and Service (New Cases including takeover) - ₹10 Lacs and below.
4. SME Manufacturing and Service (Renewal / Enhancement) - Above ₹10 Lacs up to ₹50
Lacs.
5. SME Manufacturing and Service (Renewal / Enhancement) - ₹10 Lacs and below.
Pnb Farm Sector

Farm Score is divided in 4 score models for scoring under 24 Agriculture Schemes which are
mentioned below:-
(i) Model I: Farm Credit-Agriculture with limit above ₹ 1 lakh and upto₹ 50 lakh.
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(ii) Model II: Farm Credit- Allied Agriculture with limit above ₹ 1 lakh and upto₹ 50 lakh.
(iii) Model III: Farm Credit- Agriculture with limit above ₹ 1 lakh and upto₹ 50 lakh (Renewal/
Enhancement).
(iv) Model IV: Farm Credit-Allied Agriculture with limit above ₹ 1 lakh and upto₹ 50 lakh
(Renewal/ Enhancement).
Validity of Credit Risk Rating:

The credit risk rating of a borrower shall become due for updation after the expiry of 12
months from the month of confirmation of rating or 18 months from the date of balance sheet
on the basis of which credit risk rating was assigned, whichever is earlier. The rating shall be
treated as „overdue‟ after the expiry of 15 months from the month of confirmation of rating or
21 months from the date of Balance Sheet on the basis of which the credit risk rating was
assigned, whichever is earlier.
Claims on Domestic/Foreign sovereigns

 Claims on Central Government/ State Govt. and accounts guaranteed by Central
Government attracts risk weight of 0%, whereas State Govt. guaranteed claims attracts 20%
risk weight.
 There is 0% risk weight in case of claims on RBI/DIGCC/CGTMSE/Credit Risk Guarantee
Fund Trust for Low Income Housing (CRGFTLIH). However, the claims on ECGC attract risk
weight of 20%, subject to maximum liability (ML) amount specified in the whole turnover policy
taken by Bank.
 Foreign sovereign attracts risk weight as per the rating assigned by international rating
agencies namely Standard & Poor, Moody’s and FITCH.
Claims on Corporates include all FB and NFB exposures, other than those which qualify for
inclusion under sovereign, bank, regulatory retail, residential mortgage, NPA and specified
categories. The risk weight is in the range of 20% to 150% depending upon the ratings
assigned by the external credit rating agencies as approved by the RBI/Board of the bank.
The following tables indicates the risk weight applicable to claims on corporate& other
prescribed entities.
A) Long Term ratings:-

Credit Assessment by AAA AA A BBB BB and Unrated**
external rating agencies below
Risk weight 20% 30% 50% 100% 150% 100%
B) Short Term ratings:-
Credit Assessment by A1+ A1 A2 A3 A4 & D Unrated**
external rating agencies
Risk weight 20% 30% 50% 100% 150% 100%
 Claim on non-resident corporates attracts risk weight as per the ratings assigned by
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international rating agencies.
 All unrated standard restructured/rescheduled claims are assigned higher risk weights, until
satisfactory performance as defined in the restructuring policy.
Claims secured by Residential Properties (Individual Housing Loans)
Outstanding loan LTV ratio (%) Risk Weight (%)

Up to ₹30 lakh ≤ 80 35
> 80 and ≤ 90 50
Above ₹30 lakh and up to ₹75 lakh ≤ 75 35
> 75 and ≤ 80 50
Above ₹75 lakh ≤ 75 50

Restructured housing loans Applicable Risk weight as prescribed above +
25%
Commercial Real Estate – NA 75

Residential Housing (CRE-RH)
Commercial Real Estate (CRE) NA 100
NPA The unsecured portion of NPA net of specific provision and partial write offs shall be risk
weighted as under:
Residential Other NPAs
mortgage
1 Specific provisions are less than 20% of 100% 150%
outstanding amount of NPA
2 Specific provisions are at least 20% and upto 50% 75% 100%
of outstanding amount of NPA
3 Specific provisions are at least 50% of outstanding 50% 50%
amount of NPA
In addition to the above , Where NPA is fully secured by following forms of collaterals either
independently or along with other eligible collaterals a risk weight of 100% will apply, net of
specific provisions, where provisions reach 15% of outstanding amount.
i) Land and Building which are valued by an expert valuer and where the valuation is
not more than three years old, and
ii) Plant and Machinery in good working condition at a value not higher than the
depreciated value as reflected in the audited balance sheet of the borrower, which is
not older than eighteen months.
Prudential limit for substantial exposure: Substantial Exposure is defined as sum total of
exposures assumed in respect of those single borrowers enjoying credit facilities in excess of
a threshold limit of 10% of capital funds of the Bank as per published accounts as on 31st
March of previous year.
Private Sector Borrowers 100% of capital funds of the Bank @
Public Sector Borrowers 300% of capital funds of the Bank @
@ as per published accounts as on 31st March of previous year
 In respect of Proprietor concern (Limit Rs. 50.00 crore), Partnership firm (including LLP)
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Limit is Rs. 100.00 crore & for Single Entity (Constitution: Society, Trust, HUF) exposure
limit shall be restricted to Rs. 200. Crore by way of Fund Based/Non Fund Based facilities.
c) Maximum Industry Exposure Limit: These are fixed as a percentage to actual Outstanding
and undisbursed term loan amounts of the respective industry of the last audited quarters. In
industries where no exposure ceilings are fixed, the exposure ceiling may be taken as 1% of
the bank’s gross advances. CRMD (Sastra) shall monitor the ceilings especially those which
reached 85% of the exposure limits to avoid any breach.
d) Unsecured Exposure Ceiling: The exposure including all funded and non-funded facilities,
where the realizable value of tangible security is not more than 10%, ab-initio of the
outstanding exposure shall be treated as “Unsecured Exposure‟, which should not exceed
25% of gross outstanding advances (FB+NFB) as on close of previous quarter. Within the
above ceiling, a sub ceiling of 15% of gross outstanding advances (FB+NFB) as on close of
previous quarter has been fixed for unsecured advances to Govt. and PSUs borrowers.
e) Exposure Limit for Advances to Traders: - Loans to Corporate Traders should normally not
exceed ₹100 Crore. However, facilities to existing clients having limits above ₹100 Crore may
be renewed/reviewed by the Sanctioning Authorities. Fresh sanction/enhancement to traders
above ₹100 crore, but upto₹200 crore shall be considered by HOCAC-III. Fresh
sanction/enhancement to traders above ₹200 crore, but upto₹500 crore shall be considered
by Management committee. Retail Chains (like Reliance, Easy Day, more etc.) are kept out of
purview of aforesaid ceilings.
f) Lending to State Govt. Undertakings/PSUs– Exposure Limits
A maximum State-wise exposure limit to State Govt. Undertakings/PSUs (excluding advance
against bank deposits) is fixed at 20% of Bank‟s capital funds as at previous year end. All
fresh/enhancement/renewal proposals of loss making State Govt. Undertakings/PSUs shall
be placed to Management Committee for consideration.
g) Advance to Gems & Jewellery Industry:Fresh/Adhoc/Additional/Enhancement proposals
under Gems &Jewellery sector be considered at MC Level on merits. However, renewal of
limits shall continue to be considered by competent authority as per loaning power
guidelines.Further, financing to jewellers against Mortgage of IP under ODIP scheme of RBD
will continue as per extent scheme.
h) Quantitative Exposure Ceiling:
Film Industry sector: Exposure per borrower in the sector shall not be more than ₹25
crore. Further, as approved by board, fresh exposure i.e. aggregate of FB +NFB
facilities sanctioned in a financial year should not exceed ₹200 crore.
Real Estate: It being a sensitive sector, the overall exposure ceiling for real estate
sector has been fixed at 15% of the total advances of the bank as at close of last
quarter. There is sub ceiling of 7% on exposure on NHB/HFCs while in view of lower
risk weight of 75% for CRE-RH there is no sub ceiling for Resi. Mortgages under the
sector, while CRE has a ceiling of 10% under Real Estate sector.
l) Capital Market sector: In terms of revised RBI guidelines, the ceiling for capital market
exposure is fixed at 40% of its net worth on a solo and on consolidated basis. Bank has
stipulated following ceilings in respect of advances forming part of exposure to capital market:
 An overall ceiling of 20% of net worth of the bank as on 31st March of the previous year
for advances against shares to different categories of borrowers, forming part of exposure
to capital market.
 A sub-ceiling of 10% of net worth of the bank as on 31st March of the previous year (within
the aforesaid ceiling of 20% of net worth of the bank), for aggregate advances to all stock
brokers (fund based & non-fund based).
 A sub-ceiling of ₹ 100 crore (within the aforesaid ceiling of 10% of net worth of the bank),
for advance to any single stock broking entity (fund based & non-fund based) including its
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associate/inter connected companies.
 A ceiling of ₹ 10 lakh and ₹ 20 lakh for financing individuals for acquiring shares under
IPO/FPO and ESOP respectively
m) Renewable Energy- Exposure limit: Exposure limit of 1% of Gross Advances for lending to
Renewable Energy within the overall limit of 10% fixed for Energy sector as on close of
previous quarter has been fixed by Board.
n) Exposures to entities with Un-hedged Foreign Currency Exposure: Banks to monitor the
unhedged f.c exposure of the borrowers at quarter ends along with annualized EBID for
incremental provision of 0 to 80 basis points on total credit exposure, over and above the
standard asset provisioning.
Framework on Enhancing Credit Supply for Large Borrowers through Market Mechanism if
the banking system crosses the lending limit prescribed for a large borrower, the provisioning
requirement on the excess amount would be 3 percentage points higher than normal.
Additionally, the banking system would have to assign a risk weight of 75 percentage points
over and above the applicable weight for the exposure to the large borrower.
Strengthening of Pre-sanction Appraisal:

 To ensure the quality of credit portfolio, GOI under EASE program has emphasised on
strict segregation of Pre-sanction and Post-sanction roles and responsibilities for
enhanced accountability.
 In this direction, Bank has created MCCs, RAM, LCBs, E-LCBs to ensure improved
TAT, Qualitative Credit Assessment, Efficient Monitoring and Strict Segregation of Pre
& Post sanction roles and responsibilities.
 Score based lending is being followed in retail lending for healthy growth of retail
lending portfolio.
 Due diligence and market intelligence, along with personal field visits is given due
importance.
 Independent market reports and vetting of documents submitted by borrowers from
authorised data bases and independent experts like advocates is being used.
 Credentials are verified from the existing bankers of the prospective borrowers and
their records in Credit Information Companies (CICs).
Central Economic Intelligence Bureau:

CEIB report on prospective borrowers is sought for HO power loan accounts, to see if there is
any adverse mention there
Legal Entity Identifier (LEI) Registration:

RBI has made it mandatory for corporate borrowers having aggregate (FB+NFB) exposure of
₹5 crore and above (introduced in a phased manner) from any bank to obtain Legal Entity
Identifier (LEI) registration and capture the same in the Central Repository of Information on
Large Credits (CRILC). This will facilitate assessment of aggregate borrowing by corporate
groups, and monitoring of the financial profile of an entity/ group.
Adoption of Fair Practice Code:
Our bank has introduced Fair Practices Code to refine standard of customer services and
transparency in the lending activities.
Valuation of Property AND Plant and Machinery:

A) Valuation of Property: The purpose is to ensure that the IPs as security are valued at
realisable price to assess security coverage. Periodical valuation gives an idea about
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the movement in realisable value over time.
Criteria for valuation of IPs:
• where aggregate credit limits are Rs.10 lac & above and value of immovable property
to be mortgaged/charged is Rs.20 lac & above
• where the value of IP is above Rs.5 crore, get valuation of such Ips done from
minimum two valuers of category A or B on the Bank’s approved panel. In case the
difference in valuation is less than 15%, the average value may be taken
• In case the difference is more than 15%, 3rd valuation may be got done from a senior
valuer in category A and the average of the two valuation reports having difference of
not more than 15% be taken.
• Wherever the Branch Head feels that RV of IPs is significantly lower than the one on
bank’s record in accounts with aggregate limits/ outstanding of Rs.10 lac & above but
less than Rs.1 crore and value of IP is Rs.20 lac & above, he may get the property re-
valued from the bank’s approved valuer provided the valuation is more than one year
old
• In accounts having aggregate limit of Rs.1 crore & above, valuation of IPs be got done
from approved valuer once in three years.
B) Valuation of Plant and Machinery:

i. In cases where new P&M is to be financed, the cost price indicated in the quotation/
supplier’s bill shall be reckoned as its value, which should be verified by making
enquiries from other vendors supplying such machinery.
ii. In fresh borrowal accounts where credit facility is to be considered against the
principal/ collateral security of existing P&M to be charged to the bank, valuation of
such P&M be got done by branches from the valuer on the Bank’s approved panel.
iii. Where the value of P&M to be charged is ₹50 crore & above, branches shall get
valuation of such P&M done from minimum two valuers on the Bank’s approved panel.
Methods of Lending:
Working Capital: Following systems to be followed for assessment of WC requirements:
i. Simplified method linked with turnover: Simplified method based on turnover for
assessing WC finance upto ₹2 crore (upto ₹5 crore in case of MSME units) shall be used.
ii. MPBF System: It shall be followed for units requiring working capital finance exceeding
the above-mentioned amount.
iii. Cash Budget System: Cash Budget System shall to be followed in Sugar, Tea, Service
Sector, construction activity, Film Production accounts etc.
Loan System for Delivery of Bank Credit: RBI has advised that in respect of borrowers
having aggregate FBWC limit of ₹150 crore and above from the banking system, a minimum
level of ‘loan component’ of 60% needs to be maintained from 01.07.2019. Hence, the
working capital loan to be divided in two separate components as WCL and Cash Credit in all
applicable cases.
Methods of Lending:
Foreign Currency Loan (FCL & FCTL): Foreign currency loan (FCL) shall be applicable
under working capital for making payment for merchandise imports. Loans shall also be in
substitution of Working Capital Demand Loan or CC component. In case the facility is
released for domestic purchase of goods, the amount will be disbursed to the borrower in INR
equivalent to the FC advanced. However, the liability of the borrower will be denominated in
foreign currency only.
Foreign Currency Term Loan (FCTL) may be allowed to importer of capital goods, in
substitution of term loans approved by the bank in favour of constituents in INR, takeover of
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high cost Rupee term loans from other banks and financial institutions in India and for Pre-
payment of high cost ECB.
Assessment of Non-fund based facilities: shall be subjected to the same degree of

appraisal/ scrutiny as in the case of fund based limits because outstanding in these facilities
are to be reckoned at 100% for exposure purposes.
Need based requirement of a borrower should be assessed after reckoning the lead time,
credit period available, source of supply, proximity of supplier, etc. in case of LCs and industry
practices and business requirements in case of LGs.
The working of NFB assessment is to be incorporated in the appraisal note.
Further, while assessing non-fund facilities, cash flow aspects should also be taken into
account.
Term Loan: Assessment of earning potentials and generation of cash surplus is the vital
ingredient in the appraisal of term loans. The unit should make enough surplus earnings after
meeting all the expenses, taxes and other necessary provisions and the same should be
adequate for servicing the loan and interest thereon within a reasonable period of time.
The appraisal of term loan broadly involves an analytical assessment of the following:
• Purpose, cost of project and how it is to be tied up,
• Future trends of production and sales,
• Estimates of costs, expenses, earning and profitability, and
• Cash flow statements during the period of the loan.
While appraising proposal for term loan, the following four fundamentals should be carefully
studied and analysed:
• Technical feasibility of the project.
• Economic viability of the project.
• Financial viability of the project.
• Managerial competence.
Tail risk embedded in project financing: Tail risk, though inherent in project, is not accounted
for generally, but can occur due to occurrence of rare events. It is something that is unlikely to
happen, but still could. Adequate precaution, with an eye on the tail risk must also be taken,
while appraising the project.
Benchmark ratios with Desired and Acceptable levels for different Segments/ Industries: In
accordance with EASE Reforms, guidelines on benchmark ratios with desired and acceptable
levels for different segments/ industries have been specified. The key Benchmark ratios have
also been defined vide L&A 145/ 2019.
Scrutinise group balance sheet and ring-fencing of cash flows: For scrutiny of group
balance sheet it is advised that while appraising/ sanctioning the proposal, consolidated group
balance sheet must be examined and group leverage ratio be also kept in view to judge the
impact of risk emanating from group companies.
For ring-fencing of cash flows the guidelines on TRA/ Escrow accounts have
been issued which provides that TRA/ Escrow arrangements to be followed in
true spirit right from the disbursement stage.
Lending on the basis of Projects Appraised by Other Institutions:

Many times TEV studies carried out for Project Lending by nationalized banks, appraising
institutions, consultancy organizations and other institutions are received by the Bank. To
have a uniform approach regarding vetting of projects appraised by such institutions,
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guidelines detailing the procedure to be followed, outsourcing of some part of Project
Appraisal like due diligence, market potential studies, stage of business cycle, technology
related inputs and cost components including the reports on equipment/ raw material
suppliers, comparative study of similar projects and preparation of financial models for the
individual project and cut-off level for TEV Study have been framed.
Besides all Nationalized Banks, names of appraising institutions, consultancy organizations
and other institutions approved by the Bank from time to time are circulated to the field on an
on-going basis.
Viability Gap Funding (VGF): GOI has notified a scheme for Viability Gap Funding (VGF)
to infrastructure projects, under which grant support one-time or deferred is made available
for certain PPP Projects by Govt. of India, with the objective of making the project
commercially viable. (L&A 104/ 2016)
• Partial Credit Enhancement: RBI has issued directions for partial Credit
Enhancement to bonds issued by corporates/ Special purpose vehicles (SPV) for
funding all type of projects. Based on this, Bank has also issued detailed guidelines on
various aspects inter alia nature, purpose, capital requirement, eligibility, exposure
ceiling, assessment etc.
Documentation– Vetting of Loan Documents: A uniform set of Standard Covenants

circulated by IBA with the instructions that the Standard Covenants will be stipulated at the
time of sanction and shall form part of documentation for all credit facilities sanctioned by the
bank has been advised to the field vide L&A Circular No. 109 dated 19.12.2016.
Bank has in place a system of Vetting of Loan Documents from the approved advocate in
case of borrowal accounts, with sanctioned limits of ₹ 2 crore & above (both fund based and
non-fund based).
PRE DISBURSEMENT COMPLIANCE (L&A 22/21)
Credit Facility PDC to be cleared by

Upto ₹10.00 Lakh/ GBB sanctioned cases Branch Incumbent
Above ₹10.00 lakh and upto₹100.00 Any independent officer of PLP not below the rank of
Lakh/ Retail Loans irrespective of limit Scale-III preferably from field Visit Team not involved
sanctioned in the Credit Appraisal and Sanction of the
respective proposal.
Above ₹100.00 Lakh Any independent officer preferably in the rank of
Scale-IV but not below the rank of Scale-III at MCC,
not involved in the Credit Appraisal and Sanction of
the respective proposal.
Cases dealt at LCB/ELCB LCB/ELCB Head
In cases where PLP is not located / MCCs have not been established and GBBs are linked
only to PLPs: (For Cases above ₹100.00 Lakh and other than Retail Credit)
Exempted Category Following category of advances shall be exempted from PDC: a. Loan to
staff members under Staff Scheme or General Public Scheme b. Renewal of Credit Facilities
at existing or reduced level without any major change (i.e. which does not require any
documentation formalities) in terms and conditions of last sanction/renewal. c. DL/OD against
100 % FDR. However, other loans fully secured by Liquid Security (e.g.BG/LC against 100%
FDR/LIP/NSC etc.,) shall continue under PDC.
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Post-Sanction Follow Up :
Limit Sanctioned Statement (LSS): Sanctioning Authorities have to submit details of all
limits sanctioned, whether fresh/ renewal/ reduction/ enhancement or adhoc in the prescribed
format of LSS as on last day of the month to the next higher authority.
GBBs will submit the LSS to respective Circle Offices; RAMs/ MCCs shall submit to respective
Zonal offices; LCBs, E-LCBs & Zonal offices shall submit to Head Office.
Legal Compliance Certificate: For all credit limits of Rs. 10 Lac and above, branches will
submit legal compliance certificate, certifying the compliance of all the formalities contained
therein. Pending formalities, if any, shall also be reported in terms of extant guidelines. The
same is to be submitted in respect of all fresh sanctions/ enhancement/renewal, to the
respective controlling office, within the stipulated time.
Ensuring end-use of funds: Bank needs to ensure end-use of funds, it has lent. It is necessary
to ensure that the Bank does not depend entirely on the end-use certificates issued by the
CAs, but strengthens its internal controls and system to ensure end-use of funds, which would
enhance the quality of the loan portfolio.
Some of the illustrative measures that could be taken by the branches to ensure end-use of
funds are:
i) Meaningful scrutiny of quarterly progress reports/ operating statements, balance sheets of
the borrowers;
ii) Regular inspection of borrowers’ assets charged to the Bank as security;
iii) Periodical scrutiny of borrowers’ books of accounts;
iv) Periodical visits to the assisted units;
v) System of periodical stock audit, in case of working capital finance
Ensuring end-use of funds: Following points may also be kept in view especially in case of
large borrowal accounts:
i. In working capital facility, stock statement submitted by the borrower may also be got
verified by CA/ Statutory auditor of the borrower, initially at the time of its first submission and
periodically thereafter as prescribed in the sanction. Sanctioning authority may waive the
same on merits of the case.
ii. To verify the debtors and creditors, their GSTIN as mentioned on the invoice may be cross
checked from GST website.
iii. In case sufficient information is not available about the supplier of machinery/ equipment,
credit report/ external rating report of supplier of machinery & equipment may be obtained to
verify the credentials of the supplier.
iv. In cases where loan is being sanctioned for purchase of land/ property/ machinery or for
construction and Lender’s engineers have not been appointed, certificate from valuer/
technical experts (approved by Bank) may be obtained for verification of end use of funds.
Since, in some HO sanction cases, proposals are being recommended by the branches,
which are located very far from the project site of the company , it has been advised that a
suitable stipulation may be prescribed in the sanction itself, that the project may be monitored
by a nearby branch to ensure a systematic follow up.
Agencies for Specialised Monitoring (ASMs): The services of ASMs are to be utilized for
large value loan by bank under Sole/ multiple/ consortium banking arrangement. In case
borrowal account is having large exposure i.e. more than ₹250 crore, ASMs are to be
appointed by the Lead Bank.
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However, in cases where the sanctioned facility is more than ₹250 crore under Consortium
but our Bank is not the Lead Bank, respective Zonal Heads to take up with the Consortium
Lead Bank/ FI for appointment of ASM.
Further, if need arises, ASMs can also be appointed in the following situations, irrespective of
the type of banking arrangement and limit amount:
• Exposures of specialized nature.
• Criticality/ Stress observed in the account.
• Project or functioning of borrowal account is too technical or complex.
• If flagged as RFA by Banks.
• If there is adverse development in the account or in the industry
Notwithstanding anything mentioned above, in case of borrowers having valid External Risk
Rating of AAA or AA for the Bank facilities, Sanctioning Authority is empowered for
considering waiver of appointment of ASMs.
As State Govts. / PSU (Central/ State) Borrower entities are subject to different kind of audits,
appointment of ASMs is waived in such cases.
Loan Review Mechanism: Coverage of credit audit:

All standard risk rated accounts except (a) Retail Banking segments (i) Rule Based Lending
(housing, vehicles & personal loan) (ii) Advances against consumer durables, (b) Advances
against Bank Deposits, LIC policies, Govt. securities, Gold/ silver Jewellery& ornaments,
advance against shares, debentures & Mutual Fund will be covered under credit audit.
Eligibility of accounts for credit audit:
• All rated standard accounts with exposure of ₹10 cr. & above. In case of combined
group exposure of ₹10 cr. and above, all the accounts irrespective of individual limits
shall be subjected to credit audit.
• Top 5 rated standard accounts of Circle with a minimum balance of ₹5 cr. & above,
where auditable accounts are less than 10 in a Financial Year
• In case of taken over borrowal accounts, credit audit are also to be conducted for
accounts with exposure of ₹1 crore and above.
Loan Review Mechanism: Frequency of credit audit:

All eligible Accounts shall be subjected to credit audit annually.
However, in following cases, half yearly audit may be conducted in respect of accounts with
exposure of ₹5 Crore and above:
• Where there is decline in Credit Risk Rating by two notches, and/or
• Decline in PMS by 2 notches for 2 quarters continuously and /or
• Account is persistently in SMA-II category for 2 quarters continuously.
Credit Audit Exercise: Credit audit will be conducted as under:
i) By Concurrent auditor: Upto Rs. 20 Cr.
ii) By CARD/ Outsourced auditor: Above Rs. 20 Cr.
Loan Review Mechanism Policy for Overseas Credit Accounts:
Coverage: Credit Audit shall be conducted on standalone basis in all standard risk rated
accounts except:
i) Those secured by 100% cash security.
ii) Bills discounted under LC issued by approved banks after receiving acceptance from the
LC issuing bank.
iii) Term loan secured by SBLC of approved banks
Loan Review Mechanism (overseas): Scope of credit audit:
i) Credit Audit & Review shall provide feedback on the effectiveness of credit appraisal
and to identify incipient deterioration in portfolio quality.
ii) The scope of the review shall cover all loans above a cut off limit. Banks shall also
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target other accounts that present elevated risk characteristics. As per RBI, at least
30% to 40% of the portfolio should be subjected to Loan Review Mechanism in a year.
Eligibility of accounts for Credit Audit:
i) All rated standard accounts with exposure of USD 3 Mio & above. In case of combined
group exposure of USD 3 Mio and above, all the accounts irrespective of individual limits shall
be subjected to credit audit.
ii) 5% of rated standard accounts selected on random basis with exposure of USD 1 Mio &
above but upto USD 3 Mio.
Credit Audit Exercise: Credit Audit will be conducted either by Concurrent Auditor/ CARD
Auditor so deputed by IAD, HO in consultation with CARD, HO/ Outsourced Local Auditor
appointed by GM-IBD.
Loan Review Mechanism (overseas): Frequency of credit audit:

a) All eligible Accounts shall be subjected to credit audit annually.
b) However, in following accounts half yearly audits may be conducted:
• Where there is decline in Credit Risk Rating by two notches, and/or
• Decline in PMS by 2 notches for 2 quarters continuously and/or
• All eligible accounts under SMA category.
• Other accounts not covered above which are intermittently under SMA category for 2
quarters continuously.
Credit Audit for Secondary Market Purchase/ Taken over accounts: shall be conducted as is
the case with taken over accounts in domestic Policy.
Processing of Credit Audit Reports: The CARD/ Outsourced Auditor will submit their
reports to the CARD, HO and IBD, HO under copy to the branches for compliance of the
observations.
Preventive Monitoring System (PMS):

System for tracking the health and conduct of borrowal accounts to capture the signals of
early warning and is applicable to all borrowal accounts having sanctioned limits (FB plus
NFB) above ₹1 crore.
Timely decision should be taken on the future course of action in the borrowal accounts
depending upon PMS rank.
As part of EASE agenda, the existing PMS has been revamped to additionally cover 127
Early Warning Signals including 42 Early Warning Signals prescribed by RBI and renamed as
PNB-SAJAG (EWS + PMS).
The scope and objective of PMS have been enlarged to not only cover the conduct and
compliance of terms & conditions of sanction but also contains triggers invoked in borrowal
account out of 127 Early Warning Signals.
The 127 EWS cover transactional/ financial/ non-financial and external parameters to facilitate
timely monitoring of loan accounts.
Stock Audit: Annual Stock Audit should be got compulsorily done in respect of all borrowal
accounts, enjoying Fund Based & Non Fund Based Working Capital Limits of ₹5 crore and
above from our Bank.
In respect of borrowers enjoying fund based limits of less than ₹5 crore, the extant guidelines
for getting the stock audit done in emergent cases and/ or, wherever bank’s interest demands,
with prior concurrence of Circle Heads shall continue.
Annual Stock Audit to be compulsorily conducted in all ‘B2’ to ‘C3’ rated accounts and NPA
accounts enjoying fund based and non- fund based working capital limits of ₹3 crore and
above.
In cases of Consortium/ Multiple Financing, where the borrower is enjoying working capital
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limits (fund based) of less than ₹ 5 crore from our Bank and ₹ 20 crore and above in
aggregate from the banking system, branches should take up with lead bank/ major share-
holder banks in multiple banking arrangement for getting the stock audit conducted.
There may be certain prestigious accounts which may fall under the category ‘A1’ to ‘B1’
under the risk rating module signifying lower risk and where conducting stock audit by an
outside agency may hurt the sentiments of borrowers. Exemption from annual stock audit, if
required, in such cases based on merits should be incorporated at the time of fresh sanction/
renewal/ review of the WC limits.
Recovery in Loans: At all levels, meticulous follow up needs to be continued to ensure that
the recovery is made in all loan accounts to ensure that no overdue remain outstanding in any
loan account.
Review/ Renewal of Working Capital Limits/Term Loans: All limits are to be renewed/
reviewed at least once in 12 months. The review of lower rating categories of “C1 to C3”
accounts is required to be done every 6 months.
Branches to treat borrowers continuing on lapsed sanction as high risk borrowers and to
monitor the operations in such accounts closely.
Sanctioning authority should avoid frequent short reviews in the account and ensure that the
account is renewed on regular basis.
In order to ensure effective monitoring specially in case of project financing having longer
gestation period, a system of annual review of Term Loans is in vogue. Accordingly, all Term
Loans, other than retail loans, with sanctioned limit of ₹2crore & above needs to be reviewed
annually, both during and after implementation stage.
The review of Term Loans will have no bearing on asset classification and income recognition
of the accounts.
Adoption of Green Renewal:

Simplified Procedure for Renewal of Credit Facilities i.e. Green renewal shall be applicable for
the following borrowers:
- Having aggregate credit facilities above Rs 50 lakh and upto Rs 5Crores (Retail Term Loan)
- Having aggregate credit facilities above Rs 10 lakh and upto Rs 5 Crores (Credit facilities in
cases of revolving Credit facilities)
Following conditions should be ensured for Green renewal
-No dilution in security/ margin
-No change in management.
Restructuring of Accounts: The basic objective of restructuring is to put in place a transparent

mechanism for restructuring of debts of potentially viable entities facing temporary problems
due to factors beyond their control.
The detailed Board approved Policy & Framework for Resolution of Stressed Assets has been
framed in line with RBI’s revised framework issued vide notification dated 7.6.2019.
Restructuring cell under Credit Division/ ZO to ensure resolution of standard accounts as per
RBI guidelines within time frame of 180 days.
Guidelines on Framework for Revival and Rehabilitation for Small and Medium Enterprises
(FRR for MSMEs) has been conveyed vide MSME Circular No. 40/ 2016 and subsequent
amendment, issued from time to time. As per FRR guidelines, all stressed MSME accounts
(only Standard & Sub- standard) with total credit limits upto ₹ 25 crores will be covered under
the framework.
Restructuring in respect of projects under implementation involving deferment of date of
commencement of commercial operations (DCCO), shall continue to be covered under
guidelines contained in RBI circular on ‘Prudential norms on Income Recognition, Asset
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classification and Provisioning pertaining to Advances’ (RBI/ 2017-18/ 131 dated 12.02.2018
and DOR.No.BP.BC.33/ 21.04.048/ 2019-20 dated 07.02.2020)
Policy for restructuring of Agriculture Debts aimed at providing relief to such farmers who are
not willful defaulters by way of restructuring of loans/ rehashing of installments and provide
further funding for carrying on with their farming operation has been conveyed by PSFID
division.
Group Approach:
For identification of a group, the guiding principle is “Commonality of Management and
Effective Control”. In case the accounts of any unit belonging to a Group become irregular
and the concerned promoters do not co-operate with the Bank and Financial Institution to
settle their dues, the Group will not be provided accommodation from the Bank.
Under large exposure framework (LEF), counterparties with specific relationships or
dependencies such that, were one of the counterparties to fail, all of the counterparties would
very likely fail are defined as Group of Connected Counterparties.
Two or more natural or legal persons shall be deemed to be a group of connected
counterparties if at least one of the following criteria is satisfied:
i. Control relationship: one of the counterparties, directly or indirectly, has control over the
other(s) or the counterparties are, directly or indirectly, controlled by a third party (bank may or
may not have exposure towards this third party). The control relationship criterion is satisfied if
one entity owns more than 50% of the voting rights of the other entity.
ii. Economic interdependence: if one of the counterparties experiences financial problems, the
other(s), as a result, would also be likely to encounter funding or repayment difficulties.
While dealing with such cases, it should be kept in view that financial support for setting up of
new ventures or expansion should not be extended to unit belonging to a group, which is
wilful defaulter or non-cooperative, so that no amount lent to a healthier unit is transferred to
another unit within the group.
Assessment of relationship amongst counterparties in reference to above is conveyed vide
L&A Cir. no. 66/ 2019 on large exposure framework (LEF)
Consortium Arrangement:
Consortium arrangement shall be considered only in cases where our bank’s minimum
aggregate exposure is of ₹50 crore and above (fund-based limits).
To ensure meaningful participation of the lender banks, it is advised that minimum 10% share
of the exposure should be taken by a single lender as far as possible.
In existing accounts, where our bank’s share is less than Rs 50 Cr in consortium banking
arrangement, efforts are to be made to bring the exposure upto the desired level.
For effective coordination in large consortium accounts, IBA has proposed Standard
Operating Procedure (SOP) for Pre-sanction, Post-sanction/ disbursement and monitoring
stage in consortium lending for all the banks. Accordingly, Board in its meeting held on
11.12.2018 has approved the SOP to be adopted in our Bank for Pre-sanction, Post sanction/
disbursement and monitoring stage in Consortium Lending
Multiple Banking Arrangement: Under MBA, each Bank is free to negotiate terms and
conditions, including margin, rate of interest etc.
Based on the communication received from IBA, the common code for financing under MBA,
particularly in respect of sharing of information as well as common securities has been
adopted by the bank.
In existing MBAs where our borrowers have total exposure upto Rs. 50 Cr, efforts to be made
convert such accounts into sole banking arrangement.
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Syndication: In view of thrust of Government on infrastructure projects, there is a business
opportunity for the banks towards part financing such projects by way of project appraisal and
syndication, to augment bank’s fee based income.
This will further add to our project appraisal and debt syndication assignments and generation
of fee based income. This activity is being looked after by Credit Division, HO.
Joint Lending Arrangement (JLA): All lending arrangements, involving more than one PSB,
with a single borrower:
• with aggregate credit limits (both FB+NFB) of ₹150 crore and above,
• and all non-investment grade borrowers (External Commercial Rating below BBB or
equivalent), enjoying credit limits from more than one PSB, irrespective of the amount
of exposure, shall be under JLA.
Group Approach
Under large exposure framework counterparties with specific relationships or dependencies
such that, were one of the counterparties to fail, all of the counterparties would very likely fail
are defined as Group of Connected Counter parties. Two or more natural or legal persons
shall be deemed to be a group of connected counterparties if at least one of the following
criteria is satisfied:
i. Control relationship: one of the counterparties, directly or indirectly, has control over
the other(s) or the counterparties are, directly or indirectly, controlled by a third party
(bank may or may not have exposure towards this third party). The control relationship
criterion is satisfied if one entity owns more than 50 percent of the voting rights of the
other entity.
ii. ii. Economic interdependence: if one of the counterparties were to experience
financial problems, in particular funding or repayment difficulties, the other(s), as a
result, would also be likely to encounter funding or repayment difficulties.
Validity of Credit Limit Sanctioned
Sanctions in respect of Working Capital and Term Loan facilities shall be valid for 6 months,
from the date of sanction. Facilities not availed within the above period should be treated as
lapsed and borrower be advised accordingly. Unless a lapsed sanction is revalidated by the
competent authority within a maximum period of 12 months from the date of sanction, no
facility should be released. However, where documents have been executed within a period of
six months from the date of sanction, the sanctions shall be valid for next 6 months from the
date of documentation.
New Business Group (NBG)
The system of NBG is in place at HO level to examine the large credit proposals in respect of
new borrowers and take a view whether the same is support worthy or not. The purpose of
setting up of NBG is to cut down the time period involved in making the credit decision and to
consider the credit proposal in a structured format, so as to reach a consensus about the
proposal. The approval of NBG is only by way of expression and the complete appraisal is
undertaken subsequently. As per the system, all fresh credit proposals envisaging total
exposure (both fund based and non-fund based) of above ₹50 crore shall be placed before
NBG in a structured format known as Preliminary Information Memorandum (PIM).
In case, complete proposal is available beforehand, placing of Preliminary Information

Memorandum (PIM) before NBG is not mandatory i.e. the branches/sanctioning authorities
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are free to submit/consider the proposal even without approval of NBG. The purpose of NBG
is only to take quick decision based on PIM because preparation of complete proposal
normally takes more time and not to prohibit submission of proposal without NBG’s approval.
Contactless Loans through online portal
The Scheme of Contactless Loans to MSME through portal

www.psbloansin59minutes.comwas initially formulated for fresh / existing credit facilities
ranging from Rs. 1.00 lac to Rs. 1.00 crore and now the credit facilities have been enhanced
to Rs 5.00 crore. Further, our Bank has also developed product for Mudra Loan on
psbloansin59minutes.com
Monitoring of Special Mention Assets (SMA)

Accounts under SMA are monitored on daily basis. Sastra (CRMD) monitor all SMAs under
standard category with outstanding of ₹5 crore and above. All standard SMA/weak accounts
such as units incurring operating/cash losses and accounts with C1, C2 & C3 risk rating etc. is
also monitored at corporate level on half yearly basis. For monitoring of SMAs, the Task
Force is set up with the constitution/ scope/functions as under:
Level Constitution Scope
HO GM (CRMD), DGM/AGM/Chief (CRMD), All SMA under standard
GM/DGM & AGM/Chief (RD), GM/DGM (Credit category with Aggregate
Div.) Exposure (AE) of ₹5 crores
and above.
ZO ZM, 2nd Man of ZO (AGM/DGM), AGM/CM All SMA under standard
(credit/Recovery), Desk Officer (Credit/ Recovery) category with AE of ₹1 Crore
and above.
CO Circle Head, AGM/CM and/or FM (Credit), Desk All SMA under standard
Officer (Credit), FM (RD). category with AE of ₹ 5.00
lac and above.
Extra-Large / Large Corporate Branches, Mid Corporate Centre and RAM (Retail-
Agriculture-MSME), GBB (General Banking Branches)
 GBBs-Upto 10 lacs only

 RAM – Above Rs 10 lacs and up to Rs 1 Cr (all retail loans within their vested powers)
 MCC –AboveRs 1 Cr and up to Rs 50 Cr.
 LCB – Above Rs 50 Cr
 E-LCB – Above Rs 500 Cr
For branches that are not linked with MCCs, RAMs shall exercise their loaning powers as
defined in the Loaning Powers guidelines for Agriculture and MSME also in addition to Retail
loans.
In places where LCBs are not located, MCCs at such locations shall cater to loan proposals
above than Rs 50 Cr.
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Policy on Collection of Dues & Repossession of Security
General Guidelines
All the members of the staff or any person authorized to represent our Bank in collection
or/and security repossession would follow the guidelines set out below:
i. You would be contacted ordinarily at the place of your choice and in the absence of
any specified place, at the place of your residence and if unavailable at your
residence, at the place of business/occupation.
ii. Identity and authority of persons authorized to represent Bank for follow up and
recovery of dues would be made known to you at the first instance. The Bank staff or
any persons authorized to represent the Bank in collection of dues or / and security
repossession will identify himself / herself and display the authority letter issued by the
Bank upon request.
iii. The Bank would respect your privacy.
iv. The Bank is committed to ensure that all written and verbal communication with you
will be in simple business language and Bank will adopt civil manners for interaction
with borrowers.
v. Normally the Bank’s representatives will contact you between 0700 hrs and 1900 hrs,
unless the special circumstance of your business or occupation requires the Bank to
contact at a different time.
vi. Your request to avoid calls at a particular time or at a particular place would be
honoured as far as possible.
vii. The Bank will document the efforts made for the recovery of dues and the copies of
communication sent to you, if any, will be kept on record.
viii. All assistance will be given to resolve disputes or differences regarding dues in a
mutually acceptable and in an orderly manner.
ix. Inappropriate occasions such as bereavement in the family or such other calamitous
occasions will be avoided for making calls / visits to collect dues.
SASTRA VERTICLE
PROCESS FLOW ( CIRCULAR NO. MPD 13/2020)

NPA Balance O/S Reporting/ Sanctioning Authority
NPA Accounts at the The NPA accounts will be retained at the Branch, and the
Branches (NPA Account NPA recovery will be monitored by the Branch Head.
with Balance Outstanding Process flow for all the proposals related to NPA will be:
upto Rs 1.00 Lakh) Branch Circle Office Zonal Office SASTRA
Division, HO
NPA Accounts at Circle The SASTRA Centre will be responsible for the recovery and
SASTRA Centre monitoring of NPA accounts with Balance outstanding above
(NPA Account with Balance Rs. 1.00 lakh (Borrower-wise).
Outstanding above Rs. 1.00 The NPA accounts with Balance Outstanding above Rs.
lakh 10.00 Lakh will be transferred to the SASTRA Centre.
The NPA Accounts with Balance Outstanding up to Rs. 10.00
Lakh will remain with the branches, however, for recovery
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and resolution of those NPA accounts, Field Recovery
Warriors will be mapped with the Branches.
NPA Accounts at Zonal The NPA accounts with Balance outstanding above Rs.
SASTRA Center 10.00 Crore at the same centre where Zonal SASTRA is
(NPA Accounts with located shall be transferred to the Zonal SASTRA Centre
Balance Outstanding above after 30 Days, and the NPA recovery will be monitored by
Rs. 10.00 Crore and other the SASTRA Division, Head Office. At other centres, the
NCLT Accounts) same shall be handled by Circle SASTRA Centre. ELCB/
LCB accounts shall also be treated in the same manner
As per the new model, Responsibilities are defined as under

Type of Centre/ Office Definition
Branch Office Responsible for recovery in NPA accounts with Balance O/s
up to Rs 1.00 Lakh. (Borrower wise)
Circle SASTRA Centre a) Field Recovery Warrior (FRW)- Field Recovery Warrior
shall be responsible for recovery in NPA accounts above Rs
1 lakh & up to Rs 10 lakhs (Borrower wise). However, any
restructuring in these accounts shall be done by
branches/circle offices/PLPs as per bank extended
guidelines.
b) Circle SASTRA Office: Recovery and resolution of NPA
borrowers having aggregate balance outstanding above Rs
10 lakhs (Borrower wise).
Zonal SASTRA Centre NPA Accounts of the Circle with Balance O/s above Rs10.00
Cr (Borrower wise) & NCLT referred accounts irrespective of
amount to be transferred to Zonal SASTRA
Centre at the Zonal office centre.
They will also monitor the Circle SASTRA & will be reporting
office of Circle SASTRA.
SASTRA Division Responsible for overall management of the NPA portfolio of
the bank.
SPECIAL OTS SCHEME FOR FY2020-21: NON DISCRIMINATORY AND NON-DISCRETIONARY

SPECIAL OTS SCHEME 2020- FOR NPA ACCOUNTS UPTO Rs 5.00 CRORES
(SASTRA DIVISION CIRCULAR NO. 4/2021)
1. Nomenclature: Non-Discriminatory and Non-Discretionary Special OTS Scheme-2020 For

NPA Accounts upto Rs 5.00 crores
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2. Salient Features:
- The scheme will remain in force upto 31st March, 2021
- Scheme is Non-Discriminatory and Non-Discretionary in nature.
- This scheme shall cover all NPA accounts as on 31.03.2020 with exposure upto Rs 5.00
crores as under:
3. Eligibility Criteria:
- All NPA accounts under Sub-Standard, Doubtful- I, Doubtful-II, Doubtful III, LOSS
category (including Technical Write-off accounts) with ledger outstanding (also termed
as balance) up to Rs.5.00 crores as on 31.03.2020 (except agricultural advances up to
Rs 10.00 lacs) shall be eligible under this Scheme. The eligible accounts shall also
include the following
Cases pending before Courts / DRTs will be eligible. However, consent terms with default
clause will have to be filed before presiding officer of Court/ DRT for obtaining consent
decree.
Cases where Bank has initiated the action under Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act (SARFAESI-2002) will also be
eligible.
Eligible accounts referred for Revenue Recovery action under State Recovery Laws will
also be eligible, subject to requisite charges, if any payable, being recovered separately and
remitted to the State Authorities.
Agriculture accounts with balance outstanding more than Rs 10.00 lacs will be
covered under this scheme. For accounts with balance upto Rs 10.00 lacs, guidelines given
in SASTRA Division Circular No 21/2020 dated 27.03.2020 will remain in force.
Cases where OTS was earlier approved but not implemented and has already been
declared failed on or before 31.03.2020, will be eligible.
Accounts under Consortium or Multiple Banking Arrangements will also be eligible
to be covered under the scheme
Units where rehabilitation / restructuring have failed as on date 31.03.2020 are eligible.
Exceptions
1 Central Govt. /State Govt. guaranteed accounts.
2 Units under rehabilitation/restructuring (Already approved and under implementation).
3 Cases admitted in NCLT under Insolvency and Bankruptcy Code, 2016.
4 Loan against Gold/Jewellery and other liquid securities e.g. LIC/NSCs/KVPs etc.
5 Staff Accounts.
6 NPA accounts where bank has already entered into a compromise/settlement and
settlement is in force as on 31.03.2020.
7 OTS in written off accounts will not be covered in this scheme and OTS in such cases shall
be considered as per “Special guidelines for OTS in Written off Accounts” as circulated vide
SASTRA Division Circular No 21/2020 dated 27.03.2020. However, TWO (Technically Write
Off) accounts will be covered in the scheme.
The post-facto audit of OTS approved by Branches is also to be got done from
Concurrent Auditor posted in the Branch/regular auditor and necessary
confirmation/certificate to this effect shall be submitted to Circle Office periodically.
Note:  In respect of eligible accounts having balance outstanding upto Rs. 3.00 Cr &
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classified as Fraud/ Wilful Default/Quick mortality, such cases shall be considered by ZOCC.
 For all eligible accounts having balance outstanding more than Rs. 3.00 Cr and upto Rs.
5.00 Cr, classified as Fraud/ Wilful Default, Quick mortality, such cases shall be considered by
HOCAC-I.
Sanctioning Authority and Settlement Amount
Category (Ledger O/s as on 31.03.2020) Sanctioning Authority
Upto Rs.1.00 lacs Branch Head*
Above Rs 1.00 lacs upto Rs 20.00 lacs Circle SASTRA Head* (Chief Manager)
Above Rs 1.00 lacs to Rs 50.00 lacs Circle SASTRA Head *(Assistant General
Manager)
(i) Above Rs 20.00 lacs and upto Rs 1.00 crores Circle office Compromise Committee
(For circles where Circle SASTRA Head is Chief (COCC)
Manager)
d. (ii) Above Rs 50.00 lacs and upto Rs 1.00
crores (For circles where Circle SASTRA Head
is Assistant General Manager)
Above Rs 1.00 crores upto Rs 2.00 crores Zonal SASTRA Head
Above Rs. 2.00 crores upto Rs. 5.00 crores Zonal office Compromise Committee
(ZOCC)
*However, in those cases where loan sanctioning authority and OTS considering authority is
the same person, such cases shall be considered by next competent authority.
Settlement Amount as % of Outstanding Balance as on Date of Settlement
A. For NPA accounts with Balance upto Rs 1.00 lacs under Sub-Std, Doubtful category
& LOSS
FOR SUB STD ASSETS: OTS Amount = 85% of outstanding balance as on date of receipt
of proposal
FOR DOUBTFUL AND LOSS ASSETS: OTS Amount = (D-1 : 50%, D-2 : 40%, D-3 &
Loss : 25%) of outstanding balance as on date of receipt of proposal.
Sub-Standard Assets –
For eligible accounts with balance o/s above Rs 1.00 lacs and upto Rs. 5.00 Cr
Category of Sub-Standard Accounts OTS amount (% of outstanding)
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Education NPA Loans upto Rs 7.5 lacs 70% of outstanding balance as on date of
receipt of proposal
All other Sub-Standard Loans 85% of outstanding balance as on date of

receipt of proposal
For Doubtful & LOSS Assets
(1) For eligible accounts with balance o/s above Rs 1.00 lacs and upto Rs. 50.00 Lakhs.
SN Security Coverage OTS amount (% of Outstanding)

Balance >1 lacs upto 20 Balance >20 lacs – 50
(MV)
lacs lacs
1 Below 10% 25% 40%

2 Above 10% to 50% 45% 55%
3 Above 50% to 75% 60% 70%
4 Above 75% to 100% 70% 75%
5 Above 100% 75% 80%
(2) For eligible accounts with balance o/s above Rs. 50.00 Lakhs and upto Rs. 5.00 Cr
(Settlement amount for Doubtful & Loss Assets
IRAC Classification as OTS Amount for Secured * OTS Amount for

on 31.03.2020 portion (Primary + Unsecured portion
Collateral Security)
DB-I 80% 50%
DB-II 75% 50%
DB-III 70% 40%
LOSS (Classified as 70% 40%
Fraud)
LOSS (Not Classified as 70% 25%
Fraud but security is less
than 10%)
* Where Market value of Securities is more than 125% of
Balance Outstanding as on date of receipt of proposal, such
cases shall not be covered under this Special OTS Scheme
and shall be dealt as per guidelines mentioned in the Policy
on Recovery & Management of NPA.
Note:
Cases where variation in valuation of security is more than 25 % (Compared to last
sanction), reasons for the same along with justification shall be commented in the
proposal invariably.
Legal expenses, Insurance Charges and all other debited/recorded expenses
209
incurred by the bank are to be recovered in full. However, DI/SI/RI is not required to be
added to the book outstanding for the purpose of calculation of OTS amount
Valuation of Securities:
The basis of valuation of securities shall be as under:

1 Realizable Value of the Securities as per last valuation report which should not be
older than 1 year is to be considered.
2 Further, wherever properties are valued at Rs. 5 crore or above, minimum two
independent Valuation Reports not more than 1 year old from Bank’s Board approved
valuers shall be considered.
3 Cases where two valuations are obtained and difference is more than 25%, higher of
the two valuations be considered. Further, where difference is less than 25%, average
of the two valuations be considered.
4 In case of Plant & Machinery, Realizable Value as per last valuation report (Valuation
Report should not be older than 1 year) shall be considered while computing security
coverage.
5. Valuation of stocks shall be considered on the basis of last stock statement submitted by
the borrower OR as per BM assessment during the last visit which should not be more than
one month old and valuations be compared with the last stock statements, wherever
available, submitted by the borrower.
6. If variation between the market value at the time of last sanction & current market value is
more than 50%, then proper justification should be incorporated in the OTS Proposal.
Terms of Payment
1 Upfront amount of minimum 20% of the OTS amount (for NPA accounts with balance upto
Rs 25.00 lacs) and 15% of the OTS amount (for NPA accounts with balance outstanding more
than Rs 25.00 lacs upto Rs 5.00 crores) is to be deposited along with OTS offer in writing.
2 Upfront amount deposited with the Bank shall be appropriated in the account before
conveying the approval to the Borrower.
3 Party to be impressed upon to deposit OTS amount immediately within 90 days of approval
of OTS.
4 In case the entire OTS amount, as per the terms finalized in the sanction, is paid within 90
days of conveying approval to the borrower, no interest will be charged. However, simple
interest @ MCLR for one-year (applicable on the date of sanction) plus 1% on reducing
balance basis will be charged where OTS amount is paid beyond 90 days, effective from the
date of Sanction.
5 The maximum repayment period for the said scheme will be 180 days. In case any borrower
fails to pay OTS amount within the original approved period, respective sanctioning authority
may consider extension of time period upto aggregate of 180 days from the date of conveying
approval. No extension to be allowed beyond 180 days from the date of conveying
approval.
6 In case borrower proposes to pay OTS in installments in more than 90 days then default in
payment of one installment shall render the OTS as failed.
7 The Postdated cheques coinciding with the dates of payment for the remaining amount of
OTS amount be obtained, while conveying the sanction.
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FIXATION OF RESERVE PRICE AND CONFIRMATION OF SALE (40/2020)
Competent Authority For Fixation of Reserve Price and Confirmation

of Sale of Individual IP/ Plant & Machinery in
NPA account (Realizable Value in Rs. Crores)
Circle SASTRA Committee (Headed by Upto Rs 2.00 Cr
CM)
Circle SASTRA Committee (Headed by Upto Rs 4.00 Cr

AGM)
Circle Office Compromise Committee Upto Rs. 6.00 Cr
(Headed by AGM)
Circle Office Compromise Committee Upto Rs. 8.00 Cr
(Headed by DGM)
Zonal SASTRA Committee (Headed by Upto Rs. 8.00 Cr
AGM)
Zonal SASTRA Committee (Headed by Upto Rs. 10.00 Cr
DGM)
Zonal office Compromise Committee Above Rs. 8.00 Cr – For cases of Zonal SASTRA
Centre headed by AGM
Above Rs. 10.00 Cr – For cases of Zonal SASTRA
Centre headed by DGM
Roles and Responsibilities Customer Acquisition
OBJECTIVE OF CACs - Focused approach to cater to the diversified needs of the Corporate/
Institutional and HNIs & NRIs Customers. - Emphasis has been laid on dedicated feet-on-
street as against reliance on branchbased reach-in broad-base bank’s business-connect skills
and expertise as per EASE guidelines.
The purpose of Customer Acquisition Centre is given as under:

 To acquire bulk institutional Business with strategic focus to generate business from the
existing Corporate Institutions who have been extended credit facilities by the Bank.
 To focus on corporate institutions operating in the areas and create long term relationships
with these customers for identifying cross-sell and up-sell opportunities.
 To focus on deepening relationships for HNIs and NRIs by servicing and crossselling and
up-selling suite of financial products and services to them.
SN Other Points Status/ Rationale

1 Business Generation Corporate Sales: Officials will cross-sell and up-sell
Role bouquet of financial products to the corporate credit
customers of the mapped districts / region/state for
deepening long term relationship with the Bank.
2 Reporting of CAC CAC shall report to and will be monitored by Customer
Acquisition Head: HO
3 Scope of CAC CAC to work in coordination with other verticals and
branches for providing composite offer to customers for
their credit need as well as garnering bulk business.
211
4 Owner Division of CACs Customer Acquisition Division shall be the owner division
for Customer Acquisition Centres for its monitoring and
follow-up and further expansion.
5. Manpower requirement Manpower requirement to be calculated as per opening
guide and requirement in the respective locations. All the
officers to be provided by Head Office Customer
Acquisition Division in consultation with HO: HRD on
selection/ identification basis. Substaff to be provided by
the Circle Office of the said area and concerned CO to
ensure that requisite Sub-staff as per approved policy are
provided to CACs
6. Training Support LKMC, HO: Customer Acquisition Division & MPD to
prepare the training structure for the model jointly.
212
SCHEME ELIGIBILITY INITIAL DEPSOIT & MIN. BAL. (QAB) USP
OF PRODUCT
Resident Individuals Initial Depsoit
(either singly or Rural & SU : Rs. 500/- Urban : Rs. 1000/-
PNB UNNATI SAVING FUND
jointly); Metro: Rs. 2000/-

Associations, Trusts, Debit entries in a half year should not exceed
ACCOUNT
Hindu Undivided 40 excl. IBS, ATM & SI

Families (HUFs), 50 free personalized multicity cheque leaf per
Clubs, Societies, year.
Institutions subject to No NEFT/RTGS charges if transaction
RBI Guidelines. initiated via i- Bank.
ATM Cum Debit card (However annual
maintenance charges are to be levied)
Accounts can be Initial Depsoit : Rs.25000/-
PNB SF PRUDENT SWEEP DEPOSIT SCHEME FOR INDIVIDUALS
opened as per RBI Charges for Non Maint: Rs. 400/- per quarter
directives for Sweep In and Out shall take place in Savings
opening Saving Fund Accounts after the cut off level of Rs.50,000/- i.e.,
Accounts of having a balance of over Rs.50,000/- with a
INDIVIDUALS. minimum Sweep-out/ Sweep-In of Rs.5,000/- and
Staff members are thereafter in multiples of Rs.5,000/- to/from Fixed
also eligible to open Deposit.
their accounts under FDR’s under this scheme can be issued for
this scheme. minimum period of 46 days and for maximum
period of 179 days.
Free Collection of Outstation Cheques - Upto
the maximum amount of Rs.25,000/- in a month.
(However, out of pocket expenses will be
recovered)
Free cheque books
50% concessions on Annual Maintenance
Charge - For De-mat Services for first year only.
RTGS/NEFT to be allowed at 50% concession.
213
PNB SF PRUDENT SWEEP DEPOSIT SCHEME FOR INSTITUTIONS Accounts can be Initial Depsoit : Rs.10 lakh
opened as per RBI Charges for Non Maint: Rs. 400/- per quarter
directives for Free cheque books
opening Saving Fund Sweep In and Out shall take place in Savings
Accounts of eligible Accounts after the cut off level of Rs.50,000/-
INSTITUTIONS. having a balance of over Rs.50,000/- with a
minimum Sweep-out/ Sweep-In of Rs.1.00 lakh
and thereafter in multiples of Rs.1.00 lakh to/from
Fixed Deposit. Sweep out will be on daily basis.
FDR’s under this scheme can be issued for
minimum period of 07 days and for maximum
period of 91 days.
Free Remittance Facility - Upto two
remittances withthe maximum amount of
Rs.25000/- (for both remittances) in a month.
Free Collection of Outstation Cheques - Upto
the maximum amount of Rs.25,000/- in a month.
However, out of pocket expenses will be recovered
RTGS/NEFT to be allowed at 50% concession.
Account can be Initial Depsoit : ZERO
opened by a minor of
PNB JUNIOR SAVING FUND ACCOUNT FOR
any age through Free Cheque leaves – 50 cheque leaves per

his/her natural or year
legally appointed NEFT charges - Free upto Rs.10,000/-per day
guardian. Issue of Demand Drafts - Free for
Minors above the school/college fee
MINORS
age of 10 years (on Issue of ATM/Debit Card (RuPay)- Allowed

obtaining satisfactory subject to debit upto Rs.5000/- per day
proof of age) are Internet Banking & Mobile Banking Facility
allowed to open and (only view facility)
operate savings bank To arrest the misuse of Minor Accounts, all the
accounts concessions and freebies under the scheme shall be
independently, if they withdrawn after attaining the age of 18 years.
so desire.
214
Regular Employees Variants Gross Salary per Overdraft P
of central/state Initial month allowed
PNB mySALARY ACCOUNT
Govt./PSU/ Depso Silver Rs.10,000 & above Rs. 50000/- R

Govtsemi Govt it upto Rs.25,000/-
Corporation/MNCs/ Gold Rs. 25,001 & above Rs. 150000/- R
Reputed Institutions ZERO upto Rs.75,000/-
/Reputed Premium Rs.75,001 & above Rs. 225000/- R
Corporate/Reputed upto Rs.150000/-
Educational Patimum Rs.1,50,001 and above Rs. 300000/- R
Institutions. Primary account holder of the scheme
Facility Silver Gold may Premium Platimum
avail overdraft up to a sum
Free cheques 40 per FY 50 per FYrepresenting
100 per last
FY two months’ NET
Unlimited
RTGS & NEFT thru 2 per month 5 per month Unlimited
Salary(salary creditedUnlimited
in account) @ Rate
salary a/c each each of Interest of ‘RLLR + 3.70% p.a.
Demand draft 2 per qtr. 4 per qtr. Unlimited Unlimited
Upto Upto Rs.OD is to be adjusted in six months
Rs.25000/- 75000/- and fresh OD limit will be allowed only
Demat 50% discount on AMC for after adjustment
No chargesof the previous one.
first year only
Documentation & 50% Discount On100%
authorization
Discountby primary account
Processing on holder, it will automatically get initiated
Housing, Car& (Min. 3 months regular after ensuring an initialregular
(Min. 3 months threshold amount
Personal Loan salary credit) of Rs salary
20,000/- in salary account, subject
credit)
Locker Rent 1st yr. 25% (Small) to a minimum
50%(Small) 75%(Small)Sweep-in / out of Rs
100%(S&M
1,000/- and in multiples
) of Rs 1,000/-
thereafter.
TDRs/STDRs created through Sweep

facility will be issued for a period of 7 to
365 days.
In case, salary is not credited for
continuous three months in a calendar
quarter, the account will be transferred to
215
Saving Fund General and all freebies will
be withdrawn by system.
Individuals Initial Deposit:

(either singly or Rural : Rs. 500/- SU : Rs. 1000/- Urban : Rs.
jointly), 2000/-
PNB SAVING ACCOUNT PRODUCT FOR PREMIUM CUSTOMERS
Associations, Metro: Rs. 2000/-

Trusts, Hindu QAB: Rs. 50000/- & Above
Undivided Cash Deposit Charges : 50% discount on applicable
Families (HUFs), charges.
Clubs, Societies 50 cheque leaves are already free p.a to all
etc. Saving Fund Customers.
20 additional cheque leaves will be given free of
cost in a year (i.e. 5 additional cheque leaves free in
the quarter for aintaining QAB of Rs.50000/- &
above in the previous quarter).
Concession in respect of upfront fee/
processing Fee for availment of Loan (Housing Loan
upto Rs.50 lakh & Car Loan upto Rs.6 lakh) -
concession will be available after maintaining QAB
for 2 quarter.
50% concession in small locker rent for first year
only Platinum Debit Card will be issued to the
customers who maintain QAB of Rs.50000/- &
above wherein accidental insurance cover of Rs.2.00
lakh will be available.
PREMIUM Individual QAB : 25 % Concession on Annual Charges
SAVING Resident Indian > Rs.1.00 Personal Accidental Insurance for
ACCOUNT 18 years of age & lakh for a primary account holder (Death + Total
‘PNB BEST < 70 years of age. minimum Permanent Disability) : Rs. 10 lakh
CUSTOMER’ Associated period of Daily ATM Withdrawal, POS &
with the bank for 1 year E-com: 1 lakh
a period of not SMS Charges : Free & DD
216
less than 3 years. issuance charges : Nil upto Rs. 5 lakh
per month
Minimum 5 transactions (both Cr &
Dr) in a month.
PNB Individuals Initial : SMS Charges : Free & DD
PRATHAM (either singly or Zero issuance charges : Nil upto Rs. 5 lakh
SAVING jointly) subject to QAB : per month
ACCOUNT fulfilling Rs. Daily ATM Withdrawal : Rs. 1 lakh,
eligibility criteria 1,00,000/ POS & E-com: 2 lakh
(domestic - per 25 % Concession on Annual Charges
Depositors) quarter Two free lounge access at domestic
(Calendar airports per quarter for RuPay Platinum
Year) International Card holders only.
PNB POWER Accounts can be Initial cheque leaves per year, 25%
SAVING opened as per Deposit: concession on small locker rent (1st
SCHEME RBI directives Rural : year), 25% discount in Demat account
for opening Rs. 500/- fee, No charges for NEFT and SMS
Saving Fund SU : Alerts, no charges for one dtaft per
Accounts of Rs. month upto Rs. 10000/-:
women. 1000/- Sweep In and Out- after the cut off
Urban : level of Rs. 1 lakh in multiples of Rs.
Rs. 10000/- on daily basis for 7 days to 1
2000/- year.
Metro: Free Accidental death Insurance
Rs. cover: Rs.2 lakh/Rs.5 lakh (subject to T
2000/- & C)
PNB SAMMAN Pensioner/Prospe INITIAL Overdraft facility: Rs. 1,00,000/- or
SAVING ctive pensioner :ZERO the 4 times the monthly pension (Net of
ACCOUNTS including all the QAB : arrear, if any for this purpose, the
employees retired ZERO incumbent to check the pension credit
from our bank 50 for the last two months) whichever is
who has given Cheque lower. Maximum age of pensioner
mandate for leaves should be 70 years at the time of
credit of his per year. sanction of overdraft.
217
pension in the Free one A prospective pensioner can also
account. Account draft p.m. open the account under the scheme
will be opened upto subject to receiving the pension in the
preferably jointly Rs.25000 account within the next six months and
with spouse. NEFT + gives documentary proof of the same at
Free the time of opening of account to the
SMS satisfaction of the branch official.
OD facility at interest rates
applicable to Pension OD loans.
PNB BASIC The Saving Fund INITIAL :ZERO QAB : ZERO
SAVING BANK Account may be A cheque book of 10 leaves may be issued (at the
DEPOSIT opened by an discretion of the branch incumbent) free of cost in a
ACCOUNTS INDIVIDUAL year. Thereafter, normal cheque book charges would
singly or jointly, be applicable.
minors of the age No limit on number and value of deposits that
of 10 can be made in a month.
years and above, Minimum of six withdrawals in a month,
minors under including ATM withdrawals. {The minimum free
natural/legal withdrawals available to the BSBD Account holders
guardianship. can be made at all ATMs (own-bank/other bank
An illiterate or a ATMs).}
visually impaired Holder of Basic Saving Bank Deposit Account
person is also will not be eligible for opening any other saving
eligible to open bank deposit account in the same bank. BSBDA
with usual holder will be required to close all existing saving
safeguards. fund account in our Bank within 30 days from the
date of opening of the account.
PNB Defence INITIAL :ZERO QAB : ZERO
RAKSHAK Personnel are Sweep-In / Out facility after ensuring an initial
PLUS eligible to open threshold amount of Rs 10,000/-, subject to a
account under the minimum Sweep-in / out of Rs 1,000/- and in
(26/2020) scheme i.e. three multiples of Rs 1,000/- thereafter on daily basis.
wings of TDRs/STDRs created through Sweep facility
Defence, will be issued for a period of 7 to 365
218
including BSF, OVERDRAFT FACILITY: Category – I
CRPF, (JCOs/ ORs of Indian Army & equivalents): Rs.
CISF,ITBP, State 75,000/- Category – II (Officers of the Indian
Police Force, Army & equivalents):Rs. 3 lakh
Metro Police Note :OD facility is not available to A/cs with Sweep
Pensioners facility
(Defence/eligible PAI cover of Rs. 30 lakhs, provided the monthly
as above) who salary / pension for the past three months, preceding
choose to draw the month of the accidental death, has been regularly
their pensions credited in his/ her RAKSHAK PLUS Savings Bank
through PNB account.
Branches and Air Accident (Death) Insurance (AAI): AAI
pension is cover of Rs. One Crore, covering both the
credited through International and Domestic travels, provided the
CPPC i.e. ticket for such air travel was purchased by him / her
processed & from his / her ‘RAKSHAK PLUS’ Savings Bank
credited through account using net-banking OR the Debit cum ATM
our bank. Card issued under the ‘RAKSHAK PLUS’ Scheme
Accounts where and the monthly salary / pension for the past three
pension is months, preceding the air accident, have been
received by regularly credited in his/ her RAKSHAK PLUS SB
Cheque/NEFT/R account.
TGS etc will not Personal Accident (Permanent Total Disability)
be Insurance: Cover of Rs. 30 Lakhs, provided the
covered under monthly salary for the past three months, preceding
scheme. the month of accident resulting in permanent total
No ‘Cash disablement, have been regularly credited in his/her
Handling RAKSHAK PLUS Savings Bank account.
Charges’ Financial Support for Education for the
Instant Credit dependent child of a PAI (Death) Case - The Bank
of Outstation would provide financial support of Rs. 1 lakh per
cheques: year for 4 years or the actual expenditure whichever
Available upto is less, for education of one surviving and dependent
Rs. 50,000/- child (Male / Female) of a PAI(Death) case.
219
Lockers : 25% Full waiver of Processing Fee/ Upfront Charges &
Annual Documentation charges on Housing, Car &
Maintenance Personal Loan scheme.
Charges(AMC)
waived-off for
three years from
date of issue.
PNB myBIZ Individuals, Sole Initial deposit amount as per by HO: IRMD from
(CURRENT Proprietary time to time.
ACCOUNT Concerns, Cheque book Facility & Free internet banking
GENERAL) Partnership ATM Cum Debit card (Individuals/Sole
Firms, HUFs, Proprietor account)
Companies, Fast remittance of funds through NEFT/RTGS
Acceptance of standing instructions
PNB Merchants like Initial Deposit: R/SU-Rs.5,000/- and U/M-
MERCHANT Shopping Rs.10,000/-
CURRENT Centers, Petrol QAB: 25000/-
ACCOUNT Pumps, Cash deposit -Per day free deposit limit: Free
Hospitals, upto 3 times monthly amount swiped at Bank POS
Educational terminal or Rs.3.0 Lakh whichever is lower;
Institutes thereafter standard charges apply.
Cash Withdrawal: Maximum upto Rs.1.00 lakh
per day (Third party withdrawal upto Rs.25,000/- per
day)
Free 2 DD (Free per Quarter upto Rs.5.00 lac per
Instrument)
50% waiver of processing charges on Retail
Loans in the name of Proprietor, Firm or partners of
the Firm and Company or Directors of the Company.
220
PNB myBIZ PLUS CURRENT ACCOUNT (SMART BANKING CURRENT
ACCOUNT)
PARAMETERS FEATURES
Variants PNB PNB GOLD PNB PNB
SILVER DIAMOND PLATINUM
Scheme Code CASMR1 CASMR2 CASMR3 CASMR4
Minimum Quarterly Rs. 100000/- Rs. 200000/- Rs. 500000/- Rs. 1000000/-
Average Balance
Initial Deposit Rs. 5000/- Rs. 5000/- Rs. 5000/- Rs. 5000/-
(R/SU/U/M)
Non Maintenance of 500/- 1000/- 2000/- 4000/-
QAB Charges
Charges for non For Rural & Semi – Urban Branches QAB Below Rs. 1.00 lac
maintenance of QAB : Rs. 500
for For Urban & Metro Branches QAB below Rs. 1.00 lac but ≥
Silver* variant of PNB Rs. 10,000: Rs. 500
Smart Banking Current QAB below Rs. 10,000 :Rs. 1000
Accounts
Minimum Balance for 5,00,000/- 10,00,000/-
Sweep-in and Sweep –
out facility
Sweep – in and Sweep – 50000/-
out in multiples of
Tenor of Term Deposit 15 to 91 days
(Amount will be swept out on 5th and 20th of every month-If
there is holiday on these days, the next working day)
Free Cheque Leaves 100 200 300 600
(Per Quarter)
RTGS/NEFT Charges FREE
Concession in Cash Upto Rs.2 Upto Rs.5 lac Upto Rs.5 lac Upto Rs.10 lac
Deposit Charges lac per day – per day – per day – Free; per day – Free;
Free; Free; thereafter thereafter
thereafter thereafter applicable applicable
applicable applicable charges charges
221
charges charges
Concession in Cash Upto Rs.1 Upto Rs.2 lac Upto Rs.5 lac Upto Rs.10 lac
Withdrawal Charges lac free per per day – per day – Free; per day – Free;
day Free;
Instant Credit of 15000/- 20000/- 50000/- 100000/-
outstation cheques
Free Collection of 0.50 lakh 2.00 lakh 5.00 lakh 10 lakh
outstation Chq per qtr
Issue of Free Demand 5 nos. Max. 10 nos. Max. 15 nos. Max. 30 nos. Max.
Drafts per quarter Amt. Amt. Amt. Amt.
upto Rs.0.5 upto Rs.2 upto Rs. 5 lakh upto Rs. 10 lakh
lakh lakh
POS Machine- Applicable 50% Free Free
Installation, Transaction Charges concession
/ Processing Charges On Applicable
Charges
222
SCHEME Eligibility Initial deposit Period of deposit / USP of Products
Individual (singly or Initial Deposit 7 days to 179 days

jointly) with others of Rs.100/-
Minor who above age only, and Deposits for Rs.10,000/- and above on
ORDINARY FIXED DEPOSIT
of 10 years(self) thereafter in written request shall be eligible for

Proprietorship/Partners multiples of Demand Loan/overdraft facility
hip Firm, Commercial Re.1/- with a Auto Renewal
SCHEME
Organization, maximum All deposit receipts shall be payable At

Company / amount of Par on maturity at all CBS branches
Corporate Body, Rs.199,99,99 Demand Loan/Overdraft facility
Hindu Undivided 9/- Payment of overdue interest at the rate
Family, of applicable Saving bank rate during
Association, Club, the overdue period even without further
Society, Trust or renewal
Religious/Charitable or
Educational Institutions
Individual (singly or Minimum 6 mths to 120 mths.

jointly) with others deposit
MULTI BENEFIT TERM DEPOSIT
Minor who above age of Rs.100/- Auto Renewal

of 10 years(self) as initial
Proprietorship/Partners deposit and All deposit receipts shall be payable At
hip Firm, Commercial thereafter in Par on maturity at all CBS branches
SCHEME
Organization, multiples of
Company / Rupee one Demand Loan/Overdraft facility
Corporate Body, (Re.1/-) with
Hindu Undivided maximum
Family, amount of
Association, Club, Rs.199,99,99
Society, Trust or 9/-.
Religious/Charitable or
Educational Institutions
Individual (singly or Minimum 1 year to 10 years, even for

jointly) with others deposit of incompleted quarters,
Minor who above age Rs.100/- as
SPECIAL TERM DEPOSIT
of 10 years(self) initial deposit Interest shall be payable quarterly at

Proprietorship/Partners and simple rate
hip Firm, Commercial thereafter in or monthly at discounted rate at the
SCHEME
Organization, multiples of option of the depositor.

Company / Rupee one
Corporate Body, (Re.1/-) No charges are to be levied on transfer
Hindu Undivided maximum of the interest amount to other
Family, amount under branches, for credit to customer’s
Association, Club, the scheme is deposit account or loan account.
Society, Trust or Rs.199,99,99
Religious/Charitable 9
Institutions
223
Individual (singly or Minimum 46 days to 120 months
jointly) with others deposit of  Facility to withdraw any amount
Minor who above age Rs.10000/- before maturity in multiples of
of 10 years(self) and Rs.1000 any time without
PNB SUGAM TERM DEPOSIT SCHEME
Proprietorship/Partners thereafter in breaking the entire deposit and

hip Firm, Commercial multiples of without losing interest on the
Organization, Re.1/- with remaining deposit under the
Company / maximum scheme
Corporate Body, amount of  Payable at all Branches (Only on
Hindu Undivided Rs.10.00 Maturity). Conversion from other
Family, Crore. scheme for more than remaining
Association, Club, period
Society, Trust or  Premature renewal/Extension in
Religious/Charitable or the period before maturity is
Educational permitted
Institutions  Part withdrawal allowed.
 No penalty on prepayment part/
full withdrawal.
DL/OD for deposits of Rs. 10000/- &
above permitted
Individual(s), sole Rs.10,000/- 6 months to 120 months
proprietorship concern, and in Overdraft Facility
DEPOSIT SCHEME
partnership firm, multiples of Cheque Book will be issued

ANUPAM TERM
OD Facility)
association, trust, Ltd. Rs.1000/-

(In Built
Company etc. thereof with No third party advance is allowed

However, Anupam Maximum
Account shall not be amount of Anupam Account shall not be
opened in the name Rs.199,99,00 opened in the name of minor,
of minor, illiterate 0/-. illiterate and blind persons.
and blind persons. Facility of further Term Deposits in
the same Anupam Account
224
Individual (singly or Single deposit Maturity Option: For any period from 91
jointly) with others Minor of above Rs.15 days to 120 months
who above age of 10 lakh, and
years(self) thereafter Income Option: For any period from 6
in
UTTAM TERM DEPOSIT SCHEME
Proprietorship/Partnershi multiples ofmonths to 120 months

p Firm, Commercial Re. 1 No premature withdrawal/ part withdrawal/
Organization, Company / extension shall be permitted under the
Corporate Body, scheme in any case except in case of
Hindu Undivided Rs. 15 lac to death of the depositor.
Family, Rs. 10 Cr
Association, Club, The option of Demand Loan/ Overdraft
Society, Trust or facility shall be available as per discretion
Religious/Charitable or of the bank & the existing guidelines.
Educational
Institutions, The incomplete quarter of such deposit shall
Municipality or be reckoned at the end, for the purpose of
Panchayat, Government calculation of interest
or Quasi-Government
Body.
Illiterate and blind
persons can also open
the account.
Individuals, Including minimum minimum 5 years to maximum 10

illiterate, blind persons deposit of years, including incomplete quarter of
PNB TAX SHIELD – FIXED
and joint account. Rs. 100/- or 82 months, 95 months and 16 days so

HUF in multiples on
DEPOSIT SCHEME
The joint holder thereof,  Lock in Period : 5 year

deposit receipt may be subject to The deduction from income under
issued jointly to two maximum section 80C of the Act shall be
adults or jointly to an deposit of available
adult and a minor, and Rs. 1.50 Lac  No loan before expiry of lock in
payable to either of the per financial period
holders or to the year only  No term deposit receipt shall be
survivor. encashed before the expiry of five
years from the date of its receipt
except in case of death of
depositor.
Nomination facility is available
225
55 & 55+ Individuals Minimum Income & Maturity option: For any
(singly or jointly) with deposit of period with minimum of 1 year to
others. In case of joint Rs.100/- and maximum of 10 years
deposit, the thereafter in Scheme code
prospective Senior multiples of  Depositor will automatically get
Citizen has to be first Rupee one additional rate of interest
PNB PRANAM FIXED DEPOSIT SCHEME
holder of the term (Re.1/-) with applicable to Sr.Citizen on

deposit. maximum attaining age of 60 years.
amount of  Both income
Rs.1,999999 (monthly/quarterly) & maturity
9/- options.
55 & 55+ Illiterate The depositor  At PAR Collection of
and blind persons can shall maintain Fixed Deposit Receipt
also open the account. an operative  Payable at all Branches
The Scheme shall be Saving Fund (Only on Maturity)
applicable for the age Account/Curr  Loan/Overdraft facility
of 55 years and above ent Account available
and up to 60 years. with the bank  Automatic Renewal is
At the time of opening wherever permitted. Extension of fixed
of a term deposit required. deposit is permitted
account under the  No penalty on premature
scheme, Branch shall cancellation when depositor
verify the age by becomes Sr. Citizen.
submission of any of  Conversion to any other
the OVDs. Term Deposit scheme is
allowed.
In case of death of prospective senior
citizen before attaining the status of
Senior citizen, additional benefit of
0.50% will not be applicable.
Individual (singly or Minimum From 07 days to maximum 10 years,

jointly) with others deposit of even for incomplete quarters.
PNB FLOATING RATE FIXED
Minor who above age Rs.1000/- or Premature Withdrawal:

of 10 years(self) in multiple Term deposits of up to Rs.10
DEPOSIT SCHEME
Proprietorship/Partners thereof. Crore:

hip Firm, Commercial Acceptance -Where deposit remains with the
Organization, of FDRs of bank up to 5 years, interest payable
Company / Corporate above Rs.10 will be 1% minus the rate that
Body, crore remained effective from time to time for
Hindu Undivided shall be the period FD has actually run.
Family, strictly -Where deposit remains with the bank
Association, Club, subject to above 5 years, interest payable will be
Society, Trust or approval by 0.5% minus the rate that remained
Religious/Charitable or Treasury effective from time to time for the
Educational Division, HO. period FD has actually run.
Institutions,
226
Individual (singly or Rs.10,000/- accepted for 24, 36, 48, 60, 72, 84, 96,
jointly) with others and in 108 & 120 months only
Minor who above age multiples of
PNB VARSHIK AAY
YOJANA DEPOSIT
of 10 years(self) Rs.1000/- Auto Renewal
Proprietorship/Partners thereof with All deposit receipts shall be payable At
SCHEME
hip Firm, Commercial Maximum Par on maturity at all CBS branches

Organization, amount of Demand Loan/Overdraft facility
Company / Corporate Rs.199,99,00 The option/facility of ‘overdraft’
Body, 0/-. shall not be available in the account
Hindu Undivided opened in the name of illiterate or a
Family, blind person.
Association, Club,
Society, Trust or
Religious/Charitable
Individual (singly or Single Matuirty Option
PNB GROWTH FIXED DEPOSIT SCHEME
jointly) with others deposit of For any period from 7 days to 120
Minor who above age minimum Rs. months.
of 10 years(self) 2.00 Crore, Income Option
Proprietorship/Partners and For any period from 6 months to 120
hip Firm, Commercial thereafter in months.
Organization, multiples of The conversion will be allowed
Company / Corporate Re 1 and provided:
Body, maximum up The fixed deposit receipt has been
Hindu Undivided to Rs. issued for a period of 12 months or
Family, 10.00 crore. more and remaining period of the
Association, Club, FD till maturity is 6 months and
Society, Trust or above.
Religious/Charitable or The depositor shall have free access to
Educational deposit, and can withdraw any
Institutions, amount (but core amount of minimum
Rs 2 Crore shall be maintained in the
account) in multiples of Rs.1, 00,000/-
before maturity without breaking the
entire deposit without any loss of
interest
227
Individual (singly or single deposit Maturity Option: from 7 days to 120
jointly) with others. of above months.
Rs.10 crore,
Minors who have and Income Option: from 6 months to
attained the age of 10 thereafter 120 months.
years and above in multiples Conversion/change in option: No
of Re. 1 conversion/change in option is allowed
PNB BULK FIXED DEPOSIT SCHEME
Proprietorship/partners Single under the scheme

hip firm, commercial Interbank
organization, Deposit of Rs In case of pre-mature cancellation
company/corporate 2 crore& of FDRs accepted under the scheme,
body. above the rate contracted at the time of
Hindu Undivided Single NRE FDR shall not be paid to the
Family. & NRO Term customer.
Association, club, Deposits of
society, trust or above Rs 10 No part withdrawal is permitted under
religious/ charitable or crore the scheme
educational institution. Single
Municipality or FCNR (B) Auto Renewal : Not permitted
Panchayat, deposit of 1
Government or quasi- Mio and Premature Renewal/ Extension : Not
government body. above for permitted
USD,GBP &
EUR
currency
To start with only for Single Minimum of 7 days with a maximum of
High Networth Individu deposit of 60 days
als (HNI’s), above RATE OF INTEREST
PNB MIBOR LINKED NOTICE
Rs.10 Crores To be decided by Treasury Division-

Company/Corporate and HO linked to MIBOR (NSE Overnight)
DEPOSIT SCHEME
body, Public Sector thereafter in with an upper cap, with daily reset
Undertakings and multiples of (simple interest).
Commercial Re. 1/-. Upper cap to be reviewed by
Organization. Treasury Division, HO in consultation
The FDR with ALCO on quarterly basis.
METRO Cities only shall be auto Treasury Division, HO will give spread
renewed for (either plus or minus) over MIBOR on
14 days only daily basis along with other rates of
bulk deposits. NSE MIBOR will be
fixed at 10 A.M. daily. Hence, Treasury
Division will give previous day MIBOR
fixing along with bulk deposit rates.
Demand Loan/Overdraft facility is not
available.
228
NRIs – Individuals in Minimum-Rs. Minimum one year and maximum 10
SUGAM TERM DEPOSIT Single or Joint capacity 10000/- ; years
Maximum: no The rate of interest shall be Card Rate
PNB NRE RUPEE
limit payable on NRE term deposits for

different maturities in accordance with
SCHEME
the circulars issued by the Bank from

time to time.
Depositor may withdraw any amount
before maturity in multiples of Rs.
1,000/- any time
Income Option: draw interest on
Monthly/Quarterly
Reinvestment/ Maturity Option
Any Non-resident Minimum
46 days to 120 months
PNB NRO SUGAM TERM
Indian (NRI) or person deposit of

1. The account may be held jointly with
of Indian origin can Rs.10,000/-
residents and/or with non-residents.
DEPOSIT SCHEME
open NRO Sugam and

2. The account may be held jointly
Term Deposit account. with residents on „former or
thereafter in
The account should be survivor‟ basis only.
multiples of
opened by the non- Re.1/- with a
No additional interest shall be paid
resident account maximum
on NRO deposits in the name of
holder himself and not amount of
members of staff (Existing or
by the holder of power Rs.10.00
retired) or Senior Citizen.
of attorney in India Crore.
Additional rate of interest applicable on
domestic deposits accepted from
senior citizens is not applicable for
NRO deposits
ANNUIT Purpose: One time lump DEPOSIT 36 to 120 months
Y sum amount, as AMOUNT : If period is less than 36 mth. normal
SCHEM decided by the Court / FD be opened.
E FOR Tribunal, deposited to Maximum- for longer period (more than 120
VICTIM receive the same in No Limit months) as per direction
S Equated Monthly of the Court.
OF Installments (EMIs), Minimum- No Receipts will be issued to
ROAD comprising a part of Based on depositors.
ACCIDE the principal amount minimum Passbook will be issued for MACAD
NTS as well as interest. monthly No loan or advance shall be allowed
17/2020 annuity Premature closure or part lumpsum
DT. Individuals, including, Rs.1,000/- for payment of MACAD during the life of
30.03.20 Minors through the the claimant will be made with
20 guardian in single relevant permission of the court.
name. period. Premature closure penalty will not be
charged.
Branch will open the accounts Motor
Accident Claims Annuity term Deposit
(MACAD) under scheme code FDMAC
and MACT claims Saving Account
under scheme code. SBMAC.
229
FIXED All girls who pass class Government girl child attains the age of 18 years.
VIII from Kasturba of India would
Gandhi Balika allow deposit Min: 7 days
Vidyalayas of Rs. 3000/- AUTOMATIC RENEWAL
(irrespective of in the name Auto renewal shall be done for 30
BALIKA SHIKSHA
DEPOSIT SCHEME
whether they belong to of eligible girl days, until final disposal of funds only
SC/ST) and enroll for child and she in the cases where directions are not
class IX in State/UT would be received from the implementing
Govt., Govt. aided or eligible to agency on or before the due date of
local bodies schools in withdraw it on the fixed deposit
19/2020
the academic year reaching 18 PROCESS OF WITHDRAWAL

2008-09 onwards. years of age. On attaining 18 years of age and
production of Xth class pass certificate
The income tax Deposit Apply to the Bank/branch in Form ‘A’,
assesses can avail the Account-A: in duplicate
benefit of exemption Saving Funds Period of deposit: 46 days to 120
from capital gains only Account months
if the amount of capital No additional rate of interest will be
gain or net Deposit given on deposits held under Capital
consideration is Account-B: Gain Accounts Scheme 1988 received
(16/2020)
deposited with the from Sr. Citizens as well as staff

Bank under the Capital account can members
Gain Account Scheme be opened A deposit in Account-B, at the request
on or before their due with a of the depositor on Form ‘B’ may be
date of filing of their minimum transferred to his Account-A, opened
CAPITAL GAINS ACCOUNTS SCHEME – 1988
return of income. deposit of under the same section of the Act

Rs.10000/- WITHDRAWAL FROM THE
DEPOSITS HOW TO and ACCOUNT : A depositor having
BE MADE thereafter in Account-A, at any time after making
A deposit or deposits multiples of initial deposit, can apply on Form ‘C’
may be made under Re.1/- with with Pass Book for the withdrawal of
the provisions of maximum the amount from the balance in
section 54 or section amount of Account-A
54B or Section 54D or Rs.10.00 The withdrawal for more than
Section 54F or section Crore. Rs.25,000/-, will be allowed through
54G of the Act by any cross demand draft in favour of the
depositor intending to Scheme person to whom the depositor
avail of the benefit code: For wants to make payment.
under the said section SB: SBCGS The amount withdrawn shall be utilized
or sections of the Act, For FD: by the depositor within 60 days from
as the case may be, in FDCGB the date of such withdrawal for the
accordance with the purpose specified in the section and
provisions of this the amount
Scheme. or any part thereof which has not been
so utilized, can be re-deposited in
Account-A immediately thereafter.
If a depositor desires to close his
account, he shall have to apply to
deposit office on Form ‘G’ along with
the approval of the Assessing Officer
NO Demand Loan / OD Facility
230
FIXED DEPOSIT SCHEME FOR VICTIMS OF Individuals including Court orders 12 months to 120 months. In case, the
Minors through in support of court
guardian in single the claim in directs tenor more than 120 months,
name. his/their the same shall be auto renewed
ames. Automatic Renewal
Mode of Holding : 1% higher rate of on the applicable
ROAD ACCIDENTS
Singly Maximum- CARD rate

Any No Limit The original FD receipt shall be
(18/2020)
individual/dependent Minimum- retained by the Bank in safe custody

(singly or jointly with Based on No premature cancellation/part
others), Minors of 10 minimum withdrawal is permitted
years and above in his monthly CBS Code Identifier for the captioned
own name and below annuity Scheme is “001FDVRA” in free text 1
10 years under Rs.1,000/- for in “V” option, second page
guardianship shall be the Relevant Loan Facility: No loan or advance
eligible to open under period. shall be allowed
the scheme provided
there are Court orders
in support of the claim
in his/their names.
a. An individual. Rs. 10/- and - 12,36,60 months interest
b. One or more thereafter in For accounts of 12 months period -
persons, jointly, multiples of 3.00% p.a. 36 M : 4% 60 m : 5%
payable to either or Rs.10/- may Interest shall be calculated on daily
ICT based scheme through Hand Held Terminals (HHTs)
survivor. be deposited balance basis

c. An individual minor, either directly
under guardianship of or through Premature closure of accounts :
his/her natural Mini Deposit No interest will be paid by the bank
MINI DEPOSIT SCHEME (14/2020)
guardian. Collector. before completion of 12 months. For

d. An illiterate person. The upper all other cases, in case of premature
ceiling for closure of account, 1% penal interest
The revised scheme deposit per shall be charged.
shall be applicable to account per Bank at its discretion may allow loans
only those MDCs who month is against Mini Deposits
opt for the ICT based Rs.5000/- Each Mini Deposit Collector will be
scheme with the use of required to deposit Rs. 5000/- in cash
hand held terminals Accounts as Security and also provide a surety
(HHTs). under good for Rs.5000/-.
Revised Mini Fall Back Wages per month : 8000/-
Sole proprietary Deposit Minimum ceiling for collection per
concerns, partnership Scheme can month:
firms, clubs and be opened Rs. 5 Lac(Area-A), Rs. 4 Lac (Area-B),
associations. However, through Menu Rs.3 lac(Area-C).
corporate bodies like Option Rs. 750/-Conveyance allowance per
joint stock companies, MDNOAAC month.
corporations, etc., may with scheme Commission @ 3% If they meet their
not be allowed to open code target i.e. Deposit collected is 3 Lacs <
accounts under the RDMDN. 5 lacs.
scheme. Commission @ 2% if the collection in
any area is above 5 lacs.
231
RECUR Recurring Deposit Minimum  Encourages savings without
RING Account may be monthly stress on finances.
DEPOSI opened by an installment of  High rates of interest (identical to
T individual singly or Rs. 100/- or the fixed deposit rates).
SCHEM jointly, or by a minor more in  Loans against deposits available.
E through his/her multiples  Withdrawals on maturity or one
guardian or by a minor thereof. month after deposit of last
of the age of 10 years installment, whichever is later.
and above in his /her Maximum  All deposit receipts shall be
own name or in the limit.: payable At Par on maturity at all
name of a firm, club, 5 Lakh CBS branches
association,  SMS Alerts for missed
educational institution, Period: 6 installments and due date of
municipality, months to maturity
panchayat, Govt. and 120 months,  Free accidental death coverage to
quasiGovt. body, coin multiples of the extent of Rs. 2.00 lacs in
operative society, 1 month accounts with installment of Rs.
religious or charitable 5000/ & above per month and are
institution., etc. NRI(s) regular.
can also open RD  Premature cancellation available
(NRO) accounts. (0.50% penalty will be levied
instead of 1%)
Individual (singly or Core monthly Period : 6 months to 120 months.
jointly) with others installment  Encourages savings without
PNB SWECHHA JAMA YOJNA/PNB
Minor who above age with a stress on finances.

of 10 years(self) minimum of  High rates of interest (identical
Proprietorship/Partners Rs.100/- or to the fixed deposit rates).
FLEXI RD SCHEME
hip Firm, Commercial above in its  No penalty on missed/late

Organization, multiples with instalment.
Company / ceiling on  No premature penalty for
Corporate Body, maximum Staff/Sr. Citizen/Death of
Hindu Undivided amt 50000/- Depositor.
Family,  Payable at par all CBS
Association, Club, 10 times of branches on maturity & No inter-
Society, Trust or core amount sol charges.
Religious/Charitable or permitted  Loans against deposits
Educational Institutions i.e. Rs. 5 available at base branch only.
Lakh Intt shall be applied on daily product
basis.
232
Individual having Minimum - Period: From 6 months to 120 months,
minimum age of 55 Monthly in multiple of 1 month
PNB PRANAM RECURRING
years and maximum installment of No penalty will be levied if the deposit

upto 60 years of age. Rs. 100/- or is prematurely closed for the purpose
DEPOSIT SCHEME
more in of investment to any other term deposit

• In case of Joint multiples scheme of the bank provided that the
Deposit, the thereof deposit remains with the bank after
prospective senior reinvestment for a period longer than
citizen has to be the Maximum the remaining period of the original
first holder of the limit.: contract.
recurring deposit 5 Lakh No penalty on premature cancellation
after the depositor attains the status of
Sr. Citizenship
Option of demand loan/overdraft facility
available under the scheme
All Govt. Institutions, Minimum Rs. 6 Months to 120 month.
Pvt. Institutions, PSUs, 10/- For a longer duration i.e. more than
PNB SPECIAL RECURRING
Corporate Bodies etc. according to 120 months at present, the previous

DEPOSIT SCHEME
The account shall be PF account will be closed after the full

opened in the Name of deductions of tenure i.e. 120 months and new
the institution A/C the account will be opened.
Name of the employees
employee. Minimum and may be No penalty on missed instalment/s.
10 Employee or 75% accepted
of the eligible later on in No premature withdrawal allowed
employee multiples of without the prior sanction or permission
Re.1/- of the institution.
thereof. Loans and Advances may be granted
An individual, singly or Minimum 60 months to 120 months in multiples

PNB RAKSHAK RECURRING DEPOSIT SCHEME
jointly having salary monthly of 3 months.

account under PNB installment of  Encourages savings without
Rakshak Scheme. Rs. 1000/- or stress on finances.
more in  High rates of interest (identical to
Scheme code: RDRAK multiples of the fixed deposit rates).
Rs.100/-.  Loans against deposits available.
The deposit shall No maximum  Withdrawals on maturity or one
mature for payment 30 limit. month after deposit of last
(26/2017)
days/ one month after installment, whichever is later.

payment of last  All deposit receipts shall be
installment or on expiry payable At Par on maturity at all
of the period for which CBS branches.
the deposit was  No penalty on pre-mature
accepted whichever is payment if the proceeds are
later utilized for the purpose of margin
money in Housing loan to be
availed from our bank.
In case RD account is not made
regular by depositing pending
installments till maturity date, simple
interest will be paid .
233
GENERAL GUIDELINES
ADDITIONA 1% additional ROI to Staff / retired staff members / widow/ widower of staff in
L RATE OF Saving and Fixed Deposit Accounts have been allowed i.e. above the rate of
INTEREST interest, permissible to public.
ON Benefit of additional rate of interest to banks‟ staff members or retired staff
DEPOSITS member is available only in case of the staff member or retired staff members
OF STAFF has an account singly or jointly with family member where the staff
AND EX- member/retired staff members is the Principal Account Holder. The staff
STAFF member who is principal account holder in a joint account may give a
declaration to the Bank that the money belongs to the depositor.
ISSUANCE Indemnity Bond, on form no. PNB-322 (stamped according to local law) in case
OF TDR was issued on Bank‟s security form before payment is made or a
DUPLICAT duplicate receipt is issued. When a duplicate receipt is issued, it should be
E TERM marked, in red ink, 'issued in lieu of the fixed deposit receipt no…
DEPOSIT dated....reported lost', a similar note being also made in computer records also
RECEIPT by the authorized officer.
PAYMENT Payment of FDRs issued by CBS branches can be made by any CBS branch
OF TERM on maturity only. All the deposits, which are repayable after notice or repayable
DEPOSITS after a certain period, where the amount of deposit / aggregate amount of
deposit / such deposit repayable together with interest i.e.Rs.20,000/- or more,
the repayment of such deposit(s) has to be made by account payee cheque or
account payee bank draft.
DEATH OF Upon the death of one of the holders of a joint account, where the relative
ONE OF Account Opening Form provides for payment of balances to the survivors
THE (either or survivor/Former or survivor), the account will, of course, continue and
HOLDERS payment on maturity can be made to survivor(s), unless at or before the time of
IN JOINT payment, an order of Court or other competent authority has been received
ACCOUNT prohibiting payment to the survivor(s). A letter of request from the survivor(s)
S and death certificate produced should be kept on record.
PAYMENT 1. Overdue Term Deposits are to be renewed on the date of presentation and
OF not to be renewed from retrospective date.
INTEREST 2. The appropriate prevailing rate of interest shall be applicable from the date
ON of renewal of the FDR.
RENEWAL 3. Interest for the overdue period is to be paid at Savings Bank rate of interest
234
OF as applicable from time to time,
OVERDUE 4. Interest on Overdue Term Deposits is not subjected to Tax Deduction at
TERM Source in terms of section 194A of the Income Tax Act, 1961. However, in the
DEPOSITS cases where the said overdue deposits are renewed further, the interest on
such renewed term deposits will be subjected to same provisions of TDS
applicable in the case of any other new/fresh terms deposits.
AUTO Where the customer has opted for auto renewal, his/her term deposits shall be
RENEWAL auto renewed after the date of maturity except Term Deposit under PNB Tax
OF Saver Scheme, Capital Gain Scheme, Recurring Deposit Scheme, deposit
DOMESTIC accepted under Bulk Term Deposit (above Rs.10 Crore) and Inter Bank
TERM Deposits.
DEPOSITS Where the customer has not opted for auto renewal, the same shall not be auto
ON renewed.
MATURITY The auto renewal period may be modified at the instance of the customer
subject to the minimum or maximum period of the scheme.
The Term Deposit shall continue to be auto renewed till the number of times
opted by the customer
PREMATU 1% penal interest shall be charged at the time of premature cancellation/part
RE withdrawal of domestic term deposits for all tenors and interest rate payable
WITHDRA would be contractual rate minus 1% or the rate under the scheme on the
WAL OF contractual date applicable for the tenor for which the deposit has actually run
DEPOSIT minus 1%, whichever is lower.
No penalty is to be levied if the deposit is prematurely closed for the purpose of
investment to any other term deposit scheme of the bank provided that the
deposit remains with the bank after the re-investment for a period longer than
the remaining period of the original contract.
Staff members/Senior Citizen (except their term deposit, if any, accepted by
Bank on Differential Rate of Interest basis), instances of death of the depositor
before maturity, are exempted from the levy of 1% penal interest.
Deduction TDS shall be deducted on proportionate basis from the very first month /
of Tax at quarter if total interest payable to a customer during the financial year (i.e. from
Source April to March) on all his term deposits, wherein his / her name stands first, in a
Bank on the basis of CIF of the customer comes to Rs 50,000/- and above in
case of Senior citizen and Rs. 40,000/- and above for any other person.
235
In order to comply with the provisions of Income Tax Act, interest for the
broken period would be calculated on the principal amount at the end of the
relevant quarter (i.e. from the date of opening to the last date of the
relevant calendar quarter) at the applicable rate and credited in the fixed
deposit account or operative account of the customer as the case may be and
TDS, if applicable, would be deducted there from.
Internet Now, the option of premature cancellation of e-FD has been provided in the
Banking following schemes:
Services – Multi Benefit Term Deposit Scheme, Special Term Deposit Scheme,
Online Ordinary Term Deposit Scheme & PNB Sugam Term Deposit Scheme.
opening of However, part withdrawal facility is not available in e-FD.
Fixed Online pre-mature closure of e-FD after Branch EOD as well but upto Central
deposits EOD. After Central EOD, the customer’s request will be captured with display
(e-FD) of the message on screen that his/her request will be processed on the next
working day.
Issuance of Every depositor will be provided with a pass book of his/her account. No
Pass Book repayment will, ordinarily, be made from the account, without production of the
in RD / pass book. However, this formality may be waived, at the written request of the
Flexi depositor. If the pass book is lost, spoiled or mutilated a duplicate pass book
Recurring will be issued after a levy of duplicate pass book charges.
CONVERSI In case the depositor desires to exercise the option of conversion to any other
ON OF Term Deposit Scheme before maturity, Incumbent In-charge on the request
FIXED from the depositor can allow conversion provided the depositor agrees to
DEPOSIT continue the deposit with the Bank, for a term longer than the remaining period
of original contract.
Interest accrued, if any, up to the date of conversion may be paid and excess
payment of interest, if any, should be recovered from the account, before
complying with his instructions.
Change in limit for accepting Form 15H (Finance Divn. 20/2019)
Rebate under section 87A is available in case of a resident individual if his/ her taxable
income (i.e. gross total income minus deduction under section 80C to 80U) does not exceed
Rs 5,00,000/- for AY 2020-21. Amount of rebate under this section is 100% of Income Tax or
Rs 12,500/- whichever is less.
236
Handling of i. TAXEXM for flagging 15G/H for Interest Payments
ii. EXMPTDS – L for Lower TDS Certificate under section 195/197
TDS iii. EXMPTDS – N for exemption under DTAA for non-residents
iv. EXMPTDS – Z - TDSZR Rate Code for customers where TDS is not
Exemptions in applicable (available for use at Circle Office only)
CBS v. EXTMTDS for adding 15G/H details for flagging 15G/H for Rent
Payment in EXTM
(Finance Divn. vi. Lower TDS in EXTM – field for lower TDS flag and certificate
number in EXTM
7/2019)
TRANSFER OF Fixed Deposit Receipts can be made transferable at the branch other
TERM DEPOSIT than the issuing branch on the request of the Depositor/depositors (in the
ACCOUNTS case of joint holder type deposit, the application may be signed by one of
the joint holders, if the other is dead).
HINDU In the case of a Hindu Undivided family (HUF) account, when the death of
UNDIVIDED a major co-partner occurs, the operation in the account will be stopped
FAMILY (HUF) and dealt with as a claim case.
PAYMENT OF 1. In case of death of the depositor, before the date of maturity of deposit
INTEREST ON and amount of the deposit being claimed after the date of maturity, the
TERM DEPOSIT Bank shall pay interest at the contracted rate till the date of maturity.
OF A From the date of maturity to the date of payment, the bank shall pay
DECEASED interest as permissible in case of overdue term deposits for the period for
DEPOSITOR which the deposit remained with the Bank beyond the date of maturity.
2. Further, in case of death of a depositor after the maturity date where
the depositor had failed to renew the deposit for a further period, the bank
shall pay interest as permissible in case of overdue Fixed Deposit
DELEGATION COMPETENT PERIOD AMOUNT
OF POWERS AUTHORITY
FOR ISSUE OF Circle 1 month Up to Rs. 5.00 Crores
TERM Head/LCBs(AGM/DGM)
DEPOSITS Zonal Manager 2 Month Above Rs 5.00 Crores and upto Rs 10.00
FROM Crores.
RETROSPECTIV HO: RBD(Resources) Full Full Powers
E EFFEC Powers
237
LOANING POWERS
Loaning Powers (Individual Capacity/ CACs) – sanction & revalidation
The GBBs shall handle normal operational activities of business and shall be
vested with very nominal discretionary powers sufficient enough to handle day
to day operations. GBBs will sanction loans up to Rs 10 Lakh only within their
vested powers. However Loaning power of GBB head shall be restricted to Rs
3.00 lac in case of core agriculture loan (including KCC/KGS) .
• Further, GBBs shall also be responsible for business development i. e.
mobilization of retail and corporate proposals and forwarding the same to
respective MCCs or RAMs, as applicable.
• It is pertinent to note here that GBBs shall not recommend and only forward
such proposals to RAMs/MCCs.
• The files of existing accounts in GBBs which are beyond their sanctioning
powers i.e. Rs 10.00 Lakh shall be transferred as advised by MPD H.O. from
time to times.
LOANING POWER (individual GBB heads)
Amt. in Lacs
NATURE OF FACILITIES JMG-I MMG-II MMG-III SMG-IV
REGULAR POWER
Aggregate Commitment per Borrower 10.00 10.00 10.00 10.00
LAC LAC LAC LAC
Within (1) above:
i. Secured Fund Based 10.00 10.00 10.00 10.00
ii. Unsecured Fund based 2.00 10.00 10.00 10.00
iii. Non fund based** 6.00 10.00 10.00 10.00
AD-HOC LOANING POWERS
Ad-hoc (drawings beyond limits Nil Nil Nil Nil

Ad-hoc facilities (reduction in margin Nil Nil Nil Nil
10% of sanctioned limit or Rs 1.00 Lakh Nil 10% of sanctioned limit or Rs
whichever is lower
1.00 Lakh whichever is lower
Nature of Facilities Over & Above MMG-II MMG-III SMG-IV
Commitment
Against Bank’s own Deposits (all 25 80 400
types)
238
Miscellaneous Powers 10 10 10
Purchase of TCs and C. notes 5 8 10
Bank Premises Loan Nil Nil Nil
Scooter/Motor-Cycle/Moped/ Bicycle Full Full Full
Loan to Members of Staff
Negotiation of DA/DP bills drawn under Full Powers Full Full
bank’s own ILCs
Powers Powers
Purchase of Govt. Cheques for Two times of their vested loaning
credit for/drawn by Govt. powers for FB (secured) advances over
Dept./Undertakings & drafts of & above the aggregate commitment
public sector banks/banks per borrower.
Restrictions:
Following restrictions shall be adhered to while exercising of loaning powers by
officials up to AGM level:
1- Term loan except Retail Loans* - 50%
2- Packing Credit advance against firm orders - 50%
3- Book Debt Facility - 25 %
4- Purchase/advance against demand documentary bills accompanied by MTRs of
unapproved transporter - 15 % (of Secured Fund Based Power)
• It is pertinent to mention that NON Fund Based limit (LC/BG) evein against 100%
margin, the vested loaning power of GBB Head is same (overall exposure Rs 10 lac)
. However in case of BG against 100% margin, GBB Head can issue BG for validity
period of more than one year, within the vested loaning power.
• ENHANCEMENT WITHIN 6 MONTHS OF SANCTION The enhancement within 6
months of sanction under exceptional and genuine cases shall by exercised by next
higher authority not below HOCAC-I and above within their vested powers.
Allowing Overdraft/Clean loan - 5% of unsecured FB power
• Advance against clearing instruments other than Bank drafts, Banker's cheque /
pay order, Central & State Govt. cheques - 50% of unsecured FB power and
advances to Premium Clients
For definition of Premium Clients
PREMIUM CLIENTS (For allowing advance against uncleared effects premium

clients shall be identified on the basis of following criteria:
1- Current account holders who have maintained a minimum average balance of
Rs 1 Lakh during the previous 12 months and in whose case cheque returning
during the previous 12 months are less than 10%
239
2- Borrowal accounts, which are having at least ‘B1’ Credit Risk Rating/score of
>52 where score is applicable and in cases where risk/other rating is not
applicable, borrowers having satisfactory track record).
Recommendation
Sanctioning authority will sanction facilities within his loaning powers on regular loan
proposals prepared by another officer of the office.
• Where second officer is not available, such proposal may be prepared by Special
Assistant of the office, if available. If neither officer nor Special Assistant is available
in the branch, clerk officiating as Special Assistant can recommend loan proposal for
sanction.
• Any officer deputed to a branch for the purpose of preparing/ appraising of loan
proposals shall be treated as officer of such office during the period of deputation.
• Subordinate staff while officiating in clerical cadre is not allowed recommending any
loan proposal.
• In the present structure, such powers shall be exercised only in GBBs under
exceptional circumstances.
Individuals (GBB Heads):Priority Sector Advances

Branch Head of GBBs may process/sanction loan proposal falling within vested
loaning powers in following cases even though proposals have not been
prepared/recommended by second officer, where no other officer is posted:
• All Priority Sector advances/Govt. sponsored schemes upto Rs. 1 lakh each •
Loans upto Rs.3 lakh under KCC Scheme/other direct agriculture.
• Tractor loans, the ceiling on individual loan will be Rs.3 lakh
• Housing Loans, the ceiling on individual loan will be Rs.2 lakh
• Total advance granted without recommendation of second man would not exceed
Rs.20 lakh in a month. Ceiling may be increased by Circle Heads to Rs.50 lakh
• Other loan proposals under Govt. sponsored schemes.
• In such cases efforts may be made by Branch Heads, to get proposals prepared &
recommended by Special Assistant or the senior most clerk in the branch.
• Note: For declining/rejecting the credit proposals pertaining to SC/ ST, MSE, Ed.
Loan, Govt. sponsored schemes, and Export Borrowers branches shall refer these to
Circle Head.
Concept of Credit Approval Committees
• For credit dispensation at all levels different CAC ( credit approval committees) has
been formed
• PLP-CAC (in case proposal above one cr)
• MCC-CAC
• ZOCAC-I
• ZOCAC-II
• HOCAC-I/II/III
Credit Approval Committee (PLP-CAC) for sanction of loans above Rs. 1.00 Crore
(136/20)
PLP shall exercise loaning powers for loans above Rs 1.00 crore in the following
scenarios:
240
- MCC is not established at those circles and all proposals of linked branches
under that circle have to be sanctioned by PLP as per loaning powers
- MCC is established at those circles, however many of the branches situated
at far flung areas are not linked with MCC. As such proposals above Rs 1.00
crore of those branches have to be sanctioned by PLP as per loaning powers.
- It has now been decided that loans above Rs. 1 Crore at PLP level shall be
sanctioned under committee approach.
Loaning Power Chart for PLP Credit Approval Committee:
Sr.No. Nature of facilities PLP-CAC CREDIT APPROVAAL

COMMITTEE HEADED BY (AGM/CM)
(in cr)
CM (INCUMBENT AGM (BH OF PLP)
OF PLP)
01 Aggregate Commitment as 4.00 10.00
per borrower
02 Within (1) above
A Secured fund based 4.00 10.00
B Unsecured fund based 1.00 2.50
C Non fund based 1.50 5.00
CAC-MCC , ZOCAC-I /II, HOCAC-I/II
• CAC-MCC Headed by AGM /MCC HEAD

• ZOCAC-I Headed by GM/DGM(Second-In-Charge of Zone)
• ZOCAC –II Headed by CGM/GM (Incumbent of Zone)
• HOCAC-I Headed by CGM CREDIT
• HOCAC-II Headed by Senior Most Executive Director
• HOCAC-III Headed by MD & CEO
LOANING POWER CHART FOR CACs (in crore)

Nature of facilities MCC ZOCAC ZOCAC-II HOCAC HOCAC- HOCAC-
-I -I II III
Aggregate Commitme 10 30 50 100 300 800
nt – per Borrower
Within (1) above
Secured Fund Based 10 30 50 100 300 800
Unsecured Fund Based 2.5 7.5 12.50 50 150 400
Non Fund Based 5 30 50 100 300 800
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AUTHORITY TO DECLINE & REJECT CREDIT PROPOSAL
SANCTIONING AUTHORITY AUTHORITY OF REJECTION

A. All Credit Proposals (Except proposals pertaining to SC / ST, MSE, Education
Loan, various Government sponsored schemes, and Export borrowers)
All Sanctioning Authority (i.e. at Respective Sanctioning Authority
Branch/RAM/MCC/ZO/HO level
B. All Credit proposals pertaining to SC/ST, MSE, Education Loan, various
Government sponsored schemes, and export borrowers
GBB Power Circle Head
RAM/MCC Power ZOCAC – 1
C. All Credit proposals pertaining to MSE and Export Borrowers
ZOCAC Power Respective Sanctioning Authority
HOCAC I, II and III Power Respective Sanctioning Authority
D. All Credit proposals pertaining to Export Borrowers
MC Power HOCAC III
VALIDITY OF SANCTION
• Sanctions of working capital and Term Loan shall be valid for 6 months.
• Facilities not availed within 6 months should be treated as lapsed.
• Where documents executed within 6 months from the date of sanction, the
sanctions shall be valid for next 6 months from the date of documentation.
• Unless a lapsed sanction is revalidated by competent authority within a maximum
period of 12 months from the date of sanction, no facility should be released.
• In case of lapsed sanctions falling under the powers up to HOCAC-III level, the
same shall be revalidated by the sanctioning authority
• In respect of sanctions under the powers of Management Committee, revalidation
of lapsed sanctions can be considered by HOCAC-II/III.
• While permitting revalidation, the competent authority shall obtain and study the
latest financials and also ensure that the projections submitted at the time of original
sanction continue to hold good.
LOANING POWERS & CREDIT RISK RATING

Rating Loaning Powers
‘A1’ & ‘A2’ CMs, AGMs of RAMs and MCCs, ZOCAC-I & above shall
exercise 125% of their normal loaning powers.
‘A3’ & ‘A4’ AGMs of RAMs and MCCs, ZOCACI & above shall exercise
110% of their normal loaning powers.
‘B1’ Normal Loaning Powers by officials at all levels to the extent
of their vested loaning powers
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However, no fresh exposure should be taken upto field level (branch office level) for
such accounts in case of unfavourable industries in terms of HO IRMD L&A circular
issued from time to time.
Sanctioning Powers prior to Retirement
• In case of GBBs, Circle Heads shall also be vested with authority to withdraw the
powers, for reasons to be specified, of their junior(s) wherever they feel that powers
so delegated are not being exercised judiciously or in Bank's interest.
• Next senior authority is to be informed in case of such withdrawal of powers.
• Branch Heads of RAMs/MCCs are to exercise their sanctioning powers jointly with
other officials with due care during the period of 3 months prior to the retirement and
submit the Statement of Limits Sanctioned' promptly to the Controlling Office at
fortnightly intervals.
• In case of any adverse observation in LSS relating to exercising of loaning powers,
suitable remedial measures be taken immediately which include suspension of
loaning powers.
WITHDRAWAL OF POWERS
• Zonal Managers and above are authorized to withdraw powers, for reasons to be
specified, of their junior(s) wherever they feel that powers so delegated are not being
exercised judiciously or in Bank's interest
• In case of GBBs, Circle Heads shall also be vested with authority to withdraw the
powers, for reasons to be specified, of their junior(s) wherever they feel that powers
so delegated are not being exercised judiciously or in Bank's interest.
Disbursement/ Reimbursement/ Reschedulement of Term Loan
• In case of schematic lending tenor of term loan as per as per the respective
scheme guidelines
• However, in other cases like Project Finance etc. sanctioning authority can
consider the tenor of term loan up to 7 years.
• In cases of tenor above 7 years and upto 10 years, the same can be considered at
the level of ZOCAC-I and above within their vested loaning powers
• . However, for lending above 10 years in case of Infrastructure and other such
sectors, the case be considered on merits as per RBI guidelines
Reimbursement in Term Loan Account
• In emergent circumstances, ZOCAC-I & above may permit reimbursement, on

merits, within six months of acquisition of fixed assets to the extent of loan
sanctioned to MSME borrowers within their vested loaning powers and after ensuring
end use of funds.
• In other than MSME borrowers also, reimbursement in term loan account for capital
expenditure incurred within last six months may be given in highly deserving cases,
on merit of the case.
• In exceptional and deserving cases, part disbursement of term loan may be allowed
through current/cash credit account by the sanctioning authority not below the level
of CM subject to maximum of 25% of the sanctioned limit.
• The following guidelines shouldbe taken into considerationwhile permitting
disbursement through current/CC accounts in branches:
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The disbursement should be made in stages. Next installment should be released
after verification of end use (through bills/physical inspection etc.) for previous
installment. The permission for disbursement through current/cash credit account
may be given on merits of each case and condition to this effect may be incorporated
in the terms of the sanction itself.
Due caution should be taken by the disbursing authority to ensure the end use of
funds.
The facility may be permitted in case of better-rated accounts say ‘B1’ & above.
For disbursement through current/cash credit account beyond 25% of sanctioned
limit, the case be referred to the next higher authority.
However, ZOCAC-I and above shall have full powers in the matter. In case of any
deviation/relaxation in the laid down guidelines given at above, the matter be put up
to HOCAC-III/II.
Annual Review of Term Loan Accounts
All Term Loans, other than retail loans, with sanctioned limit of ₹ 2 crore & above
needs to be reviewed annually. The review of Term Loans will have no bearing on
asset classification and income recognition of the accounts
Adoption of Green Renewal (L&A 38/20) Having aggregate credit facilities of Rs 50
Lakh to Rs 5 Crores. (Retail Term Loan) Having aggregate credit facilities above Rs
10 Lakh and upto Rs 5 Crores (Credit facilities in cases of revolving Credit facilities)
Include term loan also.
Following conditions should be met for Green renewal:

No dilution in security/margin
No change in management.
RESCHEDULEMENT OF TERM LOAN
Sanctioning authority may reschedule Term Loan up to 1 year subject to total

repayment period not exceeding 7 years
Authority one step higher may reschedule Term Loan upto total period of 7 years
Branch Heads of LCBs/ELCBs, ZOCAC-I and above have full powers to reschedule
repayment of Term Loans in their own sanctions as well as sanctions by lower
authorities.
AUTHORITY FOR EXTENSION IN VALIDITY OF SANCTION IN CBS FOR

OPERATIONAL CONVENIENCE (L&A 138/2020 and 146/2020):
Guidelines on authority for extension of validity of sanction in CBS has been

conveyed. The Branch Head can permit extension in validity of sanction in CBS
through short review upto three months from the due date of renewal of limits subject
to certain condition detailed in the circular and In exceptional cases, the various
authorities, may permit further extension in validity of sanction in CBS through
second short review upto three months subject to certain condition detailed in the
circular. The extension in validity of sanction shall be a maximum period of six
months from the due date of the regular sanction through short review.
244
Powers for Interchange of Limits
• Branch Heads (other than GBBs) may convert unavailed limits

sanctioned by authority other than Management Committee, temporarily
for a period of 3 months, as given below:
i) 50% of unavailed CC limit into Docy.DD/ABC limit with the
same margin as under CC facility.
ii) Unavailed Cash Credit limit into Packing Credit limit for
executing specific export orders.
iii) Unavailed Documentary DD limit into FOBP limit for executing
specific export orders. )
iv) Unavailed Packing Credit limit into FOBP limit
v) Unavailed BD/Clean DD/Docy. DD/ABC/AUBC limit into CC
limit on secured basis with usual margins.
vi) Unavailed Book Debt limit into Documentary DD/ABC/CC limit
on secured basis with usual margins.
• b) In case of MC's sanction, ZOCAC-I and above can permit
conversion as mentioned above.
c) Branch Heads of LCBs/ELCBs, ZOCAC-I & above may interchange
fund based facilities upto two times of their respective powers within
overall sanctioned limits. d) Branch Heads of LCBs/ELCBs, ZOCAC-I
& above may convert unavailed fund based facilities into non fund
based facilities upto two times of their respective powers within the
aggregate sanctioned limit for purchase of raw material only.
e) Earmarking is to be done in the unavailed portion to the extent of
limit required to be converted.
In case of Board/MC/HOCAC-III sanctions, HOCAC Level-II may
permit interchangeability between Fund Based & Non Fund Based
facilities, within the overall sanctioned limits, during Holding On
Operations (HOO) in case of accounts admitted for CDR package.
Financing & Safeguards - Allied/ Associate Concerns

• Officers working as Branch Head/Dy. Branch Head may sanction credit facilities,
subject to condition that aggregate amount in respect of each facility to be allowed to
parties and their allied/associate concerns does not exceed overall powers vested in
them for a particular facility/ aggregate limits per party, depending on the type of the
branch they are posted at.
• Total credit facilities proposed to be sanctioned to party/group/ associate firms shall
be considered by an officer under whose powers they fall.
• ZOCAC-I & above has been empowered to sanction credit facilities to
allied/associate concerns taken together, upto 2 times of their ‘aggregate
commitment per borrower’. Such CACs may consider proposals in favour of
allied/associate borrowers, even where the facilities of one or more such borrowers
have been allowed at higher level provided
245
• The aggregate exposure to all allied/associate concerns, including the one which
have been sanctioned facilities at higher level, does not exceed two times of their
aggregate commitment per borrower
• The aggregate exposure to any single borrower, other than one which has been
sanctioned facilities at higher level, does not exceed the loaning powers of the
concerned official
• For purpose of Loaning Powers, concerns shall be allied/associate of another, if:
• Two concerns have one or more common partners/proprietors
• Any of the directors of the private limited company is director of another private
limited company
• The proprietor/partner of a firm is a director in a Pvt. Ltd. Company,
• A limited company is subsidiary of another limited company or is closely held
company with substantial interest (i.e. more than 20% of the equity share capital
(excluding preferential shares) of the company is owned by the another company).
• Where two or more limited companies belong to the same group having
commonality of management and control.
• In spite of the above broad based definitions of associate/allied concerns, if the
sanctioning authority still feels that two concerns/ firms/companies are suspected to
be connected but not covered under the above definition, he should treat them as
associate/allied concerns.
• Common guarantors are not to be taken into account for defining associate/allied
status. However, if the guarantor has sufficient/ substantial interest in either one or
more of the common concerns, they should be treated as connected accounts and
accordingly dealt.
• It is desirable that all the loan accounts/credit facilities, of the associate allied firms
(Group entity) are kept together under single set-up i.e. Branch, RAM, MCC, LCB
Adhoc/ TOD/ Clean Overdraft/ Clean Loans
• Clean Loan- Clean loan is an unsecured loan where no primary security is

available. Such loans are given to existing clients (older than six months) for specific
business purposes with fixed repayment schedule and is in the shape ofterm loan for
short period (maximum upto 12 months). These loans are also given for meeting
genuine credit requirements arising due to the temporary mismatch of cash flows
against security of future receivables. No roll over is allowed
• Clean OD- Clean OD facility, unsecured in nature, is normally given in the deposit
accounts for very short period against expected future cash flows such as
salary/rent/pension/proceeds of FDR, etc. However, it can also be considered in the
borrowal accounts for meeting casual/business needs of the party for a very short
period, say upto one month (maximum upto three months by ZOCAC-I& above). It is
in the shape of overdraft facility and mainly givenon the basis of financial
strength/past dealings etc. No roll over is allowed
• Clean Overdraft may be allowed/ permitted for short periods, not exceeding, one
month by officials up to DGM level. However, exceptional and genuine cases for
sanction of Clean OD may be referred to ZOCAC-I & above who can permit Clean
OD upto maximum period of three months within their vested loaning powers. The
Clean Loans are to be allowed only in case of existing/properly introduced customers
having repaying capacity to the satisfaction of the sanctioning officialfora period
notexceeding12 months. However, Clean OD/Clean Loans should not be permitted
246
unless the conduct of the account has been satisfactory with the bank for a period of
at least six months and no roll over of such loans is to be allowed
• Casual needs of officers in Govt. Deptt/Public Sector Undertakings by way of this
facility may be met only to the extent of salary cheques. Exceptions may, however,
be made in case of occasional drawings covered by deposits held in the account of
individual(s), firm(s), partner(s), etc. Also in case of standard accounts whose
viability is not in doubt as at present, occasional overdrafts may be allowed within the
delegated powers without observing above formalities upto 50% of the average
balance held in the account.
• Overdraft up to Rs 5000/- may be allowed in Saving Fund Accounts (including

minor/staff accounts) where regular income such as salary, pension, etc. are
credited at fixed periodical intervals. Such overdraft may not be allowed more than 4
times in a calendar year and should be adjusted within 15 days. It should be allowed
only for meeting pressing liabilities and after obtainment of proper documentation.
Transfer of Credit facilities
• Circle Heads in case of GBBs and Zonal Managers in case of RAMs and MCCs
shall have discretion to permit transfer of any loan facility within their respective
areas.
• Circle Heads in case of GBBs and Zonal Managers in case of RAMs and MCCs are
empowered to permit transfer of limits to other Circles/ Zones at the request of the
borrower and with the consent of the transferee Circles provided the account is in
standard category
• ZM shall have discretion to permit transfer of any loan facility within their respective
areas
• General Manager at HO shall have full discretion. Additionally, transfer of accounts
with LCBs shall be under the power of HO Credit Division
• No permission shall be required for transfer of staff loans and they can be
transferred by the Branch Head.
Takeover of Accounts
Borrowal account should be taken over from other Banks/Financial Institutions (FIs)
like All India Financial Institutions (AIFIs) and State Financial Corporations (SFCs)
on selective basis after obtaining prior approval from the next higher authority of the
official under whose powers the takeover of the account (entire fund based and non-
fund based limits) is proposed. ZOCAC-I & above may, however, permit takeover of
borrowal accounts upto the extent of their vested loaning powers. In case of working
capital limits if enhancement of 25% and above is considered at the time of takeover,
instead of seeking prior approval from the next higher authority, the proposals shall
be sanctioned by the next higher authority on merits of the case subject to the
compliance of the other guidelines.
Such approval shall not be necessary in cases where the accounts of other banks
have been adjusted for over 3 months.
• In case borrower was availing credit facilities from another Bank /FIs within the
period of three months prior to submitting loan proposal to our bank such credit
proposal shall be treated as Deemed Takeover. It does not include loans and
247
advances against Govt securities, LIC fixed deposits , temporary overdraft, retail
loans
• In case of crop loans/KCC, the prior approval from next higher authority is not
necessary even if the accounts from other banks/FIs have been adjusted within three
months subject to the compliance of other takeover parameters and subject to the
condition that only those accounts be taken over wherein there was no default in
payment of interest/instalment during the last previous one year with the previous
• The requirement of seeking permission from the next higher authority shall not be
applicable for taking over of Retail Loan Accounts from other banks/FIs. However,
sanctioning authority while taking over such accounts shall ensure that the Loan
Accounts with other banks/FIs are running regular with no defaults in payment of
interest/installment
• Branch Heads of all the MCCs and RAMs may consider takeover proposals to the
extent of 50% of their regular loaning powers in case of MSME/Trading Advances
without obtaining prior approval from the next higher authority
• The borrowal accounts with minimum credit risk rating as B1 may be considered for
takeover. However, HOCAC-II/III shall exercise their normal loaning powers for
considering takeover of B2 & B3 rated accounts in Large Corporate
• The small loan accounts (aggregate exposure upto & including Rs 5 crore) with
credit risk rating B2 and below are not to be considered for takeover.
• With the objective of preventing unethical/ unjustified takeover of borrowal
accounts, it is advised that takeover of borrowal accounts from the banks, where our
present EDs and Managing Director & CEO have worked earlier, need not be
considered (L&A 92/2020).
Substitution/ Release of Security

• Substitution/ release of IP kept as collateral in sanctions falling upto the vested
loaning powers of GBBs/RAMs/MCCs may not be permitted up to the level of
ZOCAC-I except where the IP is proposed to be replaced by the cash security/FDR
of equivalent amount to higher of, Valuation as per Last Sanction or Latest valuation
obtained on receipt of request of substitution. In all other cases where such cash
security/FDR is not available, the powers of substitution / release of IP shall vest with
ZOCAC-II.
• For sanctions falling under power of ZOCAC-I, the substitution/ release of collateral
in the form of IP shall be permitted by ZOCAC-II.
• ZOCAC-II and above may continue to permit the substitution/release of collateral in
the form of IP in sanctions falling within their vested loaning powers.
Amendment in Terms & Conditions AND Conformation of Action
In case, officials, in organizational interest, have to exceed their vested loaning
powers (i.e. where there is transgression of discretionary powers), then after such a
transaction has taken place (including the cases where telephonic/oral sanctions
were obtained from the higher authority for exceeding the powers), it should be
reported immediately to the controlling authority, i.e. Circle Head through submission
of a proposal on Bank's prescribed format for confirmation of action by the
Competent Authority giving full details/justification of the case and explaining the
circumstances necessitating accommodation beyond their powers and the reason
why it was not possible to have prior approval from the Competent Authority (Format
given at L&A circular 154/2020).
248
CONFIRMATION OF ACTION IN SANCTIONS EXCEEDING
DISCRETIONARY POWERS CIRCULAR L&A 100/2020, 157/2020
Reporting of transgression after 7 days shall be considered as staff side lapse and
immediate action in this regard shall be initiated by the Controlling Authority. Cases
of delay in reporting, if justifiable may, however, be considered for confirmation
exceptionally.
• Proposal for confirmation is not to be linked with the renewal/review/ sanction of

facilities.
CONFIRMATION OF ACTION – TRANSPARENCY IN DECISION
MAKING CIRCULAR L&A 71/2015
• Any direction (including telephonic direction) for taking action in any case in respect
of matters on which the senior officer or his subordinate has powers to decide, shall
ordinarily be conveyed in writing. If, however, the circumstances of the case are such
that there is no time for giving the instructions in writing, the senior officer should
follow it up by a written confirmation at the earliest
If an officer seeks confirmation of oral instructions given by his senior, the latter
should confirm it in writing, whenever such confirmation is sought.
Receipt of proposals from junior officers seeking confirmation of oral instructions
should be acknowledged by the senior officers or by their office staff, as the case
may be.
PROCEDURE AND TIME SCHEDULE TO BE FOLLOWED BY THE

BRANCHES
• Branches to ensure that the proposals in respect of any transaction requiring
confirmation of action are submitted immediately after such a transaction has taken
place, to the controlling office on the prescribed format
• Such proposal submitted by the branches to the controlling office be serially
numbered i.e. 1/2020, 2/2020 ...... and so forth and be sent under Regd.
Cover/Courier/Speed Post/e-mail for which a proper receipt and record be
maintained.
• The Controlling Office, on receipt of the proposal for confirmation will send
acknowledgement to Branch Office for having received the proposal. Further, the
Controlling Office is to maintain proper Branch wise records of such proposals
received.
• In case proposal does not fall under the powers of controlling authority, the same
shall be immediately (on the same day or the following day of the receipt of such
proposal) forwarded by the controlling authority along with his/their
views/recommendations to the next higher authority for consideration by the
competent authority
• However, in case of proposals for confirmation falling under HO powers, the same
shall be submitted on the prescribed format as under:
• The Branch Manager should preferably obtain prior concurrence/ approval of Circle
Head before permitting accommodations falling within the vested loaning powers of
Circle Office/HO.
• For the proposals falling under HO powers, the Circle Head shall preferably seek
prior concurrence/approval of the competent authority at HO before giving his
concurrence to the Branch Manager
shall be submitted on the prescribed format as under:
249
• In case of proposals falling within the powers of Circle Head/ FGM, the
communication regarding confirmation/rejection of action be sent to the concerned
branch within a period of 15 days from the date of receipt of the proposal failing
which the action of the branch will be deemed to be confirmed automatically.
• In case the proposal falls within the vested loaning powers of HO, the Circle Head
should immediately move for confirmation of action of Branch Manager after adding
hisrecommendations/ views on the proposal but in any case not later than 7 days
from the receipt of the proposal from the branch.
shall be submitted on the prescribed format as under: (Refer circular no L&A 8/2010)
• In case Circle Head differs with the proposal, he may add his views/facts/reasons
for the same and forward the proposal to HO for consideration by the competent
authority as per the aforesaid time schedule
• The competent authority may confirm or reject the proposal on merits giving proper
justification. In case proposal falls under the vested powers of MC, CMD may reject
the proposal.
• Similarly, for proposals falling under ED/CMD powers, the recommending authority
at HO level shall also add his recommendations in the proposal. However, in case
he differs with the proposal, the reasons/views for the same shall be mentioned in
the proposal which shall be placed before the competent authority for final
approval/rejection.
GENERAL GUIDELINES
• Controlling Authority i.e. Circle Heads, where they are not competent authority
should closely follow-up such cases and ensure that the decision is taken within the
time frame
• Proposals requiring confirmation as well as communications regarding
confirmation/rejection/queries be sent through fastest mode available viz.
Fax/Courier/Speed post/Regd. post to controlling/ competent authority for which a
proper receipt/record also be maintained at all the concerned offices.
• Competent authority at HO/CO level while conveying the confirmation/rejection of
the proposal to CO may also endorse a copy of the same to the concerned branch.
• Staff accountability in respect of cases not having been confirmed should be
decided expeditiously on top priority.
Loan to members of Staff/ Directors & their relatives

• Loaning powers for sanction of loan to staff will be the same as applicable for
similar schemes for public, depending upon the scale of the designated officers and
the type of branches they are posted at. However, for Festival Loan, other
conveyance loan (other than car loan) and Clean Overdraft/Demand Loan, the
Branch Heads (Scale II/ III) and the designated officers of other branches/ other
offices shall exercise full powers.
• The rate of interest shall be concessional for staff loans upto the amount allowed in
Staff loan schemes. For amount sanctioned above that, rate of interest applicable to
public shall be charged
• For sanction of loan to staff working in Administrative Offices/ other offices,
designated officers of CO/ZO/ ZAO/Other Offices/ HO Divisions shall exercise the
same powers as vested in the Branch Head of that scale
• Any staff loan beyond the vested powers of the Branch Head and loans to Branch
Heads/ Incumbent of other offices other than RAMs and MCCs shall be sanctioned
by the designated officers of respective Circle Offices. Loan cases of CHs,
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Incumbents In-charge of RAMs and MCCs, and DGMs/GMs of LCBs/ELCBs and
Incumbent of ZAOs will be sanctioned by the designated CM/AGM of ZO and that of
Divisional Heads of HO, Principal of CSC and GMs/CGMs (ZO/HO) will be
sanctioned by the designated CM/AGM of Credit Division HO
• Designated officers can sanction such facilities to their seniors also including
CM/AGM of the branch/ administrative offices other than Brach head
• Officers for sanction of staff loan to be designated through office order
• Sanctioning authority should not sanction/set-up any limit in his own favor at his
own office even against Banks' own deposits/Govt. Securities/LIC Policy/Gold/Silver
jewellery/Postal Saving certificates/ Units of Mutual Funds/
Shares/Debentures/Bonds of public sector undertakings. However, he may sanction
such facilities within his own vested powers to any officer, other than himself,
irrespective of the fact that the borrowing officer is senior or junior to him.
• Credit facility should not ordinarily be granted to spouse/close relatives of bank’s
workmen staff for the purpose of any trade/ business. However, depending upon
genuineness of the case, loans may be granted after obtaining the prior permission
of Zonal Manager. Further, no credit facilities should be granted to the workmen staff
for the purpose of any trade/business.
• No officer or any committee comprising an officer, as a member shall sanction any
credit facility to his/her relative. Such a facility should be sanctioned by the next
higher sanctioning authority.
RESTRICTIONS IN CREDIT FACILITIES TO DIRECTORS AND THEIR

RELATIVES
• Loaning powers for sanction of loans to Chief Executive Officer/ Whole Time
Directors shall be vested with HOCAC-I.
• The interest rate on loans to Chief Executive Officer/ Whole Time Directors shall
not be lower than the rate charged on loans to the staff members of Bank
• All loans and advances to Directors of other banks, any relative of bank’s Directors
or relative of other banks’ Directors, any firm in which any Director of other banks or
relative of bank’s Directors or relative of other banks’ Directors is interested as a
partner or guarantor and any company in which any Director of other banks or
relative of bank’s Directors or relative of other banks’ Directors hold substantial
interest or is interested as a director or guarantor:
• For Rs 25 lac & above need to be sanctioned by the Bank's Board of
Directors/Management Committee of the Board.
• For less than `25 lac may be sanctioned by the competent authority in terms of
powers delegated to them. However, such cases are subsequently to be reported to
the Board.
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PROCEDURAL GUIDELINES FOR AGRICULTURAL CREDIT
Processing the applications for agricultural credit.
(i) Technical feasibility and economic viability in each case should be assessed by
Agriculture Officer/Officer having agriculture background to the extent possible.
(ii) However, the services of agriculture officers should not be used for processing of
routine type of agriculture loan proposals upto Rs. 3 lakh.
(iii) In case where Loan Incharge of branch offices are satisfied about their capability to
appraise loan proposal appropriately to their own satisfaction as also to the
satisfaction of the loan sanctioning authority, they may make such appraisals
independent of any Agriculture Officer; keeping in view the soil type, cropping
pattern, available irrigation potential, scope of custom hire service and his report
should be kept on bank’s record. In addition, he should also examine the generation
of income to pay the interest and instalments as and when they become due and
ensure due recovery promptly.
Note: It is pertinent to mention here that this does not infer that agriculture loan proposals
above Rs. 3 lakh are not to be disposed by branches for want of appraisal by Agriculture
Officers. Loan Incharge of branches can appraise Agriculture loan proposals, irrespective of
amount, independent of any Agriculture Officer. As such, Branch Heads should not keep the
proposals pending for want of appraisal by Agriculture Officer only rather they should
dispose of such proposals expeditiously provided they are confident and satisfied to appraise
such proposals by themselves or by an Officer, who is competent to do so. In case of need,
they may seek guidance from Circle Office for expeditious disposal.
B. Broad parameters for Expenditure/Income calculation are as under: -
(a) Expenditure to be determined on following factors: (i) Expenditure on productive
activities like crop production, purchase of seeds, fertilizers, pesticides, expenditure on
irrigation charges, etc. (ii) Expenditure on allied activities like dairy/poultry, etc. (iii)
Consumption needs.
(b) Income of farmers shall be determined based on: (i) Land availability and cropping
pattern. (ii) Expected income from allied agriculture/non-farm activities. (iii) Any other
income.
PRE-SANCTION APPRAISAL: During the pre-sanction visit, the following aspects

should be looked into:
(i) That the applicant resides at the place given in the application;
(ii) Integrity/Experience of the applicant should be judged;
(iii)Local enquiries should be made about the assets and liabilities/ previous business
credibility and related aspects;
(iv) Spot verification should be conducted to know the correctness and suitability of the
project;
(v) Verification of land records by paying visit to the field should be followed
meticulously.
(vi) Other important facts and figures given in the application should also be verified;
(vii) Confidential Report should reflect the creditworthiness of the applicant and the
guarantor;
(viii) As far as possible, cluster approach should be adopted;
(ix) Technical assistance may also be sought (if required) from Departments of
Agriculture, Horticulture, Soil Conservation, Forestry, Fisheries, Animal
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Husbandry, Sericulture, concerned Departments of Agricultural Universities and
NABARD.
(x) While undertaking pre-sanction appraisal of the proposals, branches shall focus on
income stream of applicant(s) besides the credibility, capability
for taking up the activity proposed and techno-economic viability of the proposal.
FIXATION OF LIMIT: The limit is to be fixed depending upon the crops cultivated as per
proposed cropping pattern for the first year plus an additional 10% of the limit towards cost
escalation / increase in scale of finance for every successive year (2nd, 3rd, 4th and 5th
year).
A. The short term limit to be arrived for the first year: Scale of finance for the crop (s) (as
decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit
towards post-harvest/household/ consumption requirements + 20% of limit towards repairs
and maintenance expenses of farm assets + crop insurance and/or accident insurance
including PAIS, health insurance & asset insurance.
B. For subsequent years, first year limit for crop cultivation purpose arrived at as above plus
10% of the limit towards cost escalation / increase in scale of
finance for every successive year (2nd, 3rd, 4th and 5th year) and estimated term loan
component for the tenure of Kisan Credit Card, i.e. five years.
NOTE: It is assumed that the farmer adopts the same cropping pattern for the succeeding
four years. In case the cropping pattern adopted by the farmer is changed in the subsequent
year, the limit may be reworked. The short term loan limit arrived for the 5th year plus the
estimated long term loan requirement will be the Maximum Permissible Limit (MPL) and is
to be treated as the Kisan Credit Card limit.
DRAWING LIMIT: Drawing limit for short term cash credit should be fixed based on the
cropping pattern. The amount(s) for crop production, repair and maintenance of farm assets
and consumption may be allowed to be drawn as per the convenience of the farmer. In case
the revision of scale of finance for any year by the district level technical committee exceeds
the notional hike of 10% contemplated while fixing the five year limit, a revised drawable
limit may be fixed in consultation with the farmer. In case such revisions require the card
limit itself to be enhanced (4th or 5th year), the same may be done and the farmer be so
advised.
In case of Marginal Framers, a flexible limit of Rs. 10,000 to Rs. 50,000 may be provided (as
Flexi KCC) based on the land holding and crops grown including post-harvest warehouse
storage related credit needs and other farm expenses, consumption needs, etc., plus small
term loan investment(s) like purchase of farm equipment(s), establishing mini
dairy/backyard poultry as per assessment of the Branch Manager without relating it to the
value of land. The composite KCC limit is to be fixed for a period of five years on this basis.
NOTE: Wherever higher limit is required due to change in cropping pattern and / or scale of
finance, the limit may be arrived at as per the scale of finance of cropping pattern undertaken
by the borrower.
FIXATION OF REPAYMENT OF AGRICULTURE LOANS:
A. Short term credit: Due dates fixed for recovery of crop loans towards adjustment of loan
and interest should synchronize with harvesting and marketing of crops. A suitable
marketing period after the actual harvest be allowed to borrower for marketing of produce so
that he/she may sell the produce and conveniently repay Bank loan.
B. Investment credit: Repayment period for investment activities shall be fixed as prescribed
in the respective agriculture credit scheme.
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Repayment period of agricultural advances, whether short-term or medium term, should be
so fixed as to coincide with the period when the farmer is fluid i.e., after harvesting and
marketing of his crops. For the purpose of these guidelines, "long duration" crops would be
crops with crop season longer than one year and crops, which are not "long duration" crops,
would be treated as "short duration" crops.
NOTE: The crop season for each crop, which means the period up to harvesting of the
crops raised, would be as determined by the State Level Bankers’ Committee in each
State. Circle Offices have been provided with the utility to capture the same for their
respective state/ area in the CBS System.
1. TIME SCHEDULE FOR DISPOSAL OF LOAN APPLICATIONS:
Credit Limit Time schedule (maximum)

Upto Rs. 2 lakh 2 weeks
Above Rs. 2 lakh & upto Rs. 50 lakh 4 weeks
Above Rs. 50 lakh & upto Rs. 100 lakh 5-6 weeks
Above Rs. 100 lakh & upto Rs. 100 crores 6-7 weeks
Above Rs. 100 crores 8-9 weeks
2. MARGIN NORMS:
(a) For production and/or Investment Credit:
Amount of loan Margin

Upto Rs.1,60,000/- (both for short term and medium term) Nil
Above Rs.1,60,000/- to Rs.2 lakh 5%
Above Rs.2 lakh to Rs.5 lakh 10%
Above Rs.5 lakh 25%
Tractor Loan without mortgage of land/ IP 40% (cash
margin)
(b) Under PNB Krishi Card Scheme:
For production credit - NIL
(c) Under the Scheme of Agri-Clinics/Agri-Business Centres:
Amount of loan Margin
Upto Rs.5 lakh NIL
Above Rs.5 lakh 25%
NOTE:
(i) Where subsidy is available, the same should be treated as margin and no further
margin money should be stipulated unless subsidy falls short of requisite margin.
(ii) Labour and materials, etc., contributed by farmer should be treated towards building
up of margin.
(iii) Where the scheme has been approved by NABARD or any other Govt. agency the
terms and conditions stipulated by NABARD or Govt. agency in respect of margin
shall be followed.
(iv) In respect of Govt. sponsored schemes, the margin/security norms shall be as per the
respective schemes for agricultural advances or the above mentioned margin,
whichever is lower.
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3. SECURITY NORMS:
A. Production Credit/ Security

Investment Credit
i) For loan upto Hypothecation of crops and/or assets created out of bank loan.
Rs.1,00, 000/-
ii) Above Rs.1,00, a) Hypothecation of assets and/or assets created out of bank loan
000/- AND
Charge on land as per Agricultural Credit operations and
Miscellaneous Provisions Act of the State concerned/Mortgage of
agricultural land valued at 100% of amount of loan for other farmers
and 75% of the loan amount for small farmers/marginal farmers.
OR
Alternate security viz. charge/lien over liquid securities such as term
deposits/NSC/KVP, etc. which may be considered adequate.
OR
Susuitable third party guarantee
B. Under the Scheme of Agri-Clinics and Agri-Business Centres
i) For loan upto Rs. Hypothecation of assets created out of bank loan.
5,00, 000/-
ii) Above Rs. 5,00, a) Hypothecation of assets and/or assets created out of bank loan
000/- AND
Charge on land as per Agricultural Credit operations and
Miscellaneous Provisions Act of the
State concerned/Mortgage of agricultural land valued at 100% of
amount of loan for other
farmers and 75% of the loan amount for small farmers/marginal
farmers.
OR
Alternate security viz. charge/lien over liquid securities such as term
deposits/NSC/KVP, etc.
which may be considered adequate. OR Suitable third party
guarantee
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NOTE: (i) In States where legislation on the lines suggested by the Talwar Committee has
been passed, a simple declaration creating a charge on the land offered as security will
be sufficient. In such cases, mortgage of land may not be necessary. (ii) While valuing
land for the purpose of security, post development realizable value of land shall be
taken into consideration. (iii) The RBI has advised banks to ensure that value of
security taken is commensurate with size of loan and desist from asking additional
collateral security by way of guarantee where the land mortgaged is considered
adequate. Branches are, therefore, advised that third party guarantee should not be
taken in cases where mortgage of agricultural land has been accepted a security. RBI
has further advised that branches should desist from the practice of taking collateral
security/third party guarantee/mortgage of land for P.S. Advances, where it has been
indicated that such security is not to be taken.
LOANING POWERS: As per Loans & Advances Circulars issued from time to time.
Presently, in terms of Loans & Advances Circular No. 100/2020, following loaning
powers has been given at various levels:
(Rs. lakh)
S. Nature of facilities Incumbent Incharge of CM RAM (Segment
No. (SMG- Head)
JMG- MMG- MMG- IV)
III IV
1 II III
1. Aggregate commitment - -- 10 10 10 80 400
per borrower (Both
funded and non-funded)
2. Within (1) above
(A) Fund based
Out of this
(i) Secured -- 10 10 10 80 400
(ii) Unsecured -- 10 10 10 8 60
(B) Non fund based -- 10 10 10 30 150
Note: (i) Officials upto AGM level shall exercise 50% and 25% of their secured fund based
powers in case of Term Loan and Book Debt facility respectively. (ii) The rate of interest
and loaning powers should strictly be followed as per Loans and Advances Circulars issued
by the Risk Management Division, H.O. from time to time.
For Tractor Financing: (i) Branches (having tractor portfolio of Rs. 1.00 crore and above or
50 and above tractor loan accounts) with recovery less than 75% in tractor advances (in terms
of Recovery Statement PNB 746 as at March/ September on an annualized basis), will not
sanction any such advances at their level and will send proposals to the respective Circle
Offices for sanction.
(ii) Other branches can consider tractor financing provided their annual recovery is above
75% under agriculture credit portfolio.
Financing under KCC and Kisan Gold Scheme: (i) Circle Heads are empowered to sanction
cases above Rs. 20.00 lakh and upto Rs. 50 lakh, within their discretionary loaning powers,
on merits as per need of client, subject to compliance of terms and conditions of KCC/ Kisan
Gold scheme
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LOAN APPLICATION AND DOCUMENTATION:
S. Particulars of the Form Form No.
No.
For Loan Upto Rs One Lakh
(i) Simplified application cum sanction for loan upto Rs. PNB 1175
1 lakh
(ii) Hypothecation Agreement upto Rs. 1 lakh PNB 1087 (Revised)
For Loan above Rs One Lakh
(iii) Application for agricultural credit PNB 1235
(iv) Prescribed Annexure/Appendix for each agricultural PNB 764(R) to
activity 774(R),PNB784(R),PNB 982
and PNB 1234
(v) Hypothecation Agreement PNB 1041 (R)
(vi) Deed of guarantee, wherever applicable PNB 1042(R)
(vii) Mortgage deed, wherever applicable PNB 1043(R)
(viii) Declaration regarding Agricultural land APPENDIX II
(ix) Copies of documents establishing
ownership/cultivation rights called Fard Jamabandi,
Khasra/Khatauni Girdawri (or by other vernacular
names)
(x) Non-Encumbrance Certificate from the concerned
Office of Sub-Registrar of Assurances, i.e. Tehsildar
Office relating to agricultural land or alternate
immovable property offered as security should be
obtained
(xi) Non encumbrance certificate from bank’s approved
advocate
(xii) Tripartite Agreement to be executed amongst
sugarcane growing farmer, sugar-mill/ corporate with
the Bank, wherever applicable.
(xiii) Consideration vouchers
(xiv) Proforma invoice/bills
(xv) Field visit report for verification of borrower and land APPENDIX III
CONFIDENTIAL REPORT (CR) ON BORROWER(S) AND GUARANTOR(S):
(i) For loans upto No CR to be collected. However, information furnished by borrower
Rs.50,000/- in loan application form must be verified by Incumbent
Incharge/Agriculture Officers and they will record their opinion to
this effect.
(ii) For loan above A brief CR on PNB 539 (Simplified Confidential Report on
Rs.50,000/- & Borrowers and Guarantors in respect of Farm Advances) may be
upto Rs. 10 obtained along with the information furnished by borrower in Loan
lakh Application Form (PNB 762R) and here again, the information
furnished by borrower must be verified by Incumbent Incharge/
Agriculture Officer; besides their report on brief CR.
(iii) For loan For Regular CR may be compiled on bank’s prescribed
Loans above Form PNB 282 A/B depending upon constitution of
Rs. 10 lakh borrower.
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OBTAINING OF “NO DUES CERTIFICATE”:
“No Dues Certificate” is not to be obtained for agricultural loans from individual borrowers
(including SHGs and JLGs) in rural and semi urban areas. However, for loans above Rs.
1.00 lakh, affidavit to this effect be obtained from such borrowers.
For borrowers in urban areas and borrowers other than above “No Dues
Certificate”/’Affidavit’ is not to be obtained for agricultural loans upto Rs.1,00,000/-.
However, for agricultural loans above Rs.1, 00,000/-, obtaining of Affidavit in lieu of "No
Dues Certificate" is allowed.
RBI has advised Banks to encourage use of alternative framework of due diligence as part of
credit appraisal exercise other than the ‘No Dues Certificate’ which could, among other,
consist of one or more of the following:
 Credit history check through credit information companies.
 Self declaration or an affidavit from the borrower.
 CERSAI registration
 Peer monitoring
 Information sharing among lenders
 Information search (writing to other lenders with an auto deadline)
PRE-SANCTION STAGE
1. Ensure genuineness of the information provided by the applicant in the Application form.
2. Conduct Field Visits to ensure genuineness of the borrower and also to capture further
information on character of the applicant, the repayment capacity of the applicant and the
availability of capital and collateral.
3. Ensure that repayment is fixed as per cash flow/ income generation pattern.
4. Ensure obtaining Standing Instruction requests and ECS mandate/ Post Dated Cheques
wherever applicable.
DISBURSEMENT STAGE
1. Ensure that the proposed equipments/assets are being purchased from a reputed dealer /
distributor.
2. Ensure that good quality milch animals/ livestock/ assets are purchased.
3. Check with the Dealer/ Manufacturer that purchase has actually been made. Further, end
use verification should be done immediately in all accounts as per Banks guidelines to
contain diversion of funds. Also ensure that the equipment/assets purchased are of good
quality.
4. Borrower to be made aware about the procedure of lodging insurance claim so that there is
no time lag in reporting of death of animal/ damage to asset.
POST- SANCTION STAGE
1. Ensure insurance for the milch animal/ livestock/ assets is done on time and in case of
death of animal/ damage of asset the claim is lodged with the insurance company within
stipulated time.
2. Regular visits are conducted to ensure that milch animals/ livestock/ assets are with the
owner (Borrower) & are in good health/ condition and to check that security is intact.
3. Ensure that standing instructions/ ECS, wherever applicable, is being executed.
4. Ensure that personal details of the borrower like address, mobile number,aadhaar number
etc. are updated in the system.
5. Ensure that interest subvention/ subsidy claims, wherever applicable, are lodged timely and
promptly.
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SERVICE AREA APPROACH – REMOVAL OF RESTRICTIVE PROVISIONS AND
DISTANCE CRITERIA FOR RURAL LENDING:
Restriction of financing within the service area in, other than Government Sponsored
Programmes, since been removed. However, following guidelines are stipulated:
(i) Rural lending shall be restricted within a radius of 25 Kms. from the branch but within the
State boundary to have effective supervision and follow-up.
(ii) Where the service area is already allocated beyond 25 Kms., the branches will continue to
finance within the allocated service area.
(iii) In the Circles where the inter-branch distances are far below 25 Kms., the Circle Head
may broadly demarcate the area of operation for each rural/semi-urban branch under the
control of the Circle to obviate unhealthy competition among our bank’s branches.
(iv) Circle Heads have been given full powers to enlarge area of operation depending upon
potential, infrastructure and capability of the branch.
It is also clarified that loan proposals may be dealt by that branch office of the Bank, which is
near to the place where the applicant resides or where the activities are carried on or landed
properties are located.
RENEWAL OF SHORT-TERM LIMIT: (i) Fresh Application for Agriculture Credit and
Copies of Revenue Records are not required at the time of annual review of account. (ii)
Fresh documents would be required every 5th year for cash credit facility. (iii) In case of
enhancement of limit, fresh application and fresh documents shall be obtained.
Exercising of loaning powers in the branches without second man
(i) Branch Head may process and sanction loan proposal falling within his own vested
loaning powers in following cases even though proposals have not been
prepared/recommended by second officer where no other officer is posted or second man is
special assistant at the branch:
• All Priority Sector advances including Govt. sponsored schemes and “Loans under Retail
Lending Schemes” upto Rs. 1 lakh each.
• For loans upto Rs. 3 lakh under KCC Scheme/other direct agriculture.
• For Tractor loans, the ceiling on individual loan will be Rs. 3 lakh.
• For Housing Loans, the ceiling on individual loan will be Rs. 2 lakh.
•Circle Heads are vested with powers to revise ceilings mentioned above depending upon
potential existing in the area subject to maximum of loaning powers vested with the
Incumbent/the ceiling prescribed under the scheme. Total advance granted without
recommendation of second man, where there is none, would not exceed Rs. 20 lakh in a
month. The ceiling of total advance of Rs. 20 lakh in a month may be increased by Circle
Heads to Rs. 50 lakh wherever they find it necessary. All such branches where the above
ceilings of Incumbents have been revised Circle Offices will have close monitoring through
Limit Sanctioned Statement. This ceiling would not be applicable where second man is
provided and proposals are recommended by him.
However, efforts may be made by Branch Heads, to get proposals prepared/recommended by
Spl. Asstt. or the senior most clerk in the branch. On account of various lapses and
irregularities noticed while sanctioning/ recommending the loan proposals, Inspection &
Audit Division has issued following clarifications (vide circular no. 56/12 dated 30.07.2012):
a) Subordinate staff officiating in clerical cadre are not allowed to recommend any loan for
sanction.
b) Any Clerk/ Special Assistant officiating as an Officer cannot sanction loan independently.
c) Further;
(i) If an officer is available in the branch, then he/ she only can recommend a loan for
sanction.
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(ii) If no officer is available in the branch, Spl. Assistant can recommend the loan proposal,
for sanction.
(iii) If neither Officer nor Spl. Assistant is available in rural/ semi urban branch, a Clerk
officiating as Spl. Assistant/ Officer can recommend for sanction of loan during officiating up
to a maximum of Rs. 2.00 lakh in an individual loan proposal.
In cases where second person’s name is included in List of Officials of Doubtful Integrity
(LODI) and there is no other officer posted at the branch, Circle Heads, depending upon the
potential available in the area, may permit Branch Head of such branches to process and
sanction proposals in the aforesaid matters without the recommendations of second man
within his vested loaning powers. It may be added that in all such cases close monitoring of
the limits sanctioned by these branches shall continue to be undertaken by the Circle Office
to ensure judicious exercising of powers. Senior officials from concerned Circle Office, while
visiting such branches, should also look into this aspect in addition to other areas of
monitoring.
Powers will be exercised by Branch Head according to the scale in which he is placed.
LAPS(Lending Automation Processing System)-Agri. Module:-
In order to reduce lending risk, optimize processing time and provide greater adherence to
lending norms Bank has introduced LAPS for facilitating the field functionaries.
The LAPS (Agri Module) has been designed for processing of Agriculture Loan proposals
upto Rs. 50 lakh. The module is presently customized for processing of loan proposals under
23 schemes.
Back ended subsidy Loans and working Capital Loans other than KCC are not to be
processed through LAPS. The processing of these loans is to be done manually and the
account to be opened directly in CBS (accounts involving back ended subsidy are to be
opened through OLAPS menu in CBS).
NABARD REFINANCE:
NABARD provides refinance to the extent of 90%-100% of Bank loan, depending upon the
agricultural activity and the geographic location of lending. Refinance from NABARD is to
be availed by Circle Heads in conformity with Head Office decision taken from time to time
Monitoring of Progress Report of AOs through AO MPR PORTAL: With a view to improve
monitoring of AOs, it has been decided that PF No. of the appraising officer is to be entered in
the system while opening of agricultural loan accounts in CBS (under option ‘1’).
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PRIORITY SECTOR GUIDELINES
Historical Background
• 1967-68 - Credit Policy : Agri, Exports & SSI (Concept by Late Sh. Morar Ji Desai,
then Finance Minister)
• 1972 - Priority Sector Concept
• 1974 - First Target : 1/3rd of Total Advances
• 1980 - Target revised to 40% of Total Advances (Dr. Krishnaswamy
Committee)
• 2007 - CS Murthy Committee
• 2012 - MV Nair Committee
• 2014 - RBI IWG (Lilly Wadhera, CGM RBI).
Targets /Sub-targets for Priority sector :
Domestic
commercial banks
(excl. RRBs & Foreign banks Small
Regional Rural
Categories SFBs) & foreign with less than 20 Finance
Banks
banks with 20 branches Banks
branches and
above
Total 40 per cent of 40 per cent of 75 per cent of 75 per cent
Priority ANBC as ANBC as ANBC as of ANBC as
Sector computed in para 6 computed in para computed in para 6 computed in
below or CEOBE 6 below or below or CEOBE para 6 below
whichever is higher CEOBE whichever is or CEOBE
whichever is higher; However, whichever is
higher; out of lending to Medium higher.
which up to 32% Enterprises, Social
can be in the form Infrastructure and
of lending to Renewable Energy
Exports and not shall be reckoned
less than 8% can for priority sector
be to any other achievement only
priority sector up to 15 per cent of
ANBC.
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Agriculture 18 per cent of Not applicable 18 per cent ANBC 18 per cent of
ANBC or CEOBE, or CEOBE, ANBC or
whichever is whichever is CEOBE,
higher; out of higher; out of whichever is
which a target of which a target of higher; out of
10 percent# is 10 percent# is which a target
prescribed for prescribed for of 10
Small and SMFs percent# is
Marginal Farmers prescribed for
(SMFs) SMFs
Micro 7.5 per cent of Not applicable 7.5 per cent of 7.5 per cent
Enterprises ANBC or CEOBE, ANBC or CEOBE, of ANBC or
whichever is higher whichever is higher CEOBE,
whichever is
higher
Advances 12 percent# of Not applicable 15 per cent of 12 percent# of
to Weaker ANBC or CEOBE, ANBC or CEOBE, ANBC or
Sections whichever is higher whichever is higher CEOBE,
whichever is
higher
Categories under priority sector

• Agriculture
• Micro, Small and Medium Enterprises
• Export Credit
• Education.
• Housing
• Social Infrastructure
• Renewable Energy
• Others .
•
Total Priority Sector Target :
For SCBs and foreign banks with 20 or more branches :
• 40% of ANBC or CEOBE, whichever is higher.
Foreign banks with less than 20 branches :
 40% target, of which 32% can be to Exports and not less than 8% to any other sector.
For RRBs :
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• 75 per cent of ANBC or CEOBE, whichever is higher.
• Lending to Medium Enterprises, Social Infrastructure and Renewable Energy shall be
reckoned for priority sector achievement only up to 15 per cent of ANBC.
For Small Finance Banks :
• 75 per cent of ANBC or CEOBE, whichever is higher.
Sub Targets : For SCBs,foreign banks with 20 or more branches,RRBs and SFBs :
Targets Agriculture
Agriculture • 18% of ANBC or CEOBSE, whichever is higher.
• Out of which, sub target of 10% for Small & Marginal Farmers.
Micro 7.5% of ANBC or CEOBSE, whichever is higher

Enterprises
Weaker Sectors 15.00% of ANBC or CEOBE, whichever is higher for RRBs and
12.00% of ANBC or CEOBE, whichever is higher for SCBs, Foreign
banks with 20 or more branches.
• Marginal farmers are those who have land holding up to 1 hector and Small Farmers
are those who own land more than 1 up to 2 hectors.
• In case of domestic banks, overall lending to non-corporate farmers should not fall
below the system-wide average of the last three years achievement.
• The applicable system wide average figure for computing achievement under priority
sector lending will be notified every year.
• For FY 2020-21, the applicable system wide average figure is 12.14 percent. (NA to
UCBs).
• All efforts should be maintained to reach the level of 13.5 percent direct lending to the
beneficiaries who earlier constituted the direct agriculture sector..
The targets for lending to SMFs and for Weaker Sections shall be revised upwards from FY
2021-22 onwards as follows:
Categories Primary Urban Co-operative Bank

Total Priority 40 per cent of ANBC or CEOBSE, whichever is higher, which shall
Sector stand increased to 75 per cent, with effect from March 31, 2024. UCBs
shall comply with the stipulated target as per the following milestones:
Existing March 31, March 31, March 31, March 31,
target 2021 2022 2023 2024
40% 45% 50% 60% 75%
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Micro Enterprises 7.5 per cent of ANBC or CEOBSE, whichever is higher
Advances to 12 per cent# of ANBC or CEOBSE, whichever is higher, whichever is
Weaker Sections higher.
Revised targets for weaker sections will be implemented in a phased manner as

indicated below :
Small and Marginal Farmers target

Financial Year Weaker Sections target ^
*
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
* Not applicable to UCBs
^ Weaker Sections target for RRBs will continue to be 15% of ANBC or CEOBE, whichever
is higher.
Computation of Adjusted Net Bank Credit (ANBC)
Bank Credit in India I

Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC)* III (I-II)
ADD : Non-SLR Securities categories under HTM category, Other IV
investments eligible to be treated as priority sector, Outstanding Deposits
under RIDF/ other eligible funds on account of priority sector shortfall ,
Outstanding PSLC
LESS : Eligible amount for exemptions on issuance of long-term bonds V
for infrastructure and affordable housing as per circular
DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014.
LESS : Eligible advances extended in India against the incremental FCNR VI
(B)/NRE deposits, qualifying for exemption from CRR/SLR
requirements.
ANBC III +IV –V-VI
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Adjustments for weights in PSL Achievement
- From FY 2021-22 onwards, a higher weight (125%) would be assigned to the

incremental priority sector credit in the identified districts where the credit flow is
comparatively lower (per capita PSL less than ₹6000), and a lower weight (90%)
would be assigned for incremental priority sector credit in the identified districts
where the credit flow is comparatively higher (per capita PSL greater than
₹25,000). The list of both categories of districts is given in Annex IA & IB.
- This list will be valid for a period up to FY 2023-24 and will be reviewed thereafter.
- The districts other than those mentioned in Annex IA and IB will continue to have
existing weightage of 100%.
Agriculture Sector
• Direct and indirect agriculture Categorization dispensed with.
• Agriculture sector re-defined to include (I) FARM CREDIT (which will include short-
term crop loans and medium/ long-term credit to farmers).
• (ii) AGRICULTURE INFRASTRUCTURE AND
• (III) ANCILLARY ACTIVITIES.
Farm Credit Under Agriculture
• Farm Credit : (Individual Farmers)
• Loans to individual farmers including SHGs and JLGs directly engaged in Agriculture
and allied activities.
• This includes Crop loans, Medium and Long term loans for implements, machinery,
loans for irrigation and development activities.
• Loans against Pledge/Hypothecation of Agriculture up to Rs. 50 lac for period not
exceeding 12 months.
• Loans to distressed farmers indebted to non-institutional lenders.
• Loans to Small and Marginal farmers for purchase of land for agriculture purpose
• Loans to Corporate farmers, organizations, Companies of individual farmers, firms
and cooperative societies engaged in Agriculture and allied activities up to Rs. 2.00
crore per borrower.
Agriculture Infrastructure
• Includes loans for
• construction of storage facility (Warehouses, market yards and Silos),
• Soil conservation and water shed development,
• Plant tissue culture and Agri bio-technology, Seed production, Production of bio-
pesticides, bio fertilizers and Vermi composting. (AGGREGATE LIMIT IS RS. 100
CRORE per borrower from banking system )
Ancillary Activities under Agriculture
• LOANS UP TO 5.00 CRORE to Cooperative Societies for disposing of produce of
members.
• Loans for setting up of Agri clinic and Agri-business centres.
• Loans up to ₹50 crore to Start-ups, engaged in agriculture and allied services
• Loans for Food and Agro processing up to RS. 100 CRORE per borrower from
banking system.
• Bank loans to PACS, FSS and LAMPS for on-lending to Agriculture.
265
• Bank loans to MFIs for on-lending to Agriculture.
• Outstanding deposits under RIDF/other eligible funds of NABARD.
Small and Marginal Farmers
• For achievement of the sub-target, Small and Marginal Farmers will include :-
• Farmers with landholding of up to 1 hectare (Marginal Farmers).
• Farmers with a landholding of more than 1 hectare and up to 2 hectares (Small
Farmers).
• Landless agricultural labourers, tenant farmers, oral lessees and share-croppers.
• Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of
individual Small and Marginal farmers directly engaged in Agriculture and Allied
Activities, provided banks maintain disaggregated data of such loans.
• Loans up to ₹2 lakh to individuals solely engaged in Allied activities without any
accompanying land holding criteria.
• Loans to farmers' producer companies of individual farmers, and co-operatives of
farmers directly engaged in Agriculture and Allied Activities, where the membership
of Small and Marginal Farmers is not less than 75 per cent by number and whose
land-holding share is also not less than 75 per cent of the total land-holding.
• UCBs are not permitted to lend to co-operatives of farmers.
Micro, Small and Medium Enterprises :

Government of India Notification dated 01.06.2020 has revised the definition of MSME as
under : (Applicable wef 01.07.2020)
Classification Criteria
Micro Investment in plant and machinery or equipment does not exceed one
Enterprise crore rupees and turnover does not exceed five crore rupees.
Small Investment in plant and machinery or equipment does not exceed ten
Enterprise crore rupees and turnover does not exceed fifty crore rupees.
Medium Investment in plant and machinery or equipment does not exceed fifty
Enterprises crore rupees and turnover does not exceed two hundred and fifty
crore rupees.
- Exports of goods or services or both, shall be excluded while calculating the turnover.
- The value of Plant and Machinery or Equipment shall mean the Written Down Value
(WDV) as at the end of the Financial Year as defined in the Income Tax Act and
not cost of acquisition or original price
• ALL LOANS TO MICRO, SMALL AND MEDIUM enterprises are priority sector
without any cap..
• All loans to units in KVI sector will be eligible for priority sector classification.
• Factoring transactions on ‘with recourse’ basis by banks, wherever the ‘assignor’ is a
MSME.
• Others MSME Loans : It includes
266
• Artisans/Village and Cottage Industries entities engaged in supply of inputs and
marketing of output.
• Loans to cooperatives of produces viz. artisans, village and cottage industries.
• Loans to MFIs for on-lending to MSME sector
• Loans outstanding under GCC (including ACC, LUCC etc.)
• Outstanding deposits with SIDBI on account of PS shortfall.
• Loans up to ₹50 crore to Start-ups, that confirm to the definition of MSME.
• Overdraft to PMJDY account holder will qualify as achievement of the target for
lending to Micro Enterprises.
• Outstanding deposits with SIDBI and MUDRA Ltd. on account of priority sector
shortfall.
Export Credit
• Export credit extended as below will be categorized under PS :
Domestic Banks Foreign banks with 20 or Foreign banks with

more branches less than 20 branches
Incremental credit over previous year up to Incremental credit over Export credit allowed
2% of ANBC or OBI (whichever is higher) previous year up to 2% of up to 32% of ANBC
subject to sanctioned limit of Rs.40 crore ANBC or OBI (whichever is or OBI (whichever is
per borrower . higher) . higher)
Education Loans
• Loans to individuals for educational purposes including vocational courses up-to Rs
20.00 LAKH .
Housing Loans
• Loans to individuals up to Rs 35 lakh in metro centres with population ten lakh and
above and Rs 25 lakh in other centres for purchase/construction of a dwelling unit per
family provided overall cost per dwelling unit DOES NOT EXCEED 45 LAC AND 30
LAC RESPECTIVELY.
• Staff HL is excluded.
• Loans for repairs to the damaged dwelling units of families up to RS 10.00 LAKH IN
METRO CENTRES and RS.6.00 LAC AT OTHER CENTRES.
• Bank loans to any governmental agency for construction of dwelling units or for slum
clearance and rehabilitation of slum dwellers subject to a ceiling of RS 10 LAKH PER
DWELLING UNIT.
• Bank loans to any governmental agency for construction of dwelling units or for slum
clearance and rehabilitation of slum dwellers subject to dwelling units with carpet
area of not more than 60 sq.m.
• Bank loans for affordable housing projects using at least 50% of FAR/FSI for
dwelling units with carpet area of not more than 60 sq.m.
• Bank loans to HFCs (approved by NHB for their refinance) for on-lending, up to ₹20
lakh for individual borrowers, for purchase/construction/ reconstruction of individual
dwelling units or for slum clearance and rehabilitation of slum dwellers.
• Outstanding deposits with NHB on account of priority sector shortfall.
267
Social Infrastructure
• Loans up to RS. 5.00 CRORE PER BORROWER for building Social Infrastructure for
Schools, Health care facilities, Drinking Water and Sanitation facilities in Tier II to
Tier VI Centres.
Bank loans up to a limit of ₹5 crore per borrower for setting up schools, drinking water
facilities and sanitation facilities including construction/ refurbishment of household
toilets and water improvements at household level, etc. and loans up to a limit of ₹10
crore per borrower for building health care facilities including under ‘Ayushman
Bharat’ in Tier II to Tier VI centres. In case of UCBs, the above limits are applicable
only in centres having a population of less than one lakh.
Renewable Energy
• Loans up to Rs. 15.00 crore per borrower for Solar Power units, Bio mass Power
generators, Wind Mills, Micro Hydal Plants and non-conventional energy based
public utilities.
• For individual households, the loan limit will be Rs. 10 lac per borrower
• Others
• Loans, not exceeding Rs 50,000 per borrower provided directly to individuals and
their SHG/JLG, provided the borrower’s household annual income in rural areas does
not exceed Rs1,00,000/- and for non-rural areas it should not exceed Rs1,60,000/-.
• Overdraft limit to PMJDY account holder upto ₹ 10,000/- with age limit of 18-65
years.
• Loans sanctioned to State Sponsored Organizations for Scheduled Castes/ Scheduled
Tribes for the specific purpose of purchase and supply of inputs to and/or the
marketing of the outputs of the beneficiaries of these organizations.
Weaker Sector
• Small and Marginal Farmers – It include Farmers with land holding up to 1 hector
(Marginal Farmers) and with land holding more than 1 hector but up to 2 hector. It
also includes Landless laborers, Tenant Farmers, Share croppers and Oral Lessees.
• Artisans, Village and Cottage Industries where individual credit limit does not exceed
100000/-
• Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY), now National Rural
Livelihood Mission (NRLM)
• Loans to SCs/STS, DRI beneficiaries, SJSRY & SRMS beneficiaries, Self Help
groups.
• Loans to Distressed farmers indebted to non-institutional money lenders.
• Loans to Distressed persons having credit exposure not exceeding 100000/- to prepay
debts of non-institutional lenders.
• Loans to individual women beneficiaries up-to Rs 1,00,000 per borrower.
• Loans sanctioned under above to persons from minority communities as may be
notified by Government of India from time to time.
• Persons with Disabilities.
Miscellaneous :
• Following investments are also eligible for classification under respective categories
of priority sector (direct or indirect).
268
• Investments by banks in securitized assets.
• Transfer of Assets through Direct Assignment /Outright purchases.
• Inter Bank Participation Certificates bought by Banks
• Priority Sector Lending Certificated bought by banks
• Bank loans to MFIs for on-lending
• (a) Bank credit to MFIs extended for on-lending to individuals and also to members of
SHGs / JLGs will be eligible for categorisation as priority sector advance under
respective categories viz., Agriculture, Micro, Small and Medium Enterprises, Social
Infrastructure and Others,
• provided not less than 85 percent of total assets of MFI (other than cash, balances
with banks and financial institutions, government securities and money market
instruments) are in the nature of “qualifying assets”.
• In addition, aggregate amount of loan, extended for income generating activity,
should be not less than 50 percent of the total loans given by MFIs.
• (b) A “qualifying asset” shall mean a loan disbursed by MFI, which satisfies the
following criteria:
Qualifying Assets
• A “qualifying asset” shall mean a loan disbursed by MFI, which satisfies the
following criteria:
• If borrower’s annual income in rural areas does not exceed ₹ 1.00 lakh while for
non-rural areas it should not exceed ₹ 1.60 lakhs.
• Loan does not exceed ₹60,000/- in the first cycle and ₹ 1 lakh in the subsequent
cycles.
• Total indebtedness of the borrower does not exceed ₹ 1.00 lakh.
• Tenure of loan is not less than 24 months when loan amount exceeds ₹30,000/- with
right to borrower of prepayment without penalty.
• The loan is without collateral.
• Loan is repayable by weekly, fortnightly or monthly installments at the choice of the
borrower.
• Banks to ensure that MFIs comply with the following caps :
• Margin cap: Not to exceed 10% for MFIs with loan portfolio exceeding ₹1
billion and 12% for others.
• Interest cap on individual loans: Interest rate on individual loans will be the average
Base Rate of five largest commercial banks by assets multiplied by 2.75 per annum or
cost of funds plus margin cap, whichever is less. The average of the Base Rate shall
be advised by Reserve Bank of India.
• Only three components are to be included in pricing of loans viz.,
• (a) a processing fee not exceeding 1 percent of the gross loan amount, (b) the interest
charge and (c) the insurance premium.
• The processing fee is not to be included in the margin cap or the interest cap
• Only the actual cost of insurance i.e. actual cost of group insurance for life, health and
livestock for borrower and spouse can be recovered; administrative charges may be
recovered as per IRDA guidelines.
• There should not be any penalty for delayed payment.
• No Security Deposit/ Margin is to be taken.
• The banks should obtain from MFI, at the end of each quarter, a Chartered
Accountant’s Certificate stating, inter-alia, that the criteria on (i) qualifying assets, (ii)
the aggregate amount of loan, extended for income generation activity, and (iii)
pricing guidelines are followed.
269
Monitoring of PS Lending Targets
• Monitoring of PS lending compliance will be done Quarterly basis instead of annual
basis. Quarterly data will have to be furnished for the purpose.
• Non- Achievement of Targets
• Shortfall in lending to overall priority sector target/agriculture target and weaker
sections target shall be allocated amounts for contribution to the Rural Infrastructure
Development Fund (RIDF) established with NABARD or Funds with
NHB/SIDBI/other Financial Institutions, as specified by the Reserve Bank from time
to time.
• Priority Sector Common Guidelines
• Rate of Interest will be decided by DBOD of RBI from time to time.
• No loan related and Adhoc Service charges should be levied on PS advances up to
25000/-
• Electronic record of Receipt and Disposal of loan applications will be kept by bank.
• Each loan application will be acknowledged and time limit will be prescribed.
Priority Sector Lending Certificate
• Government has specified “Dealing in Priority Sector Lending Certificates (PSLCs)
as a form of business under Section 6 (1)(o) of the Banking Regulation Act, 1949.
• To facilitate trading in PSLCs, a trading platform is being provided through the CBS
portal (e-Kuber).
• RBI notification dt 07.04.2016.
• Priority Sector Lending Certificates – Scheme
• Purpose:
• To enable banks to achieve the priority sector lending target and sub-targets by
purchase of these instruments.
• Nature of the Instruments:
• The seller will sell fulfillment of priority sector obligation and the buyer would be
buying the same. There will be no transfer of risks or loan assets.
• Modalities:
• The PSLCs will be traded through the CBS portal (e-Kuber) of RBI. The detailed
operational instructions are available through the e-Kuber portal.
• Sellers/Buyers:
• Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Local Area
Banks (LABs), Small Finance Banks (when they become operational) and Urban Co-
operative Banks who have originated PSL eligible category loans.
• Types of PSLCs:
• There would be four kinds of PSLCs :–
• (i) PSLC Agriculture: Counting for achievement towards the total agriculture lending
target.
• (ii) PSLC SF/MF: Counting for achievement towards the sub-target for lending to
Small and Marginal Farmers.
• iii) PSLC Micro Enterprises: Counting for achievement towards the sub target for
lending to Micro Enterprises.
• iv) PSLC General: Counting for achievement towards the overall priority sector
target.
• Thus, a bank having shortfall in achievement of any sub-target (e.g. SF/MF, Micro),
will have to buy the specific PSLC to achieve the target.
• Computation of PSL achievement:
• A bank’s PSL achievement would be the sum of outstanding priority sector loans, and
the net nominal value of the PSLCs issued and purchased.
270
• Such computation will be done separately where sub targets are prescribed as on the
reporting date.
• Amount eligible for issue:
• Normally PSLCs will be issued against the underlying assets.
• However, a bank is permitted to issue PSLCs upto 50 percent of previous year’s PSL
achievement without having the underlying in its books.
• To the extent of shortfall in the achievement of target, banks may be required to invest
in RIDF/other funds as hitherto.
• Credit Risk:
• There will be no transfer of credit risk on the underlying as there is no transfer of
tangible assets or cash flow.
• Expiry date:
• All PSLCs will expire by March 31st
• Will not be valid beyond the reporting date (March 31st), irrespective of the date it
was first sold.
• Settlement:
• The settlement of funds will be done through the platform as explained in the e-Kuber
portal.
• Priority Sector Lending Certificate
• Value and Fee:
• The nominal value of PSLC would represent the equivalent of the PSL.
• It would get deducted from the PSL portfolio of the seller and added to the PSL
portfolio of the buyer.
• The buyer would pay a fee to the seller which will be market determined.
• Lot Size:
• Standard lot size of Rs.25 lakh and multiples thereof.
• Accounting:
• The fee paid for purchase of the PSLC would be ‘Expense’ and the fee received for
the sale of PSLCs would be ‘Miscellaneous Income’.
• Disclosures: Both seller and buyer shall report the amount of PSLCs (category-wise)
sold and purchased during the year in the ‘Disclosures to the Balance Sheet’.
• Illustration:
• Bank A may sell PSLCs with a nominal value of Rs.100 crores to Bank B on July 15,
2016. Bank B will reckon Rs. 100 crore towards its priority sector achievement as on
the reporting dates of September 30, 2016, December 31, 2016 & March 31, 2017,
while Bank A will subtract the same from its achievement figures for the respective
reporting dates. The PSLC will expire by March 31, 2017.
271
SYNOPSIS OF AGRI. CREDIT SCHEMES
Scheme Purpose & Eligibility Extent of Repayment Period / Other Imp.

Loan Guidelines
FINANCIN (i) Farmers – Individuals / Extent of Cash Credit Limit: Aggregate credit (last 12/
G UNDER Joint borrowers who are Limit: 18 months) should be equal to outstanding.
PNB owner cultivators; Maximum Working Capital for allied activities: 12
KISAN (ii) Tenant Farmers, Oral Rs. 50.00 months
CREDIT Lessees & Share Croppers lakh
CARD For loans up to Rs 50,000/-, in lieu of copies
PSFID (iii) SHGs or Joint Circle of revenue extracts branches to invariably
51/2018 Liability Groups of Heads are obtain either the following revenue
Farmers including tenant empowere documents for short term loan:
54/2018 farmers, share croppers etc d to a. Extract from the latest
Oral tenants can be eligible sanction Revenue/Agricultural Pass Book issued by
for loan only if land cases State Revenue Department. OR
owners agree to become above Rs. b. Receipt issued by the State
co-borrowers. In the 20.00 lakh Revenue/Irrigation Department for payment
accounts which are secured and upto of land revenue or irrigation charges or any
by liquid securities like Rs. 50 other document issued by State Revenue
FDR, NSC/KVP, etc., the lakh, Department containing details of ownership/
cards to oral tenants can be within cultivation rights, kila/plot number, area of
issued without stipulating their land and other requisite details. Such
the condition of land discretiona receipt/document should not be more than
owners to be made ry loaning nine months old. OR
coborrowers. powers, on c. In case a farmer is already availing crop
Landless labourers, share merits as loan/term loan from our Bank and particulars
croppers, tenant farmers per need of of his/her land holdings with nature of rights
and oral lessees can be client, are on Bank‟s record, local enquiries may be
issued PNB Kisan Card subject made to verify the present position and in
(KCC) upto limit of Rs tocomplian case there is no adverse change, loan may be
50,000/- on the basis of an ce of terms considered without asking for fresh copies of
affidavit containing details and revenue records every time upto three years.
of land tilled/ crops grown, conditions OR
duly stamped as per the of Kisan d. A simple Application-cum-verification
respective State Stamps Credit report containing details of land duly
rules Card countersigned by Revenue Officials, viz.,
scheme Patwari/NaibTehsildar/Tehsildar, etc.
KISAN Purpose: Maximum Production Credit:
GOLD Production & Rs.50 lakh Cash Credit Limit: Aggregate credit (last 12/
79 /17 investment credit for Circle 18 months) should be equal to outstanding.
agriculture & allied Heads are Working Capital for allied activities: 12
activities (At least 75% of empowere months
the limit). d to
Rural housing related sanction No drawal to outstand for more than 12
activities cases months (18 months for long duration crops)
Consumption needs (i.e. above Rs. Housing: 9 years (with gestation of 12
for marriage, education, 20.00 lakh months)
religious/family functions) and upto
272
Loan Guidelines
I. Only existing good Rs. 50 Need based term loan within overall ceiling
agricultural land owner lakh of Rs. 50 lakh including cash credit limit
borrowers who have been mentioned & loan maximum up to Rs 3 lakh
continuously availing of for Rural Housing. To encourage investment
any loan and having no credit there is no upper ceiling on investment
NPA record for last Two loan.
years as on the date of RURAL HOUSING LOAN:-(i) If the land
application will be eligible. for which the house related loan is to be
New farmers with given is in thename of spouse then spouse
evidence of satisfactory will be co-borrower.
dealing with other banks (ii) Maximum age limit at the time of
for a minimum period of 2 sanction of loan may be 60 years. Applicants
years will also be eligible. above 60 years but maximum 65 years may
The above condition of be considered for sanction of loan if all the
track record of 2 years may legal heirs join as guarantors.
be relaxed in case of new Loan limit will be the lowest of:
farmers having good (a) 5 times average annual (2 years) total
amount of deposit for the income of the borrower.
last 2 years provided: (b) 50% of value of mortgage land.
Loan is secured by 100 % 25% of the loan amount or Rs 5 lakh,
liquid collateral security whichever is lower may be given for
like Deposit/ NSCs, etc., nonproductive purposes. Out of this
or maximum of Rs. 3 lakhs for rural housing
Loan is secured by 50 % activities and Rs. 2 lakhs for consumption
liquid collateral security purposes may be sanctioned.
and 50% by mortgage of
land (valued at 50 % of
Bank Loan for Small/
Marginal farmers and 75%
of Bank Loan for other
farmers)
PNB Purpose of the scheme is to Extent of Repaid by the farmers in 5-7 years including
KRISHAK provide finance to the loan: Need a maximum moratorium period of 12 months
SAATHI farmers to redeem their based with half-yearly/yearly installment
28/2020 outstanding dues to credit
moneylenders. against DOCUMENTATION: I. Letter of
All farmers including their Request/application/undertaking for loan
small & marginal farmers, indebtedne from the farmer (APPENDIX-I). II. Farmer’s
tenant farmers, oral ss from Affidavit of debt taken from moneylender
lessees, sharecroppers, money (APPENDIX-II). III. Hypothecation
agriculture laborers, etc., lender Agreement (PNB 1041(R)) IV. Confidential
who are indebted to non- within Report. V. Consideration Vouchers.
institutional money maximum
sources. of
Rs.1,00,00
0/- per
farmer.
273
Loan Guidelines
PNB Krishi Small and marginal Maximum Loan (i) Branches should ascertain the
Bhu-Swami farmers i.e. those who Loan may be end-use of funds given for
Yojana would own maximum of 5 Amount: repaid purchase of land/other assets. (ii)
13/2020 acres of unirrigated land or Rs.10 lakh in 7-12 Applicant farmers may be allowed
2.5 acres of irrigated land Extent of years in to purchase agriculture land within
including the land to be loan will half- a radius of 15 kms from the
purchased (one hectare or depend yearly/ existing land owned by him/her or
two hectares). Farmers upon (i) yearly from the residence or within the
allowed purchasing valuation instalm command area whichever is
agriculture land within a as assessed ents higher. (iii) Whenever farmers
radius of 15 km (earlier 3- by the includin avail themselves of loan for
5km) from the existing Branch (ii) g purchase of virgin land, they must
land owned by him/ her Guidance maximu be encouraged to develop the land
from the residence or value/Circl m and put the same under cultivation
within the service area e rate fixed morator without delay.
villages whichever is by the ium During the outstanding of the loan,
higher. State or period the farmer shall not allow to sell
(iii) the of 24 the land and an undertaking to this
Registratio months effect must be obtained from the
n Value borrower.
whichever
is lower,
plus value
of stamp
MINOR (i) A borrower intending to Need Repayment:
IRRIGATI implement a minor based. Size 5-15 Years for different activities.
ON irrigation project including of tube scheme code ‘TLAMI
ACTIVITI sprinkler/ drip irrigation wells/
ES projects must have a pumpsets It will be open for borrower to repay loan
24/2020 holding of at least 1 acre of should be earlier than the prescribed period depending
land. However, in case of commensu upon his incremental income/activity.
borrower sponsored by rate with Finance should be provided only in respect of
State Development land new diesel/electric pump sets
Agencies where smaller holdings to Adequate servicing facilities for repairs, etc.,
holdings of any farmer has ensure are available at conveniently approachable
been considered viable, the optimum centers
condition of minimum utilization Sprinkler system operates under a wide range
holding of 1 acre of land of of pressures varying with the area to be
will not apply. investment covered, the type of sprinkler used, sprinkler
(ii)Group Financing – . spacing and crops being irrigated.
Community Projects: Sprinkler system being comparatively more
Small and marginal costly than other systems of irrigation, in
farmers in groups or order to make the project financially viable
community minor
irrigation projects may be
financed
274
Loan Guidelines
FINANCIN Small/marginal Need Maxim (i) Both working capital and term
G farmer(s)/agricultural based. um 5 loans are to be clubbed together to
APICULT labourer(s) who are trained However, years determine the size of the loan for
URE in beekeeping. (ii) scale of Minimu the purpose of fixing the rate of
25/2020 Individuals/Association of finance m unit interest for all agriculture
persons/ Partnerships/ according for borrowers. (ii) Payment of interest
Companies to financin should be insisted upon only at the
Fixed cost such as: (i) yield/size g time of repayment of loan
Construction of honey should be should installmentss as fixed. (iii) Interest
houses; (ii) Purchase of worked out be of 10 on current dues should not be
colonies; and (iii) Purchase on the bee compounded.
of equipments such as bee- basis of hives. Equipment purchased should be
boxes, honey extractors number of Gestati new and any equipment costing
Recurring Costs: Purchase colonies on more than Rs.10,000/- should be
of foundation sheets, Period: insured
sugar, medicines, gloves, 12
etc Months
Nature
of
Loan:
Term
Loan
PURCHAS Loan may be given for Need maximum period of 60 months
E purchase of following
OF based
TRUCKS vehicles: (i) New trucks
AND made by standard Borrower should hold necessary
OTHER manufacturing concerns permit/driving licence required under law.
TRANSPO like Ashok Leyland, Tata, Where borrower is not having a driving
RT Mahindra, etc. (ii) Other licence in his own name, an undertaking to
VEHICLE new motorized the effect that vehicle shall be driven by a
S light/medium vehicles like person holding valid driving licence should
64/2017 tempo, matador, jeeps, be obtained as in the case of financing for
pick-up vans, mini-trucks tractors. (iii) Loan for purchase of trucks
and other light commercial shall be given to farmers whose land holding
vehicles. is 3 acres or more.
An individual or a Hindu The Circle Heads under their discretionary
Undivided Family, or an powers may extend the repayment period on
Association of persons not merits from 60 months to 72 months.
being a company or a Co-
operative Society being the
owner, tenant or lessee of
land and engaged in
farming or allied
agricultural activity
CONSTRU A natural person, a group Need Max. upto 9 years including a grace period of
CTION/EX of individuals or a legal based as 2 years
PANSION/ person (Partnership Firm, a per
MODERNI Trust, Cooperative capacity of I. The subsidy will be available @ 35% of the
275
Loan Guidelines
ZATION Society, a Society storage. cost of project in general areas and 50% in
OF COLD registered under case of North East, Hilly States for subsidy
STORAGE Registration of Society on the pattern of HMNEH states and
S Act, a company, self-help scheduled areas for capacity above 5000MT.
133/2017 group, Farmer Producers In case of N.E. region, projects having
Organization, Cooperative capacity above 1000 MT are eligible. II.
Marketing Federations, However, the subsidy will be available in
Agricultural Produce case of Item —Technology induction and
Marketing Committees modernization of Cold-Chain for capacity
above 5000 MT. III. Eligible Subsidy amount
to be capped at par with term loan sanctioned
by Bank.
Time limit for completion of the project
would be maximum of 18 months period
from the date of disbursement of the
1stinstallment of term loan
FINANCIN Farmers, SHGs, Joint Need (i) Short term loan for nursery: As per KCC
G Liability Groups (JLGs), based Scheme. (ii) Medium Term Loan for forest
FORESTR Companies, State plantation: Loan for scheme where trees are
Y Undertakings having grown should be repaid within a maximum
DEVELOP ownership/ lease -hold/ period of 15 years inclusive of grace period.
MENT perpetual tenancy rights (i) Loan shall be calculated for raising
PROGRA over land in their name minimum of 25,000 seedlings which can be
MMES. shall be eligible for planted over an area of 10 hectares. (ii)
18/2020 availing loan under the Minimum area of cultivation should be one
scheme acre. In case of plantation of trees on bunds,
Farm Forestry: Raising of economic viability of project should be done
trees on bunds and with respect to minimum number of trees to
boundaries of fields and/or be planted.
raising trees on private Financing of projects formulated by
agricultural lands Companies/Joint Sector Undertakings: (a)
Development of Minimum area to be planted will have to be
nurseries: 5000 hectares over 3 years span of plantation
Investment credit needs for so as to make the investment proposal viable
preparation of land, raising
nurseries at the initial stage
and operational and
maintenance cost during
the first year. Entire
investment will be
capitalized in the first year.
AGAINST PURPOSE: For Need Lump Loan may be allowed by way of
BANK undertaking priority sector based sum demand loan/overdraft for
DEPOSIT, activity/ies viz, agriculture, depending Repay productive purpose and for
NATIONA MSE, etc. upon the ment meeting the contingencies
L No advance be allowed to activity securiti (i) Only revised Form PNB-308 be
SAVINGS customers against deposits financed es, are used for fresh advances. (ii) Bank's
CERTIFIC of other banks and to be lien should be noted and
276
Loan Guidelines
ATES To ensure that KVPs are stipulated released authenticated by the competent
AND issued prior to 01.12.2011 margin. after officer on Confirmation of
KISAN or after 22.09.2014.(w.e.f repaym Deposit, Recurring Deposit Pass
VIKAS 01.07.2016, KVPs are ent. Book and account in case of
PATRA issued in e-mode or advance against the credit balance
131/2017 passbook mode) in Current/SF Account/ Recurring
Deposit
FINANCIN To provide working capital 1. For On- Cash 1. For On-Lending to farmers: DP
G TO facility to the Cold Storage Lending to Credit is to be arrived at based on
COLD units for facilitating the farmers: limits monthly statement of advances
STORAGE farmers against stock of DP is to be shall be made to the farmers by the Cold
UNITS their agriculture produce arrived at sanctio Storage, by maintaining stipulated
FOR and also to meet the based on ned for margin. 2. For running the Cold
FACILITA running expense monthly a period Storage: On actual basis. The
TING THE (electricity bills, repair, statement of one expenditure incurred by the Cold
FARMERS maintenance, etc) of the of year Storage unit on electricity, repair,
AND Cold Storages. advances maintenance, etc
ALSO TO All existing Cold Storage made to Margin: Cold Storage owner to obtain
MEET units which are in the farmers 25% necessary license/ registration, if
RUNNING commercial operation with by the required under any Act in force.
EXPENDI satisfactory track record. Cold Scheme
TURES OF Application of interest: On Storage, by Code: Collateral Security: Minimum
COLD half yearly basis. Interest maintainin CCAG 150% (realizable value) of the
STORAGE will be accrued on monthly g R limit sanctioned.
S basis for Profit & Loss stipulated
129/2017 purpose but collection / margin. 2. No DP to be allowed against the
demand will be made on For advances made against the
half yearly basis. running commodity stored in Cold Storage
the Cold beyond one season.
Storage:
On actual
basis.
FINANCIN Farmers having owned/ Need Repay Animal(s) purchased with bank’s
G registered leased land may based ment: loan should be tattooed/ branded.
PURCHAS be provided credit for keeping in 4 -7 Identification marks given by way
E OF purchasing two animals as view unit years of ear tagging, etc., should be
DRAFT per requirement. Farmers cost fixed mentioned along with natural
ANIMALS owning minimum 2 acres by State identification mark at the place
15/2020 of land or having perpetual Unit Cost where security is mentioned in
right of cultivation of Committee documents. Identification marks of
minimum 2 acres of land the animals along with the ear tag
Loan may be given only in number should be kept on bank’s
respect of young and record; along with loan documents.
healthy draft animals
within age group of 2-6
years.
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Loan Guidelines
FINANCIN The borrower may be a Extent of Product NABARD provides refinance to

G small farmer, landless loan: ion the extent of 90%-100% of Bank
POULTRY agricultural labourer or Need credit:1 loan,depending upon the
FARMING other person who is under- based 2/18 agricultural activity and the
26/2020 employed and intends to months geographic location of lending.
supplement his income UNIT Gestati Refinance from NABARD is to be
through poultry. He should SIZE: on availed by Circle Heads in
be having adequate Minimum period conformity with Head Office
land/shed where he/she size of the of 6/3 decision taken from time to time.
proposes to establish poultry months On the basis of the judgment/order
poultry farm. unit to be in the of Hon’ble High Court of
The borrower should be financed as case of Uttarkhand regarding the ban of
well experienced in subsidiary layers use of Battery Cages for Poultry
running poultry unit and activity and farming it has been decided that no
should be should be broilers financing to Battery Cage
engaged/desirous of 500 birds , Component of Poultry Farming
engaging himself in such respecti Projects is allowed with immediate
an activity on commercial vely effect on PAN INDIA Basis
basis as his main vocation. TL: 6-
7 years
FINANCIN For construction of biogas Need Loan
Intending borrower should have
G plant with sanitary latrines based up to 5
adequate number of cattle
SETTING in rural areas depending cubiccommensurate with size of plant
UP OF upon metres
proposed to be set up. Since there
BIO-GAS Biogas plants of 1 cubic models 7 years
is no apparent income from the
UNITS metre capacity can be and Loans
activity, except saving in cost of
30/2020 operated with dung capacities for
fuel, eligibility of intending
collected from one or two of biogas above 5
borrower should be linked with his
adult cattle heads and plant cubic
income to repay from other
attachment of a latrine metres
sources, viz., land holding, allied
complex serviceable for 5- 5 years
agriculture activities or
10 persons employment, etc. Intending
borrower should be identified by
Khadi and Village Industries
Commission/State Agro- Industries
Corporation/concerned
Department of State Government
DIFFERE 1) Persons not owning any Rs.15000/ Maximum of Five years
NTIAL land or 2) The size of land - Seven years in hardship cases
RATE OF holding does not exceed Rs.20000/- At least 2/3 of the DRI advances should be
INTERES one acre in case of for granted through rural and semi -urban
T irrigated land and 2.5 acres housing branches. 2. It should be ensured that at least
122/2017 in case of un - irrigated For 40 percent of the total advances granted
land SC/ST category are physically under DRI scheme go to eligible borrowers
eligible for the loan, handicappe belonging to SC/ST category
irrespective of land d persons Rate of interest shall be uniformly at 4% p.a
holding Rs. 5000/- Income Criteria Family income of the
extra borrower from all sources does not exceed
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Loan Guidelines
Rs.18000/ - p.a. in rural areas and Rs.24000/

- p.a. in urban and semi - urban areas
FINANCIN Purchase of good quality Need – Cross Cattle purchased with the amount
G DAIRY high milk cows/buffaloes based. bred of loan shall be insured against risk
DEVELOP with minimum average A unit of 2 calf of mortality and Permanent and
MENT daily milk yield of 6.5 milch rearing Total Disability (PTD)
PROGRA liters or exotic cross bred animals is : 6 As far as possible, farmers should
MMES cow. Construction of considered years not be allowed to purchase milch
120/2017 shed(s) for keeping the viable animals from within his village or
animals minimum Cross neighboring villages.
a. The intending size for bred Animals purchased with the
borrower(s) should be such an cow(s)/ amount of loan should be ear
having experience in activity for Buffalo tagged/ tattooed/may have
maintenance of milch continuous es : 5 electronic chip for proper
animals. b. He should be production years identification.
landless agricultural of milk A certificate from the local animal
laborer or farmer/any husbandry Extension
individual who has Officer/Veterinary Officer/Dairy
arrangements for supply of Extension Officer indicating the
adequate quantity of age, state of health, breed, calving
fodder stage, estimate price and milk yield
of the animal.
FINANCIN Loan assistance may be Need Pond Water available should be of good
G extended to farmers, based fish quality and suitable for fish
FISHERIE individuals, co-operative Project culture culture. As such report on quality
S societies, companies, should be - 5-8 of water should be submitted by
DEVELOP association of persons who technically years borrower(s) along with
MENT have adequate know-how feasible Brackis Application for Agricultural Credit
119/2017 and necessary and h water In case of project on commercial
infrastructural facilities for economica fish/pra lines where loan amount exceeds
implementation of the lly viable. wn Rs.50,000/-, borrower(s) should
scheme. culture maintain register where particulars
Scheme Code – TLAFS - 5-10 of quantum of different species of
Purpose of Advance - years fish reared, inputs utilized, dates of
FISHD cleaning and filling up pond/tank
with water, number of crops
harvested, quantity of fish
harvested, etc.
FINANCIN To meet the Financial Need Workin In case of financing FPCs under
G TO needs of the Farmer Based g Equity Grant and Credit Fund
FARMER Producer Companies Rs. 1 Capital: Scheme it is to be ensured that
PRODUCE (FPCs) by way of Working Crore For a credit facility is released only after
R Capital and/ or Term Loan without period getting “in principle” approval
ORGANIZ as per the requirement any of 12 from Small Farmers Agribusiness
279
Loan Guidelines
ATIONS In a ‗Farmer Producer Collateral months Consortium (SFAC) for sanction

114/2017 Organization‘, persons Security / subject of Gu arantee Cover to the Bank.
engaged in an activity Third to
connected with, or related Party annual Farmer Producer Organization
to, primary produce only, guarantee renewal enable s its members to deal with
can participate in the FPCs / review the risk and challenges involved in
ownership. The members fulfilling Term Agriculture practices with the help
of Organization have certain Loan: of economies of scale production.
necessarily to be Primary criteria As per It gives them opportunity and
producers. extant bargaining power to avail financial
guidelin and non -financial inputs and
e s services, appropriate technology,
based reduce transportation cost,
on the opportunity to access the high
purpose value markets, etc. So , FP O is the
and need of the hour
income
generati
on
pattern
of the
activity
PNB SAUR Small Farmers/Marginal Need 5 years There are various vendors in the
URJA Farmers/Share based with in market, which provide Solar Home
YOJANA croppers/Tenant farmers, a yearly/h Lighting/Solar Water Heaters
113/2017 other farmers and agri - maximum alf System at a competitive rate. The
entrepreneurs. limit of yearly borrowers are free to purchase and
Rs.50,000/ instalm install the system from any of the
-. ent vendors as per their choice.
Produce Purpose: To meet short Maximum Repay Subvention Scheme of Govt of
(Marketing term credit requirement to loan upto ment : India: (a) Only small/marginal
) Loan adjust/repay the Rs. 50 lakh farmers who have availed KCC
Scheme outstanding KCC limit Extent of Maxim facility and have been financed
12/2020 availed by farmers from loan would um against negotiable warehouse
the branch and to procure be 75% of period receipt (NWRs) issued by
better price by storing farm the of warehouses registered with the
produce and selling it at Minimum twelve Warehousing Development
favourable price within a Support months Regulation Authority (WDRA)
specified period. Price or will be eligible for the subvention.
Current Scheme (b) The Rate of interest upto loan
Eligibility: Market code: of Rs. 3 lakh will be 7% for a
All the farmers irrespective Price DLWH period of 6 months and thereafter it
of whether they were given whichever R will be charged @ normal
crop loans for raising the is lower, at applicable interest.
produce or not; will be the time of The subvention will be calculated
eligible for advances disburseme for a period of 6 months from the
nt. date of disbursement /drawal or
Loan against date of actual repayment of the
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Loan Guidelines
hypothecation of produce loan which is earlier.

stored at the Farmers’ own Stocks covered under Warehouse
premises will be allowed Receipts should be inspected and
only to the farmers who physically checked/verified by the
have availed crop loan branches before sanction/ release
from our Bank. of credit facility.
FINANCIN Bank credit to MFIs Loan Term A “qualifying asset” shall mean a
G MICRO extended for on -lending to assistance Loan is
loan disbursed by MFI, which
FINANCIN individuals and also to per MFI repayab
satisfies the following criteria: i.
G members of SHGs / JLGs for on le over
The loan is to be extended to a
INSTITUT will be eligible for lending is a period
borrower whose household annual
IONS FOR categorisation as priority subject to a of 3 to
income in rural areas does not
ON - sector advance under maximum 7 years
exceed Rs.1,00,000/ - while for
LENDING respective categories viz., cap of non -rural areas it should not
TO Agriculture, Micro, Small Rs.200 exceed Rs.1,60,000/ -. ii. Loan
INDIVIDU and Medium Enterprises, crores does not exceed Rs.60,000/ - in the
AL Social Infrastructure and first cycle and Rs.100,000/ - in the
MEMBER Others, provided not less subsequent cycles. iii. Total
S OR than 85 percent of total indebtedness of the borrower does
SHGs/JLG assets of MFI (other than not exceed Rs.1,00,000/ -. iv.
s cash, balances with banks Tenure of loan is not less than 24
110/2017 and financial institutions, months when loan amount exceeds
government securities and Rs.30,000/ - with right to borrower
money market of prepayment without penalty. v.
instruments) are in the The loan is without collateral. vi.
nature of “qualifying Loan is repayable by weekly,
assets”. fortnightly or monthly installments
at the choice of the borrower.
FINANCIN The applicant should own Extent of 5-7 Interest is 7% p.a. in the regular
G GREEN required agricultural land Loan: years Crop loan/KCC accounts on
HOUSES and the site should be well dependi running balance outstanding upto
31/2020 connected with market. Need ng upon Rs. 3 lakh. The above guidelines
Good quality water, based the are linked to the subvention as per
electricity, drainage quantu GOI/RBI guidelines.
facility etc should also be The m of Both working capital and term
available. project loan, loans are to be clubbed together to
Financial assistance can be report purpose determine the size of the loan for
given for: (i) Construction submitted of loan the purpose of fixing the rate of
of green house/ poly by the Grace interest for all agriculture
house; (ii) Purchase of applicants Period: borrowers.
281
Loan Guidelines
equipments/machinery ; should be One A prospective green house user,

(iii) Purchase of inputs and thoroughly year who is not having a considerable
other expenses ; (iv) scrutinized for TL experience in green house
Requirement of post . compo cultivation, should prefer to start
harvest operations and nent with a small size green house.
marketing Green houses may be of a size of
100 to 500 sq.mt.
FINANCIN In case of farmers: Need Repay (i) Financing is to be done in
G Intending borrowers based. ment respect of new combine harvester
COMBINE should be able to maintain period: models which are approved by
HARVEST and run combine harvester (Cost of Head Office.
ERS or should make suitable combine 5 -7 (ii) Proposal should be from areas
16/2020 arrangements for the same. harvester years in which offer good potential for
In case of persons other should be half - custom hiring i.e. a minimum of
than farmers : Intending verified to yearly/ 1600 acres per year.
borrowers should be ensure that yearly (iii) Proposal should be techno -
technically qualified it is not installm economically viable and generate
having adequate know - inflated ) ents sufficient incremental income to
how, skill and managerial enable borrower to repay loan
ability to run custom GEST installments with interest.
service units ATION (iv) Since the use of combine
In case of State PERIO harvesters restricted only to the
Agriculture Farms / D: harvesting season, the density of
Corporations: Maxim population of such harvesters,
State Agriculture Farms/ um six scope of custom hiring, impact of
Corporations engaged in months density on custom rates, etc.,
land development should be kept in view
activities should have v) Combine harvester should be
adequate resources and registered with the concerned
command area to run and Registering Authority with Bank's
maintain combine lien.
harvesters.
Financing Purpose: Loan may be Need As per 1. Land taken on lease/ rent is not
Agriculture given for Agriculture/ Based. extant already mortgaged in favour of any
activities Allied Agriculture However, guidelin other branch/bank.
on activities being carried out the loan es 2. It is to be ensured that Lease
unregistere on unregistered leased amount pertaini Deed/ Rent Agreement is for a
d leased/ land/ rented land should be ng to period of 11 months and it contains
rented land above Rs. the clause related to extension of
106/2017 Eligibility: All individuals/ 1.00 lakh particul lease/ rent for a further period of at
SHGs/ JLGs ar least two terms of 11 months each
scheme at the request of the lessee/ tenant
Loan may be given in the and if he/she fails to submit
form of Working Capital request, he/ she is deemed to have
exercised option of extending the
same.
282
Loan Guidelines
ORGANIC (i) All Farmers – Cash Repay (i) The limit shall be fixed after
FARMING Individuals / Joint Credit – ment : assessing the total requirement of
AND borrowers who are Owner Need farmer for undertaking various
ORGANIC cultivators, Tenant Based Cash farm activities in totality for
INPUTS Farmers, Oral Lessees & max. to a Credit – production (involving Kisan Credit
20/2020 Share Croppers, SHGs or limit of Rs. As per Card) as well as investment
Joint Liability Groups of 50 lakh (as KCC purposes.
Farmers per KCC guidelin (ii) For production credit KCC
(ii) The applicant should guidelines) es. may be issued for limit upto Rs.50
have adequate land for lakh and all guidelines as
taking up the activity. Term Loan Term applicable for KCC be followed.
Vacant land in/ around – Need Loan - As the cost involved in organic
residential houses with Based As per farming is more than the cost
right to use such land may extant involved in conventional
also be used for the Fixation guidelin agriculture, due to being labour
purpose. of Limit: es intensive, the credit limit should be
Purpose: The farmer pertaini fixed in accordance with actual
Loan may be given for the shall draw ng to costs involved and not on the basis
following purposes: out his the of scale of finance fixed for
(i) Initial expenditure on plan particul conventional agriculture.
fencing if not already put. encompass ar Subsidy:
(ii) Purchase of inputs like ing all scheme Operational Guidelines for
seeds, bio-fertilizers, bio- activities Subsidy Schemes shall be
pesticides, vermin- related applicable as issued by the Nodal
compost, Farm Yard with Agency.
Manure (FYM), fruit & organic Varieties
vegetable waste and farming on
compost etc. the basis of For organic farming of tomato,
(iii) Land development. which Open Pollinated Varieties (OPV)
(iv) Small farming extent of are preferred. Varieties like Arka
equipment. loan is to Rakshak, Swarna Lalima, Swarna
(v) To help farmer for be Naveen, Lakshmi NP 5005 are
conversion from determined suitable for organic cultivation of
conventional farming to . Tomato.
organic farming
FOOD Food processing is the Term loan: (i) Rate of interest : As per LA circular
AND transformation of raw Need no 110/2019 dated 01.10.2019
AGRO ingredients, by physical or Based ii) Discretion to pass the concession /
PROCESSI chemical means into food, Working relaxation of interest rate in existing as well
NG UNITS or of food into other Capital as in new accounts is to be exercised by
20/2019 forms. Food (FB+NFB) sanctioning authority not below the level of
processing combines raw : Need CACs headed by the Circle Head, judiciously
food ingredients to based on selective basis, in respect of proposals
produce Composite falling upto their vested powers only, except
marketable food products loan: Need in case of HOCAC-III headed by CMD,
that can be easily prepared based which can permit relaxation in respect of
and served by the (However, proposals falling under the power of MC also
283
Loan Guidelines
consumer. the entire

All the existing MSME requiremen
guidelines applicable on t of funds, Additional concessions in applicable card
Food & Agro Processing irrespectiv rates:
shall remain in force i.e. e of its
the branches shall process location Realizable Collateral Coverage
the loan application under (requiring Value of linked ROI
the category as per MSME loan up to Collateral
guidelines and will also Rs.100.00 A1 to B1 to B3 to
security (% A4 B2 C3
exercise loaning powers as lakh) of total
given for MSME exposure)
advances. >50% up to 0.25% Nil NIL
Eligibility : Individuals / 75%
SHGs/ JLGs/
>75% up to 0.50% 0.25% NIL
Proprietorship Firms/
100%
Partnership / Ltd Liability
>100% 0.75% 0.50% NIL
Partnership / Pvt. Ltd. Co.
/ Public Ltd. Co/ Trust and
Co-operative Societies
registered under any law
relating to co-operative
societies/ / Farmer
Producer Organizations
and other legal entities etc
Any person engaged in Term Cash Credit / The loan may be granted
PNB agriculture or allied loan-Upto Overdraft: On as a Cash Credit /
SONA activities as well as 36-60 lines of KCC Overdraft or single
KRISHI persons engaged in months Term Loan : 5 transaction-Demand Loan
RIN activities permitted by GOI depending years with one year tenor Where
YOJANA / RBI to be classified under on the the KCC facility has been
59/12 agriculture. Loan will be purpose. allowed, the guidelines
given based on declaration. Margin: applicable for KCC
Additionally, proof, of CC/Short Scheme are to be
pursuing the activity to be Term Loan followed.
given for loans above Rs. 1 - 5%, This margin will be on the
lakh. Term Loan rates advised by RAD
- 20% from time to time.
However, the account may
be reviewed annually to
ensure availability of
sufficient margin as
stipulated above.
CONTRA The main features of Term Loan Cash Credit / Overdraft:

CT contract farming are that and /or On lines of KCC
FARMING selected agriculture Working Term Loan : 5 years
82/2017 produce is produced by Capital. Repayment :
284
Loan Guidelines
farmer under a buy back As per extant guidelines pertaining to the

arrangement with buyer Need particular scheme.
engaged in processing or based, Corporate Guarantee shall be obtained from
trading. In India, small subject to the Company for the full exposure and an
farmers are generally fulfillment undertaking shall be obtained from the
capital starved and cannot of borrower that loan facility for the purpose has
make major investment in eligibility not been availed from any other Bank/ FI and
land improvement and criteria of that the borrower shall not avail loan facility
modern inputs. Contract the for the said purpose from any other Bank/ FI
farming provides borrower till continuation of loan under the tie-up
opportunity to such small as arrangement
farmers to adopt new and perextant
modern techniques for Bank The Buyer and Farmer will first sign an
increasing their guidelines Agreement wherein the Buyer will undertake
productivity. to buy the agriculture produce from the
Eligibility criteria shall be Farmer at a pre-determined quality and as per
as per Banks guidelines quality norms and rate decided.Farmer will
(Scheme wise). also be under obligation to supply the entire
Bank will assess the produce to the Buyer
eligibility criteria of such In case of Bank finance, there shall be a
farmers/producers (as per Tripartite Agreement between Bank, Buyer
guidelines) and on their and Farmer. Bank will finance the genuine
selection under potato requirements of the Farmer who in turn will
grower (KCC) scheme of authorise the Buyer to route the sale proceeds
the Bank; these through the designated branches of the Bank.
farmers/producers shall be
required to submit
documents prescribed by
the Bank from time to
time.
FINANCIN Individual farmer or group Need 4-15 years (inclusive of gestation period)
G of farmers having aptitude/ Based Economic life, gestation period and
DEVELOP adequate experience Working repayment period for various horticulture
MENT OF together with stipulated capital crops and plantation crops is given in
HORTICU land holding (either as loan would appendix I of Circular.
LTURE owner or tenant /lessee on depend Establishment &development of new
27/2020 long term basis (at least upon scale orchards or grove of
three years more than of finance Fruit crops like mango, grapes, litchi,
economic life of projects ) Marketing apple, guava, pomegranate, banana, citrus,
Loan: Not etc.
Public Sector to exceed Plantation crops like tea, coffee,
Undertakings or private 20% of cashewnut, coconut, cocoa, arecanut, rubber,
firms desirous of seeking estimated oil
financial assistance for value of palm, betel vine, etc.
plantation of fruit trees or crops.
other economic plants on
project basis.
285
Loan Guidelines
SCHEME Construction of Building, Working Term loan: 7 years including gestation

FOR etc.: Loan may be Capital period.
FINANCIN considered for construction (For Working capital: Annual review/renewal.
G of building, construction of initial one Financial assistance for spawn production
MUSHRO generator room, packing crop only) may be considered for the following edible
OM and boiler room, air & Term mushrooms for the purpose of investment as
CULTIVA conditioning room, water Loan well as recurring expenditure.
TION tank, construction of (i) Cash component may be disbursed in cash
14/2020 platforms, construction of Need to borrower as per approved unit cost for
compost, pasteurization based items like labour charges, electricity, water
and blower room, septic charges, etc.
tank and tube well. (ii) Kind component may be paid directly to
suppliers of inputs depending upon progress
of work in three to four instalments.
SCHEME Small and marginal Need Medium term Loans:

FOR farmer(s) and agricultural based. 5 to 6 years (including gestation period of 12
SHEEP labourer(s) desirous of Unit size months)
AND undertaking sheep/goat 1:20 (i) Purchase of sheep/goat of recognized
GOAT breeding/rearing as (male: breed for the purpose of breeding and/or
BREEDIN subsidiary activity or female in rearing them for wool, meat and milk
G/REARIN trained persons including case of production.
G farmer(s) desirous of sheep) &
17/2020 taking up the venture as 1:4 (male: (ii) Construction of sheds for sheep/goat, if
whole-time business on female in considered necessary, and also for purchase
commercial lines are case of of equipments/tools.
eligible for financial goats)
assistance
SCHEME (a) For purchase of exotic Need For Production Credit:
FOR boars like Large or Middle based and Working capital loan will be repaid in a
PIGGERY White Yorkshire (white according maximum period of one and half years from
DEVELOP breeds), Land Race to the unit the date of advance.
MENT (Brown), Large Black, cost For Investment Credit:- 5-6 years
23/2020 Saddle Black, Hampshire approved Progressive farmers who have sufficient land
(black breeds), etc., and for by the Unit to produce home grown feeds may be
purchase of sows of Cost financed a minimum breeding unit of 1 boar
improved breeds. Committee and 3 sows. Farmers who have very limited
for that capacity to produce home grown feeds may
(b) Construction of pig- area. be preferred for undertaking rearing activity.
pens (enclosures with Loan The unit size/cost approved by Unit Cost
fence). component Committee may be kept in mind while
s may processing the loan requirement.
(c) Purchase of feed and include
medicines for a period not purchase Proximity of land for above purposes and
exceeding 9 months. of boar availability of agricultural by-products, waste
(male), materials and home grown feeds such as
(d) Purchase of sows tapioca, rice-bran, broken rice, sweet potato,
equipments, if required. (female potato, raw fresh fruits such as banana, leafy
286
Loan Guidelines
Individuals, farmers, pigs), vegetables, molasses distillery waste, etc.,

agricultural laborers, constructio may be ascertained to work out feed
tenant farmers, group of n of shed, requirement.
farmers, Self Help Groups, purchase Quantity of supplementary concentrate feed
Joint Liability Groups, of will depend upon the foregoing condition and
firms, co-operative equipment, the quality and quantity of agricultural by-
societies, companies feed for 9- products available in the area.
having aptitude/adequate 12 months,
experience/training medicine Where subsidy is available, the same should
Persons undertaking and be treated as margin and no further margin
activity on commercial insurance money should be stipulated unless subsidy
lines must have adequate cost, etc. falls short of requisite margin.
technical
knowhow/training/exposur
e of the activity
Purpose: Term loan, Repayment: 4 to 9 years
SCHEME (i) Cultivation of mulberry. Cash GESTATION PERIOD: 12 Months
FOR (ii) Rearing of silkworm. Credit Where the scheme has been approved by
FINANCIN (iii) Non-farm activities limit and NABARD, the terms and conditions
G related to sericulture Composite stipulated by NABARD in respect of margin
SERICUL Eligibility: - individual loan. shall be followed
TURE farmers, SHGs, firms,
29/2020 companies engaged in Need Short term production credit upto Rs. 3.00
sericulture activity. based loan lakh, extended for cultivation of mulberry
(meeting recurring expenses only), may be
provided to the borrower at concessional*
rate of interest as per RBI Interest Subvention
Scheme.
Identification of the 10 The adopted girl students shall be provided study material
PNB needy girl students from a like books, notebooks,uniform etc. relevant to their course
LADLI single village, who are and payment of school fees if considered essential. The
SCHEME willing to continue studies value of such study material and fees will not exceed Rs.
14/2019 till at least 12th class 2500/- per student per annum
Selection of students will Earlier the scheme was to be implemented through adopted
be finalised by a villages of PNB Vikas/FTCs/RSETIs. Later on for the
Committee comprising of purpose of widening the scope of the scheme girl students
an official from Circle may be selected in any village. The selection shall be done
Office, LDM, and by Circle Offices/LDM Offices. Criteria of selection shall
Principal of the School be need based.
where school is situated Saving Fund accounts of all the girl students adopted under
CASH-INCENTIVE is PNB LADLI Scheme will be opened and Rs. 600/- on Half
credited to accounts of Yearly basis (Rs. 100/- PM) will be deposited to meet their
only those girls who are out of pocket expenses. The amount will be credited in
willing to continue their their SF accounts in April and October every year.
studies.
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Loan Guidelines
„PNB The agriculture borrowers Criteria for providing Financial Assistance: All children
KISAN comprising of small of eligible loanee farmers who have passed8th class,
BALAK farmers, marginal farmers, Matriculation, Inter/10+2 and Graduation and have secured
SHIKSHA tenant farmers,oral lessees 50% and above marks shall be provided financial
PROTSAH and agriculture labour are assistance under the scheme.
AN eligible to claim incentive Amount of Financial Assistance (Lump sum):-Lump
YOJANA for maximum of two sum financial assistance of Rs. 2500/- per childshall be
13/2019 children if bothare girl payable once a year. However, Girl students shall get an
child or if the second additional annual assistance of Rs.1,000/- under each of
child is girl provided their the above category. The amount of financial assistance
loan account is running shall be credited to SF account of the beneficiary..
regular. Students of Government and Government aided/ Private
A child having got Schools/Colleges/Universities shall be eligible
financial assistance once Maximum Number of Awards: (i) The ceiling on number
under any other scheme of of cases has been restricted to 100 children per Circl
the Bank shall be eligible
for subsequent assistance
as well.
PNB A Women, residing from For formation and credit linkage of SHGs: Rs. 1000/- per
SAKHI Command area of the SHG formed and credit linked with the Bank (in stages i.e
PSLB/WS/ branch, who has been a 300/-, 300/- & 400/-).
SHG/5/201 member of an SHG or well Apart from above the PNB Sakhi will also be provided
6 conversant about the SHG honorarium of Rs. 1500 per month which will be in
41/2016 concept. PNB Sakhi will addition to honorarium given under NRLM, if any.
49/2016 be a suitable woman who The payment of incentive/ honorarium shall be made to
can easily PNB Sakhi by debiting the Misc. Expenditure Head under
communicate/facilitate to HO Power.
Banks as well as SHG Responsibilities of a PNB Sakhi:
members. Training:
Minimum education of Encourage the rural poor to organize into self help
8th/ 10th pass with basic groups and their saving linkage with the Bank.
reading, writing and Undertake awareness among SHGs on credit linkage,
numeracy skills terms and conditions of loans, including interest rate and
Ability to undertake repayment schedule as well as interest subvention and the
frequent travel to the Bank conditions of eligibility for the interest subsidy.
branches and other villages Honorarium for First 3 months to all PNB Sakhis thereafter
Competent Authority to linked to number of SHGs formed and/ or linked.
appoint PNB Bank Sakhi: - PNB sakhi should help the SHG members in conducting
In Lead Districts- LDM regular meetings and should guide them about proper
Other than Lead Districts- bookkeeping.
Deputy Circle Head
(Second man) in Circle
office
288
Loan Guidelines
SCHEME Purpose: Need-based 5- 15 years

FOR To increase productivity of loan shall
FINANCIN land and convert degraded be given repayment of loan will accrue only after 2 or
G land to arable land. taking into 3 years - longer gestation
DEVELOP consideratio Panchayats/other bodies having such
MENT OF Schematic afforestation of n the community land. Project report for
WASTELA wasteland by individual requirement reclamation, levelling and conservation of
ND farmers/ entrepreneurs s for soils should be prepared/estimates verified
32/2020 and/or group of farmers integrated by Soil Conservation Officer/Agricultural
either on their own land or developmen University/ Krishi Vigyan Kendra/
on land obtained on lease t of Agricultural Department/ Forest
from State Governments/ wasteland. Department.
Panchayats, etc.
Individual farmers having land holdings
Loan for development of (either as owners or on the basis of long
non-forest wasteland under term tenancy/leasehold rights) which are
the Investment Promotion degraded due to soil salinity, alkalinity,
Scheme water erosion, wind-erosion, floods, water
logging, etc., and are lying as wasteland
NATIONA The Ministry of Rural Revolving First Dose: 6 times of the existing corpus or
L RURAL Development, GOI has fund minimum of Rs. 1 lakh whichever is higher.
LIVELIH launched NRLM by minimum Second Dose: 8 times of the existing corpus
OOD restructuring Rs. 10000/- or minimum of Rs. 2 lakh whichever is
MISSION Swarnajayanti Gram and higher Third Dose: Minimum of Rs. 3 lakhs
(NRLM) Swarozgar Yojana (SGSY) maximum based on the Micro credit plan prepared by
(PSFID replacing the existing Rs. 15000 the SHGs and appraised by the Federations
45/2018 SGSY scheme per SHG /Support agency and the previous credit
27/2019) The existing defunct SHGs would be history
are also eligible for credit provided by Fourth Dose: Minimum of Rs. 5 lakhs based
if they are revived and NRLM on the Micro credit plan prepared by the
continue to be active for a SHGs and appraised by the Federations
minimum period of 3 No Capital /Support agency and the previous credit
months. subsidy. History.
Women SHGs under The loan amount will be based on the micro
DAY-NRLM consist of credit plans of the SHGs and their members.
10-20 persons. In case of Repayment schedule could be as follows: 
special SHGs i.e. groups in The First year/First dose of loan will be
the difficult areas, groups repaid in 12-18 months in monthly/quarterly
with disabled persons, and instalments.  The Second year/ Second
groups formed in remote dose of loan will be repaid in 18-24 months
tribal areas, this number in monthly/ quarterly instalments.  The
may be a minimum of 5 Third year/ Third dose of loan will be repaid
persons. in 24-36 months in monthly/ quarterly
instalments.  The loan from Fourth year/
Fourth dose onwards has to be repaid
between 3-6 years based on the cash flow in
monthly/ quarterly installments.
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Loan Guidelines
Deendayal NULM focuses on

Project Cost No minimum educational qualification is
Antyodaya providing financial
(PC): The required for prospective beneficiaries under
Yojana— assistance throughgroup will this component.
National provision of interest
be eligible Repayment: Repayment schedule would
Urban subsidy on loans to supportfor a range between 5 to 7 Years after initial
Livelihoods establishment of Individualmaximum moratorium of 6-18 months as per norms of
Mission & Group Enterprises and loan of Rs. the banks
(DAY- Self-Help Groups (SHGs) 2 Lakh per Margin Money: No margin money should be
NULM) of urban poor. member or taken for a loan up to ₹50,000 and for higher
26/2019 The underemployed and Rs. 10 amount loans, preferably 5% should be
unemployed urban poor Lakh, taken as margin money and it should in no
will be encouraged to set whichever case be more than 10% of the project cost.
up small enterprises
is lower. Type of Loan Facility: Banks may extend
relating to manufacturing, Type of finance to individuals for capital expenditure
service and small business Loan in the form of Term Loan and Working
for which there is
Facility: Capital loans through Cash Credit. Banks
considerable local demand. Term Loan may also extend Composite Loans
and for consisting of Capital Expenditure and
Eligibility Criteria: The Working Working Capital components, depending
group enterprises should Capital upon individual borrower’s requirement.
have minimum of Three The Incumbents of branches in JMG Scale I,
(3) members with a MMG Scale II & III are empowered to
minimum of 70% of the sanction unsecured loan/ clean advance per
members from urban poor SHG up to a maximum limit as follows:
families. More than one JMG Scale- I : Rs.2.00 Lacs, MMG Scale-II
person from the same : Rs.5.00 Lacs, MMG Scale-III : Rs.8.00
family should not be Lacs, Scale IV and above : Rs. 10 Lacs.
included in the same
group.
AGRICUL ELIGIBLE Extent of Loan: Need based
TURE BENEFICIARIES: For Stand alone cold storage projects are not admissible for
MARKETI creation of storage subsidy under the scheme.
NG infrastructure (Capacity 50 REPAYMENT: Min. 5 years and Max.11 years
INFRAST - 5000 MTs) and Non- (including gestation period of 1-2 years)
RUCTURE storage infrastructure: SUBSIDY: The subsidy available under the scheme is as
SCHEME Individuals, Group of under:
PSFID 21 farmers / growers, For Storage Infrastructure Projects:
& 63/2018 FPOs/FPCs registered a) 33.33% of the capital cost of the project. In case of
under respective projects located in North – Eastern States, Sikkim, UTs
companies of Andaman & Nicobar and Lakhsdweep Islans and
Act/cooperatives societies hilly areas, maximum ceiling on subsidy will be Rs.
Act/ societies registration 4.00 crore.
Act (with minimum 50 b) In case of Registered FPOs, Panchayats, Women,
number of farmer SC/ST beneficiaries and their self help groups / co-
members); Partnership/ operatives and SC/ST entrepreneurs & their self-help
Proprietary firms, groups/ Co-operatives (in areas other than (a) above),
Companies, Corporations; 33.33% of capital cost of project subject to maximum
NonGovernment ceiling of Rs.3 crore.
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Loan Guidelines
Organizations (NGOs), c) 25% of the capital cost of the project to all other
Self Help Groups (SHGs); categories of beneficiaries, subject to a maximum
Cooperatives, Cooperative ceiling on subsidy of Rs. 2.25 crore.
Marketing Federations; * Hilly area is a place at an altitude of more than 1,000
Autonomous Bodies of the meters above mean sea level. ** SC/ ST Cooperatives to
Government, Local be certified by the concerned officer of the State
Bodies, Panchayats; State Government # For the projects of pulse splitting and oil
agencies including State crushing, the maximum subsidy for 25% category is
Government Departments Rs.12.50 lakh and 33.33% category is Rs.16.66 lakh only.
and autonomous SUBSIDY CEILING: 9.3.1 The total subsidy which can
organization / State owned be availed of by a promoter for all his/her projects in a
corporations such as District since inception of the scheme (erstwhile GBY) up
Agricultural Produce to the end of 2019-20 will be restricted to a maximum
Market Committees & capacity ceiling of 10,000 MT. if a promoter intends to
Marketing Boards, State have more than one project of different type including
Warehousing storage project in the same District he/ she will be eligible
Corporations, State Civil for a maximum subsidy up to Rs.75 lakh or Rs. 133.20
Supplies Corporations etc lakh as the case may be.
Development of marketing There is no provision of assistance for renovation of
infrastructure such as storage infrastructure projects under the Scheme
common facilities in the
market yards like
platforms for auction,
loading unloading, drying,
cleaning etc.
(i) Individuals, group of
farmers/ growers,
Registered Farmer
Producer Organizations
(FPOs)
(ii) Partnership/
Proprietary firms,
Companies,
Corporations
(iii) NGOs, Self Help
Groups (SHGs)
FINANCIN SFAC will provide Need based EXTENT OF VENTURE CAPITAL
G AGRI- Venture Capital Assistance ELIGIBLE ASSISTANCE :-
BUSINESS for qualifying projects of COST OF (i) 26% of prmoter’s equity or
PROJECT individuals/ producer THE (ii) Rs 50 Lakh , whichever is lower.
S WITH groups / organizations PROJECT In North- Eastern Region, Hilly States
VENTURE which meet the following : (Uttarakhand, Himachal Pradesh, Jammu &
CAPITAL criteria: - Min Kashmir) and in all cases in any part of the
ASSISTAN Projects are dependent Rs.15.00 country where the project is promoted by a
CE FROM upon agricultural or allied lakh (Rs. registered Farmer Producers Organization
SMALL produce, 10.00 lakh ,the quantum of venture capital will be the
FARMERS Projects provide direct for Hilly lowest of the following:
' (SFAC) access to producers as and North- (i) 40% of the promoter’s equity
291
Loan Guidelines
(PSFID assured market, Eastern (ii) Rs. 50.00 lakh

81/2017) Projects encourage farmers states and REPAYMENT : Repayment of loan shall
to diversify into high value backward synchronize with the income generation
crops aimed to increase districts) from the qualifying projects.
farm incomes, and
The Bank has accepted the Maximum
project for grant of term upto Rs.5
loans after satisfactory crore.
techno-commercial
feasibility.
SCHEME PURPOSE: INCOME CITERIA:
FOR Purchase of New Four a. In case of loans up to Rs. 10 Lacs, it is desirable to
FINANCIN wheelers, three wheelers submit latest ITR where agricultural income is also
G (carriers) and Two declared for ascertaining the gross annual income, in case
VEHICLE Wheelers (LMVs) of all of non-availability of ITR, Income certificate issued by the
FOR types Tehsildar/ Mandal Revenue Officer/District Revenue
FARMERS The loan amount will Authorities or any competent authority
/ comprise of:Cost of b. In case of loans above Rs. 10 Lacs, ITR where
AGRICUL vehicle, One time agricultural income is also declared is compulsory.
TURISTS Insurance cost & One time In case of agriculturists engaged in Dairy farming, Poultry
9/2020 Registration cost farming, Plantation Crops and Horticultural produce or
ELIGIBILITY: All new other allied activity, the minimum land holding
and existing farmers requirement does not apply, instead they should have
ELIGIBILITY minimum gross annual income of Rs. 2.50 lacs for 3 & 4
CALCULATION: wheeler.
Farm Income: 4 times of Loan Amount:
net annual income or 3 For Scooters, Motorcycles : Maximum Rs 1, 00, 000/-
times the value of annual For Three- Wheeler (carriers): maximum Rs. 3.00 Lacs.
crop production For Four- Wheeler): Maximum Rs. 15.00 Lacs.
Net Take Home (NTH) should be 40% of the gross
Margin: annual income after meeting the instalment of the
Upto 10 Lakh : 10% proposed loan under this scheme with a minimum of
Rs. 1.50 lacs p.a.
Above 10 lakh to 15 lakh: Repayment: In case of 2/3 wheeler- Max.60 M.
15% In case of new 4 wheeler vehicle-Max. 84 months.
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CENTRAL Eligible Beneficiaries : Primary Eligible projects: a. Post- Harvest
SECTOR Agricultural Credit Societies (PACS), Management Projects like: Supply chain
SCHEME Marketing Cooperative Societies, services including e-marketing platforms,
FOR Farmer Producers Organizations Warehouse, silos, pack houses, assaying units,
“FINANCI (FPOs), Self Help Groups (SHGs), sorting & grading units, cold chains, logistics
NG Joint Liability Groups (JLGs), facilities, primary processing centers, ripening
FACILITY Farmers, Multi- Purpose Cooperative chambers.
UNDER Societies, Agri- entrepreneurs, Start- b. Viable projects for building community
AGRICUL Ups and central/ state agency or local farming assets including: Organic inputs
TURE body sponsored Public Private production, Bio- stimulant production units,
INFRAST Partnership Projects. infrastructure for smart and precision
RUCTURE Extent of Loan : Need Based agriculture, projects identified for providing
FUND” supply- chain infrastructure for clusters of
Nature of facility : Term Loan crops including export clusters, projects
PSFID/PRI Rate of Interest: a. Upto a limit of promoted by central/ state/ local governments
ORITY Rs. 2.00 Cr: MCLR (6 Months)+1% or their agencies under PPP for building
SECTOR (Subject to Max. 9%) community farming assets or post- harvest
CIRCULA b. More than Rs. 2.00 Cr: Linked to management projects.
R NO. 58/ ERR & IRR Interest Subvention: a. All loans under this
2020 facility will have interest subvention of 3% per
Credit Guarantee: a. Credit annum up to a limit of Rs. 2.00 Crores.
DATED : Guarantee coverage will be available b. The subvention will be available for a
24.08.20 to eligible borrowers from this maximum period of 7 years.
financing facility under Credit c. In case of loans beyond 2.00 crores, the
Guarantee Fund Trust for Micro & interest subvention will be limited up to 2
Small Enterprises (CGTMSE) Crores.
Scheme for a loan up to Rs. 2.00 d. Subvention will be allowed only till the
Crores. account is under standard category. In case of
b. The guidelines circulated vide accounts which have turned NPA, subvention
MSME Div. Circular No. 53/2018, will be allowed from the date of up gradation
dt. 15.09.2018 and other related of account to standard category
circulars on CGTMSE are to be Margin Norms : Up to Rs. 2.00 Cr : 10%, >2
adhered with. Cr to 10 Cr : 15%, >10 Cr : 25%
c. The fee for this coverage will be Repayment period: The loan is to be repaid
paid by the Govt. within a maximum period of 8- 10 years
inclusive of moratorium period of 6 months to
2 years
CENTRAL Eligible Beneficiaries: Farmers Nature of loan: Term Loan / Working Capital
SECTOR Producer Organization (FPO), : Need based
SCHEME Individual Entrepreneurs, Private Margin: Micro & Small Enterprises : 10%,
OF Companies & Section 8 companies Medium : 15%, Others : 25%
FINANCIN and MSME Activities eligible for Rate of Interest: Projects whose cost falls
G availing benefits within MSME defined ceilings: RLLR+2%
FACILITY a. Dairy Processing:  Interest Subvention:
UNDER Establishment of new units and a. 3% for all eligible entities (EEs). b.
'ANIMAL strengthening of existing dairy Department of Animal Husbandry and
HUSBAND processing units Dairying will directly pay the interest
RY b. Value added dairy product subvention to the bank.
INFRAST manufacturing:  Establishment of c. Department of Animal Husbandry and
293
RUCTURE new units and strengthening of Dairying will pay interest subvention amount
DEVELOP existing manufacturing units for in advance upfront to the bank for first year
MENT value addition of milk products like based on the request of the bank. d. Interest
FUND' ice cream units, cheese subvention from second year onwards would
manufacturing units, Ultra High be released based on the non- NPA borrowers
PSFID/PRI Temperature (UHT) milk processing entitlement. e. The subvention is to be claimed
ORITY units. every year in advance. f. Eligible entities will
SECTOR c. Meat processing and Value not get interest subvention if EE is defaulter of
CIRCULA addition of facilities:  repayment of loan amount in any given year.
R NO. 60/ Establishment of new meat Credit Guarantee Fund: a. Credit Guarantee
2020 processing unit and strengthening of Fund of Rs. 750 Cr will be established and the
existing meat processing facilities for same will be managed by NABARD. b. Credit
DATED : sheep/ goat/ poultry/ pig/ buffalo in guarantee will be provided only for those
24.08.20 rural, semi- urban and urban areas. projects which are viable and are covered
d. Animal Feed manufacturing and under MSME defined ceilings. c. The
strengthening of existing units/ guarantee coverage would be up to 25% of the
plant:  Establishment of mini, credit facility available to the borrower
medium and large animal feed plant. Repayment: a. Maximum Repayment is
 Total mixed ration block making period 8 years inclusive of moratorium of 2
unit.  By pass protein unit  years on principal amount. b. The repayment
Mineral Mixture plant  Enrich period may be decided depending on the size
Silage making plant  Animal feed and viability of project. c. Maximum
testing laboratory. repayment period will not exceed 10 years
NOTE: Loans under the scheme from the date of first disbursement inclusive of
shall not be provided for acquisition moratorium of 2 years on repayment of
of land in any manner such as principal in cases where cost escalation has
purchase, transfer, lease, accession/ occurred and the same has been financed by
addition etc. required for the bank.
implementation of the identified Collateral Security: Collateral Security be
project activities. obtained as per Bank’s extant guidelines.
PRADHAN MANTRI FASAL BIMA YOJANA (PSFID 59/2018)
I. Objective of the Scheme: Providing financial support to farmers suffering from crop
loss/damage arising out of unforeseen events.
II. Coverage of Farmers: Loanee farmers for the notified crops would be covered
compulsorily and for non-loanee farmers coverage under the PMFBY is optional.
III. Coverage of Crops: 1) Food crops (Cereals, Millets and Pulses 2) Oilseeds and 3)
Annual Commercial / Annual Horticultural crops.
IV. Coverage of Risks includes Prevented Sowing/ Planting Risk, Standing Crop
(Sowing to Harvesting), Post-Harvest Losses and Localized Calamities.
(Note: This scheme excludes losses arising out of war and nuclear risks, malicious damage
and other preventable risks.)
V. Preconditions for implementation of the Scheme:
Issuance of Notification by State Government / UT for implementation of the scheme
(PMFBY).
VI. Notification : State Government/ UT shall also notify seasonality discipline for
various activities under the scheme viz. submission of insurance proposals, consolidated
declarations by banks, yield data, claim assessment of losses for (i) standing crop (ii)
localized calamities, (iii) prevented sowing,(iv) post harvest loss, (v) on-account payment for
major calamities, etc as per the provisions of the scheme.
294
VII. Sum Insured /Coverage Limit :
Sum Insured per hectare for both loanee and non-loanee farmers will be same and equal to
the Scale of Finance as decided by the District Level Technical Committee, and would be
pre-declared by SLCCCI and notified.
VIII. Premium Rates and Premium Subsidy
S. Season Crops Maximum Insurance charges

N. payable by farmers
1. Kharif All foodgrains and Oilseeds crops 2% of sum insured or Actuarial rate,
(all Cereals, Millets,Pulses and whichever is less
Oilseed crops)
2. Rabi All foodgrains and Oilseed crops 1.5 % of sum insured or Actuarial
(all cereals ,Millets, Pulses and rate, whichever is less
Oilseed crops)
3. Kharif & Annual Commercial /Annual 2% of sum insured or Actuarial rate,
Rabi Horticultural crops whichever is less
IX. Seasonality Discipline
The cut-off date is uniform for both loanee and non-loanee cultivators. The State-wise cut off
dates for different crops shall be based on Crop Calendar of major crops published from time
to time by the Directorate of Economics and Statistics, Department of Agriculture,
Cooperation and Farmers’ Welfare, Ministry of Agriculture and Farmers’ Welfare,
Government of India.
Sl.No Activity Kharif Rabi

.
1 Loaning period (loan sanctioned /renewed) for April to July October to
loanee farmers covered on Compulsory basis. December
2. Cut-off date for receipt of proposals /debit of 31st July 31st December
premium from farmers account (loanee and
non-loanee)
3. Cut-off date for receipt of consolidated Within 15 days for loanee farmers and
declarations /proposals of loanee farmers and 7 days for non-loanee farmers after
covered on compulsory basis and non-loanee cut-off date.
farmers covered on voluntary basis from Bank
branches (CBs/RRBs) to respective insurance.
4. Uploading of soft copy of the details of Within 15 days after cut-off date for
individual insured farmers by banks. collection of premium from farmers
For proper implementation of the scheme, report code “PMFBY” has been created. Branches are
advised to enter the mentioned report code while deducting the premium under PMFBY
scheme.
Report Name Purpose
PNBRPT 3/97 This report will help in preparing the excel sheets for the purpose of uploading the
data, on insured individuals, in the Crop Insurance Portal.
PNBRPT 3/98 This report is for MIS purpose wherein all KCC/ Crop Loan Accounts along
with Name, Status of account, Premium deducted and date of deduction will be
given which will help the branches in identifying eligible accounts where
premium is not collected.
295
PNB WOMEN EMPOWERMENT (39/2008)
Under the scheme following relaxations can be provided to women beneficiaries:
 Interest rate to be relaxed by 0.25% in Non-Priority Sector Advances and 0.50% in Priority
Sector advances
 Margin to be reduced to 10%, wherever the margin requirement is more than 10%
 Waiver of 50% upfront fee (wherever applicable)
The above relaxations will not be permissible in case of:

- Advances to women beneficiaries under Differential Rate of Interest Scheme as these advances
are already being extended at concessional rate of 4% p.a.
- Staff loans to women, i.e. concessional loans or any other loan where the female staff is eligible
for the loan only for the reason of being PNB employee.
- Female staff availing credit facilities where rate of interest is charged at concessional rate as per
various H.O. Circulars such as Jewellery, Life insurance Policies, Conveyance loan, Festival
Loan, Consumer Loan, Advances against UTI & other Mutual Funds, Govt. Securities, NSCs,
KVPs, IVPs, Bank’s own deposits, FDRs of PNB Housing Finance Ltd./PNB Caps Ltd.,
Computer Loan and Housing Loan etc. will not be eligible for the above relaxations.
Further only a single concession be made available as per option of the women beneficiary as some
other concessions under PNB Festival Season Bonanza, Weaker Sectors advances are also available.
Simultaneous advantage of more than one concession cannot be made available under any
circumstances.
PNB Farm Score Model is applicable to: -
CREDIT SCORE (i) Agriculture loans up to Rs. 50 Lakh
MODELS FOR
(ii) Agriculture loans above Rs. 50.00 lakh for those Individuals only, who don’t
FARM SECTOR-
prepare any book of accounts and don’t have credible financial statements”
“PNB FARM
Risk Rating shall be done through Credit Risk Rating Model-PNB TRAC under
SCORE”
the following cases:-
22/2020
For all Agriculture loans above Rs. 50.00 lakh (except point no. ii)
Agriculture loans above Rs. 50.00 lakh for Individuals having audited book of
accounts and financial statements shall be rated through Small Loans Rating
Model.
Farm Score is divided in 4 score models for scoring under 39 Agriculture

Schemes which are mentioned below: -
I) Model I: Farm Credit-Agriculture with limit above Rs. 1 lakh.
II) Model II: Farm Credit- Allied Agriculture with limit above Rs. 1 lakh.
III) Model III: Farm Credit- Agriculture with limit above Rs. 1 lakh (Renewal/
Enhancement).
IV) Model IV: Farm Credit-Allied Agriculture with limit above Rs. 1 lakh
(Renewal/ Enhancement).
PNB Farm Score Model is applicable for Cash Credit/Production Credit
loan more than Rs.3 lakh and for investment Credit/Term Loan more than
Rs.1 lakh.
296
OVER VIEW OF MSME & SCHEMES
1.0 Overview of MSME
It is universally recognized that small businesses are the best vehicles to generate jobs. The
role of micro, small and medium enterprises (MSMEs) in the economic and social
development of the country can hardly be over-emphasized. About one-third of the country's
GDP is contributed by more than 50 million MSMEs in the country. It is expected that by
2020, India will have the largest job-ready youth population in the world. India is facing
challenges of providing employment and livelihood to the growing population. The MSME
sector has a great potential to address the same.
Focus on programmes, such as, Make in India, Skill India and Digital India and initiatives
such as revising the definition of MSMEs, providing framework for rehabilitation of MSMEs
and introducing the Trade Receivables Discounting System to solve the problem of delayed
payments, clearly indicate significance attached by the Government and the Reserve Bank to
this sector.
The Government of India enacted MSME Act in June 2006 and the provision of the Act came
into force w.e.f. 2nd October 2006. This act has been passed with a view to provide a new
category of Micro, Small and Medium Enterprises with well defined limits for investment in
Plant & Machinery/ Equipments and turnover. This Act seeks to facilitate promotion,
development and enhancing competitiveness of these enterprises. This sector has been tagged
as the engine of the modern Indian economy. In line with the direction of the Government of
India and being a partner in growth of the country, our bank is focusing on MSME and is
paying due attention for financial assistance to this sector.
297
1.1 Definition of Micro, Small and Medium Enterprises :
1.1.1 Revised Definition

Government of India vide notification dated 01.06.2020 has revised the definition of MSME
as under : (Applicable wef 01.07.2020)
Classification Criteria
Micro Investment in plant and machinery or equipment does not exceed one
Enterprise crore rupees and turnover does not exceed five crore rupees.
Small Investment in plant and machinery or equipment does not exceed ten
Enterprise crore rupees and turnover does not exceed fifty crore rupees.
Medium Investment in plant and machinery or equipment does not exceed fifty
Enterprises crore rupees and turnover does not exceed two hundred and fifty
crore rupees.
- The value of Plant and Machinery or Equipment shall mean the Written Down Value
(WDV) as at the end of the Financial Year as defined in the Income Tax Act and
not cost of acquisition or original price
1.1.2 Becoming a Micro, Small or Medium enterprise:

- Any person who intends to establish a Micro, Small or Medium enterprise may file
Udyam Registration online in the Udyam Registration portal, based on self
declaration with no requirement to upload documents, papers, certificates or proof.
- On registration, an enterprise (referred to as “Udyam” in the Udyam Registration
portal) will be assigned a permanent identity number to be known as “Udyam
Registration Number”.
- An e-certificate, namely, “Udyam Registration Certificate” shall be issued on
completion of the registration process.
- There will be no fee for filing Udyam Registration.
1.1.3 Validity of EM Part II and UAMs issued till June 30, 2020
 The existing Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar

Memorandum (UAMs) of the MSMEs obtained till June 30, 2020 shall remain valid
till March 31, 2021.
 Further, all enterprises registered till June 30, 2020, shall file new registration in the
Udyam Registration Portal well before March 31, 2021.
(ii) ‘Udyam Registration Certificate’ issued on self-declaration basis for enterprises exempted
from filing GSTR and / or ITR returns will be valid for the time being, upto March 31, 2021.
1.1.4 Composite criteria of investment and turnover for classification:

- A composite criterion of investment and turnover shall apply for classification of an
enterprise as micro, small or medium.
- If an enterprise crosses the ceiling limits specified for its present category in either of
the two criteria of investment or turnover, it will cease to exist in that category and be
placed in the next higher category.
298
- But no enterprise shall be placed in the lower category unless it goes below the ceiling
limits specified for its present category in both the criteria of investment as well as
turnover.
- All units with Goods and Services Tax Identification Number (GSTIN) listed against
the same Permanent Account Number (PAN) shall be collectively treated as one
enterprise and the turnover and investment figures for all of such entities shall be seen
together and only the aggregate values will be considered for deciding the category as
micro, small or medium enterprise.
1.1.5 Calculation of investment in plant and machinery or equipment:

- The calculation of investment in plant and machinery or equipment will be linked to
the Income Tax Return (ITR) of the previous years filed under the Income Tax Act,
1961.
- In case of a new enterprise, where no prior ITR is available, the investment will be
based on self-declaration of the promoter of the enterprise and such relaxation shall
end after the 31st March of the financial year in which it files its first ITR.
- The expression “plant and machinery or equipment” of the enterprise, shall include all
tangible assets (other than land and building, furniture and fittings).
- The purchase (invoice) value of a plant and machinery or equipment, whether
purchased first hand or second hand, shall be taken into account excluding Goods and
Services Tax (GST), on self-disclosure basis, if the enterprise is a new one without
any ITR.
- The cost of certain items specified in the Explanation I to sub-section (1) of section 7
of the Act shall be excluded from the calculation of the amount of investment in plant
and machinery.
1.1.6 Calculation of Turnover:

- Information as regards turnover and exports turnover for an enterprise shall be linked
to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the
GSTIN.
- The turnover related figures of such enterprise which do not have PAN will be
considered on self-declaration basis for a period up to 31st March, 2021 and
thereafter, PAN and GSTIN shall be mandatory.
1.1.7 Updation of classification :

- Based on the information furnished or gathered from Government‟s sources including
ITR or GST return, the classification of the enterprise will be updated. An enterprise
shall update its information online in the Udyam Registration portal.
- In case of an upward change in terms of investment in plant and machinery or
equipment or turnover or both, and consequent re-classification, an enterprise will
maintain its prevailing status till expiry of one year from the close of the year of
registration.
- In case of reverse-graduation of an enterprise, the enterprise will continue in its
present category till the closure of the financial year and it will be given the benefit of
the changed status only with effect from 1st April of the financial year following the
year in which such change took place.
- Field functionaries to capture the details of Udyam Registration No. along with the
date of Registration, Category of account (Micro/ Small/ Medium), Turnover and
299
Value of Plant & Machinery/ Equipment in the newly developed menu “URDM” in
Finacle system now onwards for proper classification of MSME accounts. Detailed
SOP given in
1.1.8 Two Or More Undertakings Under The Same Ownership – Status Of Unit
Investments of different enterprises set up by the same person / company NOT to be clubbed
for classification as micro, small and medium enterprises.
2.0 Important provisions of MSMED Act and related notifications :
2.1 Liability of Buyer to make payment ( Section 15 of MSMED Act, 2006) :

Buyer to make payment to supplier on or before the on or before the date agreed between him
and the supplier, provided that in no case the period agreed upon between the supplier and the
buyer in writing shall exceed 45 days from the date of acceptance (deemed acceptance). (
Sec 15 of MSMED Act, 2006).
2.2 : Penal provisions for delayed payments :
If the buyer fails to make payment within period as given above, the buyer shal;l be liable to
pay compound interest with monthly rests to the supplier from the appointed day,
immediately following the date agreed upon, at three times of the bank rate. (Sec 16,17
MSMED Act, 20016).
2.3 Interest not to be allowed as deduction from income.

Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), the amount of
interest payable or paid by any buyer, under or in accordance with the provisions of this Act,
shall not, for the purposes of computation of income under the Income-tax Act, 1961, be
allowed as deduction. (Section 23 of MSMED Act).
2.4 Overriding effect.

- The provisions of sections 15 to 23 shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the time being in force. (Section
24).
- In case of dispute with regard to any amount due, a reference shall be made to the
Micro and Small Enterprises Facilitation Council, constituted by the respective State
Government.
- Further, banks are advised to fix sub-limits within the overall working capital limits to
the large borrowers specifically for meeting the payment obligation in respect of
purchases from MSMEs.
2.5. Prompt payment to suppliers including MSMEs : Charging of interest on delayed

payments in Government e-Marketplace (GeM) :
GOI notification dt 03.07.2020 (effective from 01.10.2020)
- For procurements made under rule 149 of GFRs 2017, buyers are mandated to make
payments within 10 calendar days after generation (including auto generation) of
consignee receipt and acceptance certificate (CRAC) in the Gem.
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- Whenever a CRAC is auto generated or issued by a buyer and payment is not made 10
days thereafter, the buyer will be required to pay penal interest @1.0% per month
for the delayed payment beyond the prescribed timeline till the date of such
payment.
- For example, if a CRAC is generated on 1st day of the month, and payment by the
buyer is made on 20th day of the month, interest for 10 days will be charged. The
penal interest will be 10/30 multiplied by 1%, i.e., 0.33%. month may be taken as 30
days in all cases.
- The interest amount thus collected shall be deposited in an account maintained by
GeM. This interest will not be paid to the vendor and will be used for the education
of sellers/ buyers etc. or other purposes related to GeM.
This is effective from 01.10.2020.
2.6. Reference to Micro and Small Enterprises Facilitation Council :
Application for setting aside decree, award or order.
No application for setting aside any decree, award or other order made either by the Council
itself or by any institution or centre providing alternate dispute resolution services to which a
reference is made by the Council, shall be entertained by any court unless the appellant (not
being a supplier) has deposited with it seventy-five per cent. of the amount in terms of the
decree, award or, as the case may be, the other order in the manner directed by such court.
2.7 Mandatory procurement from Micro Small and Enterprises. –
- Every Central Ministry or Department or Public Sector Undertaking shall procure
minimum of 25 per cent, of total annual purchases of products produced and services
rendered by Micro and Small Enterprises. (raised from 20% to 25% wef 9.11.2018).
- Special provisions for Micro and Small Enterprises owned by Scheduled Castes or
Scheduled Tribes.
- Out of 20% target of annual procurement from Micro and Small Enterprises, a sub-
target of 20% (i.e., 4% out of 25%) shall be earmarked .for procurement from Micro
and Small Enterprises owned by the Scheduled Caste or the Scheduled Tribe
entrepreneurs.
- Out of the total annual procurement from Micro and Small Enterprises, 3% from
within the 25% per cent target shall be earmarked for procurement from Micro and
Small Enterprises owned by women.
3.0 Priority sector targets for MSMEs
Domestic
commercial banks
(excl. RRBs & Foreign banks Small
Regional Rural
Categories SFBs) & foreign with less than 20 Finance
Banks
banks with 20 branches Banks
branches and
above
Total 40 per cent of 40 per cent of 75 per cent of 75 per cent of
Priority ANBC or CEOBE ANBC or CEOBE ANBC or CEOBE ANBC or
Sector whichever is higher whichever is whichever is CEOBE
higher; out of higher; However, whichever is
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which up to 32% lending to Medium higher.
can be in the form Enterprises, Social
of lending to Infrastructure and
Exports and not Renewable Energy
less than 8% can shall be reckoned
be to any other for priority sector
priority sector achievement only
up to 15% of
ANBC.
Micro 7.5 per cent of Not applicable 7.5 per cent of 7.5 per cent
Enterprises ANBC or CEOBE, ANBC or CEOBE, of ANBC or
whichever is higher whichever is higher CEOBE,
whichever is
higher
- All bank loans to MSMEs conforming to the above guidelines qualify for
classification under priority sector lending.
- All loans to units in the KVI sector will be eligible for classification under the sub-
target of 7.5 percent prescribed for Micro Enterprises under priority sector.
Factoring Transactions
i) Factoring transactions on “with recourse” basis by banks which carry out the
business of factoring departmentally, wherever the “assignor” is a Micro, Small or
Medium Enterprise are to be classified by banks under MSME category.
ii) The borrower’s bank shall obtain from the borrower, periodical certificates regarding
factored receivables to avoid double financing/ counting. Further, the “factors‟ must
intimate the limits sanctioned to the borrower and details of debts factored to the
banks concerned, taking responsibility to avoid double financing.
iii) Factoring transactions taking place through the Trade Receivables Discounting
System (TReDS) are eligible for classification under MSME and priority sector upon
operationalization of the platform.
In terms of the recommendations of the Prime Minister’s Task Force on MSMEs, banks are
advised to achieve:
- 20 per cent year-on-year growth in credit to MSEs,
- 10 per cent annual growth in the number of micro enterprise accounts and
- 60 per cent of total lending to MSE sector as on corresponding quarter of the previous
year to Micro enterprises.
4.0 Common guidelines / instructions for lending to MSME sector
4.1 Issue of Acknowledgement of Loan Applications to MSME borrowers
- Banks to mandatorily acknowledge all loan applications, submitted manually or

online, and ensure that a running serial number is recorded on the application form as
well as on the acknowledgement receipt.
- Banks to put in place a system of Central Registration of loan applications, online
submission of loan applications and a system of e-tracking of MSE loan applications.
4.2 Collateral
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- Banks are mandated not to accept collateral security in the case of loans up to Rs.10
lakh extended to units in the MSE sector.
- Banks may increase the limit to dispense with the collateral requirement for loans up
to Rs.25 lakh.
- Banks to strongly encourage their branch level functionaries to avail of the Credit
Guarantee Scheme cover. (VK Sharma Committee recommendations).
4.3 Composite loan
- A composite loan limit of Rs.1 crore can be sanctioned by banks to enable the MSE
entrepreneurs to avail of their working capital and term loan requirement through
Single Window.
4.4 Revised General Credit Card (GCC) Scheme
GCC guidelines were revised on December 2, 2013.
4.5 Credit Linked Capital Subsidy Scheme (CLSS)
- Credit Linked Capital Subsidy Scheme (CLSS) for Technology Upgradation of Micro
and Small Enterprises is launched by Ministry of MSME, subject to the following
terms and conditions:
- Ceiling on the loan under the scheme is Rs.1 crore.
- Subsidy is 15% for all units of micro and small enterprises up to loan ceiling as
above.
- SIDBI and NABARD will continue to be implementing agencies of the scheme.
- The SC/ST owned enterprises will be eligible for additional subsidy of 10% above
15% i.e. 25%.
4.6 Streamlining flow of credit to Micro and Small Enterprises (MSEs) for facilitating
timely and adequate credit flow during their ‘Life Cycle’:
Banks are advised to tune their lending policies to the MSE sector by incorporating therein
the following provisions so as to facilitate timely and adequate availability of credit to viable
MSE borrowers especially during the need of funds in unforeseen circumstances:
- To extend standby credit facility in case of term loans

- Additional working capital to meet with emergent needs of MSE units
- Mid-term review of the regular working capital limits, where banks are convinced that
changes in the demand pattern of MSE borrowers require increasing the existing
credit limits of the MSMEs, every year based on the actual sales of the previous year.
- Timelines for Credit Decisions
4.7 Debt Restructuring Mechanism for MSMEs
- All scheduled commercial banks are advised to follow the guidelines / instructions
pertaining to SME Debt Restructuring and put in place appropriate systems.
4.8 Framework for Revival and Rehabilitation of MSMEs
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The revival and rehabilitation of MSME units having loan limits up to Rs.25 crore would be
undertaken under this Framework.
The salient features of the Framework are as under:
- Before a loan account of an MSME turns into a Non-Performing Asset (NPA), banks
or creditors should identify incipient stress in the account by creating three sub-
categories under the Special Mention Account (SMA) category as given in the
Framework.
- Any MSME borrower may also voluntarily initiate proceedings under this
Framework.
- Committee approach to be adopted for deciding corrective action plan.
- Time lines have been fixed for taking various decisions under the Framework
4.9 Structured Mechanism for monitoring the credit growth to the MSE sector
Based on the recommendations of the Committee (Indian Banking Association (IBA)-led

Sub-Committee (Chairman: Shri K.R. Kamath)), banks are advised to:
- strengthen their existing systems of monitoring credit growth to the sector and put in
place a system-driven comprehensive performance management information system
(MIS) at every supervisory level (branch, region, zone, head office) which should be
critically evaluated on a regular basis;
- put in place a system of e-tracking of MSE loan applications and monitor the loan
application disposal process in banks, giving branch-wise, region-wise, zone-wise and
State-wise positions. The position in this regard is to be displayed by banks on their
websites; and
5.0 Institutional Arrangements
5.1 Specialised MSME branches
- Public sector banks are advised to open at least one specialised branch in each district.
- Further, banks permitted to categorise their general banking branches having 60% or
more of their advances to MSME sector as specialized MSME branches.
- Banks to take care to train the officials posted in such branches appropriately.
5.2 State Level Inter Institutional Committee (SLIIC)
- In order to deal with the problems of co-ordination for rehabilitation of sick micro and
small units, State Level Inter-Institutional Committees were set up in the States.
- Continuation or otherwise, of the SLIIC Forum has been left to the individual States /
UTs.
5.3 Empowered Committee on MSMEs
- Empowered Committees on MSMEs are constituted at the Regional Offices of RBI,

under the Chairmanship of the Regional Directors with the representatives of SLBC
Convenor.
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- The Committee would meet periodically and review the progress in MSME financing,
revival and rehabilitation of stressed Micro, Small and Medium units, coordinating
with other banks/financial institutions and the state government in removing
bottlenecks, may decide the need to have similar committees at cluster/district levels.
5.4 Banking Codes and Standards Board of India (BCSBI)
- The Banking Codes and Standards Board of India (BCSBI) has formulated a Code of
Bank's Commitment to Micro and Small Enterprises.
- The Code sets minimum standards of banking practices for banks to follow.
- The Code does not replace or supersede regulatory or supervisory instructions issued
by the Reserve Bank of India (RBI).
The Code is developed to:
- Give a positive thrust to the MSE sector by providing easy access to efficient banking
services.
- Promote good and fair banking practices by setting minimum standards in dealing
with MSE.
- Increase transparency to enable a better understanding of what can reasonably be
expected of the services.
- Improve understanding of business through effective communication.
- Encourage market forces, through competition, to achieve higher operating standards.
- Promote a fair and cordial relationship between MSE and banks and also ensure
timely and quick response to banking needs.
- Foster confidence in the banking system.
In terms of the key commitments,
- Bank to provide micro and small enterprises (manufacturing) working capital limits
computed on the basis of a minimum of 20 per cent of your projected annual turnover.
- Bank to Supply, at our cost, authenticated copies of all the loan documents executed
by you, with a copy each of all enclosures quoted in the loan document and the list
thereof.
- Follow a rating system, the parameters of which will be shared with you.
- Permit pre-payment of fixed rate loans up to Rs. 50 lakh without levying any pre-
payment penalty.
- Banks to dispose of MSE loan application for credit limit up to Rs.5 lakh within 2
weeks; for credit limit above Rs.5 lakh and up to Rs.25 lakh within 4 weeks; and
for credit limit above Rs.25 lakh within 8 weeks from the date of receipt.
- Note : This is as per revised BCSBI code. In terms of bank guidelines (MSME
Policy), the MSE loan applications for loan up to Rs.5.00 lakhs to be disposed
within two weeks, above Rs.5.00 lakhs and up to Rs.25.00 lakhs within 3 weeks
and above Rs.25.00 lakhs, within 6 weeks. However, in terms of LA Cir 157.2020,
the following timeline is advised (sole banking) :
Credit Limit Time schedule (Maximum)

Upto ₹ 2 lakhs 2 weeks
Above ₹ 2 lakhs & Upto ₹ 50 lakhs 4 weeks
Above ₹50 lac & upto ₹100 lakhs 5-6 weeks
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Above ₹100 lac & upto ₹100 crore 6-7 weeks
Above ₹100 crore 8-9 weeks
The complete text of the Code is available at the BCSBI's website (www.bcsbi.org.in)
Timeframe for disposal of consortium credit proposals (LA 157.2020) :
Time schedule prescribed by RBI for processing/sanction of credit/loan proposals under

Consortium arrangement are indicated hereunder:
*Export Proposals Other
Gold Card Other Proposals
Holders Exporters
Fresh/ enhanced credit limits 25 Days 45 Days 60 Days
Renewal of existing credit 15 Days 30 Days 45 Days
limits
Sanction of Adhoc facilities 07 Days 15 Days 30 Days
*The same timeframe is applicable for export credit proposals under sole banking
arrangement.
5.5 Micro and Small Enterprises Sector – The imperative of Financial Literacy and
consultancy support
- Scheduled commercial to either separately set up special cells at their branches, or

vertically integrate this function in the Financial Literacy Centres (FLCs) set up by
them, as per their comparative advantage.
- Further, Financial Literacy Centres operated by Scheduled commercial Banks are
advised to conduct target specific financial literacy camps, where one of the target
groups is small entrepreneurs.
5.6 Cluster Approach
- All SLBC Convenor banks are advised to encourage to extend banking services in
such clusters / agglomerations which have come up and identified subsequently by
SLBC / DCC members.
- As per Ganguly Committee recommendations (September 4, 2004), banks are advised
to extend banking services to recognized MSE clusters by adopting a 4-C approach
namely, Customer focus, Cost control, Cross sell and Contain risk.
- A cluster based approach to lending may be more beneficial:
(a) in dealing with well-defined and recognized groups;
(b) availability of appropriate information for risk assessment and
(c) monitoring by the lending institutions.
- Clusters may be identified based on factors such as trade record, competitiveness and
growth prospects and/or other cluster specific data.
- The Ministry of Micro, Small and Medium Enterprises has approved a list of clusters
under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and
Micro and Small Enterprises Cluster Development Programme (MSE-CDP) located in
121 Minority Concentration Districts.
- In terms of recommendations of the Prime Minister’s Task Force on MSMEs banks
should open more MSE focused branch offices at different MSE clusters which can
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also act as Counselling Centres for MSEs. Each lead bank of a district may adopt at
least one MSE cluster.
5.7 Delayed Payment
See Provisions of MSMED Act.
6.0 Committees on flow of credit to MSE Sector
6.1 Report of the High Level Committee on Credit to SSI (now MSE) (Kapur
Committee)
Reserve Bank of India had appointed a one-man High Level Committee (June 30, 1998)
headed by Shri S L Kapur, (IAS, Retd.), Former Secretary, Government of India, Ministry of
Industry to suggest measures for improving the delivery system and simplification of
procedures for credit to SSI sector. RBI decided to accept 88 recommendations which include
the following important recommendations and advised banks to implement the same :
a) Delegation of more powers to branch managers to grant ad-hoc limits;

b) Simplification of application forms;
c) Freedom to banks to decide their own norms for assessment of credit requirements;
d) Opening of more specialised SSI branches.
e) Enhancement in the limit for composite loans to Rs. 5 lakh. (since enhanced to Rs.1
crore);
f) Banks to pay more attention to the backward states;
g) Special programmes for training branch managers for appraising small projects;
h) Banks to make customers grievance machinery more transparent and simplify the
procedures for handling complaints and monitoring thereof.
6.2 Report of the Committee to Examine the Adequacy of Institutional Credit to SSI
Sector (now MSE) and Related Aspects (Nayak Committee)
The Committee was constituted by Reserve Bank of India in December 1991 under
the Chairmanship of Shri P. R. Nayak, the then Deputy Governor to examine the
issues confronting SSIs (now MSE) in the matter of obtaining finance. The
Committee submitted its report in 1992. All the major recommendations of the
Committee have been accepted and the banks have been, inter-alia, advised to:
1) give preference to village industries, tiny industries and other small scale units in that
order, while meeting the credit requirements of the small scale sector;
2) grant working capital credit limits to SSI (now MSE) units computed on the basis of
minimum 20% of their estimated annual turnover whose credit limit in individual
cases is upto Rs.2 crore [ since raised to Rs.5 crore ];
3) ensure that there should not be any delay in sanctioning and disbursal of credit. In
case of rejection/ curtailment of credit limit of the loan proposal, a reference to higher
authorities should be made;
4) not to insist on compulsory deposit as a `quid pro-quo’ for sanctioning the credit;
5) open specialised SSI (now MSE) bank branches or convert those branches which have
a fairly large number of SSI (now MSE) borrowal accounts, into specialised SSI (now
MSE) branches;
6) standardise loan application forms for SSI (now MSE) borrowers; and
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7) impart training to staff working at specialised branches to bring about attitudinal
change in them.
8) All scheduled commercial banks were advised to implement the Nayak Committee
Recommendations.
6.3 Report of the Working Group on Flow of Credit to SSI (now MSE) Sector
(Ganguly Committee)
1) A “Working Group on Flow of Credit to SSI sector” was constituted under the
Chairmanship of Dr. A S Ganguly in 2004.
2) The Committee made 31 recommendations and RBI has accepted 8 recommendations
so far and communicated to banks for implementation, which are as under:
(i) adoption of cluster based approach for financing MSME sector;
(ii) sponsoring specific projects as well as widely publicising successful working
models of NGOs by Lead Banks which service small and tiny industries and
individual entrepreneurs;
(iii) sanctioning of higher working capital limits by banks operating in the North East
region to SSIs (now MSE) , based on their commercial judgment due to the peculiar
situation of hilly terrain and frequent floods causing hindrance in the transportation
system;
(iv) exploring new instruments by banks for promoting rural industry and to improve
the flow of credit to rural artisans, rural industries and rural entrepreneurs
6.4 Working Group on Rehabilitation of Sick SMEs (Chairman: Dr. K.C.

Chakrabarty)
In the light of the recommendations of the Working Group on Rehabilitation of Sick MSEs
(Chairman: Dr. K.C. Chakrabarty, the then CMD of Punjab National Bank), all commercial
banks were advised to:
a) put in place loan policies governing extension of credit facilities,

Restructuring/Rehabilitation policy for revival of potentially viable sick
units/enterprises and non- discretionary One Time Settlement scheme for recovery of
non-performing loans for the MSE sector, with the approval of the Board of Directors
and
b) implement the recommendations with regard to timely and adequate flow of credit to
the MSE sector as detailed in the aforesaid circular.
c) Lending in case of all advances upto Rs 2 crores (upper cap has since been removed)
may be done on the basis of scoring model.
6.5 Prime Minister’s Task Force on Micro, Small and Medium Enterprises
1) A High Level Task Force was constituted by the Government of India (Chairman:
Shri T K A Nair), in January 2010, to consider various issues raised by Micro, Small
and Medium Enterprises (MSMEs).
2) Banks are urged to keep in view the recommendations made by the Task Force and
take effective steps to increase the flow of credit to the MSE sector, particularly to the
micro enterprises.
6.6 Working Group to Review the Credit Guarantee Scheme for Micro and Small
Enterprises
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- The recommendations of the Working Group (under the Chairmanship of Shri V.K.
Sharma, Executive Director) included, inter alia, mandatory doubling of the limit for
collateral free loans to micro and small enterprises (MSEs) sector from Rs.5 lakh to
Rs.10 lakh and enjoining upon the Chief Executive Officers of banks to strongly
encourage the branch level functionaries to avail of the CGS cover and making
performance in this regard a criterion in the evaluation of their field staff, etc. have
been advised to all banks .
6.7 U.K.Sinha Expert Committee Recommendation on MSME :

Presently, banks assess working capital and term loan requirement of MSME units based on
various methods viz. Cash Budget Method, Nayak Committee of minimum 20% of Turnover
Method, Traditional or Operating Cycle Method.
The movement from Balance Sheet or turnover based Working capital financing to cash flow
based or supply chains/cluster based financing needs to be accelerated to reduce TAT.
This is within the remit of individual banks and requires no regulatory intervention.
6.8 Financial Support to MSMEs in ZED Certification Scheme:
- In supporting “Make in India” campaign, the Ministry of Micro, Small and Medium
Enterprises (MSME), Govt. of India, launched the “Financial Support to MSMEs in
Zero Defect Zero Effect (ZED)” Certification Scheme on 11th July 2016.
- The Scheme aims to enhance global competitiveness of MSMEs.
- Quality Council of India (QCI), an autonomous body setup by Ministry of Commerce
& Industry, Govt. of India has been appointed as the National Monitoring and
Implementing Unit (NMIU) for facilitating, implementation, coordination and
monitoring of the Scheme.
- ZED Maturity Assessment Model consists of 50 parameters covering various aspects
like Production, Quality, Design, Safety, Environmental, Energy, Natural Resource,
Human Resource, Intellectual Property, and Performance.
- Each parameter has 5 levels and the rating is on a weighted average of marks obtained
in each parameter.
- The Rating is valid for 4 years and the surveillance audit is carried out by QCI.
- Based on the assessment, the MSME will be ranked as Bronze, Silver, Gold, Diamond
and Platinum enterprises.
- As the ZED rated MSME units reflect better performance in terms of manufacturing
processes and financial discipline, following concessions may be allowed:
ZED Rating Eligible Concessions
Gold 50% Concession in Processing Charges and 10 bps (0.10%) interest
concession
Diamond & 50% Concession in Processing Charges and 25 bps (0.25%) interest
Platinum concession
However, after allowing above concessions, the interest rate should not go below the
benchmark lending rate.
7.0 Other Important Guidelines (MSME 20.2020)
7.1 Loan Application Form:

- Bank’s approved Application Form and documents as per the checklist is to be
obtained from all MSME borrowers irrespective of limit requested.
- However, additional information, required for processing the proposal, may be
obtained as annexure.
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- Wherever scheme specific application form is prescribed the same should be obtained.
7.2 Photograph of the Borrower:
- For the purpose of identification of borrowers, branches themselves should make
arrangements for the photographs.
- Cost of photographs of borrowers falling in the category of Weaker Sections should
be borne by the bank.
7.3 Issue of Acknowledgement of Loan Applications:
- All Branch/Cluster Offices are advised to mandatorily acknowledge all loan
applications, submitted manually or online, by their MSME borrowers and ensure that
a running serial number is recorded on the application form as well as on the
acknowledgement receipt.
7.4 Disposal of Loan Application:
- The disposal of loan applications of MSE borrowers will be in line with BCSBI-Code
of Bank’s Commitment to Micro and Small Enterprises (MSE).
7.5 Type of Loan / Facility:
The Bank provide all types of fund based and non-fund based facilities to the borrower under
this sector viz. Term Loan, Cash Credit, Overdraft facility, Bill financing, Letter of Credit,
Packing credit, Bank guarantee, etc.
7.6 Other Parameters:
- While considering proposals under MSME sector, the book debt up to six months
may be treated as current assets, for the purpose of computation of permissible
bank finance and drawing power calculation.
- All book debts more than 180 days are to be treated as Non-current asset.
- Collateral requirement except the scheme specific loans are to be guided by Bank’s
CREDIT policy in this respect.
- As per Companies Act, close relative covers : Father, mother (including step mother),
son (including step son), son's wife, daughter (including step daughter), son's son,
son's son's wife, son's daughter, son's daughter's husband, daughter's husband,
daughter's son, daughter's son's wife, daughter's daughter, daughter's daughter's
husband, brother (including step brother), brother's wife, sister (including step sister),
wife/husband and sister's husband.
7.6.1 Collateral requirement :
- No collateral security to be obtained and all accounts up to Rs.10lacs will be covered
under CGTMSE guarantee coverage.
- Loan above Rs.10 lakh to Rs.50 lakh - AGM Headed PLPs are empowered to
sanction the loans and shall have discretion to cover eligible loan under CGTMSE on
merits of the case.
- However, for Chief Manager Headed PLPs, ZOCAC-I shall be the Competent
Authority.
- Loan above Rs.50 lakh - ZOCAC-I shall have the said discretion.
Collateral Requirement under PNB’s MSME Schemes

Scheme Collateral requirement
PNB SHIKHAR - Facilities (including additional facility, if any) sanctioned under
SCHEME FOR the scheme may be covered under the CGTMSE guarantee
JAMMU & cover.
KASHMIR AND
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LADAKH -
Here, it is clarified that PLP/MCC Heads shall have the
discretion of obtaining CGTMSE guarantee coverage for the
borrower under this scheme on merits of the case. Hence,
PLP/MCC is not required to obtain permission from higher
authority for obtaining CGTMSE guarantee coverage for this
scheme. ii. Wherever party wish to offer Collateral Security in
the form of immovable property/liquid security, the same shall
be accepted.
- Shortfall in collateral security shall be met by CGTMSE
coverage. Here it is reiterated that collateral security for partial
credit facility can be obtained and the remaining part of the
credit facility can be covered under Credit Guarantee Scheme of
CGTMSE under CGTMSE “Hybrid Security” product.
- Premium for Credit Guarantee schemes including renewal
premium will be borne by the borrower.
- Personal guarantee of the promoters shall be obtained. (Third
party guarantee in case of property/ Collateral Security stands in
the name of Third Party)
PNB Vyapar Collateral Security ( as per MSME 24.2020)
Scheme - Collateral security in shape of NSCs/KVPs/ FDR (at least 6
(MSME 24.2020 and months old in case of fresh/enhancement/ additional facility),
95.2020) LIC (SV) / liquid security and/ or any other tangible security i.e.
Equitable Mortgage of Immovable Property/ies (Other than
Agricultural) having realizable value at least equivalent to the
loan amount.
- In case of factory premises value of land and building
(realization value) only be considered as collateral security.
- No additional collateral security is required, if the total loan
amount is less than the value of purchase of Land & Building
mortgaged with the Bank.
- Under any circumstances the loan shall not be considered for
purchase of land only.
- Collateral is to be obtained when no CGTMSE/ CGSSI (Credit
Guarantee Scheme for Standup India) cover is available.
- Under CGTMSE “Hybrid Security” product, collateral security
for a part of the credit facility can be obtained whereas the
remaining part of the credit facility up to a maximum of Rs. 100
lakh can be covered under Credit Guarantee Scheme of
CGTMSE. Premium for Credit Guarantee schemes including
renewal premium will be borne by the borrower.
Relaxations in Collateral security ( MSME 95.2020)
Requirement of collateral Security may be relaxed by maximum upto

25% by next higher sanctioning authority For Fresh/ Enhancement /
Additional / Adhoc credit proposals :
- ZOCAC-I may permit relaxation in value of collateral security
upto the extent of 50% of the loan /limit in the proposals falling
within loaning powers of lower authorities on merits of the case
subject to the following conditions:-
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- a) Internal Risk Rating of the party is ‘PNB-B1’ and above. In
case of advance up to Rs.50 lakh, where limit has been
considered based on PNB Score Model, the relaxation can be
permitted in cases where PNB Score is above 52 (equivalent to
rating of B1 & above.) b) Further, in case of the proposals,
where external rating is applicable, it should not be below BBB.
- In case of enhancements, It is to ensure that conduct of account
is satisfactory and no serious inspection irregularity is
outstanding.
- ZOCAC-II may permit relaxation for the fresh/ Enhancement /
Additional/ Adhoc Credit proposals in value of collateral
security upto the extent of 50% of the loan/ limit falling within
vested loaning powers of lower authorities, on merits of the case
subject to the following conditions:-
- a) Internal Risk Rating of the party is ‘PNB B1’ and above
- b) Internal Risk Rating is ‘PNB-B2’ and total exposure
(FB+NFB) is upto Rs.25 crore.
- c) Further, in case of the proposals, where external rating is
applicable, it should not be below BBB.
outstanding.
- HOCAC-I may permit relaxation for the fresh / Enhancement /
Additional/ Adhoc proposals in value of collateral security upto
the extent of 75% of the loan/ limit falling within vested loaning
powers of the lower authorities, on merits of the case, provided
Internal Risk Rating of the party is PNB-B1 and above.
the extent of 50% of the loan/ limit falling within vested loaning
powers of lower authorities, on merits of the case, for borrowers
having Internal Risk Rating of PNB-B2.
the extent of 50% of the loan/ limit falling within its vested
loaning powers. Further, in case of the proposals, where external
rating is applicable, it should not be below BBB.
outstanding.
- HOCAC-II shall be vested with full powers to permit relaxation
in collateral security for loans / limits falling within its vested
loaning powers and powers of lower authorities, on merits of the
case, for borrowers having Internal Risk Rating of PNB-B2 and
above.
- HOCAC-III shall have full powers.
- Existing accounts shall continue on existing Collateral coverage,
as per their sanctioned terms & conditions, irrespective of the
sanctioning authority. In addition to this, respective sanctioning
authorities can renew the limit in such accounts, in terms of their
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original sanction, as per the delegated loaning powers and
irrespective of the collateral coverage.
STAND UP INDIA Besides primary security, the loan may be secured by collateral security
Scheme or any Credit Guarantee Scheme i.e CGTMSE/CGSSI
PNB Kushal - No collateral securities to be obtained from the borrower(s).
Handicraft Welfare - All accounts are to be covered under Credit Guarantee Scheme
Mudra Scheme of CGTMSE or any other Credit Guarantee Scheme.
SCHEME OF - In case no mortgage is available, the borrower may arrange
VENTURE collateral and corporate guarantees from family / friends /
CAPITAL FUND associates / group companies.
FOR SCHEDULED
CASTES
SCHEME FOR -The manufacturing and service activities to be undertaken by the
FINANCING PWDs beneficiaries should be eligible for coverage under Credit
Guarantee Scheme of CGTMSE (Credit Guarantee Fund
Trust for Micro and Small Enterprises).
- Since as on date trading activity is not eligible for CGTMSE
coverage, therefore traders are not eligible for getting the
financial assistance under the scheme.
(MSME 42.2020).
PNB WEAVER The loans must be covered under Credit Guarantee scheme of Credit
MUDRA SCHEME Guarantee Corporations.
(PNBWMS) (MSME 41.2020)
PNB LAGHU The existing securities shall be retained while converting the account to
UDHYAMI PNBLUCC account.
CREDIT CARD Loans up to Rs. 10 Lakh: No Collateral & Third Party Guarantee and
SCHEME eligible loans are to be covered under Credit Guarantee Scheme of
CGTMSE.
(MSME 40.2020)
PNB General Collateral Security: NIL, to be covered under CGTMSE for eligible
Credit Card (GCC) activities.
Scheme (MSME 39.2020)
PNB ARTISANS - To be covered under Credit Guarantee Scheme of CGTMSE.
CREDIT CARD - As per extant guidelines of CGTMSE credit facilities extended
SCHEME to Joint Liability Groups (JLGs) & Self-Help Groups (SHGs) are
(PNBACC) not covered under the credit guarantee scheme as such PNBACC
facility extended to JLGs & SHGs is not to be covered under
Credit Guarantee Scheme of CGTMSE.
(MSME 38.2020)
PNB - To be covered under any Credit guarantee Scheme OR
PROFESSIONAL Minimum 100% Collateral Security in the shape of immovable
SCHEME property/liquid security.
- However, no collateral security will be insisted upon wherever
the land & building is available for Primary security to the Bank.
(MSME 35.2020)
PRADHAN Guarantee Coverage under CGTMSE shall be obtained
MANTRI MUDRA (MSME 34.2020)
YOJANA
PNB TATKAL All Loans should invariably be covered under CGTMSE / CGTSSI. For
SCHEME obtaining guarantee coverage having loan above Rs. 10 lacs under
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CGTMSE, permission from Circle Head be obtained as per guidelines
contained in MSME Policy.
(MSME 33.2020)
PNB GST Express - Mortgage of immovable property having realizable value of at
Loan least equivalent to 100% of the total exposure. OR Security in
shape of NSCs/KVPs/ FDR/CDR (Accrued Value), LIP
(Surrender Value) at least equivalent to 100% of total exposure.
- Guarantee of owner of property shall be obtained invariably in
case of security standing in the name of third party.
- No loans under this scheme shall be sanctioned under any Credit
Guarantee schemes.
(MSME 32.2020)
PNB - Minimum 75% of the exposure (Fund based and Non- Fund
CONTRACTOR based) by way of Mortgage of Immovable property/ liquid
SCHEME security.
- Personal guarantee should be obtained in line with extent
guidelines of the Bank.
(MSME 31.2020)
PNB SATKAR - Advance under this scheme must be covered by collaterals
SCHEME coverage of at least 40% of the exposure (FB+NFB).
- However, if the Primary Security is in the shape of Land &
Building Residual Value over and above 135% of the Term Loan
outstanding shall be treated as collateral security.
(MSME 30.2020)
PNB GURUKUL - Minimum 50% of the loan amount (Other than the land and
SCHEME building of the educational institute) shall be obtained in the
form of immovable property / liquid security.
- Institutions whose final approval is pending (After receipt of
Letter of Intent from the concerned authority like AICTE, UGC,
MCI, DCI, CBSE, ICSE etc. as applicable at particular stage),
collateral security shall be 100% of the loan amount (Other than
the land and building of the educational institute).
- Personal guarantees of the Promoters/ Trustees (only office
bearers excluding professional office bearers) / Members of the
Society (only office bearers excluding professional office
bearers)/ Proprietor/ Partners /Directors (excluding professional
or independent directors) of the Institution shall be obtained.
- While sanctioning credit facilities to the Educational Institutions,
comfort should not be derived from the securities being offered.
The viability of the project and cash flows of the Educational
Institutions are to be relied upon while considering any credit
facilities to the Educational Institutions.
- Education Institutions are not eligible to be covered under
CGTMSE Scheme.
(MSME 29.2020)
PNB MAHILA Coverage under CGTMSE
UDYAMI (MSME 28.2020)
SCHEME
PNB ARHATIA Primary Security
SCHEME - The facility shall be secured by way of mortgage of residential /
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commercial property (Other than Agricultural Land) having
realizable value worth at least 100% of advance sought
belonging to either the applicant or the guarantor.
- OR Pledge of NSC/ KVP/ FDR (Accrued Value), LIP (S.V.) at
least 100% of advance.
Collateral Security
- Personal guarantee of owner the property as per extant
guidelines.
(MSME 27.2020)
PNB TRANSPORT Loan upto Rs.10.00 Lacs:
SCHEME No collateral security to be obtained. The facility shall invariably be
covered under CGTMSE.
Loan amount above Rs. 10.00 Lacs:
50% collateral Security in the shape of immovable property/ eligible
liquid security from the borrower.
OR
Credit Guarantee Coverage under CGTMSE/CGSSI for the entire
exposure as per the extent guidelines.
(MSME 26.2020)
PNB - Minimum 25% collateral security shall be obtained in the form
SANJEEVANI of immovable property / liquid security.
SCHEME - No collateral is required if realizable value of the primary
security in the shape of Land & Building mortgaged is more than
110% of the total exposure.
(MSME 25.2020)
PNB SEVA - Advance shall be covered by collateral coverage of at least 40%
SCHEME of the total exposure (FB+NFB).
- The extent of cash margin (In case of Non fund based limits)
over and above 15%, shall be considered for the computation of
collateral coverage.
- If the Primary Security is in the shape of Land & Building,
Residual Value over and above 135% of the Term Loan O/s shall
be treated as collateral security.
- Where collateral security is not available, facility may be
covered under Credit Guarantee Schemes i.e. CGTMSE, CGSSI
as per guidelines. Personal Guarantee of promoters / directors /
Partners/ Trustees/ Members of the society/ etc. as applicable
shall be obtained as per Bank’s Policy guidelines.
(MSMS 23.2020)
PNB UDYOG - Advance shall be covered by collaterals covering at least 30%
SCHEME of the exposure (FB+NFB).
- Cash margin (in case of Non fund based limit) over and above
15% shall be considered for the computation of collateral
coverage.
- If the Primary Security is in the shape of Land & Building,
residual value over and above 135% of the Term Loan O/s shall
be treated as collateral security.
- Where collateral security is not available, facility should be
covered under Credit Guarantee Schemes like CGTMSE/ CGSSI
as per Bank’s Policy guidelines.
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-
Personal Guarantee of promoters / directors / Partners/ Trustees/
Members of the society/ etc. as applicable shall be obtained as
per Bank’s Policy guidelines.
(MSME 22.2020)
7.7 Credit Appraisal and Due-Diligence :

One peculiarity associated with MSME sector is that a major chunk of them are single owner
run or family run businesses. It could take the shape of proprietorship or partnership, but
generally unregistered. Proper due diligence in borrower selection assumes paramount
importance. The due diligence exercise should inter alia cover the following aspects
- KYC formalities (identification & address verification through generally accepted
documents).
- Checking of CIR Reports (to be done annually at the time of review).
- Verification RBI / ECGC defaulters' list / SAL.
- Search in records of Registrar of Companies (RoC).
- Verification of PAN. Educational qualifications, experience, skills.
- Employment / business details.
- Scrutiny of existing Bank Accounts / borrowing if any .
- Family background, social reputation, standing/duration in the business.
- Market reports.
- Interview of the borrower and compliance of KYC norms.
- Financial Statements/Data submitted by the borrower.
- Integrity of the borrower.
- Track record with special emphasis on servicing/repayment/ restructuring history.
- Report from existing bankers.
- Scrutiny of RBI Willful / Defaulters' (Non-Suit Rs.1 Crore& above) List/ CIR/SAL
List/RBI‟s Caution List/List of NPA Borrowers of the Bank.
- Behavior of Payment history of electricity bill and telephone bill to be checked.
7.8 Working Capital Assessment :

To be made discreetly as per the three methods discussed below:
i) Turnover method – For loan upto Rs.5.00 Cr.
A. Turnover Method where the borrower that made more than or equal to 75%
transactions Digitally.
WCG = 37.50% of PATO = WCL of 30% of PATO and 7.50% of NWC.
B. Turnover Method where the borrower made transactions non digital i.e., less than
75% transactions through digital mode.
WCG = 31.25% of PATO = WCL of 25% of PATO and 6.25% of NWC.
Digital Transactions:
All sales transitions other than cash and paper based instruments like cheques, DD,
Pos etc should be considered digital.
- In case, the actual digital transaction is below 85% of the accepted digital sales then
credit limit assessed at 30% should be restored to 25%.
- All the fresh accounts i.e. first time borrower is to be treated at par with non digital
i.e. less than 75% transactions through digital mode.
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- Under Simplified Turnover Method, the working capital requirement of the borrower
is computed at 25% of the projected annual turnover of which at least four-fifth i.e.
20% of the projected turnover should be provided by the Bank as working capital
finance and balance one fifth i.e. 5%of the projected turnover shall be brought in by
the promoters/borrowers as their own contribution.
- These guidelines are on the premise that an operating/ business cycle will be of 3
months, although in reality the operating cycle may be shorter or longer. Therefore, in
case the operating cycle is longer than 90 days, the assessment of working capital
shall be undertaken as per Traditional method wherein working capital finance can be
provided in excess of 20% of the projected annual turnover with proportionate
increase in borrower’s contribution (margin).
- However, in case the operating cycle is shorter than 90 days viz. fast moving
consumer goods, petrol pump etc., where the turnover is very fast and limits assessed
on turnover method may be very large in relation to actual requirement. In such cases,
the limits be fixed on the basis of average stock, receivables and creditors held by the
borrower. The operating cycle be computed in number of days and thus number of
operating cycles in a year. Illustration, where operating cycle is 90 days, the working
capital requirement is (90 days/ 360 days) = 25% with minimum margin requirement
of 5% of annual turnover. Similarly in case operating cycle is 60 days, the working
capital requirement is (60 days/ 360 days) = 16.66% (turnover method) with
minimum margin requirement of 3.33% of annual turnover and remaining 13.33%
through bank finance. Wherever, the nature of business activity so warrants, the Bank
may apply traditional method of lending (based on holding levels of Inventory,
Receivables and Creditors). (LA 227.2020).
MPBF (Maximum Permissible Bank Finance) Method (2nd Method):

- Applicable to FBWC limit above Rs.5.00 crore.
Cash Budget Method :
- For working capital requirement of more than Rs. 5 Cr., assessments should be carried
out under cash budget method especially where the borrower is engaged as contractor
or revenue is recognized on progressive billing basis, etc. Under this method, the peak
level cash deficit will be the level of total working capital finance to be extended to
the borrower.
Term Loans :
Disbursement/ Reimbursement/ Re- schedulement of Term Loan
- In case of schematic lending tenor of term loan as per as per the respective scheme
guidelines
- However, in other cases like Project Finance etc. sanctioning authority can consider
the tenor of term loan up to 7 years.
- In cases of tenor above 7 years and upto 10 years, the same can be considered at the
level of ZOCAC-I and above within their vested loaning powers
- However, for lending above 10 years in case of Infrastructure and other such sectors,
the case be considered on merits as per RBI guidelines
Reimbursement in Term Loan Account
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- In emergent circumstances, ZOCAC-I & above may permit reimbursement, on merits,
within six months of acquisition of fixed assets to the extent of loan sanctioned to
MSME borrowers within their vested loaning powers and after ensuring end use of
funds.
- In other than MSME borrowers also, reimbursement in term loan account for capital
expenditure incurred within last six months may be given in highly deserving cases,
on merit of the case.
- In exceptional and deserving cases, part disbursement of term loan may be allowed
through current/cash credit account by the sanctioning authority not below the level of
CM subject to maximum of 25% of the sanctioned limit.
- The following guidelines should be taken into consideration while permitting
disbursement through current/CC accounts in branches:
- The disbursement should be made in stages. Next installment should be released after
verification of end use (through bills/physical inspection etc.) for previous installment.
The permission for disbursement through current/cash credit account may be given on
merits of each case and condition to this effect may be incorporated in the terms of the
sanction itself.
- Due caution should be taken by the disbursing authority to ensure the end use of
funds.
- The facility may be permitted in case of better-rated accounts say ‘B1’ & above.
- For disbursement through current/cash credit account beyond 25% of sanctioned limit,
the case be referred to the next higher authority.
- However, ZOCAC-I and above shall have full powers in the matter. In case of any
deviation/relaxation in the laid down guidelines given at above, the matter be put up
to HOCAC-III/II.
Annual Review of Term Loan Accounts
- All Term Loans, other than retail loans, with sanctioned limit of ₹ 2 crore & above
needs to be reviewed annually.
- The review of Term Loans will have no bearing on asset classification and income
recognition of the accounts.
- Adoption of Green Renewal (L&A 38/20) Having aggregate credit facilities of Rs 50
Lakh to Rs 5 Crores.
- (Retail Term Loan) Having aggregate credit facilities above Rs 10 Lakh and upto Rs 5
Crores (Credit facilities in cases of revolving Credit facilities) Include term loan also.
- Following conditions should be met for Green renewal:
- No dilution in security/margin
- No change in management.
RESCHEDULEMENT OF TERM LOAN
- Sanctioning authority may reschedule Term Loan up to 1 year subject to total

repayment period not exceeding 7 years.
- Authority one step higher may reschedule Term Loan upto total period of 7 years
- Branch Heads of LCBs/ELCBs, ZOCAC-I and above have full powers to reschedule
repayment of Term Loans in their own sanctions as well as sanctions by lower
authorities.
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7.9 PSB loans in 59minutes:
Govt. of India launched a transformative initiative in MSME credit space by launching portal
www.psbloansin59minutes.com. This web portal is enabled for in principle approval for
MSME loans having value minimumof Rs.1.00 Lacsand maximumuptoRs.5.00 Crorewithin
59 minutes. The contactless module process is a straight through process, which involves
making use of machine based analytics (ITR, Bank statement, GST, Aadhaar based KYC,
credit model etc.) to help lenders take informed decision within 59 minutes, thus reducing the
turnaround time for in-principle sanction. The borrower can procure in principle sanction
(after providing consent to share requisite information) which is then to be followed by visits
/ due diligence and physical verification of credentials. The process from in principle sanction
stage to disbursement of loan is taken care by respective banks.
7.10 Interest Subvention Scheme for MSMEs 2018
Eligible Loan
a. Incremental term loan or fresh term loan or incremental or fresh working capital extended
during FY 2018-19 from 2nd November, 2018 and during FY 2019- 20 would be eligible for
coverage.
b. In order to ensure maximum coverage and outreach, all eligible working capital or term
loan would be eligible for coverage to the extent of Rs. 100 lakh only during the period of the
Scheme.
c. Wherever both the facilities working capital and term loan are extended to a MSME by an
eligible institution, interest subvention would be made available for a maximum financial
assistance of 100 lakh.
Interest Subvention
The interest relief will be calculated at two percentage points per annum (2% p.a.), on
outstanding balance from time to time from the date of disbursal / drawal or the date of
notification of this scheme, whichever is later, on the incremental or fresh amount of working
capital sanctioned or incremental or new term loan disbursed by eligible institutions.
Loan Application Form
Bank‟s approved Application Form and documents as per the checklist is to be obtained from
all MSME borrowers irrespective of limit requested. However, additional information,
required for processing the proposal, may be obtained as annexure. Wherever scheme specific
application form is prescribed the same should be obtained.
Type of Loan / Facility: The Bank provide all types of fund based and non-fund based
facilities to the borrower under this sector viz. Term Loan, Cash Credit, Overdraft facility,
Bill financing, Letter of Credit, Packing credit, Bank guarantee, etc.
Composite Loan: A composite loan with maximum limit up to Rs.1.00 Cr. should be
considered by bank to enable the Micro and Small Enterprises {both for manufacturing and
service sector} to avail of their working capital and Term loan requirement through Single
Window.
MarginRequirement: Requirement of margin shall be guided by loan policy/RMD policy of
the Bank, except for scheme specific products of MSME, which are to be followed while
disposal/processing of loan applications.
Internal Risk Rating
The assigned Credit rating of all priority sector advances having credit limit up to Rs.50
lakh for MSME account shall be rated as per respective rating model adopted by the Bank.
MSME loan of limit above Rs.50 lakh are to be rated as per rating manuals issued by
IRMD.
External Credit Rating:
Rating from an external accredited agency is required for all borrowers availing loan limit of
above the prescribed limit as decided by IRMD policy of the Bank.
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8.0 PNB’s Loan Schemes for MSMEs
The bank has launched a number of schemes for extending credit flow to the MSME
Borrowers. Gist of these schemes is as under :
PNB Arhatia Scheme (MSME: 27/27.03.20)

Purpose/Objective: i) To provide Working above the normal MPBF, provided that the
Capital to the Commission Agents/ Arhatia, collateral coverage does not go below 100% after
irrespective of their location enabling them to considering Stand By Credit facility.
make advance payment to farmers for supply Comments regarding sanctioning of inbuilt Stand
of inputs as also for buying the output from By Credit facility should be recorded in the
them. process note at the time of sanctioning/renewal of
ii) Supply of inputs (such as fertilizers, credit facility and documentation shall be done
pesticides, seeds, cattle feed, poultry feed, with full sanction amount including Stand By
agricultural implements and other inputs) to Credit limit as per Banks guidelines. However, the
farmers and buying the output from them. facility shall be released as and when required by
iii) Carrying post-harvest activities such as the borrower upon his request.
sorting, grading etc.
2. Eligibility: i) Commission Agents/Arhatia In built Stand By Credit limit can be considered by
having valid license from the market the respective sanctioning authorities over &
yard/Board. ii) All Commission Agents/Arhatia above their delegated powers. However, Overdraft
irrespective of location shall be covered under limit including Stand By Credit limit can be
the scheme. sanctioned within maximum limit of Rs. 5.00
3. Type of facility: OD limit for working Crore.
capital. - Standby Credit facility should be allowed to only
4. Max. Loan Amount: up to Rs. 5 Crore. those commission agents whose Arhtiya card is
5. Margin: NA linked to the Overdraft account sanctioned under
6. Assessment of Loan: 20% of annual Sales/ the Scheme.
Turnover (Estimated), OR 8 times of the - While considering in built Standby Credit facility
Commission earned (actual)– Whichever is within the overall sanction of the facility under the
applicable. Commission earned/Annual Sales/ scheme, following guidelines shall be adhered to:-
turnover can be identified/assessed on the basis --
of GST return (Where ever applicable)/ i) Standby Credit facility shall be allowed
Balance Sheet and P&L/26AS Statement etc. selectively to borrowers dealing with the Bank for
(26AS is an annual consolidated credit at least 6 months and classified as Standard. For
statement issued under Section 203AA of the new borrower, in built sanction of Stand By Credit
Income-tax Act, 1961. It contains details of facility may be considered at the time of sanction.
various taxes deducted on the income by However, availment will be permitted only after 6
deductors). months of satisfactory dealing of the party and
7. Benchmark Ratio: No Benchmark Ratio is ensuring that accounts is classified as Standard.
stipulated under the scheme other than as ii) Availment of Stand By Credit facility can be
mentioned below: Leverage Ratio (TOL/TNW permitted for a maximum period of 90 days at a
or Adj TOL/TNW): 6:1 stretch and maximum 3 times in a year in a
8. Tenure of Loan: 12 months, annual borrowal account.
renewal. iii) Total duration of Stand By Credit limit
9. Moratorium: NA availment shall not exceed 180 days in a financial
10. Primary Security: The facility shall be year.
secured by way of mortgage of iv) Additional interest of 1% shall be charged on
residential/commercial property (Other than the portion of Stand By Credit limit during the
Agricultural Land) having realizable value period of Stand By Credit facility is availed.
worth at least 100% of advance sought v) 150% of process fee on the amount of Stand By
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belonging to either the applicant or the Credit Limit is to be charged on pro-rata basis for
guarantor. OR the period it has been permitted.
Pledge of NSC/KVP/FDR (Accrued Value), vi) In case of non-adjustment of Standby Credit on
LIP (S.V.) at least 100% of advance. time, the same shall not be allowed in future.
11. Collateral Security: Personal guarantee of
owner the property as per Bank’s Policy
guidelines.
12. Any other feature of the Scheme:
A. Stand By Credit: In built Stand By Credit
facility of 20% of the OD limit can be
sanctioned by the respective sanctioning
authorities at the time of sanction/renewal of
facility, over and
PNB Mahila Udyami Scheme (MSME: 28/27.03.20)

1. Purpose/Objective: 6. Assessment of Overdraft: OD shall be
i)To empower and encourage women for assessed based on 20% of realistic projected
income generation for activities either in annual turnover.
manufacturing/ service/trading/small 7. Balance Sheet: Self-attested Balance
business etc. Sheet/P&L to be obtained in applicable cases.
ii) To finance for setting up new However, Audited BS/P&L shall be obtained only
unit/enterprise or for when it is applicable on the customer as per
expansion/modernization of existing Unit. Income tax Act.
iii) For acquisition of fixed assets (Plant & 8. Income Tax Returns: If the borrower is not
Machinery, equipment, furniture & fixtures), filling IT return, then there is no requirement of
iv) To meet WC needs for purchase of submission of ITR details. An undertaking from
various products/ equipments/tools etc. to the borrower in this regard shall be obtained.
meet their day to day requirements. 9. Acceptable Financial Ratios: As per Bank’s
2. Eligibility: Policy guidelines. However, financial ratios for
i) Any individual women/women loan below Rs. 2 Lac shall not be applicable.
entrepreneur(s)/ Enterprise where women 10. Rate Of Intt: CARD rate.
entrepreneurs hold not less than 50% of 11. Tenure of Loan:
financial holding. Term Loan: 3 to 5 years with maximum
ii) Preference to women belonging to moratorium period of 3-6 months depending upon
ST/SC/BPL Card Holders. type of activity and income generation.
iii) Preference will be given to the categories Overdraft: The limit shall be sanctioned for a
of women entrepreneurs trained in R- period of three years. However, the account will
SETIs/Skill Development Institutions etc. be reviewed on yearly basis and be renewed on
any other training institute. every three years.
iv) Not a defaulter to any Bank/FI. 12. Primary Security: Hypothecation of assets
v) Loan facility availed by the beneficiaries created out of Bank’s Finance.
under Govt. sponsored scheme are not 13. Collateral Security: Guar Coverage under
eligible under PNB MAHILA UDYAMI. CGTMSE.
3. Type of facility: Term Loan/Overdraft 14. Servicing of Interest/EMI: Monthly.
Facility.
4. Max. Loan Amount: up to Rs. 10 Lacs.
5. Margin: Upto Rs. 2.00 Lakh: Nil
Above Rs. 2.00 Lakh to Rs. 5.00 Lakh: 20%
Above Rs. 5.00 Lakh to Rs. 10.00 Lakh: 25%
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PNB GST Express Loan (MSME: 32/27.03.20)
1. Purpose/Objective: To provide hassle 8. Credit Risk Rating: Under “PNB SCORE
free credit to meet working capital SME MODEL” for loans above Rs.10 Lacs and
requirements related to business activity or up to Rs.50 Lacs and under “PNB Trac” for
for expansion of business. advances exceeding Rs.50 Lacs.
2.Eligibility: i) Business entities which are 9. Rate Of Intt: CARD Rate.
individuals, firms, companies, Limited 10. Tenure of Loan: One Year, Renew yearly.
Liability Partnership, co-operative societies, 11. Primary Security: Hypothecation of assets
dealing in those business activities, which are created out of the Bank finance along with entire
not prohibited by law. ii) GST registered current assets and non-current assets (Present &
units which have filed GST returns at least Future) of the Unit shall be ensured.
for the last 6 months. 12. Collateral Security:
3. Assessment of Loan: i) Mortgage of IP having realizable value of at
i) MPBF for Cash Credit Facility shall be least equivalent to 100% of the total exposure. OR
allowed based on 25% of the sales reported Security in shape of NSCs/KVPs/FDR/CDR
in the GST returns in the last one year (last (Accrued Value), LIP (Surrender Value) at least
12 months). equivalent to 100% of total exposure.
ii) Wherever GST returns have been filed for ii) Guarantee of owner of property shall be
less than one year, MPBF shall be arrived obtained invariably in case of security standing in
based on 25% of the annual sales after the name of third party.
annualising GST returns filed for that period iii) No loans under this scheme shall be sanctioned
provided customer has filed minimum GST under any Credit Guarantee schemes.
returns of the last 6 months. 11. Stock Statement: i) Half Yearly: For loan
4. Type of facility: Cash Credit upto Rs.50 Lacs
5. Loan Amount: Above Rs. 10 L to Rs. ii) Quarterly: For loan above Rs. 50 Lacs to
100 Lacs Rs.100 Lacs.
6. Margin: Not stipulated.
7. Benchmark Ratio: No specific
benchmark ratio is stipulated as there is no
requirement of submitting financial stt under
the Scheme.
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PNB Contractor Scheme (MSME: 31/27.03.20)
1. Purpose/Objective: To provide WC/OD 5. Margin:
assistance (FB/NFB) in the form of running (A) For Term Loan: i) Minimum 25% margin
limit, LC, BG for meeting WC needs and TL for on equipments/Plant & Machinery/any other
purchase of equipments/Vehicles/P&M/any legitimate assets. ii) Minimum 20% margin on
other legitimate assets to the contractors/sub- Transport Vehicles, i.e., inclusive of insurance
contractors. premium, RTO Tax and other incidental charges
❖ Working Capital (WC): FB & NFB WC in case of new vehicles.
limits for day to day requirement/ materials/ (B) For Working Capital: Minimum 25%
labour payment/statutory payments etc. (C) For Non-fund based limit:
❖ Term Loan: For purchase of Plant & i) Minimum 15% cash margin for Performance
Machinery/Equipments/ Transport Vehicles, to guarantee (Next higher authority can allow
be used for execution of contract works. deduction in cash margin by maximum of 5%
❖ Bank Guarantee: For bidding of tenders, i.e. up to minimum 10%).
mobilization of advance money, performance of ii) 100% cash margin for BG against disputed
the contract, guarantee in favour of Central/State liabilities.
Govt. & its various depts and reputed Pvt. ltd. iii) Cash Margin is defined as: a. Deposit in
Companies/guarantee for release of retention SF/CA duly lien marked on the respective
money. amount, b. Term Deposit duly lien marked.
2. Eligibility: 6. Assessment of OD Limit: As per Cash
i) Individual, Proprietorship, Partnership Budget Method.
firms/LLP/Private/Public Ltd. Co., falling within 7. Rate Of Intt: As per LA: Cir No. 58/2020
the definition of MSME as per MSMED Act, dated 31.03.2020.
2006. 8. Benchmark Ratio: Benchmark Ratios shall be
ii) All Registered Civil, Construction, Electrical, as per Bank’s guidelines as applicable to MSME
Mechanical, Mining, Labour and Transport advances. However, stipulation of Current Ratio
Contractors undertaking works on behalf of is not applicable under this Scheme.
Central/State Govt Dept/PWD/PSU and Reputed 9. Tenure of Loan: i) OD/BG/LC limit will be
Corporate etc. subject to annual review.
iii) Sub-Contractors executing works on behalf ii) Term Loan: Maximum repayment period up
of main contractors shall be eligible under this to 84 months including moratorium period of
scheme if subletting is through irrevocable maximum of 3 months from the date of first
registered agreement and all required permission disbursement. However, a higher moratorium
and licenses/registration are available provided it period may be allowed by next higher
is permitted under the original contract. sanctioning authority in deserving cases.
iv) Business units should have been established 10. Primary Security: Hypothecation of entire
in their line of business for Min of 2 years and equipment/current assets and non-current assets
the unit should have a Cash Profit in the (Present & Future) of the unit.
immediate preceding year. 11. Collateral Security: i) Minimum 75% of the
3. Type of facility: i) Term Loan, ii) Overdraft exposure (Fund based and Non-Fund based) by
limit, iii) Bank Guarantee/Letter of Credit, iv) way of Mortgage of Immovable property/liquid
Fund based overdraft Bid Bond limit. security. ii) Personal guarantee should be
4. Loan Amount: Need based. However, obtained in line with extent guidelines of the
interchangeability from Fund Based Working Bank.
Capital (FBWC) limit to BG/LC may be
permitted by the sanctioning authority up to
25% of the sanction limit.
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PNB Sampatti (MSME: 90/31.07.2020)
Erstwhile ODTCS scheme has been harmonized Average DSCR 1.50, with minimum of
alongwith existing PNB Sampatti scheme. 1.20 during entire repayment period
Revised guidelines of the “PNB SAMPATTI” (for Term Loan and OD with reducing
scheme have been circulated vide IRMD L& A DP). Since the loan is against
circular No. 132/2020 dated 23.07.2020. immovable property no other
Accordingly, the existing “PNB SAMPATTI” benchmark ratio is prescribed.
scheme circulated vide MSME circular Type of facility :
No.36/2020 dated 27.03.2020 is withdrawn w.e.f. - Overdraft (General/Reducing);
01.08.2020. - Term Loan (EI/ Non EI based)
Treatment of existing accounts sanctioned under - Non Fund Based (NFB) limit
PNB Sampatti Scheme circulated vide MSME i.e. BG/ LC may also be
Circular No. 32/2020 dated 27.03.2020 is given as permitted in deserving cases by
under: earmarking OD Limits subject
Term Loan: The term loan under erstwhile LAP to: Additional minimum 25%
schemes i.e. ODTCS/Existing PNB Sampatti cash margin for NFB.
Scheme (of MSME Division) or any other LAP Loan Amount : Minimum above Rs.10
scheme of eOBC and eUNI shall continue with lakhs.
existing terms and conditions by existing Tenure/ repayment period :
sanctioning authority as per sanctioned terms till - Overdraft General: One Year,
its liquidation/closure. subject to annual renewal.
Overdraft: In case of an outstanding Overdraft - Overdraft (with Reducing
facility, at the time of renewal efforts should be DP): Maximum tenor of 15
made to: years (180 months) subject to
- Convert the same to new scheme or any annual renewal.
other operational scheme at the time of - Term Loan: The maximum
renewal. repayment tenure will be 15
- Convert part of existing OD into OD- years (180 months) inclusive of
reducing and rest under new OD facility so six months moratorium.
that same may be liquidated in a time - In all the above facilities,
bound manner. account to be adjusted 5 years
- If conversion of existing OD limit is not prior to the residual life of the
possible, only renewal of the limit shall be property.
done as per existing terms and conditions. Renewal/ Review :
Revised PNB Sampatti Scheme operational - Overdraft General - At the time
from 01.08.2020 of renewal, limit shall be
Eligible Borrowers : reassessed and renewed at
All Existing Business enterprises (Both PS and existing level if at least 95% of
NPS) including : the projections accepted at the
a. MSMEs b. Education Institutions c. time of last sanction have been
Hospitals/Nursing Homes d. Hotels e. Traders achieved and the account
are eligible under the scheme subject to following: remained standard in the last 12
1. Borrower should comply with applicable months with no overdue. If such
statutory requirements such as GST condition not fulfilled limit shall
Registration, License under Shops & be renewed at reduced level.
Commercial Establishment Act, Trade - Overdraft (with Reducing DP):
License/other necessary license to run the To be renewed annually.
unit (as the case may be). - Term Loan: To be reviewed
2. In case of Education Institutions, they
annually.
should have necessary affiliation from the
At the time of renewal/review
324
concerned authorities like AICTE, UGC, following conditions to be ensured:
MCI, DCI, CBSE, ICSE etc. (wherever - LTV norms applicable at the
applicable) time of sanctioning/ renewal of
3. The unit should be in operation in last limits.
three years and should have earned cash - Availability of adequate Cash
profit at least in two preceding years. Flow to service the repayment
4. Individual Borrowers/ Professionals and during the residual period of the
Self Employed are not eligible. loan.
5. HUFs are not eligible. Enhancement in OD limit :
6. Business entities dealing in Gems & Can be considered After 3 years of
Jewellery/ Software/ IT Enterprises can original sanction of OD limit.
avail credit facility under the Scheme. Enhancement to be permitted only in
7. Further restriction as mentioned in IRMD OD General Scheme. No additional
L&A circular 103/2020 dated 03.06.2020 finance should be given to the borrower
shall not enjoying the facility under the scheme
8. be applicable if loan is given to trading merely by revising the valuation of the
activities of that segment. property before the prescribed timeline.
Credit Risk Rating IRR: LTV Ratio :
B1 and better ERR: As per bank’s extant Residential Property : Max upto 60% of
guideline. R.V.
Other than Residential Property: Max
upto 50% of R.V.
325
PNB Sampatti (MSME: 90/31.07.2020) …. Continued….
Assessment of limit : Restricted IPs :
- Property in the shape of
a. For Overdraft: Upto 5.00 crore vacant plot and agricultural
Maximum amount of loan shall be, prescribed land should not be accepted.
LTV OR 20% of the projected annual sales or - Facility backed by mortgage
receipts whichever is lower. of land & building in shape of
Above Rs. 5.00 crore: Education
Cash Budget (Cash Flow Based) method within Institutions/Hospitals/ Nursing
the prescribed LTV. Homes/ Orphanages/ Old Age
b. For Term Loan: homes or any other Social
Maximum amount of loan shall be, prescribed Sector Infrastructure and/or
LTV OR 75% of the assets to be created out of mortgage of properties of
loan whichever is lower. (If the Term Loan is promoters for setting up of
considered for augmenting long-term margin, these establishments or for
quantum of loan will be maximum upto infrastructural development of
prescribed LTV existing establishment should
c. Both Term Loan & OD facility can also be not be accepted. However loan
sanctioned simultaneously within overall can be granted to these
assessment. In such case, total advance should establishments against the
not exceed 50% or 60% of the R.V. of the residential property of
property. promoter or its close relative.
- Property which is mix of
Eligible Properties : property / partial part of
another property which is
- Unencumbered Property belonging to the situated under the boundaries
borrower, it’s of property.
Proprietor/Partners/Director/Trustee/Promoter/C - SEZ/Trust Property not
lose Relatives. eligible.
- Close relatives : a. Spouse b. Father c. Mother - Property with Power of
(including step-mother) d. Son (including step- Attorney not permitted.
son) e. Son's Wife f. Daughter (including step- - Property to be mortgaged is to
daughter) g. Daughter's Husband h. Brother be within 50 Km of the Metro
(including step-brother) i. Brother’s wife j. Branches and within 25 Km of
Sister (including step-sister) k. Sister’s husband the Non Metro Branches
l. Brother (including step-brother) of the spouse where account is/ to be
m. Sister (including step-sister) of the spouse maintained (Sanctioning
- In case of factory premises, only land and authority at Zonal office or
building are to be considered (valuation above may decide going
towards plant & machinery are not to be beyond this strictly on merit of
considered for the purpose of mortgage loan the case).
eligibility). - Loan can be extended on
- In case the property is rented/let out, it should be Leasehold property subject to:
backed by Tripartite Agreement. The lease / rent a. Such property should have
amount shall be assigned in favour of Bank and all the statutory approvals /
such proceeds shall be credited to the account permissions such as
maintained with our Bank. Building Completion
- The property which is fully constructed as per Certificate, Occupancy
approved plan having clear road access / Certificate. etc., and other
enforceable / marketable can be considered for approvals / permissions as
326
the mortgage under this scheme. per the local legal rules and
- In case of Industrial Property, it is to be ensured regulations (as the case
that the property is free from onerous clauses, may be).
especially with regard to mortgage / sale of the b. The Borrower / Bank will
property, stipulated at the time of purchase of have to comply with the
property from the Govt. or while obtaining provisions like obtaining
conversion as industrial land and there is no necessary permission/ NOC
statutory due exists against such property. from the lesser / respective
- In case of let out property: Only residential authorities and other
Property is allowed and facility may be granted conditions, if any, in the
by way of Term Loan or OD reducing only. lease deed for creation of
mortgage charge on the
property wherever required.
c. The residual lease period of
the land on which the
property is situated should
be more than 30 years or
more at the time of creation
of mortgage and the
repayment should be
proposed within this
period.
d. There should be provision
in the lease agreement for
the renewal of lease after
expiry of lease period.
e. There should not be any
restriction on the disposal
of the property in case bank
wants to recover the dues
by disposal of such
property.
f. Lease property should
be SARFAESI
compliant.
MSME 90.2020
327
PNB Professional Scheme (MSME: 35/27.03.20)
1. Purpose/Objective: 6. Benchmark Ratio: As per extant
i) For providing opportunities to professionally guidelines as applicable to MSME
qualified persons to set up or enhance their advances. However, stipulation of Current
practice/business or taking up self-employment for Ratio is not applicable under this Scheme.
providing services to the various entities. 7. Rate Of Intt: CARD Rate.
ii) This scheme is to assist self-employed professional 8. Tenure of Loan: Term Loan:
persons, firms, associations and joint ventures of such Maximum repayment period up to 120
professional persons having professional months including moratorium period of
degree/diploma/certification in Engineering and maximum of 12 months from the date of
Technical including software professionals/ Business first disbursement.
Management/Media & Journalism/Law/Foreign Overdraft limit will be subject to annual
Language/Computer/Animation/Designing/Fine review.
arts/Certified Tax Return Preparers 9. Primary Security:
(TRPs)/CA/ICWA/CS etc. - Hypothecation of entire equipments,
2. Eligibility: Current & Non-current assets of the unit.
i) Professionally qualified persons who have obtained - Mortgage of Project Land with
the requisite degree/diploma/certification approved by existing/future construction thereon.
UGC/ AICTE/Central or State government/approved 10. Collateral Security: To be covered
certifying agency by virtue of which they become under any Credit guarantee Scheme, OR
entitled to practice that profession. Minimum 100% Collateral Security in the
ii) Individual, Proprietorship/Partnership firms, shape of immovable property/liquid
Limited Liability Partnerships (LLPs), Private/Public security.
Ltd. Cos. etc. However, no collateral security will be
iii) For constituents other than individuals in which insisted upon wherever the land &
majority stake holding of the qualified professionals building is available for Primary security
as mentioned above exists. to the Bank.
iv) Units/Individuals must have valid license to 11. Extension of Charge over security
conduct such business/professions by Municipal/Local for other accounts:
Administration i) Property already mortgaged in any
3. Type of facility: existing loans, may be extended in this
- Term Loan: Need based scheme subject to availability of residual
- Overdraft: Limit upto Rs. 25 Lacs realizable value (after carving out 100%
- Max Cumulative Exposure: Rs. 2 Crore of the RV of the security of the existing
4. Margin: 25% exposure or as per security coverage
- Wherever land is also financed as part of cost of norms of the scheme under which existing
project in such cases minimum prescribed margin facility has been sanctioned).
against cost of the land shall be 25% of the cost of the ii) Property charged in this scheme may
land. be extended to cover any other facility to
- Further, the quantum of finance against cost of the the extent of spill over available i.e.
land shall be restricted to 50% of the sanctioned loan property value in excess of 100% of the
amount. exposure.
5. Assessment of OD Limit: Overdraft of maximum Note: The owner of the property
upto 10% of annual receipts or Rs. 25 Lacs mortgaged with the Bank shall stand as
whichever is lower. For the purpose of calculation of guarantor in the account.
OD limit annual receipts on the basis of last
ABS/Realistic projections shall be accepted. OD limit
shall be reviewed on annual basis.
328
PNB Tatkal Scheme (MSME: 33/27.03.20)
1. Purpose: To provide hassle free credit to 7. Financial Ratios: i) For Working Capital:
meet finance requirements related to business Current Ratio: 1.10 (minimum)
activity or for expansion of business. (Note: This ii) For Term Loan: DSCR: 1.25 (minimum)
facility is not available for purchase/construction 8. Credit Risk Rating: Internal Credit Risk
of immovable property.) Rating (For both Fresh & Takeover): Under
2. Eligibility: i) Business entities which are “PNB Score SME Model” for loans above 2 L &
individuals, firms, companies, Limited Liability upto 25 L
Partnership, co-operative societies, Trust, 9. Credit Information Report (CIR): The CIR
engaged in business activities, which are not report already generated on psbloansin59minutes
prohibited by law or speculative in nature. ii) portal shall be downloaded from the portal.
GST registered units which have filed GST 10. Rate Of Intt: As per LA: Cir No. 58/2020
returns at least for the last one year. dated 31.03.2020.
3. Permissible Bank Finance: Calculation of 11. Tenor of Loan: i) CC limit: 1 Yr subject to
MPBF: annual renewal.
Permissible Bank Finance shall be calculated by ii) Term Loan: Upto 7 Years (Including
psbloansin59minutes.com portal based on the in- moratorium period of maximum 6 months
built method of computation of MPBF. however next higher authority can extend the
For Working Capital: moratorium period upto 1 year)
1. X = Actual sales during last 12 months as per 12. Security: Primary Security: Hypothecation
data fetched from GST portal. of assets created out of Bank finance along with
2. Y = Projected sales derived by the portal entire current assets and non-current assets
based on sales during the last 12 months, 3. (Present & Future) of the Unit shall be ensured.
MPBF = 20 % of Y. Collateral Security: Covered under
For Term Loan: The loan amount shall be CGTMSE/CGTSSI.
calculated by psbloansin59minutes.com portal For obtaining guarantee coverage having loan
based on the cash accrual, margin, tenure of above Rs. 10 Lacs under CGTMSE, permission
loan, applicable ROI etc, with the help of inbuilt from Circle Head be obtained as per guidelines
parameters. contained in MSME Policy.
4. Type of facility: 13. Stock Statement: For WC facility only :
1. Cash Credit for Working Capital Half Yearly.
2. Term Loan for purchase of fixed assets. 14. Post Sanction Visit: On half yearly basis.
5. Loan Limit:
From Rs. 1 L to Rs. 25 Lacs.
6. Margin : Minimum 25 %
PNB Satkar Scheme (MSME: 30/27.03.20)
1. Purpose/ Objective: i) To meet credit 5. Margin: i) 25% for both TL & WC,
requirements to purchase land & building and/or ii) Wherever land is also financed as part of the
set up a unit for business of Hotels/ cost of project in such cases minimum prescribed
Restaurants/Lodges/Guest Houses/Motels/ margin against cost of land shall be 25% of cost
Dhabas/Pizza Centres (Franchises)/ of land.
Mess/Canteen/ Catering Services/Service iii) Further, the quantum of finance against cost
Apartments/ Banquets/Coffee Shop/food and of the land shall be restricted to 50% of the total
beverage joints with entertainment/ Gaming sanctioned loan amt.
permitted by law etc. run by themselves. 6. Benchmark Ratio: Benchmark Ratios shall be
ii) To upgrade/Renovate/Expand existing units as per Bank’s guidelines as applicable to MSME
by purchase of Furniture and Fixtures/ advances. However, stipulation of Current Ratio
Machineries /Equipments/ Vehicles etc. shall not be applicable under this Scheme.
2.Eligibility:i) Individual, Proprietorship/ 7. Rate Of Intt: Card Rate.
Partnership firms, Limited Liability Partnerships 8. Tenure of Loan: Repayment: Upto 10 years
329
(LLPs), Pvt/Public Ltd. Cos. including moratorium period of Max upto 24 M.
ii) Units under MSME in Service sector with 9. Primary Security: i) Hypothecation of entire
original investment in equipments not equipment, Current & Non-current assets of the
exceeding Rs. 5 Crores. unit purchased out of the Bank Finance. ii)
iii) Units must have valid license(s), to establish Mortgage of Land & Bldg with existing/future
& conduct such business by Municipal/Local construction thereon.
Administration 10. Collateral Security: i) Advance under this
3. Type of facility: scheme must be covered by collaterals coverage
i) TL: Maximum upto Rs. 10 Crore, of at least 40% of the exposure (FB+NFB).
ii) OD: Maximum limit upto Rs. 50 Lac. ii) However, if the Primary Security is in the
iii) Total Cumulative Exposure: Rs. 10 crore. shape of Land & Building Residual Value over
4. . Assessment of OD Limit: As per Cash and above 135% of the Term Loan outstanding
Budget Method. shall be treated as collateral security.
330
PNB Gurukul Scheme (MSME: 29/27.03.20)
1. Purpose/Objective: 6. Benchmark Ratio: Benchmark Ratios shall be
i) To meet the financial requirements for setting as per Bank’s guidelines as applicable to MSME
up of new/expansion/renovation/ modernization advances. However, stipulation of Current Ratio
of recognized Educational Institutes i.e. Schools is not applicable under this Scheme.
(including play schools), Colleges and other 7. Rate Of Intt: As per LA: Cir No. 58/2020
educational bodies, running education institutions dated 31.03.2020.
having necessary affiliation. Construction of 8. Tenure of Loan: Term Loan: Upto 10 years
hostel/canteen/labs etc. is also permissible under including moratorium period of maximum upto
the scheme. 24 months.
ii) To purchase equipments, Vehicles, Computer/ OD Facility: To be sanctioned for a period of 1
Library books/furniture/AC/Lab equipments, etc. year subject to annual renewal.
2. Eligibility: 9. Primary Security:
i) Educational institutions, Schools (including i) Hyp of entire equipments, Current & Non-
play schools), Colleges and other educational current assets of the unit.
bodies running educational institutions set up by ii) Mortgage of Project Land with existing/future
Firms/Company/Trusts/ Society/Private Ltd. Co./ construction thereon.
Public Ltd. Co./LLP etc. (HUFs are not eligible). 10. Collateral Security:
ii) Education institutions which are covered under i) Minimum 50% of the loan amount (Other than
the scheme may also be financed for construction the land and building of the educational institute)
of hostel, canteen, activity Centre which are shall be obtained in the form of immovable
exclusively used by the concerned institution property/liquid security.
provided cash flow of the education institutions is ii) Institutions whose final approval is pending
sufficient enough to meet the obligation under (After receipt of Letter of Intent from the
agreement. concerned authority like AICTE, UGC, MCI,
3. Type of facility: TL/OD: Need based. DCI, CBSE, ICSE etc. as applicable at particular
4. Assessment of OD Limit: stage), collateral security shall be 100% of the
i) Assessment of OD limit upto Rs.2 Cr will be loan amount (Other than the land and building of
on the basis of 70% of the Average Receipts of the educational institute).
the Actual and Estimated Receipts of the iii) Personal guarantees of the
institution. (Actual receipts shall be on the basis Promoters/Trustees (only office bearers
of last ABS/PBS whereas estimated receipts shall excluding professional office bearers)/Members
be on the basis of realistic projections). of the Society (only office bearers excluding
ii) Assessment of the OD limit above Rs. 2 Cr professional office bearers)/
shall be on the basis of Cash Budget Method. Proprietor/Partners/Directors (excluding
5. Margin: i) 25% for both Term Loan and professional or independent directors) of the
Working capital, Institution shall be obtained.
ii) Wherever land is also financed as part of the Note: i) While sanctioning credit facilities to the
cost of project in such cases minimum prescribed Educational Institutions, comfort should not be
margin against cost of land shall be 40%. derived from the securities being offered. The
iii) The quantum of finance against cost of the viability of the project and cash flows of the
land shall be restricted to 50% of the total Educational Institutions are to be relied upon
sanctioned loan amount. while considering any credit facilities to the
iv) However, maximum finance for the land shall Educational Institutions.
not exceed Rs. 2 crore. ii) Education Institutions are not eligible to be
covered under CGTMSE Scheme.
331
PNB Sanjeevani Scheme (MSME: 25/27.03.20 and MSME 79.2020 dt 25.06.2020)
1. Purpose/Objective: 4. Margin:
i) To meet the financial requirements for - 25% for acquisition of premises and/or
setting up of new/expansion/ renovation/ expansion/renovation/ modernization of
modernization of Nursing Home/Clinic/ existing premises.
Hospital/Veterinary Hospital/Infrastructure - 15% for purchase of equipment/
for Medical Tourism including Pathological machinery/cost of on road vehicles/ for
Laboratory, Diagnostic centres etc. Ambulance/Other Vehicle
ii) To purchase medical equipments - In case of purchase of land margin should
(including Vehicles, ambulances and be minimum of 50% of the cost of land
Implants) and office equipments, viz. (including cost of registration). However,
computers, air conditioners, office furniture, loan amount for the purchase of the land shall
etc. not be more than 50% of the total term loan
2. Eligibility: i) Individuals/ Proprietorship amount sanctioned.
firms having requisite qualification in any 5. Assessment of OD Limit: Max upto 10%
branch of medical science from a recognized of annual receipts or Rs. 2 Cr whichever is
University and having Min qualification as lower.
MBBS/BDS 6. Rate Of Intt: Card Rate.
(Dentist)/BHMS/BAMS/Veterinary/BPT/ 7. Tenure of Loan: Repayment: Upto 10
BUMS. years including moratorium period of
ii) Post Graduate or diploma qualification is maximum up to 24 months.
mandatory for financing of specialized 8. Primary Security:
equipment like CT SCAN, MRI SCAN and i) Hypothecation of entire equipment,
PET Scan etc. Current & Non-current assets of the unit.
iii) All entities, i.e. MSMEs, Enterprises, ii) Mortgage of Project Land with
Association of persons, Partnership firms, existing/future construction thereon.
LLPs, Pvt Ltd Co, Trusts & Societies 9. Collateral Security:
engaged in providing medical including i) Minimum 25% collateral security shall be
veterinary/ diagnostic services/to the Society obtained in the form of immovable
having valid license. property/liquid security.
iv) In case of individuals, Min experience ii) No collateral is required if realizable value
required is 2 years and if experience is less of the primary security in the shape of Land
than 2 years then Max OD limit upto Rs. 1 & Building mortgaged is more than 110% of
Crore shall only be sanctioned. the total exposure.
v) In case of other than individuals, 10. In case of financing purchase of old
minimum stake of qualified doctors should machinery/ assets, its residual life may be at
be 75% and in case of Trust it should be least 5 years and repayment period is to be
minimum of 50%. fixed within the residual life.
vi) The units must have the required 11. Benchmark Ratio: As per Bank’s
approvals and/or registrations from the guidelines as applicable to MSME advances.
statutory authority and have employed However, stipulation of Current Ratio shall
qualified doctors. not be applicable under this Scheme.
vii) All the statutory clearances/approvals 12. Rating :
shall be obtained in due course.
3. Type of facility: MSME advances >Rs.2 lac & upto Rs.50 lac
Term Loan: Need Based, will be rated in PNB Score (RAD) and in
Overdraft: Max Rs. 2 Crore, “PNB Trac” for advances exceeding Rs.50
NFB (LC/BG): Need Based. lac.
MSME 79.2020 dt 25.06.2020.
332
PNB SEVA Scheme (MSME: 23/27.03.20)
1. Purpose: 7. Benchmark Ratio: As applicable.
Working Capital: To meet the Working Capital 8. Margin:
requirement. i) Against Stock: Upto 2L: NIL,
Term Loan: Above 2L: 25%
- For acquiring fixed assets like land, ii)Against Book Debts/Bill for Collection/
office/workplace building, equipments & Deferred Payment Guarantee/Any other:
infrastructure (by new enterprises). 25%
- In case of existing units, expansion of existing iii) NFB : Cash Margin: 15%
offices/workplace and renovation/modernization iv) New Vehicle for business Use: 15%
with a view to improving the quality or reducing 9. Rate Of Intt: CARD Rate.
service cost, creating additional infrastructure 10. Tenure of Loan: Max 7 years for TL.
facilities, like setting up of Research & (Extension by next higher authority).
Development Centres/Testing Laboratories, In case of WC limits: one year.
purchase of vehicle (other than the vehicles meant 11. Moratorium Period: Max upto 6
for personal use) which are required exclusively for months. Interest to be serviced as and when
rendering service and marketing needs of the unit. due. (Extension of moratorium by next
2. Eligibility: higher authority).
i) Individuals/Partnership/Limited Liability 12. Primary Security: Hypothecation of
Partnership (LLP)/ Private Ltd. Co./Public Ltd. Assets i.e. Stock, Receivables, Equipments,
Co/Trust/Societies & Co-operative Societies Vehicles etc. and Mortgage of IP (wherever
(registered and incorporated under applicable law) applicable) created out of Bank finance
and eligible to be categorized as MSME(s). (present and future).
ii) MSME enterprises having GST Registration No. 13. Collateral Security: At least 40% of the
(wherever applicable) & Udyog Aadhar Number total exposure (FB+NFB).
(Desirable). - The extent of cash margin (In case of Non-
3. Special Restrictions: Exposure to Real Estate and fund based limits) over and above 15%, shall
NBFC shall not be covered under the Scheme. be considered for the computation of
4. Type of facilities: collateral coverage.
a) Working capital (CC/OD). - If the Primary Security is in the shape of
b) TL to acquire fixed assets/ equipments for general Land & Building, Residual Value over and
business purposes. above 135% of the Term Loan O/s shall be
c) NFB limit. treated as collateral security.
5. Loan Limit: Need Based Financing. - Where collateral security is not available,
6. Assessment of Loan: Simplified Turn over facility may be covered under Credit
method, MPBF and Cash Budget Method. Guarantee Schemes i.e. CGTMSE, CGSSI as
per guidelines.
Personal Guarantee of promoters/ directors/
Partners/ Trustees/ Members of the
society/etc. shall be obtained.
333
PNB Transport Scheme (MSME: 26/27.03.20)
1. Purpose/Objective: In case of E-Rickshaws total Term Loan
To purchase Autos, Taxies, E-rickshaws, including replacement cost of batteries (Upto
Commercial Vehicles (LCV/MCV/HCV), Cargo 2 batteries) shall be sanctioned in the
Vehicles etc. operating on any kind of energy which beginning by keeping minimum margin of
are permitted by State/Local authorities etc. 10%. The TL for batteries will be disbursed
2. Eligibility: through the same A/c after one & two year
Individual, Partnership, Sole Prop, Pvt Ltd./Public subsequently. The EMI will be fixed in such
Ltd. Cos/LLPs/Regd Transport Operators. a way the total TL is adjusted in 36 months.
3. Type of facility: For Used/Second hand Vehicles: 25% for
i.TL: To purchase commercial vehicles, used/second hand LCV/MCV/HCV not
ii. OD limit: For meeting of day to day expenses. older than 2 years. (Second hand E-
4. Benchmark Ratio: For loan amt above Rs. 10 L rickshaws shall not be financed)
average DSCR should be Min of 1.50 and it should 7. Rate Of Intt: Card Rates.
not fall below 1.20 during any year of the repayment 8. Tenure of Loan:
period. i) Loans upto Rs. 2 Lac: Upto 36 months,
For the loan amt upto Rs. 10 L, viability shall be ii) Loans above Rs. 2 Lac: Upto 60 months
ascertained by realistic assessment. (using PNB for new vehicles.
812). iii) In case of used/second hand vehicle,
5. Loan Amount: maximum repayment period shall be 60
i) For TL: Maximum upto Rs. 5 Crore. months from the 1st registration date of the
For financing Used/Second Hand Vehicles vehicle i.e. (60 months minus age of the
minimum purchase price of the vehicle should be vehicle).
Rs. 5 Lac. 9. Moratorium: Maximum upto 3 months if
ii) OD Limit: Rs. 50000/- per vehicle, subject to body building is required for the vehicle.
maximum Rs. 10 Lac per borrower. OD limit 10. Primary Security: Hypothecation of
shall be allowed against the vehicles financed by our Light Commercial Vehicle/ MCV/ HCV/
Bank only, having on-road purchase price of Rs. 5 Auto/Taxi/Erickshaws etc.
Lac & above. 11. Collateral Security:
6. Margin: i) Loan upto Rs. 10 Lacs: No collateral
For New Vehicles: security to be obtained. However, the facility
- 15% of “On Road Price” as per the performa shall invariably be covered under CGTMSE.
invoice of the Dealer. “On road Price” shall include ii) Loan amount above Rs. 10 Lacs: 50%
Vehicle Ex-showroom Price, insurance, Registration collateral Security in the shape of IP/eligible
for fully built up vehicles. OR liquid security from the borrower. OR Credit
- 15% of the cost on purchase of chasis, cost of Guarantee Coverage under CGTMSE/CGSSI
body building, road tax & insurance expenses. for the entire exposure as per the extent
- 10% in case of loan upto Rs. 2 L guidelines.
PNB Stand By Line Of Credit (PNB SLC) For MSMEs To Fund Temporary Liquidity
Mismatch (MSME: 49/27.03.20)
1. DFS has mandated all PSBs to conduct an This UDIN should be mentioned on the
Outreach initiative for MSME customers during certificate issued by the CA and verified by the
the month of December, 2019 and January, branch on UDIN portal (https://udin.icai.org).
2020. c. The facility will be considered as an
2. Accordingly, to ease the liquidity position of exposure on the borrower and guidelines
MSME sector, a new scheme ‘PNB Stand By stipulated under the RBI Prudential Norms shall
Line Of Credit For MSMEs To Fund be adhered to.
Temporary Liquidity Mismatch’ has been d. The facility shall be made available as Fund
launched at ‘Nil’ Margin and repayable in 12 Based Limit only.
months. 4. Disbursement & Repayment:
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3. Detailed features of the scheme are as under: ✓ The borrower can avail the sanctioned
1. Purpose: To meet the temporary liquidity amount in one go or in tranches.
mismatch arising out of delayed realization of ✓ The entire loan under the scheme has to be
receivables, receipts of GST Inputs tax credits repaid within the maximum period of 12
(including for Exports) and other Business months from the date of sanction. Further,
requirements. option would be given to the borrower to make
2. Eligibility: a. Existing Units having Limits repayment of loan in Monthly/Quarterly/Half
upto Rs. 5 crore are eligible under the scheme. yearly installment or in one go. However,
(In case, if total exposure of unit including this interest charged on loan shall be recovered as
facility (PNB SLC) is more than Rs. 5 crore, and when due.
guidelines regarding external risk rating shall be ✓ In case, the limits are availed in tranches
applicable. then the repayment/liquidation of all tranches
b. All Units irrespective of Rating. c. Account to should be 12 months from the date of sanction.
be standard. SMA-0, SMA-1 & SMA-2 are also 5. Margin: NIL
eligible under the scheme.
6. Interest Rate: ✓ 0.50 % above the
3. Loan amount: a. Limit: 25% of working
sanctioned Cash Credit rate.
capital (FBWC+NFBWC) of Existing units
having limits upto Rs. 5 crore, with maximum ✓ ROI for the primary account (originally
amount of Rs. 1.25 crore. However the limit sanctioned loan) shall not be changed on
would be sanctioned in One Go and may be account of change in collateral coverage after
disbursed in multiple tranches, with overall extending PNB SLC.
repayment period of 12 months. ✓ Penal Interest as applicable to Cash Credit
b. Other Conditions: ✓Adhoc facility, if any, account will be charged, if not repaid within the
outstanding at the time of granting this facility, stipulated period.
the same has to be liquidated from the proceeds of 7. Security: Hypothecation of stocks and
PNB SLC. Only one facility can be availed by the receivables (GST and other Credit). Extension
borrower at one time either adhoc or PNB SLC. of charge on the Primary Security /Collateral
security.
✓CA certificate to be obtained certifying the
8. Product Type: Demand Loan; Scheme
outstanding receivables, amount of pending GST
Code: DLSLC
dues up to the months for which the returns have
9. Sanctioning Authority: Branch Head not
been filed.
below the rank of CM.
✓CA has to get the Unique Document For branches headed by Senior Manager and
Identification Number (UDIN) of the certificate below, proposal be sent to COCAC
issued through the UDIN Portal.
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PNB Vyapaar Scheme (MSME: 24/27.03.20)
1. Purpose/Objective: a) For Working Capital 7. Assessment of Cash Credit: For Working
facility (along with Non-fund based facility) for Capital:
financing to retail and wholesale traders, - Assessment of the Working capital facility upto
distributors/agencies who deal in goods/commodities Rs.5.00 Cr shall be allowed based on Turn Over
(indigenous or imported). Method on realistic projected sales.
b) For financing traders for Purchase/ Construction of - Working capital (FB & NFB) limits above
Shop & Showroom/delivery van/ acquiring of assets Rs.5.00 Cr will be assessed on the basis of
for furnishing of Shop & Showroom like partition, traditional method of lending.
fixture, furnishing, purchase of equipments like Air 8. Rate Of Intt: Card Rate.
Conditioners, Refrigerators, other gadgets. 9. Tenure of Loan:
2. Eligibility: Target Group: Working Capital: Limit shall be renewed every
i) Business entities which are individuals, firms, year.
companies, Limited Liability Partnership (LLP), co- Term Loan: Upto 10 Yr including Max
operative societies, dealing in business activities. moratorium period 6 M.
ii) Entities having valid Registration/License, as 10. Primary Security: Hypothecation of assets
applicable, under local laws (i.e. Shops & created out of the Bank finance along with entire
Establishments Act) obtained from appropriate current assets and non-current assets (Present &
authorities/GST Registration (wherever applicable) Future) of the Unit. In case of financing
etc. immovable property for business premises
iii) Existing profit making units. mortgage of the same shall be taken.
iv) New units can also be financed. 11. Collateral Security:
3. Type of facility: a. CC (FB+ NFB), b. Term Loan 1. NSCs/KVPs/FDR (at least 6 months old in case
4. Max. loan Amount: Need based of fresh/ enhancement/ additional facility), LIC
5. Min. Loan Amount : Above Rs.10 L (SV)/liquid security and/or any other tangible
6. Margin: For Term Loan: security i.e. Equitable Mortgage of IPs (Other than
i. Acquiring premises/land & constructions thereon Agricultural) having realizable value at least
on ownership basis required for running the business. equivalent to the loan amount. In case of factory
For acquiring premises, 25% margin. premises value of land and building (RV) only be
ii. In case of purchase of land, margin shall be 50% considered as collateral security.
of the cost of land (including cost of registration). 2. No additional collateral sec is required, if the
However, loan amount for the purchase of the land total loan amt is less than the value of purchase of
shall not be more than 50% of the total term loan Land & Building mortgaged with the Bank.
amount sanctioned. 3. Under any circumstances the loan shall not be
iii. Further, margin of 25% shall be ensured, in case considered for purchase of land only.
of:--- 4. Collateral is to be obtained when no
a. Financing for conversion lease hold business CGTMSE/CGSSI (Credit Guarantee Scheme for
premises to free hold. b. For repair/renovation/ Standup India) cover is available.
furnishing of existing business premises/showroom. 5. Under CGTMSE “Hybrid Security” product,
c. To purchase furniture & fixtures for business collateral security for a part of the credit facility
premises can be obtained whereas the remaining part of the
d. To purchase new equipments/business tools etc. credit facility upto maximum Rs. 100 L can be
for business covered under CGTMSE.
For Working Capital: 12. Relaxation of Collateral Security: Maximum
- 25% on stocks upto 25% by next higher sanctioning authority.
- 30% on Book Debts not older than 3 Months. 13. Periodicity of Stock Statement: Ab 10L to
- 40% on Book Debts more than 3 M and max upto 50L: Half Yearly,
6 M. Ab 50L to 100L: Quarterly, Ab 100 L: Monthly.
- Cash margin for LC/BG: As per Bank’s policy. Note: CA Certified Book Debt statement shall be
Note : Please refer MSME 95.2020 for powers for obtained on Quarterly basis in case of Working
relaxation in margin and security. Capital limit is above Rs.1 Cr.
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PNB Laghu Udhyami Credit Card Scheme (PNBLUCC) (MSME: 40/27.03.20)
1. PURPOSE: To provide simplified loan return shall be considered as the limit for issuing
delivery mechanism to meet the credit the PNB LUCC.
requirements of Small Business units, Traders, iii) For Micro & Small Enterprise (Manufacturing
Artisans, Village industries, Micro & Small & processing), Micro & Small Services &
Enterprise (Manufacturing and processing), Micro Business Enterprises (MSSBEs) the assessment as
& Small-Services & Business Enterprises per the Nayak Committee recommendations.
(MSSBEs), Professionals and Self Employed 4. NATURE OF LIMIT: Cash Credit
persons, etc. 5. EXTENT OF LIMIT: Max up to Rs.10 L
2. ELIGIBILITY: All existing customers of the 6. MARGIN:
above categories, dealing with our bank for the A. For Micro & Small Enterprises (other than
last three years satisfactorily and enjoying Trading):
loan/operative limit upto Rs.10 Lacs.. The a) Cash Credit (Hyp)
conversion of existing limits to PNBLUCC will i) Upto Rs. 2 Lacs : NIL
be considered in the next quarter of completion of ii) Above Rs.2 L & upto Rs 5 Lacs: 15%
three years of satisfactory operations. iii) Above Rs.5 Lacs : 20%
3. ASSESSMENT OF CREDIT CARD LIMIT: b) Cash Credit (Pledge) : 15%
The PNB LUCC limit shall be fixed as follows:--- B. For Micro & Small Enterprises (Trading):
(i) For Small Business, Retail Traders, etc. 20% Cash Credit (Hyp./Pledge): Against Stocks : :
of the annual turnover declared for tax purposes 30% - 40%, keeping in view, nature of stocks,
or last 12 months turnover of genuine trade price fluctuation, shelf life etc.
transactions in the operative account, whichever is 7. SECURITY: PNB Laghu Udhyami Credit Card
higher. In respect of parties with good track limit sanctioned be secured by:
record, where Goods & Services Tax (GST) i) Primary security: Hypothecation of stock in
returns are not available, the credit limits may be trade, receivables, machinery, office equipment,
decided taking into consideration the actual etc., as specified for existing limits.
turnover in the account during the last 02 years. ii) Collateral Security: as per extant guidelines for
(ii) For Professionals and Self-employed persons, MSME.
50% of their gross annual income as per Income
Tax
PNB Artisans Credit Card Scheme (PNBACC) (MSME: 38/27.03.20)
1. Objective: The ACC scheme aims at providing 4. Fixation Of Credit Limit:
adequate and timely assistance to the artisans to Term Loan: Need based term loans be extended
meet their credit requirements both investments to acquire assets like tools and equipment’s,
needs as well as working capital in a flexible and accessories & machineries etc required for
cost effective manner. carrying out manufacturing process.
2. Eligibility: CC Limit: The CC limit would be fixed based on
• All artisans involved in Nayak Committee recommendations (20% of
production/manufacturing process (and otherwise anticipated turnover).
eligible for credit facilities for carrying out the The maximum limit for Term Loan & Working
proposed activities under any of the existing bank Capital to be sanctioned under the scheme would
schemes) would be eligible. be to Rs. 2 Lacs.
• Preference would be given to artisans registered 5. Margin (For Both Term Loan & Working
with Development Commissioner (Handicrafts) Capital): Upto Rs. Rs. 2 lakh: NIL
• Thrust in financing would be on clusters of 7. Validity Period Of Limit: The PNB Artisans
artisans and artisans who have joined to form Self Credit Card limit sanctioned will be valid for 3
Help Groups (SHGs). years, subject to annual review by the bank.
• Joint Liability Groups (JLGs) of artisan. 9. Repayment Schedule For Term Loan:
• Beneficiaries of other Government sponsored The term loans will be repayable in
loan schemes will not be eligible for coverage monthly/quarterly installments within 3 to 5 years
under ACC scheme. depending upon the project profitability exclusive
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All existing artisans borrowers of the bank of gestation period of 6 to 12 months.
enjoying credit facilities upto Rs. 2 L & having 10. Security:
satisfactory dealings with the bank will also be i) Primary security: Hypothecation of stocks in
eligible to avail credit facilities under the scheme. trade, receivables, machinery, office equipment,
This would enable them to get limit sanctioned etc., as specified for existing limits.
for 3 yr period as also benefit from simplified ii) Collateral Security: as per extant guidelines for
procedures stipulated for availment of credit. MSME Advances.
3. Nature Of Limits: Term Loan & Cash Credit.
PNB General Credit Card Scheme (PNBGCC) (MSME: 39/27.03.20)

1. Objective: The objective of the scheme is to 8. Security: a) Primary Security: Personal
increase the flow of credit to individuals for security of the borrower/asset created by the bank
entrepreneurial activity in the non-farm sector finance. b) Collateral Security: NIL, to be
provided through the General Credit Card. covered under CGTMSE for eligible activities.
2. Eligibility: All non-farm entrepreneurial credit 9. Repayment: GCC limit shall be repayable in 12
extended to individuals which is eligible for months with the following stipulations;
classification under the priority sector guidelines. (a) Aggregate credits into the account during 12
3. Purpose Of Limit: To provide credit to months period should at least be equal to the
individuals for entrepreneurial activity in the non- maximum outstanding in the account.
farm sector. (b) No drawal in the account should remain
4. Nature Of Facility: The credit facility outstanding for more than 12 months.
extended under the Scheme will be in the nature 10. Renewal Of The Cards: (i) The PNB GCC
of revolving credit through cash credit account. will be valid for 3 years. (ii) Limits will be
-WC, -WCTL, in case it includes Term loan reviewed annually on similar lines as normal CC
component also. A/C. (iii) The card will be renewed at least one
- WCTL is to be given on reducing DP basis. month before expiry of the current card on a
5. Extent Of Limit: The need based limit be fixed simple hand written request from the card holder.
with a Maximum of Rs. 10 Lacs, after analyzing 11. SERVICE CHARGES FOR ISSUE OF
credit needs and repaying capacity of the CARDS : Service charges for issue of the cards as
borrower. well as replacement of the card will be Rs 100/-
6. Margin: NIL +GST irrespective of the size of the limit once for
7. Rate Of Interest: Upto Rs. 50,000/- : RRLR all during the 3 years period.
Above Rs. 50,000/- to Rs. 10,00,000/- : RRLR
+1.25%
PNB Udyog Scheme (MSME: 22/27.03.20)
1. Purpose: Working Capital: WC requirement moratorium period) (Extension in repayment
(including Pre and Post Shipment credit). beyond 7 years by next higher authority).
TL: For acquiring fixed assets like land & factory ii) Working capital facility shall be sanctioned for
building, P&M by new enterprises. In case of a period of one year, yearly renewal.
existing units, for expanding factory 10. Moratorium Period: Need based. Maximum
accommodation, renovating and modernizing the upto 12 months.
existing factory. Extension of moratorium period may be allowed
2. Eligibility: i) Individuals/Partnership/ LLP/ by next higher sanctioning authority.
Pvt. Ltd. Co./Public Ltd. Co/Trust/Societies & 11. Primary Security: Hypothecation of Assets
Co-operative Societies (registered and i.e. Stock, Receivables, P&M, Vehicles etc.
incorporated under applicable law) and are created out of Bank finance (present and future).
eligible to be categorized as MSME, ii) MSME 12. Collateral Security: At least 30% of the
enterprises having GST Registration No. exposure (FB+NFB).
(wherever applicable) & Udyog Aadhar Number - The extent of cash margin (in case of Non-fund
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(desirable). based limit) over and above 15% shall be
3. Special Restrictions: Exposure to Real Estate considered for the computation of collateral
and NBFC is not covered under this Scheme. coverage.
4. Type of Facilities: a) FBWC, b) TL, c) NFB, - If the Primary Security is in the shape of Land &
d) Composite loans. Building, residual value over and above 135% of
5. Loan Limit: Need Based Finance. the Term Loan O/s shall be treated as collateral
6. Margin: i) Against Stock: Upto 2L—NIL, security.
Above 2L— 25% - Where collateral security is not available, facility
ii) Against Book Debts/Deferred Payment should be covered under Credit Guarantee
Guarantee: 25%, iii) Non Fund Based: Cash Schemes like CGTMSE/CGSSI as per Bank’s
Margin: 15%, iv) New Vehicle for business Use: Policy guidelines.
15%, v) Bill for Collection: Govt. Supply Bills: Personal Guarantee of promoters /directors/
10% Partners/ Trustees/ Members of the society/etc. as
7. Assessment of Loans: As per extant guidelines applicable shall be obtained as per Bank’s Policy
of the Bank. guidelines.
8. Rate Of Intt: Card Rate.
9. . Tenure of Loan: i) Repayment period shall be
maximum of 7 years for Term Loan (including
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Pradhan Mantri Mudra Yojana (PMMY) (MSME: 34/27.03.20)
1. Purpose: Non-Farm Enterprises engaged in 7. Margin for Term Loan:
Manufacturing, Trading and Services activities Loan Up to Rs. 50,000/- (Shishu Loans) --- NIL
for income generation. (Only Micro and Small Loan Above Rs. 50,000/- to Rs.2 L --- 10%
Enterprises (MSEs) as per MSMED Act 2006 Loan Above Rs. 5 Lac to Rs. 10 Lac --- 20%
can avail Mudra Loans). 8. Repayment Period: 7 years including maximum
2.Eligibility: moratorium period of 3 months.
i. Individual, Proprietorship, Partnership firms, 9. Validity in case of Working Capital: The limit
LLPs, Private/ Public Ltd. Cos. Or any other legal shall be sanctioned for a period of three years.
entity. However, the account will be reviewed yearly and
ii. MUDRA loans may be extended on cluster be renewed on every three years.
basis also subject to max ceiling. 10. Classification of advance: As per the RBI
3. Balance Sheet: Self-attested BS/P&L to be guidelines, the loans granted to such units will be
obtained in applicable cases. However, ABS/P&L eligible to be classified as priority sector advances
shall be obtained, when it is applicable on the under Micro and Small Enterprises.
customer as per Income tax Act. 11. Internal Credit Risk Rating: As per bank’s
4. Income Tax Returns: If the borrower is not poicy guidelines..
filling IT return, then there is no requirement of 12. Acceptable Financial Ratios: As per Bank’s
submission of Income Tax return details. An guidelines. However, financial ratios for loan below
undertaking from the borrower in this regard shall Rs. 2 Lacs shall not be applicable.
be obtained and keep on record. 13. Stock Statement: on Yearly basis.
5. Nature of Facility: i. Term Loan, ii. Working 14. Security:
Capital (Fund/ Non-Fund), iii. Composite Loan Primary: Hypothecation of assets, out of Bank
(TL+WC) 3. Quantum of Exposure: Upto Rs. Finance.
10.00 Lakh (Maximum exposure from all Banks/ Collateral: Guarantee Coverage under CGTMSE
Financial Institutions shall be Rs. 10 Lakh per shall be obtained.
enterprise/borrower). The Scheme is classified 15. TAT: Loan upto Rs. 5 Lacs: 2 Weeks, Loan
into three categories:--- above Rs. 5 Lacs: 3 Weeks.
- Shishu: Loans upto Rs. 50,000/- 16. Issuance of MUDRA Card under PMMY:
- Kishor: Loans above Rs. 50,000/- and Eligibility: To Literate Individuals & Proprietors
upto Rs. 5 L only. Joint account holders are not permitted for
- Tarun: Loans above Rs. 5 L and upto Rs. 10 L Mudra card.
6. Assessment of Cash Credit: Maximum Sanction Limit: Maximum composite
For Loan below 2.00 lacs: The Working capital loan upto 1 Lac.
facility shall be allowed based on 20% of Loan Amount: 20% of composite loan being
realistic projected turnover. No margin criteria is Working Capital component i.e. maximum Rs.
applicable. 20,000/- as OD facility, withdrawn by MUDRA
For Loan 2 Lacs & above: Card.
The Working capital facility shall be allowed MUDRA Card: Maximum limit: Upto Rs. 20,000/-.
based on 20% of realistic projected turnover after Shall work as Debit Card & based on RuPay
ensuring minimum margin of 5%. If margin Platform. MUDRA Card Will work on
available is higher, Working Capital limit shall ATM’s/POS/ECommerce. MUDRA Card will be
not be reduced accordingly. personalized.
Stand Up India- Scheme for Financing SC/ST & Women Entrepreneurs (MSME: 57/27.03.2020)
1. Objective: The objective of the Stand-Up India 4. Nature of Loan: Wherever possible,
scheme is to facilitate bank loans above Rs. 10 Lacs Composite loan (inclusive of term loan and
and upto Rs. 1 crore to at least one SC or ST and at working capital) is to be sanctioned to the
least one woman entrepreneur per bank branch for customer. However, working capital limit
setting up a Greenfield enterprise (the first time venture above Rs. 10 Lacs to be sanctioned by way
340
of the beneficiary). This enterprise may be in of Cash Credit limit only.
manufacturing, services or the trading sector. In case of
5. Margin Money: The Scheme envisages
non-individual enterprises at least 51% of the 25% margin money which can be provided in
shareholding and controlling stake should be held by convergence with eligible Central/State
either an SC/ST or Woman entrepreneur. schemes. While such schemes can be drawn
2. Eligibility: upon for availing admissible subsidies or for
1. SC/ST and/or woman entrepreneurs, above 18 years meeting margin money requirements, in all
of age. cases, the borrower shall be required to bring
2. Loans under the scheme is available for only green in minimum of 10% of the project cost as
field project. Green field signifies the first time venture
own contribution.
of the beneficiary in the manufacturing or services or 6. Interest Rate: The ROI would be lowest
trading sector. applicable rate of the bank for that category
3. In case of non-individual enterprises, 51% of the (rating category) not to exceed (base rate
shareholding and controlling stake should be held by (RLLR) + 3% + tenor premium (Applicable
either SC/ST and/or Women Entrepreneur. with Base Rate only).
4. Borrower should not be in default to any 7. Security: Besides primary security, the
bank/financial institution. loan may be secured by collateral security or
3. Purpose of Loan: For setting up a new enterprise in any Credit Guarantee Scheme i.e.
manufacturing, trading or services sector by CGTMSE/CGSSI.
SC/ST/Women entrepreneur. 8. Repayment: The loan is repayable in 7
years with a Max moratorium period of 18
months.
9. Upfront Fee: Upfront fee in case of term
loan under ‘Standup India’ is linked to
disbursement and shall be recovered
proportionately at every stage of
disbursement.
PNB Weaver Mudra Scheme (PNBWMS) (MSME: 41/27.03.20)
1. Objective: The Handloom Scheme aims at 10. Government Support To Handloom
providing adequate and timely assistance from the Weavers:
Bank to the weavers to meet their credit a) Interest subsidy: To provide working capital
requirements. The Scheme will be implemented both loans at the interest rate of 6% to handloom
in rural and urban areas. sector; the quantum of interest subsidy to be
2. Eligibility: Existing Handloom Weavers involved borne by the GOI will be limited to the
in weaving activity would be eligible. The borrower difference between the actual rate of interest
is a weaver, can be ascertained from any one of the as applicable/ charged by the Banks and 6%
following:- interest to be borne by the borrower.
(a) Weavers’ Identity card issued by the DC The maximum interest subvention would be
(Handlooms), capped at 7%. Intt Subsidy as applicable will be
(b) Health card issued as per Health insurance provided for maximum 3 years from the date of
scheme, first disbursement. Intt subsidy will be credited
(c) Certificate/ Identity cards issued by the State to the A/C of the borrower on quarterly basis.
Government. However, intt subsidy will not be available from
3. Purpose: To provide working capital assistance. the date the loan A/C turns NPA even within the
4. Nature Of Limits: Cash Credit Limit.. period of 3 years. And
5. Extent Of Loan: Need based, b) Margin money assistance @ 20% of the
Max : Rs. 5 L per borrower, by way of Cash project cost subject to a maximum of Rs.
Credit/WC. 10000/- per weaver will be provided. Margin
6. Fixation Of Limit: : simplified turnover method. money subsidy will be credited to the account
7. Margin: 20% of Working Capital Requirement. of borrower after sanction of the loan. And
Note: Govt. to bear margin @ 20% of cost of c) Accounts should be covered under credit
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project (Working Capital Requirement) with a guarantee schemes of credit guarantee
maximum of Rs. 10000/-. Rest amount to be borne corporations):--
by borrower. (i) For loans upto loan of Rs.50000/-: AGF in
8. PNB SCORE SME: As per extant guidelines. excess of 0.25% will be borne by bank. AGF
9. Issue Of Card: up to 0.25% of loan amount will be borne by
(i) For Loans upto Rs.50000/-: To be disbursed by GOI for a maximum period of 3 years.
way of MUDRA Card. (ii) For loan above Rs.50000/- & upto Rs. 5 L:
(ii) For Loans above Rs.50000/-: MUDRA Card to Entire credit guarantee fees be borne by GOI for
be issued for a maximum of Rs.50000/-. Amount a maximum period of 3 years.
above Rs.50000/- will be disbursed by way of 11. Validity Period Of Limit: 3 years, subject
opening regular CC account. to annual review.
The beneficiaries will be issued RUPAY Card 12. Security: Hyp of assets created out of bank
having the daily limit of Rs.25000/- per day or as loan & margin. The loans must be covered under
per the extant guidelines. Credit Guarantee scheme of Credit Guarantee
Corporations.
PNB Kushal Handicraft Welfare Mudra Scheme (PNBKHWMS) (MSME: 47/27.03.20)
1. Purpose: The scheme aims at providing adequate and a) Interest Subvention of 6%, subject to
hassle free assistance to the artisans to meet their credit maximum of Rs. 1 lakh in 3 years.
requirements for investments needs as well as working b) Margin Money of 20% subject to
capital in a flexible and cost effective manner. maximum of Rs. 10,000/-.
2. Eligibility: Loan applications, routed through the field Reimbursement of Interest subsidy shall
offices of Development Commissioner (Handicrafts), not be taken place in case of: i) During the
shall only be eligible for getting the finance under the period of default by the borrower, even
scheme as well as benefits of Interest Subvention and within the period of 3 years.
Margin Money. The scheme is applicable to: ii) Non receipt of Interest Subvention from
i) All handicraft artisans/workers having valid the Office of DC (Handicraft), MoT, GOI,
PAHCHAN card. ii) All artisans involved in iii) After completion of eligible period of 3
production/manufacturing process. years for Interest Subvention.
iii) Preference would be given to Handicraft artisans 6. Margin: i) Working Capital: Upto 2 L:
registered with Development Commissioner NIL, Above 2 L to 5 L: 20%
(Handicrafts). ii) Term Loan: Purchase of Land for
iv) Beneficiaries of other Govt sponsored loan schemes construction of factory building thereon;
will not be eligible for coverage under this scheme. v) Construction of Building on land purchased
The applicant should not be defaulter of any bank. through Bank’s finance; Construction of
3. Nature of facility: Building on land owned by borrower;
TL, CC & OD. Constructed Factory Building: Upto Rs. 5
4. Fixation of Credit limit: Max limit for TL & WC Lacs: 25 %
limit: Rs. 5 L. - For Plant and machinery: Upto Rs. 2 L:
Term Loan: Need based term loans be extended to NIL, Above 2 L to 5 L: 20%
acquire assets like tools and equipments, accessories & - For purchase of old machinery (having Min
machineries etc required for carrying out manufacturing remaining useful life i.e. 5 yr or loan tenure,
process, subject to Maximum of Rs. 5 Lacs. whichever is higher. In case of old generators
Cash Credit Limit: WC limit be assessed as per Nayak set, it should not be older than 3 years): Upto
Committee recommendations, subject to Max of Rs. 5 Rs. 5 L: 25%
Lacs. 7. Repayment: 3 to 5 years in Monthly/Qly
Overdraft Limit: For loans upto Rs.50,000/-, OD installments exclusive of gestation period of
facility may be sanctioned by way of Mudra Card. 6 to 12 M.
5. Govt. Support in form of interest subvention and 8. Validity period of limit: The limit under
margin money: Office of DC (Handicraft), Ministry of PNB KHWMS will be sanctioned subject to
Textile, GOI shall provide following assistance to the annual review. Request for enhancement in
Handicraft Artisans: limit could be considered at the time of
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review/renewal with maximum ceiling of
Rs. 5 Lacs.
9. Primary Security: Hypothecation of
stocks in trade, receivables, machinery, office
equipment, etc., as specified for existing
limits.
10. Collateral Security: Nil. Accounts are to
be covered under Credit Guarantee Scheme.
Tie Up Arrangement With National Backward Classes Finance & Development Corporation
(NBCFDC) (MSME: 43/27.03.2020)
1. Our Bank has entered into Memorandum of (as notified by the Govt. from time to time)
Agreement (MoA) for availing refinance from the who are living below double the poverty line.
National Backward Classes Finance and At present persons with family income
Development Corporation (NBCFDC) for extending below Rs. 98,000/- per annum in Rural
concessional loans under NBCFDC schemes for Areas and Rs. 1,20,000/- p. a. in Urban
income generating activities to Backward classes Areas come under double the poverty line.
living below Double the Poverty Line (DPL). BO: The income & caste certificates are issued by
Hauz Khas, New Delhi (Sol. Id. 3093) is Nodal Branch the competent authority of the State
for implementing the scheme. Governments. Backward classes shall be as
2. KEY FEATURES OF MOUs & SCHEMES OF defined by National Commission for
NBCFDC Backward Classes under Ministry of Social
2.1 Bank shall act as channelizing agency (CA) for the Justice and Empowerment, GOI.
purpose of granting loans to target group as per 2.3. Activities that can be financed:
eligibility criteria specified by NBCFDC. -- Small Business/Artisan & Traditional
2.2. Target group definition: Members of Backward Occupation,
Classes -- Transport Sector & Service Sector, --
Technical and Professional Trades.
3. Gist of NBCFDC’s MSME Schemes: Under the said arrangement, the Corporation will provide
refinance at 3% lower ROI against the financial assistance extended by the bank. Details of the
arrangement is as under:--
Sr.No. NBCFDC Max. loan Max. limit Rate of Interest p.a. Spread
Scheme (to be of refinance Loan
provided NBCFDC Bank to
Amt. to bank beneficiary
by bank)
1 New – Rs. One Rs. One Upto Rs.
Swarnima for lakh lakh One 2% 5% 3%
women lakh
2 All other Rs. Ten Rs. Ten Upto Rs.
3% 6% 3%
schemes of Lakh lakh 5 lakh
NBCFDC >5 lakh
to 10 5% 8% 3%
lakh
- After full repayment of refinance amount to NBCFDC by the bank, normal rate of interest will be
charged from the borrower, if credit facility is still outstanding, due to various reasons.
Scheme For Financing Persons With Disabilities (PWDs) - Under 100% Refinance Arrangement
With National Handicapped Finance & Development Corporation (NHFDC) (MSME:
42/27.03.20)
1. Objective: The scheme aims at promoting (b) For purchase of vehicle for commercial hiring
economic development activities and self- under micro enterprises segment:--- 90% of the
343
employment ventures for the benefit of persons invoice cost of the vehicle inclusive of the cost of
with disabilities by extending collateral free loan chassis, construction of body thereon and the fare
and upgradation of their entrepreneurial skill meter as the case may be. Loan will be allowed for
leading to self-employment ventures. new vehicles only.
2. Scope: The scheme will be limited for Rate of interest
financing income generating activities for the S.N. Loan Amt. ROI Int. to be
persons with 40% or more disability through charged by
banks. The manufacturing and service activities to NHFDC for
be undertaken by the beneficiaries should be refinance
eligible for coverage under Credit Guarantee 1 Upto Rs. 5% 2%
Scheme of CGTMSE (Credit Guarantee Fund 50000/-
Trust for Micro and Small Enterprises). Since as 2 Above Rs. 6% 3%
on date trading activity is not eligible for 50000/- to Rs.5
CGTMSE coverage, therefore traders are not L
eligible for getting the financial assistance under 3 Above Rs. 5 L 8% 5%
the scheme. Note- A special rebate of 1% on intt is given to
3. Eligibility: Any disabled person who fulfills women with disabilities for which refinance will
the following criteria shall be eligible for also be available at 1% lower rate to maintain
assistance under the scheme:--- (a) Any Indian 3% cushion in ROI for the Banks.
citizen with 40% or more disability. (b) Age 9. Security: Loan sanctioned will be secured by
between 18 and 60 years. (c) Annual Income way of primary charge over the assets financed.
below Rs. 5 L only per annum for urban areas No collateral security be obtained from borrower
and Rs. 3 L only per annum for rural areas. (d) and a/cs are to be covered under credit guarantee
Relevant Educational/Technical/Vocational scheme of CGTMSE. In this regard, annual service
qualification/experience & background. fee/Guarantee fee (ASF/GF) is to be recovered
4. Nature Of Loan: (a) TL, (b) WC by way of from borrower as per extant guidelines.
WCTL. 10. Inspection & Monitoring Of Accounts:
5. Quantum Of Loan: Income generating Stock statements are not to be submitted by the
activities alongwith quantum of loans, included borrowers, however, monitoring of the account
for financial assistance by way of concessional operations is to be ensured through quarterly/half
loans and grants, are as under:-- yearly inspection.
(a) For setting up of self-employment service 11. Repayment Schedule For Term
units:--- Need based, subject to Max loan upto Loan/WCTL:
Rs. 5 Lacs. (a) For setting up manufacturing/service unit The
(b)For setting up of self-employment TL/WCTL will be repayable in monthly/quarterly
manufacturing/ fabrication/production units: Need installments within 3 to 5 years depending upon
based, subject to Max loan upto Rs. 25 Lacs. the project profitability inclusive of the gestation
(c) For purchase of vehicle including auto period of 6 to 12 months.
rickshaw for commercial hiring Purpose: Need (b) For purchase of vehicle for commercial hiring
based, subject to Max loan upto Rs. 10 Lacs. under micro enterprises segment. The loan against
6. Fixation Of Credit Limit: auto rickshaw, station wagons or tempos shall
(a) TL: Need based TL be extended to acquire be for a maximum period of 4 years and against
assets like tools, equipments, accessories, taxi cars 5 years repayable by monthly
machineries etc. installments commencing from 1 M after the date
(b) WC Limit: The Working Capital limit would of the loan.
be assessed by simplified turnover method. 12. General Guidelines: Banks are required to
7. Margin (For Both TL & WCTL): make all efforts to cover target groups in
(a) For setting up manufacturing/service unit:---- accordance with the priorities laid down as under:
Upto Rs. 2 L: Nil, Above Rs 2 L & upto Rs.5 L: (i) Women 50%, (ii) Men 50%.
15%,
Above Rs.5 L & upto Rs. 25 L: 20%
344
Scheme Of Venture Capital Fund For Scheduled Castes MSME: 45/27.03.20)
A. Indicative features of the Fund: i. Financial assistance upto Rs 5 Crore:
i) Name of Sponsoring Agency: Department of Investment under this category shall be funded
Social Justice and Empowerment, Ministry of maximum upto 75% of the project cost and the
Social Justice and Empowerment. balance 25% of the project cost will be funded by
ii) Size of the Scheme: Initial Capital of Rs. 200 the promoters;
Crore, which can be supplemented every year. ii. Financial assistance above Rs. 5 Crore:
iii) Name of Asset Management Company a. Investment under this category shall be funded
(AMC)/Nodal Agency: maximum upto 50% of the project cost. At least
IFCI Venture Capital Funds Ltd. 25% of the project cost has to be financed by
iv) Duration of the Fund: 10 years from the date bank/other institutions. Balance 25% of the
of implementation with provision of 2 years as project cost will be funded by the promoters.
extension. b. The proposals forwarded by Banks or other FIs
B. Salient Features Of The Scheme: with sanction of 25% of the total project shall be
1. Purpose of the Scheme: considered. In this case, the projects shall have to be
To provide concessional finance to SC compulsorily appraised by the Banks or other
Entrepreneurs. financial institution.
2. Investment Focus: 9. Security:
Investments in projects/units being set up in • The assets of the project being funded/assisted
manufacturing and services sector ensuring asset under the scheme shall be charged for security. The
creation out of the funds deployed. Existing project assets will include land, building, plant &
companies are also eligible. The fund will be machinery and rights on licenses/patents.
available for both Ltd. and Pvt. Ltd. companies • Pari-pasu charge on assets with the Banks/FIs in
existing since 12 M. case of the companies applying for assistance of
3. Nature of financial Assistance: more than Rs. 5 Crore.
a) Equity/Optionally/ Compulsorily convertible • 2nd charge of the assets created out of the
preference shares (maximum up to 25% of the investment where the 1st charge in held by the
corpus); b) Equity linked debt instruments; c) Bank/FIs.
Debt/ Subordinate Loans; • In addition to the charge on assets, post-dated
4. Tenure of Financial Assistance: cheques and promissory notes shall be taken.
Upto 6 Years in a company. • Personal guarantees of the promoters along with
5. Moratorium on Principal: buyback agreement shall be entered.
On case to case basis but not more than 36 months • Pledge of Shares held by promoters and forming
from the date of investment. Interest payment at least 26% stake and upto 51% of the Issued
shall commence from date of investment in the and Paid up capital shall be taken. However, the
company. percentage of pledged shares would be decided on
6. Investment Size: case to case basis.
Rs. 0.50 Crore to Rs. 15 Crore. Aggregate • In case no mortgage is available, the borrower may
assistance not more than two times the current arrange collateral and corporate guarantees from
net worth of the company. family/friends/associates/group companies.
7. Expected Returns through Investment: 10. Time limit for completion of the project:
• Equity instruments may yield returns at 15% p.a. Maximum 24 months from the date of
• Debt/Convertible Instruments may carry returns disbursement, which may be extended by a further
at 10% p.a. period of 3 months.
8. Funding Pattern: Investment under the fund
will be categorized as follows:---
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Credit Enhancement Guarantee Scheme For Scheduled Castes (CEGSSC) (MSME: 46/27.03.20)
A. Features of the Scheme: for putting the System and processes in place for
1. Name of Sponsoring Agency: Department of implanting the Scheme and annual maintenance
Social Justice and Empowerment, Ministry of fees @ 0.50% p.a. thereafter, towards annual
Social Justice and Empowerment. maintenance of the scheme. This annual payment
2. Name of Asset Management Company shall be levied by IFCI on the aggregate Guarantee
(AMC)/Nodal Agency: IFCI Ltd. outstanding.
3. Size of the Scheme: Initial Capital allocation of 11. Amount of Guarantee Cover:--
Rs.200 crore. The capital allocation may be S.No Loan Amt. (Rs. In Guarantee
supplemented/ enhanced by GoI every year with . crore) Cover
similar allocation amount or higher through 1 0.15 – 1.00 100%
annual budgetary allocation. 2 1.00 – 2.00 80%
4. Nature of Scheme: Central Sector Scheme. 3 2.00 – 5.00 70%
5. Structure of the Scheme: The Government of 4 >=5 crore 60%
India shall set up a corpus of Rs.200 crore to be B. Details of the Credit Enhancement Guarantee
placed with IFCI Ltd which shall be kept in a Scheme:
separate No Lien Account (NLA). Credit 1. Eligibility: The Small and Medium Enterprises
Enhancement Guarantee shall be extended, out of promoted and run by SC entrepreneur, and not
this fund and to the extent of the fund/available covered under any other Govt Subsidy/Guarantee
balance in the NLA less 100% earmarked amount Schemes.
for Guarantees already issued, to Member Lending 2. Sector covered under: The project units being
Institutions (MLIs) for extending Term Loans or set-up, promoted and run by Scheduled Castes in
Composite Terms Loans to SC entrepreneurs Primary Sector Such as commercial agriculture,
engaged in Small and Medium Enterprises. The food processing, horticulture, poultry etc. will also
fund shall be the base to provide Guarantees to be considered in addition to the existing
the MLIs who will be encouraged to finance SC Manufacturing/Trading & Service Sector.
entrepreneurs at reasonable rates, so that these 3. Type of Borrower: a) Registered Companies
enterprises become profitable ventures and be having more than 51% shareholding with SC
contributors to capital formation of the country, promoter(s) for the past 12 months having
whereby these entrepreneurs can create wealth, management control in the hands of SC
value and employment for themselves entrepreneurs/promoters. b) Registered partnership
6. Duration of the Fund: In a block of 7 years Firms having more than 51% shareholding with SC
from the date of implementation with provision to partner(s) for the past 12 months having
review/ extend for further blocks of 7 years. management control in the hands of SC
7. Closings under the Fund: It will be an open entrepreneur partners. c) Society registered under
ended scheme, on first cum first serve basis for Society Act, and carrying approved business as per
MLIs, till available corpus with IFCI parked in the prevailing policy of Bank/FIs, having more than
No Lien Account by GoI is exhausted. 51% shareholding with Scheduled Caste member(s)
8. Availability Period: 30 days from the date of at least for the past 12 months having management
first disbursement. control in the hands of SC entrepreneurs/SC
9. Guarantee Period: Initially 1 year, which can members.
be renewed at the expiry of each year for the • Individual SC Entrepreneur will also be eligible
entire loan period with a maximum tenure of 7 under the scheme for a guarantee cover of Rs. 0.15
years. to upto Rs. 1 crore only.
7. Security for MLIs: Asset created from Loan, 4. Amount of Guarantee Cover: Maximum amt
and pledge of promoters’ shareholdings in the of Rs. 5 crore.
assisted company/firm/society. 5. Tenure of Guarantee: Maximum 7 years or
10. Cost involved in the Scheme : repayment period whichever is earlier.
Cost to GoI: Upfront fee @1.50% flat for initial 6. Guarantee Obligation: Guarantee obligation
set-up of each Corpus (the first such corpus shall be limited to the amount in default.
announced being Rs.200 crore) and
346
Financing against electronic Negotiable Warehouse Receipts-eNWR (E-GODAM) (MSME:
48/27.03.2020 and 101.2020)
1. Eligibility: Farmers (including association of  Sole Proprietorship concerns: Maximum
farmers like Primary Agriculture Cooperative Rs. 25 Crores.
societies, Farmers' producer companies of  All other categories of borrowers i.e.
individual farmers, Partnership firms and co- Partnership, Pvt. Ltd. Co., Public Ltd Co.
operatives of farmers, directly engaged in etc: Need Based 6. Margin: Minimum-
Agriculture and Allied Activities), Traders, 25%.
Processors, Arthiyas, Exporters/Importers who Sanctioning Authority to decide the required margin
are original depositors covering only non- (minimum-25%) on case to case basis.
perishable agricultural commodities. 6. Assessment of Quantum of Loan:
2. Branches eligible for financing: Circle Head i. Assessment of quantum of loan/limit under the
to decide the authorized branches to consider scheme can be over and above normal working
financing against e-NWR. While authorizing the capital limit availed by borrower, on an adhoc
Branches, scope of business in the branch and the basis.
below mentioned criteria should be kept into For calculating the PBF, if at the time of setting of
consideration:-- the limit, the pledge limit against e-NWR was not
i) Preferably situated in Metro, Urban & Semi taken into account, the same may be set up
Urban areas. separately looking into the seasonal nature under
ii) Having adequate staff with knowledge of the advance.
aforesaid scheme and availability of necessary The agriculture crops come one or two times in a
infrastructure. year, but use/processing of these commodities is
iii) With prior intimation to Zonal Manager before spread over a period of time. Therefore it is distinct
approving the branches for financing. from the limit against hypothecation of stocks. This
3. Nature of Credit Facility & Scheme Code: is an advance against pledge of stocks kept in
Demand Loan (Scheme Code- DLWHR), Cash WDRA registered warehouses.
Credit (Scheme Code – CCWHR). ii. The limits are to be fixed depending upon the
4. Eligible Warehouses/Commodities: Financing business undertaken by the borrower in the past and
shall be extended only against pledge of e-NWR looking into the anticipated business requirements.
issued by repository/ies for stock/goods kept in 7. Repayment: Maximum 12 M.
WDRA accredited godowns. i) Demand Loan shall be sanctioned for a period
The commodities to be accepted for financing not exceeding 12 months from the date of receipt.
under the scheme will be as per list displayed on ii) Cash Credit Running Account Facility shall be
website of WDRA, which is to be checked valid for one year and renewed annually thereafter.
periodically. However, the period of advance against individual
Market Value of commodities: Further, e-NWR shall not exceed 12 months and it should
Branches can check the Online rates of be ensured that the account to be brought to credit
Commodities from the State as well as Central once in 12 months. The period of finance should
Govt. Commodity sites such as agmarknet.gov.in, not be more than self-life of commodity or e-NWR
enam.gov.in, farmer.gov.in etc. expiry date or validity period of registration of
Goods covered under E-NWR be valued on the godown/s with WDRA or One year, whichever is
basis of prevailing market rates or Govt. support minimum.
price, whichever is lower. 8. Primary Security: Pledge of e-NWR duly
endorsed in favour of bank issued by Repository for
5. Extent of Loan: stocks/ goods kept in WDRA accredited godowns
a. At Branch Level: by Farmers/ Traders/Processors etc.
 Individual, Farmers including SHG/JLG, 9. Collateral Security: Waived on continual basis
Sole Proprietors : Rs.50,000/- to Rs. 50 subject to periodic review of portfolio at corporate
Lacs . level.
 All other categories of borrowers i.e. 10. Stock Audit: Waived.
347
Partnership, Pvt. Ltd. Co., Public Ltd Co. 11. Inspection of Stocks –
etc: Rs. 50,000/- to Rs.10 Crores. Verification of Security
b. At CO/ZO/HO Level: - Inspecting official to ensure that the
 For individuals, Farmers including commodities are held as per the information
SHG/JLG : Maximum Rs.50 Lacs. provided in e-NWR.
- Before financing against ware house receipt,
conduct physical verification of goods
covered against the receipt tendered for
Pledge and a visit report should be placed in
the related documents.
Financing against electronic Negotiable Warehouse Receipts-eNWR (E-GODAM) (MSME:

48/27.03.2020) --- Continued--
- The verifying official would level, the following operations to undertake by the
identify, with reference to the branch on Repository platform:
related Godown Register maintained For pledge creation :
by the Ware House Owner, the Branch Maker Branch Verifier
Stack number and the Lot No. where - To check - Pledgee verifier
goods covered under the eWHR are market value checks pledge
stored. He should ascertain to his of goods for requests
satisfaction the ENWR No., Name the pledge submitted by
of the depositor, Quantity Stored, requests pledgee maker
date of storage etc. and inspect the approved by and approved by
stock accordingly. Warehousema pledgee checker,
- He should refer to the Lot Card and n. for approval,
satisfy himself with regard to the E- - To enter loan - Completes the
NWR No. Name of the Depositor, amount and pledge transaction
Quantity etc. on the Lot Card. market value by
- He should also ensure that ‘Under as determined approving/rejectin
Pledge to PNB’ is noted on the Lot. by Pledgee in g the transaction.
- The verifying officer would record field 'Market An acknowledgment
verification under his / her full Value by receipt and eNWR can
signatures with date, on the rough Pledgee'. also be downloaded
sketch prepared by Warehouse - To send the and same shall be held
Manager / Manager in related loan pledge request on record.
documents file. Any discrepancy, if to the pledgee
observed should be placed before checker for
the Incumbent Incharge, for taking approval.
necessary corrective action. For Pledge Redemption :
- The stocks to be checked every Branch Maker
month. - Enters loan amount that is received
- Physical Verification of the stock from client against the pledged
by Auditors Quantity.
- Concurrent Auditor : Once in a - Selects pledged Quantity for
quarter in respect of accounts having redemption.
balance outstanding above Rs. 25.00 Sends for Checker approval.
lacs as at the close of last quarter Branch checker has no role.
and other accounts once in a half
year. - Nodal Officers at Cos and Zos to monitor the
348
- Regular Auditors : Accounts having accounts as per extant guidelines.
balance outstanding above Rs.50 Financing against Electronic Negotiable Warehouse Receipts
lacs as on the date of start of the - MoU with CCRL :
audit of branch.
- Notice Period to Borrowers : One - WDRA has approved two repositories namely, National
month’s notice before expiry date to E-Repository Limited (NERL) and CDSL Commodity
be given to the borrowers. Repository Limited (CCRL) for creation and
- PROCESS FLOW TO management of eNWRs.
UNDETAKE OPERATIONS - Bank has already entered into agreement with National
THROUGH REPOSITORY E-Repository Limited (NERL) for onboarding their
(NERL) repository platform to undertake the operations related
- Depositor submits the pledge to creation and redemption of pledge on e-NWR.
initiation request to the - On 31.08.2020, bank has signed agreement with CDSL
Repository Participant (RP) to Commodity Repository Limited (CCRL) also for
get finance from the Bank onboarding their repository platform to undertake the
Branch against the particular E- operations related to creation and redemption of pledge
NWR. on e-NWR.
- RP initiates the request and one MSME 101.2020 dt 18.09.2020.
reference no. is generated and it
reflects in the User Id of
warehouseman for further
process.
- Once the warehouseman user/s
confirms the pledge request,
same shall be available to the
bank.
- Once a request received at Brach
Financing against commodities kept in (Cover & Plinth) CAP storage in open compound
Eligible borrowers Processors / Exporters / Importers shall only be eligible. However, Circle
Head and above may relax the above condition on case to case basis.
Commodities Wheat and Paddy. Any other commodity that may be approved by the
General Manager (MSME Division, HO).
Nature of Facility Demand Loan or Cash Credit. However, the maximum tenor of the loan
shall not exceed 9 months, to be considered between Octobers to June. It
should be ensured that loan amount is adjusted before 30th June or onset of
rainy season, whichever is earlier.
Extent of Loan Minimum Rs.50 lakh and Maximum Rs.5 crore against the stock kept in
CAP storage in open compound. Sanctioning authority to satisfy himself
about the genuineness of requirement of the party.
Margin Minimum 35%
Sanctioning of limit While sanctioning the aggregate Cash Credit Limit against warehouse
receipts, sanctioning authority may stipulate the maximum sub-limit that can
be allowed against warehouse receipts issued in respect of commodity kept
in open compound with interchangeability clause.
349
Prime Minister’s Employment Generation Programme (PMEGP) (MSME: 44/27.03.2020)
(1) Objectives: i) To generate xi) Only one person from one family is eligible for obtaining
employment opportunities in rural as financial assistance for setting up of projects under PMEGP.
well as urban areas through setting The ‘family’ includes self and spouse.
up of new self-employment (4) Quantum and Nature of Financial Assistance:
ventures/projects/micro enterprises. A. Funds under PMEGP Scheme will be available under
ii) To bring together widely dispersed two major heads:
traditional artisans/rural and urban I. Margin Money Subsidy:
unemployed youth and give them i) Funds will be allocated under annual Budget Estimates
self-employment opportunities, so as towards disbursement of Margin Money for setting up of new
to arrest migration of rural youth to micro enterprises and ii) From the funds allocated under BE for
urban areas. the Margin Money Subsidy, Rs. 100 Crore or as approved by
(2) Eligibility Conditions of the competent authority will be earmarked for each FY towards
Beneficiaries: disbursement of Margin Money for upgradation of Existing
(i) Any individual, above 18 years of PMEGP units.
age, II. Backward & Forward Linkages: 5% of the total allocation
(ii) No income ceiling, under BE for a Financial Year against the PMEGP shall be
(iii) For setting up of project costing earmarked as funds under Backward & Forward Linkages and
above Rs.10 Lacs in the will be utilized for arranging awareness camps, exhibitions,
manufacturing sector and above Rs. bankers meeting, TA/DA, Publicity, EDP, Physical
5 Lacs in the business/service sector, Verification, Concurrent evaluation etc, and settlement of other
the beneficiaries should possess at residual liabilities by the KVIC.
least VIII standard pass educational B) Levels of funding under PMEGP:
qualification. i) For setting up of new Micro Enterprise (units):
(iv) Assistance under the Scheme is
available only for new projects Categories of beneficiaries Beneficiary’s Rate of
sanctioned specifically under the under PMEGP contribution subsidy (of
PMEGP. (of project project cost)
(v) Self Help Groups (including those cost)
belonging to BPL provided that they Area (Location of Urban Rural
have not availed benefits under any project/unit)
other Scheme) are also eligible for Gen. category 10% 15% 25%
assistance under PMEGP. Special (incl. SC/ST/OBC/ 5% 25% 35%
(vi) Existing Units (under PMRY, Minorities / Women/Ex-
REGP or any other scheme of GOI or Servicemen,physically
State Govt) and the units that have handicapped, NER, Hill and
already availed Govt Subsidy under Border areas etc.
any other scheme of GOI or State Note: a) The maximum cost of the project/unit admissible under
Govt are not eligible. manufacturing sector is Rs. 25 Lac.
vii) Project cost will include Capital b) The maximum cost of the project/unit admissible under
Expenditure and one cycle of business/service sector is Rs. 10 Lac.
Working Capital. Projects without c) The balance amount of the total project cost will be provided
Capital Expenditure are not eligible by Banks as term loan.
for financing under the Scheme. ii) For Upgradation of Existing Units:
Projects costing more than Rs.5 Categories of Beneficiary’s Rate of subsidy (of project
Lacs, which do not require working beneficiaries contribution cost)
capital, need clearance from the under PMEGP (of project
Circle Office & the claims are cost)
required to be submitted with such All categories 10% 15%
certified copy of approval from CO. (20% in NER & hill states)
viii) Cost of the land should not be
350
included in the Project cost. Cost of
the ready built & long lease or rental
Work-shed/Workshop can be included
in the project cost for a max 3 years
only.
ix) PMEGP is applicable to all new
viable micro enterprises, including
Village Industries projects except
activities indicated in the negative list
of Village Industries. Existing/old
units are not eligible.
x) The Institutions/Production Co-
operative Societies/Trusts specifically
registered as such and
SC/ST/OBC/Women/Physically
Handicapped/Ex-Servicemen and
Minority Institutions with necessary
provisions in the bye-laws to that
effect are eligible for Margin Money
(subsidy) for the special categories.
Prime Minister’s Employment Generation Programme (PMEGP) --- continued ---

Note: a) The maximum cost of the project/unit - The amount of Bank Credit will be
admissible under manufacturing sector for ranging between 60-75% of the total
upgradation is Rs. 1 Crore. Maximum Subsidy project cost after deducting 15-35% of
would be Rs. 15 Lacs (Rs. 20 Lacs for NER & margin money (subsidy) and owner’s
Hill States) contribution of 10% from beneficiaries
b) The maximum cost of the project/unit belonging to general category and 5% from
admissible under business/service sector for beneficiaries belonging to special
Upgradation is Rs. 25 Lac. categories.
c) The balance amount of the total project cost will - Banks will claim Margin Money (subsidy)
be provided by Banks as term loan. on the basis of projections of Capital
Bank Finance: Expenditure in the project report and
- 90% of the project cost (in case of General sanction thereof, Margin Money (subsidy)
Category of beneficiary/ institution). on the actual availment of Capital
- 95% of the project cost (in case of special Expenditure only will be retained and
category of the beneficiary/institution) . excess, if any, will be refunded to KVIC,
- Bank will finance Capital Expenditure in - WC component should be utilized in such a
the form of TL and Working Capital in the way that at one point of stage it touches
form of CC. 100% limit of CC, within 3 years of Lock
- Project can also be financed by the Bank in in period of Margin Money and not less
the form of Composite Loan consisting of than 75% utilization of the Sanctioned
Capital Expenditure and Working Capital. limit. If it does not touch aforesaid limit,
- Maximum Project Cost under PMEGP is proportionate amount of the Margin Money
Rs. 25 Lacs, which include TL & CC. (Subsidy) is to be recovered by the
- For Manufacturing units, Working Bank/FIs and refunded to the KVIC at the
Capital component should not be more than end of 3rd year.
40% of the Project Cost and for units under (5) Security:
Service/Trading sector, the Working  No collateral security will be insisted
Capital shall not be more than 60% of the upon by Banks in line with the guidelines
351
Project Cost. However, for Manufacturing of RBI for projects involving Loan upto
units, the project cost may include Rs.10 Lac in respect of the projects cleared
maximum Capital Expenditure upto Rs. 25 by the Task Force.
Lacs. In such cases, the WC over & above (6) Rate of interest: Card rate.
Rs. 25 Lacs will not be covered under (7) Repayment schedule: Between 3 to 7 years
Subsidy. after an initial moratorium period.
Scheme For Financing Dealers For Purchase Of Vehicles From Reputed Manufacturing
Companies (RMCs); Source :MSME Cir no. 50.2015, consolidated cir no. MSME 12.2015.
Purpose Inspection
 To provide Cash Credit (Hypothecation)  Security charged to the Bank will be inspected
facility to dealers against hypothecation by Bank officials once in each month.
of vehicles/ spares/ book debts to finance  The borrower will submit monthly statement
their procurement of vehicles from the containing details of sales turnover during the
Reputed Manufacturing Companies month.
(RMCs). Other Instructions :
Eligibility a) On placing order by the dealer with RMC,
 Dealers of vehicles, whose names appear amounts upto a maximum of 20% of the
in the lists provided by RMCs and total credit limit may be remitted to the
approved by Circle Head (under whose RMC by debiting the same to the CC
jurisdiction the dealer(s) are situated). account of the dealer borrower.
Nature of facility b) Verification of dealership can also be made
 Cash Credit (Hyp) facility against through dealership Certificate/letter of intent
hypothecation of stock of of RMC.
vehicles/spares/book debts. c) In addition to list of RMCs given in the
Loaning Powers annexure, the CH will continue to be the
 Facilities shall be sanctioned by CM and competent authority for approval of RMC for
above. financing their dealers in his command area
Extent of loan only if Corporate Head Office/manufacturing
 Credit limits will be fixed at maximum of base of the RMC is located under his
one-sixth of the projected turnover. jurisdiction.
However, sub limit by way of Cash d) GM (MSME) has been empowered to
Credit (Book Debts) and Cash Credit add/delete RMCs on recommendations of the
against hypothecation of spares may be Circle Head for all India.
allowed upto a maximum of 25% of the e) In case some RMC desires its scheme
total credit facilities. differently from the existing Scheme
Drawing Power detailed above, the case should be
 Drawing power (DP) will be calculated forwarded by the concerned Circle Head
after keeping the stipulated margin on the through their ZM to SME Division.
landed cost price. However, unsold f) After receipt of lists of dealers from RMCs,
stock older than six months lying with Circle Head (under whose jurisdiction the
the borrowers will be excluded from former are situated) shall approve them. Due
the stock, for the purpose of calculation diligence shall be carried out by the
of drawing power. DP will be allowed recommending/sanctioning authority as per
only against book debts outstanding Bank norms based on:
upto 3 months.  Past off-take of products by them .
Margin  Conduct of account with their previous
 vehicles upto 3 months old : Nil bankers.
 vehicles older than 3 months but not  Auto dealer must be having satisfactory
older than 6 months : 25% dealership of RMC of at least one year. No
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 book debts and spares. : 15% further relaxation can be permitted.
Credit Rating : As per extant guidelines.  Having one audited balance sheet (for one
Security full complete year of commercial operation)
 In addition to the primary security by of the enterprise, which should not be more
way of hypothecation of stocks of than 18 months old.
vehicles/ spares/ book debts, collateral  Credit Risk Rating of the party based on
security having minimum value of 50% Audited Balance Sheet is ‘BB’ or above.
of the total credit facility sanctioned be
taken.
“GUARANTEED EMERGENCY CREDIT LINE”

(Source MSME 72/2020,73/2020,74/2020, 76/2020, LA 118.2020, MSME 102.2020,MSME 122.2020)
- Name of the scheme : Guaranteed - Loan Amount : Pre-approved loan upto 20%
Emergency Credit Line 1.0 (GECL 1.0) of the total outstanding (of loans with
- Type of facility : Working Capital Term outstanding upto ₹ 25.00 Crore) as on 29th
Loan. Separate loan account to be opened. February, 2020 i.e. loan amount maximum of
- Purpose : To facilitate MSMEs to meet ₹5.00 Crore
their operational liabilities. - However, loan be decided in consultation with
- Eligible Borrowers : the borrower.
- The scheme is for existing customers, entity - Total Outstanding Amount would comprise of
may be : Proprietorship, Partnership, the on balance sheet exposure/ outstanding
Registered Company, Trusts and Limited across WCL,TL and WCTL loans.
Liability Partnerships (LLPs) & PMMY - Off-balance sheet/ NFB exposures will be
borrowers. Loans under individual capacity excluded.
not covered. - Tenor of loan, Moratorium& Repayment :
- Borrower’s accounts with combined - Repayment in four years from the date of
outstanding loans across all Banks/ FIs of up disbursement, inclusive of one year
to ₹ 25.00 Crore as on 29.02.2020. Upper moratorium. During moratorium period of one
cap (of Rs.250 Cr) on Annual turnover is year, interest is to be payable.
removed. - Loan shall be repaid in 36 installments after
- If accounts for the FY 2019-20 are yet to be the moratorium period is over.
finalized, declaration of turnover from the - Margin : NIL. Interest Rate : RLLR + 1.00%
borrower shall be obtained. subject to maximum of 9.25%.
- Borrower accounts should be less than or - (Interest Table Code is GECLL).
equal to 60 days past due as on 29th - Penal Interest : No penal interest due to any
February, 2020, i.e., all borrowers which non-compliance of the already accepted
have not been classified as SMA 2 or NPA covenants on the existing credit facilities may
by any of the Banks/FIs as on 29th be charged on additional loans.
February, 2020 are eligible. - Loan Disbursement : The disbursement shall
- GECL facility can be considered, if small be made only after approval of guarantee
overdues (up to 1% of GECL amount) is coverage from NCGTC.
above 60 days as on 29.02.2020 in case of - The disbursement of facility may be done in
credit card/ savings account/ current bullet or in tranches.
account, appearing in the CIR. (MSME
- Security / Guarantee :
102.2020)
- Extension of Charge on entire present and
- Borrowers not Eligible :
future current assets of the firm/ company.
- Loans provided in individual capacity are
- The credit under GECL will rank second
not covered under the Scheme.
charge with the existing credit facilities in
- NPA or SMA-2 borrowers as on 29.02.2020 terms of cash flows (including repayments)
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are not eligible. and securities, with charge on the assets
- If eligible/ applicable, borrowers must be financed under the Scheme to be created within
GST registered. a period of 3 months from the date of
- For loans having co-applicant, only those disbursal. A condition in this regard be
existing loans where entity is the primary stipulated in the sanction.
co-applicant are covered under the Scheme
for additional emergency funding.
- Benchmark Ratio : No benchmark ratios are
prescribed.
“GUARANTEED EMERGENCY CREDIT LINE” - Continued--

(Source MSME 72/2020,73/2020,74/2020, 76/2020, LA 118.2020, MSME 102.2020))
- Accordingly, it has been decided to extend - CIC Report : CIC report shall be extracted to
the charge over the existing Primary & assess the total outstanding and days past due.
Collateral securities including Personal/ However, the facility shall be considered
Corporate Guarantees (wherever applicable). irrespective of its Score.
Further, in cases of Multiple Banking/ - An ‘opt-out’ option should be provided to the
Consortium, the security charged will be on eligible borrowers to enable them to choose
pari-passu basis. whether they wish to opt out.
- Branches not to insist on obtaining Non - For eligibility, the existing loans of the
Encumbrances Certificate/ Search Report and borrowers need not be covered under the
Valuation reports, in view of the facility existing NCGTC or CGTMSE Scheme.
being 100% guaranteed by NCGTC. - End use of the funds shall be ensured.
- No additional collateral shall be obtained. - Validity of Scheme :The Scheme would be
- The creation of second charge has been applicable to all loans sanctioned under GECL
waived for all loans up to ₹ 25 lakh during the period from the date of issue of
(outstanding loan as on February 29, 2020 these guidelines by NCGTC to 31.03.2021, or
plus loan sanctioned under GECL), provided till an amount of Rs 3,00,000 crore is
the Bank ensures to safeguard the interests of sanctioned under the GECL 1.0 and GECL
NCGTC. However, an undertaking in this 2.0, whichever is earlier.
regard be obtained from the borrower. For all - Scheme Code : TLGCL.
loans above ₹ 25.00 Lakh, security clause - In case of MBA, the facility may be availed
shall remain the same. (MSME 102.2020). either through one lender or multiple lenders
- Guarantee Coverage: WCTL facility shall depending upon the agreement between the
be covered under guarantee coverage of borrower and the Banks/ FIs. In case the
NCGTC. borrower wishes to take from any lender an
- No Guarantee Fee to be charged. amount more than the proportional 20% of the
- 100% Guarantee coverage on the outstanding outstanding credit than the borrower has with
as on the date of NPA. However, NCGTC to that particular lender, a No Objection
be informed the date of NPA within 90 days Certificate (NOC) would be required from all
of classifying as NPA. other lenders. However, No NOC will,
- The NCGTC shall pay 75% of the guaranteed however, be required if the facility availed
amount within 30 days of preferring of from a particular lender is limited to the
eligible claim. The balance 25% of the proportional 20% of the outstanding credit that
guaranteed amount will be paid on conclusion the borrower has with that lender.
of recovery proceedings or till the decree gets - “The credit under GECL will rank second
time barred, whichever is earlier. charge with the existing credit facilities in
- Post invocation of claim, if any recoveries are terms of cash flows (including repayments)
made, Bank shall first adjust such recoveries and securities, with charge on the assets
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towards the legal costs incurred by them and financed under the Scheme to be created
shall thereafter remit to NCGTC the balance within a period of 3 months from the date of
recoveries. disbursal. Accordingly, extension of charge
- Rating : The facility shall be considered over the existing Primary & Collateral
irrespective of Internal and External rating. securities excluding Personal/ Corporate
- Processing Fee NIL, Guarantees (wherever applicable) shall be
- Documentation Fee NIL. done. A condition in this regard be stipulated
in the sanction.
- Prepayment Penalty : Nil.
“GUARANTEED EMERGENCY CREDIT LINE” - Continued--

(Source MSME 72/2020,73/2020,74/2020, 76/2020, LA 118.2020, MSME 102.2020))
- Further, in cases of Multiple Banking/ - In terms of LA 118.2020, the CAC has been
Consortium, the security charged will be remodeled for this specific purpose with two
on pari-passu basis.” All the eligible member committee i.e recommending
borrowers who have availed loans against authority-sanctioning authority at COs, ZOs
vehicles registered for commercial and MCCs.
purposes are eligible. It is advised to be - Circle Head shall sanction limits above ₹10
more careful while entering our Bank’s Lakhs and upto ₹1.5 Crore (AGM) and ₹3.0
outstanding figures and total outstanding Crore (DGM) in accounts, where files have
figures of all Banks/ FIs in the Finacle not been shifted to MCCs before the cut-off
system (through “GECL” menu) so that no date i.e., 26.06.2020.
MLI or borrower suffers on account of - If MCC have not started functioning, the
wrong feeding. (MSME 88.2020). proposal shall be sanctioned by CO
- Capturing data through Finacle for - If Circle Offices have not started functioning,
obtaining Guarantee Coverage : Zonal Office shall sanction limits above ₹10
- To obtain guarantee coverage under GECL lakh and up to ₹50 Crore.
Scheme, Finacle screens have been created - LCBs headed by DGM shall also sanction
under menu option “GECLDATA” for loans upto ₹2 Crore.
PNB 1.0, “GECL” for e-OBC and - Proposals beyond the power of LCBs shall be
“TLGCL” for e-UNI for capturing requisite sanctioned at Zonal Offices/ HOCAC –II, as
data in specified format. After input of the case may be.
data, report can be generated as per format
- IRMD amended the loaning powers in respect
of National Credit Guarantee Trustee
of GECL for temporary period up to
Company Ltd. (NCGTC) and can be
30.09.2020 vide LA 118.2020 dt 26.6.2020.
uploaded on the portal www.eclgs.com.
User ID’s for the same are created at Zonal - These amended loaning powers were
and Circle level. (MSME 76.2020). applicable upto 30.09.2020, the loaning
powers as communicated vide MSME
- Documentation : PNB- 1252 Agreement
Division circular No. 72/2020 dated
for Working Capital Term Loan, PNB- 728
27.05.2020 in respect of GECL gets restored.
Demand Promissory Note, PNB- 2057
Accordingly, sanctioning authority for
PNB Master Agreement, Any other
considering GECL facility shall be as per
document as prescribed.
MSME Division circular No. 72/2020 dated
- Sanctioning Authority : 27.05.2020, i.e.,
- The sanctioning authority shall be the same - “Sanctioning authority shall be the same in
in whose powers existing credit facility whose powers the existing exposure falls,
falls. even if it exceeds his/ her vested loaning
- Where the new structure is not functional, powers due to sanction of this additional
the erstwhile sanctioning authority shall WCTL facility” (MSME 114.2020 dt
continue to sanction the facility till the date 04.11.2020).
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of formation/ operationalization of new - Note : In terms of MSME 72.2020,
structure. Sanctioning authority shall be the same in
- Regarding red flagged branches, the whose powers the existing exposure falls,
respective branches can sanction the credit even if it exceeds his/ her vested loaning
facilities under this scheme only. However, powers due to sanction of this additional
“Concerned Circle Heads shall monitor WCTL facility.”
these branches closely with respect to the
sanctions under GECL.”
.
Guaranteed Emergency Credit Line (GECL 2.0) (MSME 122.2020)
Name of the Scheme :
Guaranteed Emergency Credit Line (GECL 2.0)
Objective of scheme
GECL 2.0 refers to the scheme for providing 100% Guarantee coverage by NCGTC for extension of
eligible credit to its existing borrowers in the 26 stressed sectors identified by the Kamath Committee
on Resolution Framework and the Healthcare sector whose total credit outstanding (fund based) across
all lending institutions and days past due as on February 29, 2020 was above Rs. 50 crore and not
exceeding Rs. 500 crore and upto 30 days, respectively.
Eligible Borrowers
- All Business Enterprises/MSME borrower accounts with combined outstanding loans across all
Banks/ FIs of above ₹ 50.00 Crore and upto ₹ 500.00 Crore as on 29.02.2020.
- No upper ceiling on annual turnover.
- Individuals are not eligible under GECL 2.0.
- Eligible borrowers should be in the list of 26 stressed sectors identified by Kamanth Committee,
details of which are given hereunder: 1. Power, 2. Trading Wholesale, 3. Textiles, 4. Chemicals,
5.Consumer Durables/FMCG 6. Non-Ferrous Metals, 7.Pharmaceuticals Manufacturing 8. Iron
And Steel Manufacturing, 9. Roads, 10. Real Estate, 11. Logistics, 12. Gems And Jewellery,
13.Plastic Products Manufacturing 14. Automobile Manufacturing 15. Auto Dealership, 16.
Aviation, 17. Sugar, 18. Port And Port Services, 19. Shipping, 20. Cement, 21. Auto
Components, 22. Hotels, Restaurants, Tourism 23. Mining, 24. Building Materials, 25.
Construction, 26. Corporate Retail Outlets.
- In addition to above, Healthcare sector is also considered as eligible sector under the scheme.
Past Due Criteria :
- Borrower accounts should be less than or equal to 30 days past due as on 29th February, 2020,
i.e. all borrowers which have not been classified as SMA1 / SMA2 or NPA by any of the
Banks/FIs as on 29th February, 2020 are eligible under the Scheme.
- Days Past Due status as on 29.02.2020 to be checked by the sanctioning authority from Credit
Bureau
Type of Facility :
- Fund based (WCTL) or non-fund based facility or a mix of two.
- FB and NFB facilities are not interchangeable.
- No revision in sanction limit of FB & NFB shall be allowed after taking the guarantee cover
under this scheme.
Quantum of Loan :
- Upto 20% of the total outstanding loans as on 29th February, 2020, maximum ₹ 100.00 Crore
(FB+NFB).
- Total Outstanding Amount would comprise of the on-balance sheet exposure such as outstanding
amount across WC loans, term loans and WCTL loans.
- Off-balance sheet and non-fund based exposures will be excluded.
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Application Form :
- Facility under GECL 2.0 shall be on Opt-in basis i.e. application form and undertaking, as per
GECL 1.0 shall be obtained from customer
Scheme Code/ Registers Fund based Facilities:
- Scheme Code: TLECL
- Non-Fund based Facilities: 1. Foreign LC Register FLCSE- Foreign LC Sight ECLCG 2.0
FLCUE- Foreign LC Usance ECLCG 2.0 2. Inland LC Register ILCSE- Inland LC Sight ECLCG
2.0 ILCUE- Inland LC Usance ECLCG 2.0 3. Foreign LG Register FLGE- Foreign LG ECLCG
2.0 4. Inland LG Register ILGE- Inland LG ECLCG 2.0
Rate of Interest
- For MSME Borrowers – Existing RoI or RLLR + 1.00%, whichever is lower, subject to
maximum of 9.25%
- For Non-MSME Borrowers – Existing RoI or MCLR(1Y) + 1.00%, whichever is lower, subject
to maximum of 9.25%.
- In case existing RoI is charged on credit facility under GECL 2.0, existing interest table code
shall be used. Otherwise, Interest Table Code for RLLR + 1.00% and MCLR+1.00%, whichever
is applicable shall be used, which are appended as under: RLLR+1% -GGE2L MCLR+1% -
GEC2M
Tenor of loan, Moratorium& Repayment
- Fund Based (WCTL only):
- The loan tenor is five years from the date of first disbursement.
- Moratorium period of one year on the principal amount, interest is payable during moratorium.
- Loan shall be repaid in 48 installments after the moratorium period is over.
- The last date of disbursement for fund based facility under the scheme shall be June 30,2021.
- Non fund based limit:
- No tenor prescribed for non-fund based facility, but the guarantee cover on the non-fund based
facility shall expire on completion of 5 years from the date of first disbursement/first utilization
under fund based or non-fund based facility.
- First tranche of non-fund based facility should be utilized on or before June 30, 2021.
- Sanctioning Authority:
- LCBs headed by DGM (in case of accounts of LCB): Committee headed by LCB Head for
proposals up to ₹ 30.00 Cr.
- Member of the committee: i. LCB Head-DGM (Mandatory member) ii. Asstt General
Managers/CMs iii. Sr. Managers (in case sufficient number of AGMs/CMs are not available).
Quorum: 3 members.
- ELCBs headed by GM (in case of accounts of ELCB)
- Committee of five members headed by ELCB head-GM for sanction of loans upto Rs. 50 crore
under GECL 2.0.
- Member of the committee: i. ELCB Head (Mandatory) ii. Dy. General Manager/s ii. Asstt
General Managers/Chief Managers Quorum: 4 members.
- In case of ELCB Head-GM is not present or not posted, the committee headed by ELCB Head-
DGM can exercise the powers up to Rs 30 crores only.
- Proposals beyond the powers of LCB/ELCB, shall be recommended by LCB/ELCB Head to
HOCAC-I for approval.
- Zonal Offices (in case of proposal other than those emanating from LCB/ELCB)
- ZOCAC I - Upto Rs. 30 crore.
- ZOCAC II - Above of Rs. 30 crore upto Rs. 50 crore.
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- The aforesaid loaning powers may be exercised by LCB/ELCB/ZOCAC-I/ZOCAC-II, as the case
may be, irrespective of the existing exposure to borrower and group which otherwise falls within
the power of higher sanctioning authority.
- In case of group accounts, the aforesaid powers may be exercised for each individual account,
subject to total amount sanctioned to the group under this scheme does not exceed two times of
aforesaid loaning powers for the group as a whole.
- Any facility beyond the loaning powers specified above may be sanctioned by HOCAC-I.
- Validity of the scheme
- The Scheme would be applicable to all loans sanctioned under GECL during the period from the
date of issue of these guidelines by NCGTC to 31.03.2021, or till an amount of ₹ 3,00,000 crore
is sanctioned under the GECL (1.0 & 2.0), whichever is earlier
MSME 122.2020 dt 08.12.2020
‘Mukhya Mantri Gramin Path Vikreta’ for the state of Madhya Pradesh
- The Government of Madhya Pradesh has launched a new scheme on the lines of PM SVANidhi
scheme for urban street vendors, namely 'Mukhya Mantri Gramin Path Vikreta Yojana', a special
microcredit facility scheme for providing working capital loan to street vendors working in rural
areas to help them resume their business that have been adversely affected due to Covid 9
pandemic and consequent lockdown.
The salient features of the scheme are as per Annexure 1.
- The 85% of the exposure will be covered by CGTMSE under its retail trade segment up to the
extent of 50% & 15% guarantee cover will be provided by MP State Govt. Thus, total guarantee
coverage under the scheme will be 57.50% i.e. 50% of 85% = 42.50% by CGTMSE + 15% by
State Govt.
- 18-55 years of age applicants.
- Loan amount: Maximum Rs. 10,000/-.
- Interest Subsidy: 17% by MP Govt. The govt. will reimburse this grant to Bank after the finance
is paid to Bank on time and regular. July 2020 to March 2022.
- ROI : RLLR + 0.15%.
- Registration to be done online through https://kamgarsetu.mp.gov.in.
- Moratorium will be 3 months. After moratorium, loan will be repaid in 1 year
MSME 100.2020 dt 16.9.2020.
PNB TReDS Scheme (MSME 20.2020)

1.0 : TReDS(Trade Receivables Discounting System)
In India, MSMEs are a thrust segment attending to national objectives of providing employment to local
population, enterprise development and inclusive growth with equity. While MSMEs are resilient and
adaptive to challenges, their problem to convert trade receivables timely into liquid funds restricts their
growth potential. To address this issue, RBI has taken steps to establish Trade Receivables Discounting
System (TReDS) platform for financing trade receivables of MSMEs.
TReDS Platform (Trade Receivables Discounting System) is an institutional mechanism set up for
financing of trade receivables of MSMEs from corporate and other buyers including Government
Departments and Public Sector Undertakings (PSUs) through multiple financiers.
Bank finds a new business opportunity which is arising out of fast expansion of Fintech products by
participating in TReDS exchange, which will benefit Banks, being System driven, transparent and
paperless process in TReDS along with reduced administrative cost. Major benefits for the bank :
- Participation in TReDS will help Bank in managing liquidity prudently by lending and
augmenting interest income.
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- Loans by factoring through approved exchange will be classified as PRIORITY SECTOR.
- Compliance to statutory directives.
- The TReDS could deal with both receivables factoring as well as reverse factoring.
- The transactions processed under TReDS are “without recourse” to the MSMEs.
2.0 Eligible Participants/ Stake holders in TReDS exchange:

Sellers
- MSME enterprise, in existing business for a minimum period as decided by individual exchanges.
Buyers :
- Corporate and other buyers including Government Departments and Public Sector Undertaking
and such other entities as may be permitted by the Reserve Bank of India (“RBI”) to participate
on the TReDS platform as Buyers.
- Should be in existing business for a minimum period as decided by individual exchanges.
Financiers :
- Banks, Non-banking Financial Company – Factors and such other institutions as may be
permitted by RBI.
TReDS Exchanges:
- Three entities are approved by Reserve Bank of India presently for setting up TReDS platform
which are as under:
- Receivable Exchange of India Limited (RXIL)
- A. Treds Limited.
- M1Xchange (Mynd Solutions Pvt. Ltd.)
2.1 Receivables Exchange of India Ltd (RXIL) :
RXIL is a joint venture promoted by Small Industries Development Bank of India (SIDBI) and National
Stock Exchange of India Limited (NSE), incorporated under the Companies Act, 2013. Other
shareholders of RXIL are State Bank of India, SBI Capital Markets Ltd, ICICI Bank, ICICI Securities
Ltd and Yes Bank.
2.2 A.TREDS Limited :
Jointly by Axis Bank and M. Junction incorporated under the Companies Act, 2013. M. Junction is a JV
between Tata Steel and Steel Authority of India Ltd. Digital invoice discounting TReDS platform is
known as Invoicemart.
2.3 Mynd Solutions Pvt. Ltd. :
M1 exchange is instituted by Mynd Solutions. Mynd Solutions is a leading global service provider in
business process and technology management, offering broad spectrum of services in Finance and
Accounting (FAO), Human Resource Outsourcing (HRO), Information Technology (IT) and Consulting.
3.0 Process Flow :
Broadly, following steps take place during financing / discounting through TReDS:
i. Creation of a Factoring Unit (FU) - standard nomenclature used in TReDS for invoice(s) or bill(s)
of exchange - containing details of invoices / bills of exchange (evidencing sale of goods /
services by the MSME sellers to the buyers) on TReDS platform by the MSME seller (in case of
factoring) or the buyer (in case of reverse factoring);
ii. Acceptance of the FU by the counterparty - buyer or the seller, as the case may be;
iii. Bidding by financiers;
iv. Selection of best bid by the seller or the buyer, as the case may be;
v. Payment made by the financier (of the selected bid) to the MSME seller at the agreed rate of
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financing / discounting;
vi. Payment by the buyer to the financier on the due date.
Factoring Unit (FU) :
- A Factoring Unit (FU) is a standard nomenclature used in TReDS for invoice(s) or bill(s) of
exchange. Each FU represents a confirmed obligation of the corporates or other buyers, including
Government Departments and PSUs.
- In TReDS, FU can be created either by the MSME seller or the buyer. If MSME seller creates it,
the process is called factoring; if the same is created by corporates or other buyers, it is called
as reverse factoring.
4.0 Registration & Participation by Bank as Financier:

Bank will register with all the approved electronic exchanges considering business opportunity,
development of factoring market, number of participating buyer corporates along with applicable
registration and/or transaction charges in favour of exchanges.
General Manager (GM), MSME Division, will enter into agreement with RBI approved TReDS
exchange. GM , MSME, may endorse other executives not below the rank of DGM/Divisional Head
(AGM) to undertake registration process.
Overall Exposure through TReDS : No exchange wise cap on factoring.
KYC of corporate & Assessment of buyer wise factoring limit :
- To be done by TReDS Exchange.
- Assessment will be on the basis of Long Term External rating ( or short term rating if (LT rating
not available) of the buyers.
- TReDS platform will work on auction / price discovery model for the quoted instruments. Hence
discount rates and margin% quoted by Bank should be competitive to generate successful bids.
Taking cognizance of above business determinants, buyer-wise factoring limit will be assessed on
the basis of:
- Recent Long Term (LT) external Credit Rating of the buyer corporate.
- Corporates with external LT credit rating below A shall not be considered for factoring exposure.
- Factoring exposure shall be taken on Corporates having ST rating up to A2 in.
- Cases where LT credit rating is not available.
- All PSUs/Government Undertaking (Central)/ All Government Department (Central/ State)
irrespective of External Credit Rating shall be considered for factoring exposure.
- Maximum factoring limit shall be primarily assessed from latest audited annual turnover as per
latest audited financials.
- Buyer-wise maximum factoring limit will be fixed depending upon LT/ST Rating and audited
annual turnover in following way:
External Long term Maximum Factoring Limit for Corporates

Credit Rating
AAA 5% of annual Turnover of latest audited financials, Max Rs.25 Cr.
AA 5% of annual Turnover of latest audited financials, Max Rs.20 Cr.
A 5% of annual Turnover of latest audited financials, Max Rs.15 Cr.
External Short Maximum Factoring Limit for Corporates
Term Rating
A1+ 5% of annual Turnover of latest audited financials, Max Rs.25 Cr.
A1 and A2 5% of annual Turnover of latest audited financials, Max Rs.15 Cr.
Buyer-wise factoring limit will be assessed for those businesses where TOL/TNW does not exceed the
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following activity wise benchmark to keep Bank‟s factoring exposure to buyers having controlled
leverage.
Activity TOL/TNW
Industrial / Manufacturing 4:1
Infrastructure/ Construction/ Real Estate 6:1
Service / MSME (Service) 6:1
Trading Units 3:1
For operational/ other details, please refer MSME Cir 20.2020.
9.0 Standard Operating Procedure (SOP) of CGTMSE
9.0.1 .Credit Guarantee Fund Scheme For Micro And Small Enterprises (CGTMSE)
Introduction
 The Credit Guarantee Fund Trust for Small Industries, has implemented a Scheme for
providing guarantees to a substantial extent in respect of credit facilities to borrowers in
Micro and Small Enterprises.
 The Scheme is known as the Credit Guarantee Fund Scheme for Small Industries
(CGFSI) and is in force since August 1, 2000.
 It covers eligible credit facility extended by the lending institutions to eligible borrowers
effective June 1, 2000.
 Subsequent to the enactment of MSMED Act-2006, the Trust was renamed as Credit
Guarantee Fund Trust for Micro and Small Enterprises and scheme as Credit Guarantee
Scheme for Micro and Small Enterprises.
 The Trust covers credit facilities (FB/ NFB by way of term loan and/ or working capital)
extended to a single eligible borrower in the MSE : (i) not exceeding Rs. 50 lakh
(Regional Rural Banks/Financial Institutions) and (ii) not exceeding Rs. 200 lakh
(Scheduled Commercial Banks and select Financial Institutions).
Activities eligible under CGTMSE :
 Credit facilities extended to all New and existing Micro and Small Enterprises
(MSE) engaged in manufacturing or service activities, excluding loans to
educational institutions, training centres, self help groups (SHGs) and joint
liability groups (JLGs), are eligible under the scheme. Now, Trust has decided to
cover MSE Retail Traders under Credit Guarantee Scheme of CGTMSE. Exposure
limit for credit facility of retail trade segment will be from Rs.10 lakh to Rs.100 lakh
per MSE borrower.
 In respect of Micro and Small Enterprises, small road and water transport operators,
small business, professional and self employed persons and all other service
enterprises under the ambit of Micro and Small Enterprises are covered.
 The credit facilities extended to following nine activities under Agri-Clinics and Agri
-Business Centres (ACABCs) can be covered under the CGS provided the finance is
extended as per the terms and conditions of the Credit Guarantee Scheme
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Code Area Type of Activity
1 Maintenance and Repairs of Agricultural Implements & SSSBE*
Machinery including Micro Irrigation Systems
2 Agri Service Centres SSSBE*
3 Seed Processing Units SSI**
4 Tissue Culture SSI**
5 Production of Bio-fertilizers, Bio-pesticides, Bio-control SSI**
agents
6 Honey and Bee product Processing Units SSI**
7 Feed Processing and Testing Units SSI**
8 Setting up of Information Technology Kiosks in rural areas SSI**
for access to various agricultural related portals
9 Setting up of cool chain from the farm level onwards
* Provided that the total investment in fixed assets (other than that of land and building) does
not exceed Rs. 10 Lakh.
** Provided that the total investment in plant and machinery does not exceed Rs. 100 Lakh
and the process involves use of machinery and equipment.
Activities NOT eligible under CGTMSE
 Loans to educational institutions

 Loan to training centres
 Loan to self help groups (SHGs) and joint liability groups (JLGs).
 Now, Trust has decided to cover MSE Retail Traders under Credit Guarantee Scheme
of CGTMSE. Exposure limit for credit facility of retail trade segment will be from
Rs.10 lakh to Rs.100 lakh per MSE borrower.
 Any credit facility in which risks are additionally covered under a scheme operated
/ administered by DICGC/ RBI to the extent they are so covered.
 Any credit facility in respect of which risks are additionally covered by
Government or by any general insurer to the extent they are so covered.
 Any credit facility, which does not conform to, or is in any way inconsistent with,
the provisions of any law, or with any directives or instructions issued by the Central
Government or the RBI , which may, for the time being, be in force.
 Any credit facility granted to any borrower, who has availed himself and where the
lending institution has invoked the guarantee.
 Previously coverage was available to only those accounts in which there was no
collateral security / or third party guarantee obtain up to Rs.200 lakhs. CGTMSE has
now introduced a new “Hybrid Security” product allowing guarantee cover for the
portion of credit facility not covered by collateral security. In the partial collateral
security model, the Bank will be allowed to obtain collateral security for a part of the
credit facility, whereas the remaining part of the credit facility, up to a maximum of
Rs.200 lakh, can be covered under Credit Guarantee Scheme of CGTMSE
 Any credit facility which has been sanctioned by MLI, under the Credit Guarantee
Scheme (CGS), to an eligible borrower, with interest rate more than 14% will not be
eligible for coverage under the CGS.(CGTMSE cir 11.2017)
Provided that the lending institution applies for guarantee cover in respect of credit
proposals sanctioned in a particular quarter prior to expiry of the following quarter.
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Provided further that, as on the material date
(i) The dues have not become bad or doubtful of recovery; and / or
(ii)The business or activity for which the facility was granted has not ceased; and / or
(iii) The credit facility has not wholly or partly been utilized for adjustment of any debts
deemed bad or doubtful of recovery, without obtaining a prior consent in this regard
from the Trust.
Credit facilities extended by more than one bank and/or financial institution jointly
and/or separately to eligible borrower upto a maximum upto Rs.200 lakh per borrower.
9.1 Coverage under CGTMSE

- No collateral security to be obtained and all accounts up to Rs.10lacs will be covered
under CGTMSE guarantee coverage.
- Loan above Rs.10 lakh to Rs.50 lakh - AGM Headed PLPs are empowered to
sanction the loans and shall have discretion to cover eligible loan under CGTMSE on
merits of the case.
- However, for Chief Manager Headed PLPs, ZOCAC-I shall be the Competent
Authority.
- Loan above Rs.50 lakh - ZOCAC-I shall have the said discretion.
Standard Operating Procedure of CGTMSE for PNB 2.0 is being reiterated below:
9.2 LODGING OF APPLICATIONS:
- To avail the guarantee cover lending branches have to apply for guarantee cover
through Nodal Officer at Circle Office in respect of Credit Proposals sanctioned in a
quarter before expiry of the following quarter.
- Each Nodal Officer at Circle Office is allotted Member-ID, User –ID and Password.
- When any fresh loan is sanctioned to MSE borrowers, the branch/PLP/MCC will fill
the details as per Annexure I (enclosed) and will submit physical form to Circle
Office for submitting the applications on CGTMSE portal for guarantee coverage to
generate CGDAN.
- The Nodal Officer, after logging in, will submit the applications/details provided by
branches/PLP/ MCC in Annexure I through online mode on CGTMSE portal.
- The navigation for the same is as under: Application processing >> Guarantee fee.
- CGTMSE will collect the data from its website to process the applications.
- The Nodal Officer after login to CGTMSE website can see the status of the
applications lodged by it.
- The navigation for the same is as under: Receipts Payments>>GF payment through
NEFT>>Allocate Payment Online.
- As soon as the guarantee cover is approved, a Demand Advice (CGDAN) is
generated. On receipt of the Demand Advice, the requisite guarantee fee as indicated
in the Demand Advice is to be remitted by the MLI through branches to CGTMSE.
The navigation for the same is as under: Receipts Payments>>GF payment through
NEFT>>Initiate Payment.
- CAPTURING OF CGPAN IN CBS.
- After generation of CGPAN, branch offices will execute CGPAN menu in CBS.
- ANNUAL GUARANTEE FEE PREMIUM (AGF):
- AGF will be charged on the guaranteed amount for the first year and on the
outstanding amount for the remaining tenure of the credit facilities sanctioned /
renewed to MSEs on or after April 01, 2018 as detailed below:
9.3 Annual Guarantee Structure – Standard Rate (SR)
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Credit Facility Women, Micro Enterprises and Units Others
covered in North East Region
Up to ₹5 Lakhs 1.00% + Risk Premium
Above ₹5 Lakhs and up to ₹50 1.35% + Risk Premium 1.50% + Risk
Lakhs Premium
Above ₹50 Lakhs and up to 1.80% + Risk Premium
₹200 Lakhs
Retail Trade (upto ₹ 100 lakh) 2.00%+ Risk Premium
- The calculation of annual guarantee fee inclusive of Risk Premium is demanded by

CGTMSE as per CGDAN.
- In case of term loans, AGF would be calculated on outstanding amount as on 31st
December.
- For working capital, AGF would be calculated on maximum (peak) working capital
limit availed by the borrower/enterprise during the previous calendar year. The dead
line to complete these activities is informed by CGTMSE to the banks.
- “Hybrid Security” product where the MLIs will be allowed to obtain collateral
security for a part of the credit facility, whereas the remaining unsecured part of the
credit facility, upto a maximum of ₹200 lakh, can be covered under CGTMSE. For
cases under Hybrid Security Model, Guarantee fee will be charged on the guaranteed
amount for the first year and on the proportionate outstanding amount subsequently
resulting in lower guarantee fee charged to MSEs Details of payment of Annual
Guarantee Fee are detailed in Annexure II.
- PAYMENT OF CGTMSE FEE THROUGH MENU OPTION- MCHRG:
- For compliance of GST guidelines and bifurcating the tax (SGST/CGST), menu
option “MCHRG” is to be used for recovery of CGTMSE fee for crediting the income
head 2061617(CGTMSE Income A/C) for PNB 1.0, XXXX0043152006 (CGTMSE
Income A/C) foreOBC&XXXX0166001015(CGTMSE Income A/C) for eUNI,
“where XXXX stands for respective SOLs”.
- Circle office will calculate the amount i.e. {guarantee fee (Base amount) + 9%} + 18
% GST and will share the account wise list with the branches. CGTMSE fee is to be
booked at branch level in Branch Income head by debiting customers account as per
list shared by circle office and crediting the (A/c 2061617 CGTMSE Income A/C).
- In CBS menu option CGSTRPT is available to provide invoice to customer so that
they can further take Input Tax Credit Claim.
- After ensuring and confirming recovery of guarantee fee from eligible accounts from
branches, Circle Office will make payment to CGTMSE by debiting the Expenditure
Head 1142611(CGTMSE Expenditure A/C) i.e. guarantee fee + 18 % of GST
(CGDAN). Example: If a bill (guarantee fee) is raised by CGTMSE on Bank for
Rs.100/-(Base amt.) + GST @18% i.e. Rs.18/-, then circle office will calculate
Rs.100/+ Rs.9/- (i.e. 9% Extra on Base amount) + GST 18%- Thereafter, account of
customer will be debited by Rs.109/- + GST @ 18% of Rs.19.62/- for recovery of
Guarantee fee i.e. Rs.128.62/-.
9.4 REVIVAL OF CLOSED ACCOUNTS:

- If the guaranteed account gets closed due to non-payment of AGF, the request for
revival of accounts/ delayed payment will be considered subject to the following
conditions:
- i. Request for revival of account will have to be submitted within next financial year.
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- ii. Account should be standard and regular as on date of submission of request for
revival and CGTMSE reserves the right to reject the claim if the account turns NPA
within 180 days from the date of revival of account.
- iii. Any fees due by the MLI (current and previous FY) will be demanded along with
penal interest and additional risk premium @15% of standard rate as per the
guidelines of the scheme.
9.5 CLASSIFICATION OF ACCOUNTS AS NPA:
- Bank will indicate the date of classification of the account as NPA in a particular
calendar quarter, by end of subsequent quarter using the option in the portal as under
- (Member Login area >>Guarantee Maintenance >>Periodic Information >>NPA
Details).
- To avoid delays in settlement of claims, Branches/Circles are requested to adhere to
the norms prescribed by RBI for classification of the account as NPA. Non adherence
of these guidelines may lead to the rejection of claim cases.
9.6 GUIDELINES FOR LODGING CLAIM IN CGTMSE PORTAL :
- Before lodgement of claims, please ensure that:
- The guarantee is in force as on date of claim and the MLI has paid the Guarantee Fee
(GF) and Annual Service Fees (ASF)/Annual Guarantee Fee (AGF) regularly.
- Bank has to pay Annual Service Fee/Annual Guarantee Fee till the issue of 1st
instalment of the claim to keep guarantee in force.
- The lock-in-period is 18 months from either the date of last disbursement of the loan
to the borrower or the date of payment of guarantee fee in respect of the credit facility
to the borrower, whichever is later.
- The lending institution may invoke the guarantee in respect of credit facility within a
maximum period of 3 years from the NPA date or lock-in period whichever is later,
if the NPA date is on or after 15.03.2018, time period for claim lodgement will be 1
year for cases sanctioned prior to 01.01.2013 and 2 years for cases sanctioned on or
after 01.01.2013.
- The borrower account is classified as NPA as per norms.
- Date of NPA of accounts be marked online by MLIs.
- Recovery proceedings have been initiated. Mere issuance of recall notice under
SARFAESI Act cannot be construed as initiation of legal proceedings for purpose of
preferment of claim under CGS.
- Bank should take further action as contained in Section 13 (4) of the above Act
wherein a secured creditor can take recourse to any one or more of the recovery
measures out of the four measures indicated therein before submitting claims for first
instalment of guaranteed amount.
- Recovery proceedings will be deemed to have been initiated under the due process of
law if any one of the following conditions is met:-
- Action under section 13 (4) of SARFAESI Act has been initiated.
- Issue of notice under Lok Adalat.
- Suit has been filed in appropriate court under the law of land.
- Issuance of Recovery Certificate by the competent authority under the law of the state
wherever applicable.
- Initiation of legal proceeding as a pre-condition for invoking of guarantees is waived
in respect of those credit facilities covered under Credit Guarantee Scheme where the
aggregate outstanding amount considered eligible for claim settlement by CGTMSE
does not exceed ₹50,000/- per claim.
- The aggregate outstanding amount considered is the total outstanding of all credit
facilities of particular borrower as on NPA date.
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9.7 ONLINE LODGING OF CLAIM:
- In order to lodge the claim, the CNO should log in to CGTMSE website by using the
MLI ID, User IDs.
- The navigation is as under: Claims Processing >> Claim for - First Installment.
- SETTLEMENT OF SECOND / FINAL INSTALMENT: The settlement of second /
final instalment will be considered on conclusion of recovery, irrespective of the
sanction date of the credit facility, provided minimum period of 3 years from the date
of settlement of first claim has been lapsed.
9.8. Realignment of Role and Responsibility in New Organizational Structure in respect

of various functions related to MSME :
CGTMSE Coverage MSME Division Master Cir. No. 20/20 :
For loans above 10 L and up to 50L, If credit facility is proposed to cover by CGTMSE
coverage, AGM, Headed PLPs shall have discretion to cover eligible loan under CGTMSE
on merits of the case. However for Chief Manager Headed PLPs, ZOCAC-I shall be the
Competent Authority. For loans above Rs.50.00 lakhs, ZOCAC-I shall have the said
discretion.
Tenure of Loan & Extension of Moratorium Period PNB Udyog MSME Division Cir.
No. 22/20; Relaxation in Collateral Security PNB Vyapar MSME Division Cir. No.
24/20; Tenure of Loan & Extension of Moratorium Period PNB Seva MSME Division
Cir. No. 23/20, Eligibility PNB Sanjeevani MSME Division Cir. No. 25/20, Takeover of
accounts PNB Arhatia MSME Division Cir. No. 27/20, Margin & Repayment Period
PNB Contractor MSME Division Cir. No. 31/20
The next higher sanctioning authority shall be one step higher but not below ZOCAC-I.
Tenure of Loan PNB Tatkal MSME Division Cir. No. 33/20 :
Facility under the scheme is upto Rs. 25 lakh only. However, the application shall be dealt by
PLP or MCC based on total exposure of the customer. Proposal falls under the power of
PLP/MCC: The said discretion shall remain with PLP Head / MCC-CAC, where the PLP/
MCC is headed by Scale V. However for PLPs headed by Scale-IV, the competent authority
is ZOCAC-I.
Branches Eligible for Financing & Other Guidelines e-NWR MSME Division Cir. No.
48/20 :
All duties of Circle Office / Circle Head are aligned to ZOCAC-1. Duties of Nodal Officers
at CO as per laid down guidelines shall be looked after by Nodal Officer at ZO, not below the
rank of Chief Manager.
Contactless Loans to MSME Borrowers through psb59 minutes portal MSME Division
Cir. No. 18/20 :
For Red Flagged branches, proposals upto Rs. 10.00 lakh shall be sent to PLP for sanction.
Any other guidelines :
Vested power with Deputy General Manager- Credit / Zonal Office / ZOCAC-1.
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MSME Cir 83.2020 dt 06.07.2020.
9.9 : Tenure for working capital facility – Modification in Credit Guarantee Scheme :
CGTMSE has been approving guarantee to cover the working capital facility for a maximum
period of 10 years (in block of 5 years) including intervening renewals/enhancements, if any.
CGTMSE informed vide letter dated 18-03-2020 of removing the tenure cap of 10 years for
coverage of working capital facilities under Credit Guarantee Scheme.
However, a review would be undertaken after each block of 5 years by CGTMSE before
renewal of the guarantee coverage for next 5 years.
MSME 21.2020 dt 27.3.2020.
10.0 Asset Restructuring Module for MSMEs (ARM-MSME)
A web-based Asset Restructuring Module for MSMEs (ARMMSME) has been launched on
30.11.2020 by SIDBI and its associate, ISARC (India SME Asset Reconstruction Co. Ltd.) in
coordination with our Bank.
The portal broadly covers following scenarios of Restructuring Proposals:
Working Capital: Regularization of overdrawn/ irregular portion of WC limit by way of
Working Capital Term Loan/ WC Limit enhancement etc. including conversion of part/ full
WC Limit into WCTL.
 Long Term Loans (TL/ BL/ LAP etc.): Reschedulement (additional moratorium/
change in repayment schedule) and Funding of Interest.
 Change in rate of interest on existing credit facilities.
 Additional credit facility as part of Resolution Plan/ Restructuring.
10.1 BRIEF ABOUT ARM MSME

The module is in the form of an automated/ online “Do-It-Yourself (DIY)” tool for smaller
MSMEs to self-create their restructuring proposal/ financial projections.
It has been divided into following sections:
a. Input Section: Assumptions for Income/ profitability projections & Restructuring Details.
b. Output Section: Dashboard for Key Financial Indicators & Projected Financials and Report
Generation
The module has functionality both for: MSME user and Bank/FIs.
10.1.1 a. MSME user:
 The module is in the form of a web-portal wherein MSME applicant will register
itself by providing basic details, email id and mobile number and log in.
 After data entry in Input Section and verification of the projected financials, the user
can upload soft copies of duly signed restructuring application/ other documents
prescribed by Bank and submit online the restructuring proposal to the bank
(maximum 3 lenders in case of multiple/consortium lending).
 If required, hard copies of the restructuring proposal may also be submitted
separately. The portal will then process the restructuring proposal and results will be
generated in Output section.
 Initially, enabling provision for online submission to the Bank Branches has been
made.
10.1.2 b. Banks/ FIs:

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 After online submission of first restructuring proposal to a branch, 2 auto-generated
mails will flow, first mail will flow to Branch with copy to MSME borrower
intimating submission of the proposal and second mail will go to Branch only with
User Id and Password. On first time login, Branch will be required to change the
password. For subsequent submission of proposals over the portal to the same
branch, first mail will only be sent.
 By accessing the module on www.arm-msme.in portal with its User id and Password,
Branch User will be able to login.
 By clicking on a proposal, same will get opened for view/ rework.
 During the process of reworking the proposals, branch user may enter its remarks/
comments in case any changes/ modification being made in the proposal submitted
and finalize the same as per bank’s internal guidelines.
 After decision of the competent authority, status by way of marking approved/
rejected will be updated on first screen.
For handholding support to MSMEs, following options have been provided under ‘Contact
Us’ section on the home page of the URL https://arm-msme.in.:
MSME 121.2020 dt 03.12.2020
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11.0 One Time Restructuring
One Time Restructuring

- RBI has permitted a one-time restructuring of existing loans to MSMEs classified as
‘standard’ without a downgrade in the asset classification, vide RBI notification dt
01.01.2019, and the amendments thereafter.
- Accordingly, existing loans to MSMEs classified as 'standard' may be restructured
without a downgrade in the asset classification, subject to the following conditions:
- The aggregate exposure, of banks and NBFCs to the borrower does not exceed ₹25.00
crore as on March 1, 2020.
- The borrower’s account was a ‘standard asset’ as on March 1, 2020.
- The restructuring of the borrower account is implemented by March 31, 2021.
- The borrowing entity is GST-registered on the date of implementation of the
restructuring, if the entity is not exempted from GST-registration, as per exemption limit
as on March 1, 2020.
- Asset classification of borrowers classified as standard may be retained as such, whereas
the accounts which may have slipped into NPA category between March 2, 2020 and
date of implementation may be upgraded as ‘standard asset’, as on the date of
implementation of the restructuring plan.
- For accounts restructured under these guidelines, banks shall maintain additional
provision of 5% over and above the provision already held by them.
- Banks will have the option of reversing such provisions at the end of the specified
period, subject to the account demonstrating satisfactory performance during the
‘Specified period’.
- A restructuring would be treated as implemented if the following conditions are met:
- All related documentation, including execution of necessary agreements between lenders
and borrower / creation of security charge / perfection of securities are completed by all
lenders; and the new capital structure and / or changes in the terms and conditions of the
existing loans get duly reflected in the books of all the lenders and the borrower.
- Post-restructuring, NPA classification of these accounts shall be as per the extant IRAC
norms.
- Bank to make appropriate disclosures in their financial statements, under ‘Notes on
Accounts’, relating to the MSME accounts restructured under these instructions,
specifying nos. of accounts restructured & amount therein.
- Accounts classified as NPA can be restructured; however, the extant asset classification
norms governing restructuring of NPAs will continue to apply.
- As a general rule, barring the above one-time exception, any MSME account which is
restructured must be downgraded to NPA upon restructuring.
- Such an account may be considered for up-gradation to ‘standard’ only if it demonstrates
satisfactory performance during the specified period.
- ‘Specified Period’ means a period of one year from the commencement of the first
payment of interest or principal, whichever is later, on the credit facility with longest
period of moratorium under the terms of restructuring package.
- ‘Satisfactory Performance’ means no payment (interest and/or principal) shall remain
overdue for a period of more than 30 days. In case of cash credit / overdraft account,
satisfactory performance means that the outstanding in the account shall not be more
than the sanctioned limit or drawing power, whichever is lower, for a period of more
than 30 days.
- IMPLEMENTATION OF ONE – TIME RESTRUCTURING RESOLUTION
FRAMEWORK :
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- Resolution under this framework is allowed till March 31, 2021.
- The Resolution Plan shall be deemed to be implemented only if the account fulfills the
eligibility criteria mentioned above as per the table below:
SN Resolution Plan Sanctioning Authority
1. Rescheduling of payments (for Within vested Loaning powers as prescribed in L&A
term loans & full/part 100/2020 dated 02.06.2020 & other circulars from time
conversion of Working Capital to time.
limit into Term Loan)
2. Conversion of any interest To be considered by PLP and above as per their vested
accrued, or to be accrued, into loaning powers for Fund Based Unsecured Advances.
another credit facility like The maximum tenor of loan shall not be more than 24
FITL/WCTL. months.
3. Additional funding Additional funding under One Time Restructuring shall
be considered by next higher sanctioning authority for
the cases falling upto the power of GBB/PLP/MCC
after the approval from FRR Committee. However, the
same can be considered within their respective
delegated power in case the proposal fall within vested
loaning power of ZOCAC-I and above.
-No concessions in interest rate shall be considered by field functionaries in MSME

restructured accounts.
- Efforts to be made to extend the credit support under GECL/CECF, if not extended
already, instead of invoking RP.
- Efforts to be made to identify the linked deposits in the accounts and sensitization of
the borrower to utilize these funds instead of availing Resolution Plan as the reporting
shall be done as “Restructured Advances” by Bank to Credit Information Companies
as per RBI norms.”
MSME 98.2020 dt 09.09.2020.
12.0 Frame work for Revival & Rehabilitation (FRR) for MSME in new
organizational set up.
- For accounts having exposure up to ₹ 10.00 Lakh, the account should be mandatorily
examined for CAP (Corrective Action Plan) by the branch.
- However, the cases, will be referred to the Committee headed by PLP for their
concurrence, if the Branch Incumbent has decided the option of recovery under CAP,
- Restructuring proposals falling under powers of PLP will be considered by FRR
committee at PLP.
- Restructuring proposals falling under powers of MCC will be considered by FRR
committee at MCC.
- Restructuring proposals falling under the discretionary powers of Zonal Office/HO will
be considered by FRR committee of MCC/PLP as per the place of processing of
proposal and shall be sanctioned by the respective sanctioning authority.
- Forwarding the account to the Committee for CAP is mandatory in cases of
accounts reported as SMA-2. Before sending the account to the committee for CAP,
PLP/MCC should place on record all the efforts made to regularize the account.
- vi. Composition of committee for FRR to be formed at PLP level as well as MCC
level
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S Particulars MCC Level PLP Level
N
1 chairperson MCC Head PLP Head
2 Internal CPC Head will be member and MSME Vertical Head will be
members convenor of the committee member and convenor
3 External One independent external member with expertise in MSMEs related
Member-1 matters to be nominated by the MCC, (An ex-banker / retired bank
officer) of any bank, other than PNB.
4 External One representative from the concerned State Government.
Member-2 Endeavour should be made to bring representative from the
respective State Government in the Committee. In case State
Government does not nominate any member, then the MCC/PLP
Head should proceed to include an independent expert in the
Committee, namely a retired executive of another bank of the rank of
AGM and above approved by the Dy. Zonal Manager of concerned
Zonal Office.
5 External Senior representatives of all banks / lenders having exposure to the
Member in case borrower
of MBA/
consortium.
- Other terms and conditions for functioning of committees:

- a) Mandatory Members for Quorum- Chairperson, One internal member and
any one from Sl. No. 3 or 4 as per above table shall form the quorum.
- b) Other external members in case of consortium or Multiple Banking Arrangement
(MBA) may join as per the convenience.
- c) The decisions of the Committee will be by simple majority, however, in case of
tie, the Chairperson shall have the casting vote.
- d) The borrower will be informed through a written communication from the branch
to be present before the committee with his/their concrete plan to regularize the
account. The borrower will be informed about the decision of the committee through a
written communication.
- e) In case of accounts under consortium / MBA, lenders should sign an Inter-Creditor
Agreement (ICA) on the lines of Joint Lenders’ Forum (JLF) Agreement. –
- f) The PLP/MCC Heads may put in place suitable arrangements, including dedicated
manpower, to ensure smooth functioning of the Committee and adherence to the
stipulated timelines.
- g) All eligible stressed MSMEs shall have access to the Committee for resolving the
stress.
- h) Provided that where the Committee decides that recovery is to be made as part of
the CAP, the manner and method of recovery shall be in accordance with the extant
guidelines for recovery of bank’s dues .
- Fixed remuneration of Rs.3500/- (including conveyance and other expenses) per day
(irrespective of accounts/sittings on a particular day) will be paid to the external
member for all cases to be discussed in/on a particular meeting/day as per existing
provision. However, in view of the long distances to be covered in case of Metros &
A Class cities like Delhi, Mumbai, Chennai, Kolkata, Bangalore, Ahmedabad,
Hyderabad etc. an additional amount upto Rs. 500/- may be sanctioned by the Zonal
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Manager. Further, powers to increase the remuneration will be with HOCAC-I on the
recommendations of at least 3 Zonal Managers.
- j) The minutes of the meeting will be recorded under the signatures of committee
members.
12.2. Identification of incipient stress:

Before a loan account of a Micro, Small and Medium Enterprise turns into a Non-Performing
Asset (NPA), branch should identify incipient stress in the account under the Special Mention
Account (SMA) category as given in the Table below:
SMA Basis for classification
Subcategories
SMA-0 Principal or interest payment not overdue for more than 30 days but
account showing signs of incipient stress
SMA-1 Principal or interest payment overdue between 31-60 days
SMA-2 Principal or interest payment overdue between 61-90 days
Illustrative list of signs of stress for categorizing an account as SMA-0:

- Delay of 90 days or more in (a) submission of stock statement / other stipulated
operating control statements or (b) credit monitoring or financial statements or (c)
non-renewal of facilities based on audited financials.
- Actual sales / operating profits falling short of projections accepted for loan sanction
by 40% or more; or a single event of non-cooperation / prevention from conduct of
stock audits by banks; or reduction of Drawing Power (DP) by 20% or more after a
stock audit; or evidence of diversion of funds for unapproved purpose; or drop in
internal risk rating by 2 or more notches in a single review.
- Return of 3 or more cheques (or electronic debit instructions) issued by borrowers in
30 days on grounds of non-availability of balance/DP in the account or return of 3 or
more bills / cheques discounted or sent under collection by the borrower.
- Devolvement of Deferred Payment Guarantee (DPG) installments or Letters of
Credit (LCs) or invocation of Bank Guarantees (BGs) and its non-payment
within 30 days.
- Third request for extension of time either for creation or perfection of securities as
against time specified in original sanction terms or for compliance with any other
terms and conditions of sanction.
- Increase in frequency of overdrafts in current/CC accounts.
- The borrower reporting stress in the business and financials. viii. Promoter(s)
pledging/selling their shares in the borrower company due to financial stress.
12.3. Identification by the Borrower Enterprise:

- Any MSME borrower may voluntarily initiate proceedings under this Framework, if
the enterprise reasonably apprehends failure of its business or its inability or likely
inability to pay debts or there is erosion in the net worth due to accumulated losses to
the extent of 50% of its net worth during the previous accounting year, by making an
application to the branch or directly to the Committee.
- On receipt of application, the account with aggregate loan limits above ₹10 lacs
should be referred to the Committee.
- The Committee should convene its meeting at the earliest but not later than five
working days from the receipt of the application, to examine the account for a
suitable CAP.
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- The accounts with aggregate loan limit up to ₹10 lacs may be dealt with by the branch
for a suitable CAP.
12.4. Application to the Committee for a Corrective Action Plan:

- Any lender on identifying an MSME account as SMA-2 or suitable for consideration
under the Framework or on receipt of an application from the enterprise, shall forward
the cases having aggregate loan limits above ₹ 10 lacs to the Committee for
immediate convening of meeting and deciding on a CAP.
- Stressed enterprises having aggregate loan limits above Rs.10 lacs can also directly
file an application for CAP to the Committee or to the largest lender.
- The application inter-alia, should include the following:
- (a) Latest audited accounts of the Enterprise including its Net worth;
- (b) Details of all liabilities of the enterprise, including the liabilities owed to the State
or Central Government and unsecured creditors, if any;
- (c) Nature of stress faced by the Enterprise;
- and (d) Suggested remedial actions.
- The Committee shall notify the concerned enterprise about such application within
five working days and require the enterprise to: (a) Respond to the application or
make a representation before the Committee; and (b) Disclose the details of all its
liabilities, including the liabilities owed to the State or Central Government and
unsecured creditors, if any, within fifteen working days of receipt of such notice. If
the enterprise does not respond within the above period, the Committee may proceeds
ex-parte.
- On receipt of information, the Committee may send notice to such statutory creditors
as disclosed by the enterprise as it may deem fit, informing them about the application
and permit them to make a representation regarding their claims before the Committee
within fifteen working days of receipt of such notice. This information is required
for determining the total liability of the Enterprise in order to arrive at a suitable CAP
and not for payments of the same by the lenders.
- Within 30 days of convening its first meeting, the Committee shall take a decision
on the option to be adopted under the corrective action plan and notify the enterprise
about such a decision, within five working days from the date of such decision.
- If the corrective action plan decided by the Committee envisages restructuring of the
debt of the enterprise, the Committee shall conduct the detailed Techno-Economic
Viability (TEV) study in eligible cases and finalize the terms of such restructuring in
accordance with the extant prudential norms for restructuring, within 20 working
days (for accounts having aggregate exposure up to ₹ 10 crore) and within 30
working days (for accounts having aggregate exposure above ₹ 10 crore and up
to ₹ 25 crore) and notify the enterprise about such terms, within five working days.
- Upon finalization of CAP, the implementation shall be completed by the
PLP/MCC/ZO within 30 days (if the CAP is Rectification) and within 90 days (if the
CAP is restructuring). In case recovery is considered as CAP, the recovery measures
should be initiated at the earliest.
- Where an application has been admitted by the Committee in respect of an MSME,
the enterprise shall continue to perform contracts essential to its survival but the
Committee may impose such restrictions, as it may deem fit, for future revival of the
enterprise.
- The Committee shall make suitable provisions for payment of tax or any other
statutory dues in the corrective action plan and the enterprise shall take necessary
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steps to submit such plan to the concerned taxation or statutory authority and obtain
approval of such payment plan.
12.5. Corrective Action Plan by the Committee:

- While Techno-Economic viability of each account is to be decided by the concerned
lender/s before considering restructuring as CAPs, for accounts with aggregate
exposure of Rs.10 crore and above, the Committee should conduct a detailed Techno-
Economic Viability study before finalizing the CAP.
- During the period of operation of CAP, the enterprise shall be allowed to avail both
secured and unsecured credit for its business operations as envisaged under the terms
of CAP.
- The options under CAP by the Committee may include:
- a. Rectification:– Obtaining a commitment, specifying actions and timelines, from
the borrower to regularize the account so that the account comes out of Special
Mention Account status or does not slip into the Non Performing Asset category and
the commitment should be supported with identifiable cash flows within the
required time period and without involving any loss or sacrifice on the part of the
existing banks/lenders.
- The rectification process should primarily be borrower driven.
- However, the Committee may also consider providing need based additional finance
to the borrower, if considered necessary for meeting, in exceptional cases,
unavoidable increased working capital requirement. Such additional finance should
ordinarily be an ad-hoc facility to be repaid or regularized within a maximum
period of six months.
- Additional finance for any other purpose, as also any roll-over of existing facilities, or
funding not in compliance with the above conditions, will tantamount to restructuring.
- Repeated rectification with funding, within the space of one year, will be treated as a
restructuring and no additional finance should be sanctioned under CAP, in cases
where the account has been reported as fraud by any lender.
- b. Restructuring:– Consider the possibility of restructuring the account, if it is prima
facie viable and the borrower is not a willful defaulter. Any deviation from the
commitment by the borrowers affecting the security or recoverability of the loan may
be treated as a valid factor for initiating recovery process. The lenders in the
Committee may sign an Inter-Creditor Agreement (ICA) and also require the
borrower to sign the Debtor-Creditor Agreement (DCA), which would provide the
legal basis for any restructuring process.
- A stand-still clause (as defined in extant guidelines on Restructuring of Advances)
may be stipulated in the Debtor- Creditor Agreement.
- c. Recovery:–
- Once the first two options at (a) and (b) / (rectification & restructuring) above are
seen as not feasible, due recovery process may be resorted to.
12.6. Majority for decision in case of more than one creditor:

- The decisions agreed upon by a majority of the creditors (75% by value and 50% by
number).
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12.7. Time-lines for deciding CAP:
SN Detail of action to be Taken under FRR Timeline
1. On the basis of the early warning signals, the branch maintaining 5 working days
the account will forward the stressed accounts with aggregate loan
limits above Rs.10 lacs to the Committee for a suitable CAP
within.
2. If application for CAP is submitted directly to the committee, the 5 working days from
Committee should convene its meeting for a suitable CAP at the the receipt of the
earliest but not later than. application,
3. The Committee shall notify the concerned enterprise about such 5 working days of
application within application.
4. Enterprise to disclose the details of all its liabilities, including the 15 working days of
liabilities owed to the State or Central Government and unsecured receipt of such
creditors, if any, within notice
5. On receipt of information relating to the liabilities of the 15 working days of
enterprise, the Committee may send notice to such statutory receipt of such
creditors as disclosed by the enterprise as it may deem fit, notice
informing them about the application under the Framework and
permit them to make a representation regarding their claims before
the Committee within
6. The Committee shall convene its first meeting for a specific 30 working days
enterprise and take a decision on the option to be adopted under from the date of such
the corrective action plan Within meeting
7. Within 30 days of convening its first meeting for a specific 5 working days
enterprise, the Committee shall take a decision on the option to be from the date of
adopted under the corrective action plan notify the enterprise about such decision
such a decision, within
8. The Committee shall conduct the detailed Techno-Economic 20 working days
Viability (TEV) study and finalise the terms of such a restructuring
for accounts having aggregate exposure up to Rs.10 crore within
9. The Committee shall conduct the detailed Techno-Economic 30 working days
Viability (TEV) study and finalise the terms of such a restructuring
for accounts having aggregate exposure above Rs.10 crore and up
to Rs.25 crore, within
10 If the CAP envisages restructuring of the debt of the enterprise, the 5 working days
Committee shall conduct the detailed Techno-Economic Viability
(TEV) study and finalise the terms of such a restructuring in
accordance with the extant prudential norms for restructuring, and
notify the enterprise about such terms, within
11 Upon finalization of the terms of the corrective action plan, the 30 days
implementation of that plan shall be completed by the concerned
bank (if the CAP is Rectification) within
12 Upon finalization of the terms of the corrective action plan, the 90 days
implementation of that plan shall be completed by the concerned
bank (if the CAP is restructuring).
13 If CAP decided as recovery, the recovery measures should be At the earliest
initiated within.
14 If the Committee is not able to decide on CAP and restructuring 30 days
package due to non-availability of information on statutory dues,
the Committee may take additional time for deciding CAP and
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SN Detail of action to be Taken under FRR Timeline
preparing the restructuring package. However, they should not
wait beyond this period and proceed with CAP.
15 In case the Committee decides that recovery action is to be 10 working days
initiated, such enterprise may request for a review of the decision
by the Committee within a period from the date of receipt of the
decision of the Committee.
16 A review application shall be decided by the Committee within a 30 days
period from the date of filing of such review.
12.8. Additional Finance:

- If the Committee decides that the enterprise requires financial resources to restructure
or revive, it may draw up a plan for provision of such finance.
- Any additional finance should be matched by contribution by the promoters in
appropriate proportion, and this should not be less than the proportion at the time of
original sanction of loans.
- Additional funding provided under restructuring / rectification as part of the CAP will
have priority in repayment over repayment of existing debts.
- If the existing promoters are not in a position to bring in additional funds the
Committee may allow the enterprise to raise secured or unsecured loans.
- Provided further, that the Committee may, with the consent of all creditors
recognized, provide such loans higher priority than any existing debt.
12.9 Performance by the borrower:
If the Committee decides on options of either ‘Rectification’ or ‘Restructuring’, but the

account fails to perform as per the agreed terms under these options, the Committee shall
initiate recovery.
12.10. Restructuring by the Committee:
- Eligible accounts for restructuring: accounts reported as Standard, Special Mention
Account or Sub-Standard by one or more lenders of the Committee.
- However, the Committee may consider restructuring of the debt, where the account is
doubtful with one or two lender/s but it is Standard or Sub-Standard in the books
of majority of other lenders (by value).
- Willful defaulters shall not be eligible for restructuring.
- Cases of Frauds and Malfeasance remain ineligible for restructuring. However, in
cases of fraud / malfeasance where the existing promoters are replaced by new
promoters and the borrower company is totally delinked from such erstwhile
promoters / management, banks and the Committee may take a view on restructuring
of such accounts based on their viability, without prejudice to the continuance of
criminal action against the erstwhile promoters / management. Further, such accounts
may also be eligible for asset classification benefits available on refinancing after
change in ownership, if such change in ownership is carried out under guidelines
contained in RBI.
- Banks cannot reschedule / restructure / renegotiate borrowal accounts with
retrospective effect. While a restructuring proposal is under consideration, the usual
asset classification norms would continue to apply. The process of re- classification of
an asset should not stop merely because restructuring proposal is under consideration.
- The process of restructuring can be initiated by the bank in deserving cases subject to
execution of documents as per bank’s guidelines.
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- Viability:
- a). The viability should be determined by the committee based on the acceptable
viability benchmarks determined by them, which may be applied on a case-by- case
basis, depending on merits of each case.
- b). Illustratively, the parameters may, inter-alia, include the Debt Equity Ratio, Debt
Service Coverage Ratio, Liquidity or Current Ratio, etc.
- Conditions relating to Restructuring under the Framework
- (i) The restructuring package shall stipulate the timeline during which certain viability
milestones such as improvement in certain financial ratios after a period of 6 months
may be achieved.
- (ii) The Committee shall review the account for achievement / nonachievement of
milestones on monthly basis and shall consider initiating suitable measures including
recovery measures as deemed appropriate.
- (iii) Any restructuring under this Framework shall be completed within the specified
time periods.
- The general principle of restructuring shall be that the stakeholders bear the
first loss of the enterprise rather than the lenders.
- In the case of a company, the Committee may consider the following options, when a
loan is restructured: (a) Possibility of transferring equity of the company by promoters
to the lenders to compensate for their sacrifices; (b) Promoters infusing more equity
into their companies; (c) Transfer of the promoters’ holdings to a security trustee or
an escrow arrangement till turnaround of enterprise to enable a change in management
control, if lenders favour it.
- In case a borrower has undertaken diversification or expansion of the activities which
has resulted in the stress on the core-business of the group, a clause for sale of non-
core assets or other assets may be stipulated as a condition for restructuring the
account, if under the Techno-Economic Viability study, the account is likely to
become viable on hiving off of non-core activities and other assets.
12.11.. Review of committee’s decision at the request of the Enterprise:
- i. In case the Committee decides that recovery action is to be initiated against an

enterprise, such enterprise may request for a review of the decision by the Committee
within a period of ten working days from the date of receipt of the decision of the
Committee.
- A review application shall be decided by the Committee within a period of thirty days
from the date of filing.
12.12 Loaning Powers under FRR for MSMEs :

Aggregate commitment under Up to vested loaning powers as per loaning power
rehabilitation/ restructuring chart in force. However for FITL & WCTL, loaning
package including funding of powers for sanctioning of Unsecured fund based
irregularity into FITL and WCTL loans would be exercised. Further, GBB will have
and additional limits for working powers to consider FITL & WCTL without increase
capital and term loan. in existing exposure
For other powers like repayment period/ rate of interest/margin/ charges etc.,please refer para
12 of MSME Cir 98.2020 for details.
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Sanctioning authority as per delegated powers as prescribed above are empowered to
reschedule repayment of viable MSME units in Standard category and when the account is
being restructured for the 1st time except the following cases:
- Incumbents cannot reschedule own sanctions which will be considered by next higher
authority.
- Re- schedulement of debt in any account within one year of first sanction or sanction
of term loan shall be approved by next higher authority.
- In case of sanction of extension of repayment period of existing TL, maximum up to 7
years starting from the date of reschedulement, which shall also include extension of
moratorium period. The above extension shall, however be subject to the condition
that overall repayment period of the account including this extension is not going
beyond 10 years from the date of original sanction.
12.13 Viability Criteria / Benchmarks:

PARTICULARS FRR for MSMEs
Minimum Average DSCR 1.25
Maximum period within which the unit 5 years
should become viable
Maximum repayment period of all term 10 years
loans/FITL/WCTL
Promoters’ sacrifice and additional funds Minimum 20% of banks’ sacrifice or 2% of the
should be brought upfront invariably restructured debt, whichever is higher
- Techno-economic Viability needs to be established before proceeding with the

restructuring.
- To adhere the time line, endeavor should be made to get the viability study done in
advance before examining the case. However:
- i) In Micro and Small units and total exposure (FB and NFB) to the unit does not
exceed Rs. 50 lacs as on the date of approving restructuring package, competent
authority can approve rehabilitation package as recommended without obtaining
formal TEV study.
- ii) In trading units, Competent Authority can approve rehabilitation package as
recommended without obtaining formal TEV study. However, in sanction note
justification thereof and viability of the unit with the proposed package is mentioned.
12.14 : Introduction of online portal for submission of FRR applications by MSME

borrowers
Introduction of online portal for submission of FRR applications by MSME borrowers :
- Bank has developed an online portal to receive FRR applications from our MSME
borrowers and to update the status of these applications by the Branches / Circle Offices.
- For this purpose, 2 modules have been created as under:
- (i) Customer / borrower Module : This module is for submission of FRR applications by
Bank’s existing MSME users. A link has been provided at our Bank’s website by the
name of “APPLICATION UNDER FRAMEWORK FOR REVIVAL &
REHABILITATION” to excess this module.
- ii) Branch / CO / ZO / HO Module: This module is for updation of status of FRR
applications, submitted by our existing MSME borrowers. A link has been provided under
Non CBS applications by the name of “FRR applications” to access this module.
- Following User types can be created other than Admin User (HO User) : i. Branch Maker
User ii. Branch Checker User iii. Circle Maker User iv. Circle Checker User Zonal
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Officer User.
- Zonal Office Users are to be created by Admin User (HO User). Circle Users (both maker
& checker) are to be created by their respective Zonal Office User and Branch Users are
to be created by their respective Circle Office User
MSME 52.2020 dt 27.03.2020.
13.0 Misc. Issues
13.1 Co Lending Model kept in abeyance :

13.1.1 : Co-origination of Loans by banks and Non- Banking Financial Companies (NBFCs)
for Lending to Priority Sector- Product for Machinery/Equipment Loan under Co-origination
agreement with SREI Equipment Finance Limited. Details given in MSME Cir No.
93.2020 dt 11.08.2020.
Note : In view of revision of scheme by RBI vide notification dt 05.11.2020, further
financing stopped vide MSME Cir MSME 119.2020 dt 19.11.2020 till further instructions.
CO Lending Model (Co-Origination Of Loans By Banks And Non-Banking Financial
Companies To Priority Sector)
CO-ORIGINATION OF LOANS BY BANKS AND NON-BANKING FINANCIAL

COMPANIES TO PRIORITY SECTOR- Product for Machinery/ Equipment loan under Co-
origination agreement with SREI Equipment Finance Limited :
RBI has circulated on 05.11.2020 revised framework on the co-origination model and has
rechristened the scheme as “Co- Lending Model” (CLM) to improve the flow of credit to the
unserved and underserved sector of the economy and make available funds from the banks
and greater reach of the NBFCs.
In accordance with the above, revised co-origination /co-lending model for financing with
NBFCs is under review of the Bank.
Accordingly, all field functionaries are advised that:
-No fresh financing shall be undertaken by the authorized branches/ PLPs/ MCCs, till
further instructions.
- Cases, which are sanctioned but not disbursed under this model till date and
documentation has already been done, shall be disbursed in terms of their sanction.
- Cases, which are sanctioned but not disbursed under this model and documentation is
not done till date, shall not be disbursed.
MSME 119.2020 dt 25.11.2020
13.2 “DIGITAL JOURNEY CAMPAIGN” for MSME/ MUDRA through

psbloansin59minutes portal From 25.11.2020 TO 31.12.2020
PSB online portal is facilitating sanction of Mudra Loans from Rs. 10,000 to Rs. 10.00 Lac
and MSME loans from more than Rs.1 lakhs to Rs.500 lakhs.
PSB59 minutes portal is providing multiple data points which are authenticated digitally. The
system are connected with multiple APIs leading to real time data processing. That includes
data from GST, Income Tax, Bank Statement, Fraud Databases, MCA, Bureau Reports and
multiple other input data. This can help the sanctioning authority to take more prompt
decisions.
In order to improve Bank’s performance, bank has launched a Campaign for lead generation
by our Branches/Circles/Zones for the period 25.11.2020 to 31.12.2020.
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Name : Digital Journey Campaign
Target : Fresh Onboarding and Branch Activation on PSB59 minutes portal.
Campaign Period : 25.11.2020 to 31.12.2020. For more details, refer to
MSME 118.2020 dt 24.11.2020
13.2 Amended Technology Up gradation Fund Scheme (ATUFS) :

Vide circular dated 04.11.2020, Office of the Textile Commissioner, Ministry of Textiles,
Government of India has advised to include/modify the following machines under ATUFS.
I. Detail of Machines included under ATUFS :
- Computerized Multi Head Printing Machine for Garments and Garment
Panels(Processing Segment).
- Label Weaving Machine.
II. Modification of machine specification under ATUFS.
Digital/Ink jet printing machine(for textile processing units & garments manufacturing
units only) (Revised).
MSME 116.2020 dt 21.11.2020.
13.3 : MUDRA AND STAND UP INDIA FEE COLLECTION PROCEDURE :
MUDRA AND STAND UP INDIA FEE COLLECTION PROCEDURE
- Presently in e-OBC & e-UNI, the branches recover the guarantee fees for both
Mudra(CGFMU) and Stand Up India (CGSSI) from the borrowers and credit the same in
the inter sol account of their respective Circle Offices through the menu option TM in
CBS for onward transfer to MSME Division, Head Office.
- In PNB 1.0, NCGTC fee is booked at branch level in Branch Income head by debiting
customers account and crediting the income account and Head office make payment to
NCGTC by debiting the Expenditure Account 1142612.
- As per policy of PNB 2.0, applicable premium in case of accounts in PNB & e-UNI,
100% of the guarantee fee will be borne by customer. In e-OBC, the guarantee fee will
be borne by the bank for accounts up to Rs.5.00 lacs sanctioned on or before 31.03.2020.
For accounts having sanctioned limits of above Rs.5.00 lacs, customer’s accounts will be
debited and income head will be credited.
- For compliance of GST guidelines and bifurcating the tax (SGST/CGST), menu option
“MCHRG” is already available in CBS for PNB 2.0.
- Henceforth this menu is to be used for recovery of NCGTC fee for crediting the income
head.
- As such, For booking of MUDRA (CGFMU) fees- Branches will credit following
income account PNB 1.0 - XXXXX002061618 (NCGTC-MUDRA Income A/C) E-
OBC - XXXX0043152007 (NCGTC-MUDRA Income A/C) E-UNI -
XXXX0166001016 (NCGTC-MUDRA Income A/C).
- Head office will calculate the amount i.e. {guarantee fee (Base amount) + 9%} + 18 %
GST and will share the account wise list with the zonal office.
- NCGTC fee is to be booked at branch level in Branch Income head as above by debiting
customers account as per list shared by zonal office.
- In CBS menu option CGSTRPT is available to provide invoice to customer so that they
can claim Input Tax Credit.
MSME 109.2020 dt 21.10.2020.
13.4 : Escalation matrix for resolution of queries related to MSME Division :
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Escalation matrix for resolution of queries related to MSME Division.
Post amalgamation of e-OBC and e-UNI with Punjab National Bank, it has become
imperative to have an escalation matrix in place for addressing the issues faced by field
functionaries relating to different MSME products/ schemes and to ensure expeditious
resolution of their queries to lower the TAT. Details of concerned officials are as per
Annexure-I.
- Branches to escalate issues through respective CO/ZO only.
- PLPs/MCCs to escalate issues, preferably through respective CO/ZO.
- However, in case of urgency they may contact HO directly also
MSME 106.2020 dt 13.10.2020.
13.5 : Pre Disbursement Audit- Segregation of Pre and Post Disbursement Condition of
Sanction :
Pre Disbursement Audit- Segregation of Pre and Post Disbursement Condition of Sanction :
- System of Pre Disbursement Audit is implemented to avoid any risk due to any
noncompliance of terms and conditions of sanction.
- All sanctioning authorities are advised to make clarity in conditions of sanction and
bifurcate Pre and Post Disbursement Conditions.
- If any condition which is post disbursement in nature but requires simultaneous
compliance at the time of disbursement, the sanctioning authority should clearly mention
the same in their sanction.
MSME 99.2020 dt 10.09.2020.
13.6 : Modification in PNB Vyapar Scheme - Powers for permitting relaxation in

margin and collateral security norms :
Powers for Relaxation in Margin are delegated at various levels, as under:
i) For Working Capital :
ZOCAC-I may relax margin requirement for PLP/MCC power proposals in case of
working capital limit upto the level of:- Stocks 20% Receivables: 30% .
ZOCAC-II may relax margin requirement for within powers of ZOCAC – I/ lower
authorities, for WC limits upto the level of:- Stocks 20% Receivables: 30%.
HOCAC - I may relax margin requirement for within powers of ZOCAC – II/ lower
authorities, for WC limits upto the level of:- Stocks 20% Receivables: 30%.
HOCAC - II may relax margin requirement for within powers of HOCAC – I/ lower
authorities, for WC limits upto the level of:- Full Powers.
HOCAC - III may relax margin requirement : Full Powers..
ii) For Term Loans :
(For Purchase/Construction of Shop & Showroom /Acquiring Of Assets For Furnishing
Of Shop & Showroom etc.)
HOCAC-II may relax margin requirement for cases within powers of HOCAC-II and
lower authorities : Full Powers.
HOCAC-III has full powers to relax margin.
Power of relaxation in Collateral Security
ZOCAC – I : For Fresh/ Enhancement/ Additional / Adhoc credit proposals, ZOCAC-I may
permit relaxation in collateral security by upto 50% of the loan /limit in the proposals falling
within loaning powers of lower authorities subject to the following conditions:-
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a) Internal Risk Rating of the party is ‘PNB-B1’ and above.
b) Further, in case of the proposals, where external rating is applicable, it should not be
below BBB.
Provided further that, In case of enhancements, the conduct of account is satisfactory and no
serious inspection irregularity is outstanding.
ZOCAC-II may permit relaxation for the fresh/ Enhancement* / Additional/ Adhoc Credit
proposals in collateral security by upto 50% of the loan/ limit falling within vested loaning
powers of lower authorities subject to the following conditions:-
i) Rating of the party is ‘PNBB1’ and above.
ii) Internal Risk Rating is ‘PNB-B2’ and total exposure (FB+NFB) is upto Rs.25
crore.
iii)If external rating is applicable, it should not be below BBB.
iv) In case of enhancements, conduct of account should be satisfactory and no serious
inspection irregularity should be outstanding.
For fresh / Enhancement / Additional/ Adhoc proposals, HOCAC – I may relax collateral
security by upto 75% in accounts having rating B1 and above and by upto 50% in accounts
having CRR of B2 in loan/ limit falling within vested loaning powers of the lower authorities.
If external rating is applicable, it should not be below BBB.
In case enhancements, It is to ensure that conduct of account is satisfactory and no serious

inspection irregularity is outstanding
HOCAC-II shall be vested with full powers to permit relaxation in collateral security for
loans / limits falling within its vested loaning powers and powers of lower authorities, for
borrowers having Internal Risk Rating of PNB-B2 and above.
HOCAC-III shall have full powers.
MSME 95.2020 dt 29.08.2020
13.7 : Clarification on Status of existing Accounts :

In terms of MSME Policy cir no. 20.2020 dt 27.3.2020,
“All the existing accounts under different schemes with all the amalgamating Banks shall
continue with existing terms and conditions as per sanctioned terms of the respective Banks
till its liquidation/closure. However, while review of the accounts efforts should be made by
the sanctioned authority to fit the loans proposals with the new products of the Bank.”
Bank has further clarified as under :
- Fresh Credit Limit:

- All the Fresh credit proposals will be considered only under the new MSME schemes
for the amalgamated entity w.e.f. 01.04.2020. List of new schemes is placed at
Annexure-1.
- Enhancement of Credit Limit: All the Enhancement credit proposals will be
considered under the new MSME schemes for the amalgamated entity w.e.f.
01.04.2020.
- Renewal/Review of accounts:
- All the existing accounts sanctioned under different schemes of PNB1.0 / e-OBC/ e-
UNI shall continue with existing terms and conditions as per sanctioned terms till its
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liquidation/closure. Sanctioning authority, as per the delegated loaning power will
continue to renew/review the limits on existing terms & conditions.
- However, at the time of renewal/ review of the accounts, efforts should be made by
the sanctioning authority to fit the existing credit facility with the new schemes
designed for the amalgamated entity. Further, if renewal/review is considered under
the new scheme/s, then all the terms and conditions of the new scheme/s shall be
applied.
MSME 89.2020 dt 20.07.2020
13.8 : Interest Subvention Scheme Of 2% On Prompt Repayment Of Shishu Loans. :
Interest Subvention Scheme Of 2% On Prompt Repayment Of Shishu Loans :
Small Industries Development Bank of India (SIDBI) has formulated Interest Subvention
Scheme of 2% on prompt repayment of Shishu loan extended under Pradhan Mantri Mudra
Yojana (PMMY).
The salient features of the scheme are as under:
1) Scheme announced by: Ministry of Micro Small & Medium Enterprise (MoMSME) .
2) Implementing / Nodal Agency: Small Industries Development Bank of India (SIDBI)
3) Duration: The schemes will be in operation for 12 months. For borrowers, who have
been allowed a moratorium by their respective lenders, as permitted by RBI under the
COVID 19 Regulatory Package, the schemes would commence post completion of the
moratorium period till a period of 12 months i.e. September 01, 2020 till August 31,
2021. For other borrowers, the scheme would commence w.e.f. June 1, 2020 till May
31, 2021.
4) Interest Subvention: 2% p.a. on the outstanding balance from time to time, for 12
months as explained above or till maturity of the loan whichever is earlier.
5) Eligibility for Coverage: i) MUDRA-Shishu loans have a maximum loan amount of
Rs.50000/-. Borrowers avail these loans from Member Lending Institution (MLIs),
i.e. Banks, NBFCs and MFIs. The Banks share data on the Pradhan Mantri Mudra
Yojana (PMMY) Portal.
For details refer to
MSME Cir no. 84.2020 dt 07.07.2020.
13.9 : Simplification in PMEGP Scheme procedures — selection of application and flow

of application through PMEGP E-portal :
Ministry of MSME vide letter dated 28.04.2020 informed that in order to further streamline
the process of selection and to expedite the flow of applications under PMEGP, the Ministry
has decided that the role of District Level Task Force Committee (DLTFC) is
discontinued for recommendation of proposal/applications to financing banks. The role of
DLTFC should be limited to monitor the performance of PMEGP Scheme on the quarterly
basis in their respective districts.
The State/District level implementing agencies viz. KVIC, KVIB and DICs after receiving
the applications will scrutinize the applications, and the corrected and complete applications
along with the detailed project report may be forwarded by the implementing agencies
directly to the Banks for taking credit decision. The Complete/ corrected applications must be
forwarded to the Banks as soon as possible and in no case later than three weeks of receipt
of applications by the implementing agencies.
MSME 70.2020 dt 11.05.2020.
383
13.10 : CREDIT SCORE MODELS FOR MSME LENDING- “PNB SCORE SME”
CREDIT SCORE MODELS FOR MSME LENDING- “PNB SCORE SME”
- To supplement the pre-sanction appraisal process for evaluating loan proposals under
MSME (Manufacturing/Service) category up to limits of Rs. 50 lakh, bank has developed
following 5 Credit Scoring Models and made applicable (MANDATORY) since
01.04.2013 :-
- I. MSME Manufacturing ( New Cases including takeover) - Above Rs.10 lakh up to
Rs.50 lakh.
- II. MSME Service (New Cases including takeover) - Above Rs.10 lakh up to Rs.50 lakh.
- III. MSME Manufacturing and Service (New Cases i n c l u d i n g takeover) - Rs.10 lakh
and below.
- IV. MSME Manufacturing and Service (Renewal/Enhancement)-Above Rs.10 lakh up to
Rs.50 lakh.
- V. MSME Manufacturing and Service (Renewal/Enhancement) - Rs.10 lakh and below.
- These are available on Finacle home page as “PNB SCORE SME”
- The list of exempted categories for scoring in PNB Score SME are as under:-
- (i) All MSME accounts with sanctioned limits of Rs.2 lakh and below are exempted from
Scoring in PNB Score SME w.e.f 07.07.2014.
- (ii) MSME advances >Rs. 2 lac & upto Rs. 50 lac to Traders & Medical Practitioners are
exempted from scoring under PNB Score SME. These advances will be scored in PNB
Score (RAD).
- (iii) MSME Loans relating to the activities like advances to Transport Sector and
documentary films (on themes like family planning, social forestry, energy conservation
and commercial advertising) are exempted from scoring as the models for these activities
are yet to be developed. For such activities the guidelines for credit risk rating issued by
IRMD (Systems & Models), HO shall be applicable
- As per revised guidelines, sanction & rejection of the loan application shall be done on
the basis of following scoring / coloring scheme:-
- For new Loans under Govt. Sponsored scheme (eg. PMEGP scheme etc.) above Rs.2 lakh
& up to Rs.20 lakh where Capital subsidy/ Interest subsidy/concession etc. is available
- Red Zone application if score ranges from 1-40 and can not be considered for sanction.
- Above 40 and up to 75 ( Green Zone) and above 75 (Blue Zone : Application can be
considered for sanction at branches.
- For non Govt. sponsored schemes (loans above Rs.2 lakh) and new Loans under Govt.
Sponsored scheme (eg. PMEGP scheme etc.) above Rs.20 lakh:-
- Red Zone application if score ranges from 1-40 and can not be considered for sanction.
- For score above 40 but up to 46, yellow zone : Application can be considered by next
higher Authority for sanction.
- For score above 46 and up to 75 (Green Zone) and above 75 (Blue zone) : application can
be considered for sanction at branch within vested powers.
- As per revised guidelines on interest rates on advances, the mapping of scores of the 5
SME models with the risk rating category of PNB Trac is as under:-
- A1 : >80, A2 : >70,<=80, A3 :>64,<=70, A4 :>58,<=64; B1 :>52,<=58, B2 :>46,<=52,
B3 :>40,<=46, C1: >35,<=40, C2 :>25,<=35, C3: <=25.
- (Score >40 80 2 A2 >70≤80 3 A3 >64≤70 4 A4 >58≤64 5 B1 >52≤58 6 B2 >46≤52 7 B3
>40≤46 8 C1 >35≤40 9 C2 >25≤35 10 C3 ≤25.
- It may be noted that scoring models supplement the credit appraisal; it is not substitute for
credit appraisal as the mathematical formulae/ calculations in credit risk rating are good
for measuring the risk and not for anticipating it.
384
-There is a Maker–Checker concept in “PNB SCORE SME”.
-Maker ( appraising official) to enter the data and generate the score sheet.
-Check to check the data..
-The Users for the circles are created by MSME Division HO/ITD HO. Circle Offices to
create Users and Authorisers for branches under their jurisdiction.
- The score card id obtained from “PNB SCORE SME is to be mandatorily assigned in
“Free Text 6” field in V – MIS Details in CBS”.
- A check has been placed on ACLHM menu, feeding of Score Card ID in „‟Free Text 6‟‟
in CBS under MIS- V Detail is mandatory in case of renewal /enhancement of limit
through ACLHM menu. A text message will pop up „Please Feed Proper 18 Digit SME
Score Card ID in Free text 6 through ACM menu option and then try”.
MSME 55.2020 dt 27.03.2020.
13.11 : ONLINE RECEIPT OF MSME LOAN APPLICTION AND ITS TRACKING:

ONLINE RECEIPT OF MSME LOAN APPLICTION AND ITS TRACKING :
-An online system of receipt of MSME loan applications and its tracking is in place and is
available at bank’s corporate web site www.pnbindia.in with navigation:
www.pnbindia.in->homepage- >Online Services->More-> Online Loan Application &
Tracking-> MSME Loan New Application or www.pnbindia.in->homepage->MSME >
Online Loan Application for MSME Loan.
- On line application for MSME is in three parts Viz: Part A, Part B & Part C. Part A & B
are mandatory and Part C is optional.
- Part A relates to customers KYC data e.g Name, Date of birth /Date of establishment,
Email Id, Telephone No , Address , PAN, UAD, Id proof & Address proof etc.
- Part B relates to Amount of advance, Branch preference: State, District & branch.
- Part C relates to Customer’s activity, details of partners/directors, facilities existing &
required, details of Collateral security and guarantors if any and key financials such as net
sales, net profit and capital.
- On saving Part A unique application number is generated.
- Customer can edit the application through menu option www.pnbindia.in->homepage-
>Online Services >More-> Online Loan Application & Tracking-> MSME Loan Edit
Application or www.pnbindia.in->homepage->MSME banking-> Edit Online Loan
Application for MSME Loan, using the application No. and Date of birth and security key
as displayed on screen.
- The applicant will fill the relevant field of the online form and submit.
- The borrower shall receive the online acknowledgement with a unique Serial Number
along with check list of documents to be submitted along with loan application to a
branch.
- The borrower shall use this Serial No. for tracking the status of his application.
- The link for tracking the online application by the borrower is also available on
www.pnbindia.in->homepage->Online Services->More-> Online Loan Application &
Tracking-> andwww.pnbindia.in->homepage->MSME banking-> as “Click here to check
your loan application status”.
- The authorized user at Circle office shall use the link of online loan Application on CBS
home page or by directly accessing through URL:
https://10.192.11.91/OnlineBackOffice/login.jsp to monitor the application on daily basis
and shall allot the branch as per convenience of the party/ infrastructure available at the
desired branch.
MSME 54.2020 dt 27.03.2020
385
13.12 : Group Life Insurance Coverage to MSME (Term loan, overdraft / cash credit
facility) borrowers of the Bank under the scheme Met Loan & Life Suraksha :
Basis : voluntary.
- Minimum sum assured is Rs.5000.00. No upper cap.
- Duration is equal to loan period.
- Minimum age 18 years and maximum age is 65years.
- Coverage ceasing age is 70 years.
- Premium payment : single pay/ 5 pay.
- Minimum duration of cover : 2 years for single pay, 5 years for 5 pay.
- Maximum duration is 25 years.
- Sum assured will be equal to loan amount for fresh sanctions in case of term loan and for
all sanctions in case of OD/ CC.
- Scope of coverage : Single life/ joint life.
For more details, refer to
MSME Cir 51.2020 dt 27.3.2020.
13.13 : ‘PNB MICRO LOANS PORTAL’ FOR IN-PRINCIPAL APPROVAL OF

SMALL LOANS (UPTO RS. 1 LAC) TO MSMEs :
‘PNB MICRO LOANS PORTAL’ FOR IN-PRINCIPAL APPROVAL OF SMALL LOANS
(UPTO RS. 1 LAC) TO MSMEs :
- Under “Enhanced Access & Service Excellence (EASE)” agenda, Banks should come out
with an online loan application facility with automated decision for all micro-enterprises.
- Bank has developed an online portal ‘PNB MICRO LOANS PORTAL’ to provide ‘In-
principle approval’ of loans up to Rs. 1 lac to eligible MSME applicants.
- All MSME applicants in need of afresh loan are eligible for applying loan facility through
this portal.
- Those who have already availed any credit facility from our bank / any other bank are not
eligible.
- Under the process, MSME applicants are required to first register themselves on the portal
by feeding their Aadhar Card Number. The system will send OTP on the Mobile number
registered with UIDAI. While feeding OTP, the applicant will give his consent for
authorization from UIDAI, to release his identity and address through OTP authentication
and get E-KYC done.
- The applicant is thereafter required to fill up the application form and upload the
following required documents :
- i) Residence Proof (any one from Telephone Bill, Electricity Bill, Property Tax receipt –
not older than 2 month), valid Driving License, Voter’s ID Card, Latest account statement
duly attested by Bank officials, Domicile certificate, Certificate issued by Govt.
authority/Local Panchayats / Municipality etc.
- ii) Recent passport size photograph 6. After filling the application form and uploading of
required documents, the system will ask for payment of charges for CIBIL score, which
are to be borne by the applicant.
- The applicable charges for generation of CIBIL score and GST / Service charges are as
under:
- i. Through Credit Card : 1.90% of charges for generation of CIBIL report + Service
charges / applicable taxes.
- ii. Through Debit Card : As per RBI Mandate + Service Charges / applicable taxes
- For payment of the charges, an MOU has been executed with payment gateway of M/s
386
Worldline India Pvt. Ltd.
- The payment can be made through Debit card or Credit Card only.
- The minimum CIBIL score required for getting ‘In-Principal’ approval is 690 and above’
& ‘-1’.
- If the applicant’s CIBIL score is above this prescribed limit, the system will display ‘In-
principal’ approval to the applicant with unique reference number.
- Simultaneously, the system will communicate the decision to the concerned branch, as
selected by the borrower, through Email.
- Thereafter the applicant will visit the concerned branch along with originals of the
document uploaded and branch will process the loan and dispose of the same as per extant
guidelines of the Bank.
For more details, please refer to
MSME Cir No. 50.2020 dt 27.03.2020.
13.0 PM Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi) - Updates
PM Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi) - Modifications
The amendments made till date are as under:
Modifications in the process flow/ portal software :

 Voter ID Card details made optional.
 For new applicants selecting a Preferred Lender (PL), the applications are directly being pushed
into NAS of the bank and the respective branch instead of putting in Market Place.
 Such pushed applications will stay in the NAS of the bank for 30 days during which bank
should be able to process the loan application. In case the bank does not process the loan
application within 30 days, the application will be moved to Market Place.
 All the applications where no PL was selected has been pushed to the respective branch with
which applicant has the saving bank account.
 For Digital Cash Back Incentives, all types of VPA (Virtual Payment Address) are allowed for
the purpose of PMSVANidhi.
 An additional field “Minority Status” has been introduced in Loan Application Form with effect
from 07.10.2020 to give effect to the RBI Master Circular on Credit Facility to Minority
Communities dated 01.07.2019.
Amendments regarding CGTMSE guarantee cover are as under:
- On lodgement of claim application by MLI on quarterly basis, CGTMSE would settle the claim
in one installment. And pay the amount within 30 days.
- Claim settlements would be carried out quarterly subject to maximum guarantee coverage of
15% of the year portfolio.
Modifications/clarifications in Operational Guidelines and FAQs are given below:
- The benefit of guarantee cover under the Scheme will be available to all the lending institutions
since the launch of the scheme i.e., 2nd July 2020, irrespective of date of execution of the
Undertaking to be furnished to the Trust.
- Aadhaar Number of the borrower is not required for availing guarantee from CGTMSE and
lending institution can provide PMS No. of the borrowers as the Unique Identification Number
(PMS No is generated at the successful submission of application by an eKYC verified street
vendor).
- Unsecured loan provided to the borrower under this Scheme will be eligible for the guarantee
cover from CGTMSE.
- Initiation of legal proceedings is not necessary given the small loan size.
387
- The issue of documentation between the lender and the borrower will be sole prerogative of the
Lending Institution and CGTMSE will not insist on any documentation for availing credit
guarantee.
- Any recovery made from the NPA portfolio against which claim has been settled by CGTMSE
will be allowed to be adjusted against future claim, if any, else will be returned to CGTMSE by
the concerned lending institutions.
- Lending institutions will be required to file annual returns for 2 years after settlement of the last
claim against a created portfolio in a FY about recovery made from the borrowers against which
claim has been settled by CGTMSE. Amount payable to CGTMSE out of the recovery proceeds
will be returned to CGTMSE after which accounts will be treated as finally settled and closed.
MSME Cir 111.2020 dt 27.10.2020
Modifications are as under :
- Ceiling of loan in the subsequent cycle (Rs.20,000) stands withdrawn.
- Due Diligence : Issue of Certificate of Vendor, CoV/ lD card is the sole prerogative of the
Urban Local Body (ULB). Banks are not required to conduct any further check if a vendor
presents CoV/ lD card for availing loan issued by the ULB. Branches to accept the CoV / Ids
duly issued by ULBs / TVCs irrespective of the date of issue.
- Portal access : Login credentials of UdyamiMitra portal are available in all branches of PNB
2.0.
- Credit Score : should be ‘650 & above’, ‘-1’ and ‘no score’,
- PDA - is to be done by Branch officials and to be held on record, without seeking clearance
from the Circle Office.
MSME 94.2020 dt 26.08.2020.

PM Street Vendor's AtmaNirbharNidhi (PM SVANidhi) – Modifications
The instructions regarding the ceiling of loan in the subsequent cycle (Rs.20,000) stands withdrawn.
-Banks are not accepting Certificate of Vending (CoV)/ lD Cards issued to the Street Vendors
after 24th March 2020.
- The issue of CoV/ lD card is the sole prerogative of the Urban Local Body (ULB) which
conducts due diligence, including the date of vending before the issue.
- Therefore, Banks are not required to conduct any further check. Branches to accept the CoV /
Ids duly issued by ULBs / TVCs irrespective of the date of issue.
- It is advised to sanction application having score of ‘650 & above’, ‘-1’ and ‘no score’, subject
to compliance of all other terms and conditions of the scheme.
- Following scheme codes have already been circulated :
- a) Scheme code for PNB 1.0 branches is TLSVN
- b) Scheme code for eUNI branches is TLSVN
- c) Scheme code for eOBC branches is TL744
- Menu options :
- a) PNB 1.0 : PNBSVAN.
- b) eOBC : SVANIDHI.
- c) eUNI : PNBSVAN.
- The Credit Guarantee would be available only for the first reported sanction against each
Aadhaar Number, on the PMS portal. Benefits of interest Subsidy under the Scheme would also
be applicable only to the first reported sanction.
MSME 94.2020 dt 26.8.2020
388
Name : PM STREET VENDOR’s AtmaNirbhar NIDHI (PM SVANidhi).
Loan Type : Working Capital Term loan.
Eligibility :
All street vendors engaged in vending in urban areas as on or before March 24, 2020. The eligible
vendors will be identified as per following criteria:
i) Street vendors in possession of Certificate of Vending / Identity Card issued by Urban Local
Bodies (ULBs);
ii) The vendors, who have been identified in the survey but have not been issued Certificate of
Vending / Identity Card; Provisional Certificate of Vending would be generated for such
vendors through an IT based Platform. ULBs are encouraged to issue such vendors the
permanent Certificate of Vending and Identification Card immediately and positively within a
period of one month.
iii) Street Vendors, left out of the ULB led identification survey or who have started vending after
completion of the survey and have been issued Letter of Recommendation (LoR) to that effect
by the ULB / Town Vending Committee (TVC).
iv) The vendors of surrounding development/ peri-urban / rural areas vending in the geographical
limits of the ULBs and have been issued Letter of Recommendation (LoR) to that effect by the
ULB / TVC.
v) The borrower should have Saving Account / Current Account with our Bank for the purpose of
disbursing loan amount, facilitating collections, receiving digital incentives etc.
Identification of Beneficiaries :
the ULB/ TVC will consider any of the following documents to issue letters of recommendation:
- The list of vendors, prepared by certain States/ UTs, for providing one-time assistance during
the period of lockdown; OR
- A system generated request sent to ULBs/ TVCs for issue of LoR based on the recommendation
of the Lender after verifying the credentials of the applicant; OR
- The membership details with the vendors associations including National Association of Street
Vendors of India (NASVI)/ National Hawkers Federation (NHF)/ Self Employed Women’s
Association (SEWA) etc.; OR
- The documents in possession of the vendor buttressing his claim of vending; OR
- Report of local enquiry conducted by ULB/ TVC involving Self-Help Groups (SHGs),
Community Based Organizations (CBOs) etc..
Loan amount & Repayment :

Urban street vendors will be eligible to avail a Working Capital Term loan (WCTL) up to Rs.10,000/-
with tenure of 1 year and repayable in monthly Instalments.
Interest Subsidy :
The vendors availing loan under the scheme are eligible to get an interest subsidy @ 7%.
Rate of Interest :
RLLR + Spread (0.15%) + Service Charge (4%), presently = 10.80%.
The Service charge to be shared with BC / Agents for sourcing & Collection, will be communicated
separately. Interest rate code for : • PNB 1.0 & eUNI branches : TLSVN • eOBC branches : RLP83.
Margin : Nil.
Scheme Codes :
- Scheme code for PNB 1.0 branches is TLSVN
- Scheme code for eUNI branches is TLSVN
- Scheme code for eOBC branches is TL744.
For details, refer to
MSME Cir no. 82.2020.
389
SYNOPSIS OF RETAIL LENDING
PRODUCTS
390
HOUSING LOAN RBD (A) 81/17.08.2020 (Ann. 1)
1. ELIGIBILITY: Individuals or group of 3. EXTENT OF LOAN: 5. Moratorium Period- 9. Security: EM/RM of house/flat/plot. 16. Deductions
individuals (co-borrowers) who are having an i) Purchase of Purchase of 3M 10. Margin: HL upto Rs 30 L: 15%/ 20% * (LTV- 85%, 80%) Gross Annual Max. permissible
assured source of regular income viz. Salaried house/flat/Constructio House/Flat/Plot HL above Rs.30 L and upto Rs.75 L: 20% (LTV-80%) Salary / Income deductions
employees, Professionals, Self Employed n/ Addition: Need Const./Addition of 18M Loan above Rs. 75 L & Plot: 25% (LTV-75%) Upto Rs. 5 Lakh 50%
persons, businessman, farmers etc. Staff based. house/Flat (*0.10% Higher ROI on Card Rate will be charged if margin 15%)
>5 L to 10 Lakh 60%
members are also eligible under public scheme. ii) Land/Plot: Max. Rs. Repairs/ renovation/ 6M {Stamp duty, registration charges and other documentation
charges, if any, paid by the borrower shall not be considered Above 10 lakh 70%
- Income of spouse and earning children 50 L (By AGM RAM/ alterations
(whether married or unmarried) may be added iRAM/ ZOCAC - I upto towards margin money. However, Acquisition cost of Plot be Deductions : 10% AGM RAM/iRAM,
Under construction 36M ZOCAC-I and above
for calculation of borrowers’ repaying capacity. Rs.100L in Metro/ State considered towards Margin Money. But, In case of EWS & LIG
Flat/House by borrowers, cost of stamp duty, registration and other doc charges 17. Classification of housing loan under
- Income of joint owners of the property may Capital & approved private
also be added for calculation of borrowers’ may be added to the cost of house for purpose of calculating LTV Priority sector:--HL to individuals up to Rs.
builders ratio, if Cost of house is upto Rs.10 L} 35 L in metropolitan centres (with
repaying capacity. By ZOCAC- II: Rs.300L
- Parents can also be made as co- borrower in at all centres & Rs.500L
6. Loaning power: 11. ROI: Under Floating Option population of 10 L & ab.) and HL up to Rs.
cases where property is in the single name of at State capital/ Metro As per vested loaning Concession of 0.05% to women borrower under all slabs 25 L in other centres for
Loan PNB Pride Others purchase/construction of a dwelling unit
Son/Daughter or in the joint name of Son & centres only in cases powers.
Amount irrespecti CIC CI C CIC per family, provided the overall cost of the
Daughter and their income can also be clubbed where land/plots are
ve of Risk score score score dwelling unit in the metropolitan centre
for calculation of borrowers’ repaying capacity. allotted by State
profile 750 and 700 - <than and at other centres should not exceed Rs.
-Parents (including Father-in-law & Mother- Development Authorities/
above 749 700 45 L and Rs. 30 L, respectively. HL to banks’
in-law) can also be made as co-borrower, State Hsg Boards); 7. Security Verification:
own employees will be excluded.
where property is in the joint name of Son & {For purchase of once in 2 years for regular Upto 30 L RLLR + RLLR + RLLR + RLLR +
{In case of Purchase of flat/ built-up house:
Daughter-in-law or Daughter & Son-in-law and Land/plot: Max 60% of accounts after initial end use having 0.35 % 0.35 % 0.50 % 0.60
Document value of the flat/ built-up house
their income can also be clubbed for calculation the eligible loan amt} verification and on half LTV upto as per the sale deed.
of borrowers’ repaying capacity, with the prior iii) Repair/Renovation yearly basis in case of NPA 80% In case of Construction of house: Cost of
approval of the Circle Head. /Alteration: Max.25 L. accounts. In case of 2 Upto 30 L RLLR + RLLR + RLLR + RLLR + construction (Land already owned)}
- In case of self-employed individuals the gross iv) Furnishing: 10 % of continuous defaults in having 0.45 % 0.45 % 0.60 % 0.70 Loans for repairs to damaged dwelling
income may be arrived at by adding amount of HL: Max. 25 L. repayment, inspection LTV > 80 units of families up to Rs 5 L in
depreciation to the Net Profit amount and v) Loan On Pari Passu immediately. upto 85% metropolitan centres and up to Rs 2 L in
repaying capacity be assessed accordingly. Or IInd Charge Basis (by Post Disbursement Visit:
Above 30 RLLR + RLLR + RLLR + RLLR + other centres.
- Likely rental income, if the property is to be CH&ab):Max. 20 L. The property must be re-
Lakh to 0.60 % 0.50 % 0.75 % 0.85 The loans sanctioned for housing projects
let out, shall not be considered for determining vi) Loan to Army visited by a bank official
75 L exclusively for the purpose of construction
the repaying capacity. Group Insurance Fund different from the one who
>75 L RLLR + RLLR + of houses for EWS & LIG, the total cost of
- In case of persons engaged in Agriculture/ (AGIF) on Pari Passu or made pre-sanction visit within which does not exceed Rs 10 L per dwelling
Allied Agricultural activities, net income can IInd Charge Basis under a maximum of 10 days after 0.85 % 0.95
unit. For the purpose of identifying the
be arrived at, based on their land holding, PMAY-Urban to disbursement of loan.
12. ROI: Under Fixed option (w.e.f. 01.01.2020) economically weaker sections and low
cropping pattern, yield, etc. EWS/LIG/MIG.
income groups, the family income limit of
2. SALARY SLIP/ITR/FORM 16/ABS vii) Cost of one time life Upto 75 L Above 75 L
8. Reimbursement in Rs 3 L per annum for EWS and Rs 6 L per
(a) For Salaried class: Latest salary slip, insurance cover PNB Pride/ Women MCLR+0.70% MCLR+0.75%
Housing Loan: May be annum for LIG, irrespective of the location,
Form16/ITR for the last 2 years (for at least 1 premium. Others MCLR+075% MCLR+0.80%
allowed (by AGM is prescribed.
year, for lesser service) be taken. viii) Cost of GST 13. ROI For 3rd Or Subsequent House/Flat:
RAM/iRAM, ZOCAC-I and 18. Upfront Fee: 0.35% of loan amt.
{Note: Form16/ITR is not to be insisted upon, in wherever applicable is to In case of HL under Non-CRE: Normal rate of interest.
case of confirmed/permanent employees of be considered while above) to prospective Min Rs. 2500/-, Max-Rs.15000/-,
In case of HL under CRE: 1% higher than normal ROI. Takeover of Loan: Rs. 2500/- + GST
Central Govt./State Govt./ PSUs/ MNCs/Listed arriving the cost of borrowers, who have
{Non-CRE: where more than 50% of the monthly installment of the loan
Companies at BSE or NSE, maintain salary A/C project. purchased property out of Documentation charge: Rs.1350/- +GST
is to be repaid from the borrower’s own income and not from rental
with us, drawing salary of an amount which ix) Loan amount to be their own sources, 19. Change of option from Fixed to
income of the house/flat/unit being financed.}
does not categorize under taxable income i.e. arrived at the cost of unit provided request within a Floating rate of intt and vice versa (by
{CRE: where more than 50% of the monthly installment of the loan is to
presently, upto the threshold limit of Rs.2.50 L i.e. Market Value or sale maximum period of 3 BH), for Min 3 yr. Change of option Fee:
be repaid from the rental income of the house/flat/unit being financed.}
p.a. & having salary A/C with our bank for the consideration value (In months from the date of Flat Fee 2% of o/s balance (1% by CH).
391
last 2 years. case sale/transaction is purchase. 14. Penal Intt: (For All Cases Including Purchase Of Plot): 2%, where 20. Switch from existing MCLR based
(b) For other than Salaried class: ITRs & ABS not more than 1 year loan is sanctioned for purchase of plot/land & construction of the house ROI to RLLR: Out of pocket expense
(Wherever applicable) for the last 2 years of old) whichever is lower. is not completed within 3 years from date of disbursement or in case 0.50% of o/s bal, Max Rs.10000/-.
business/activity shall be taken. {Deviation x) Cost of car parking to 4. Repayment : the plot is sold. 21. Pre-payment charge: 2% on fixed
regarding availability of ITRs/ABSs may be be excluded from project - 15 yrs for repairs and 15. If plot/land is sold or a/c has been closed without construction both rate HL, if borrower shifts HL to other
permitted by CH/COCAC & above subject to cost renovation. AND 30 yrs in other within 5 year from date of first disbursement, ROI applicable to CRE banks/FIs after 30 days of upward
taking of minimum 1 year latest ITRs/ABSs cases. with corresponding PNB Score/Risk rating score will be charged w.e.f. revision of ROI/change in T & C.
But Up to age of 70 yrs. first disbursement of loan. 22. PNB Pride: Housing & Car Loan
AGM RAM & abv may allow up to Scheme for permanent Employee of
age of 75 yr. Central/State Govt./paramilitary forces
and Pensioners of Central & State Govt.:
Rebate in ROI and Full waiver of
upfront/processing fees & doc Charges.
Scheme Purpose & Extent of Loan Repayment Period Margin, ROI & Other Imp. Guidelines
(1 YR.MCLR – 7.35 %, ) Security RLLR=REPO+MARKUP=4.00+2.80=6.80 % (since
Eligibility 01.09.20)
1. ELIGIBILITY: All HL 3. EXTENT OF LOAN: 4. Repayment: 5. Margin:

borrowers– Minimum: Rs. 2 L & OD Limit. Monthly servicing of Intt. 20% - Upto 75L 7. Security: Extension of existing EM/RM.
2 new/existing/takeover cases. Maximum: Rs. 25L. TL: Repayment in 10 Yrs or remaining 25% - Ab. 75 L 8. Max. Permissible Deduction of NMS/I -- Same as HL
(except for purchase of plot/ 80% of current realizable value of period of HL whichever is lower. 6. ROI:
HL-OD/TL Account to be reviewed annually.
under construction housing property if the loan Scheme ROI 9. Upfront fee – NIL, - Doc. chg– Rs.450/- + GST
houses/flats) (No IR amount (existing exposure of HL - If intt is not serviced within 7 days of /borrow 10. Scheme Code: ODPRH/TLPRH;
irregularity should be o/s) + proposed OD limit) is upto Rs. the close of the month: Penal intt 2% er type 11. Loaning Power: Incumbent in the grade of
RBD(A) 81 75 L. - If intt is not serviced consecutively for
- NRI/PIO HL borrowers are Top up TL: JMG-l-- NIL, MMG-II & Ab 10 L, Segment Head RAM &
/17.08.2020 OR two months, Bank may consider
not eligible for OD Facility. OD/TL HL+1.35% above : 25 Lac
75% of current realizable value of recalling the OD including HL.
OD: -The above loaning powers can be exercised by the officials
Ann.5 housing property if the loan amount
2. PURPOSE: For Personal RLLR+ even where existing facilities including the HL have been
(existing exposure of HL + proposed
needs. 2.35% sanctioned by a higher authority.
OD limit) is above Rs. 75L.
3. Objective: Providing housing Extent of Loan: 1.25 times of the Repayment Period: Flat 30 years 7. Margin: SAME AS HL - ROI, processing fee & Documentation charges: As
PNB GEN- finance to Gen-Next salaried loan amt calculated as per the Moratorium Period: 8. ROI: SAME AS HL per Regular Housing Finance Scheme.
NEXT class Borrowers (IT regular HL method subject to Under construction flats of approved 9.Security: EM/RM of
{HL to Professionals, PSBs/PSUs/ maintenance of prescribed LTV Pvt. Builders: Upto 36 months plus house/ flat/plot purchased. - Term insurance of at-least equal to loan amount be
YOUNG Govt. Employees). ratio. remaining period of possession 10. Scheme Code: mandatorily obtained. Cost of premium may be financed
GENERATION Purpose: For Construction/ Min Loan Amt: Rs 20 Lac. subject to max. 60 months. HLGEN at the option of the borrower(s).
purchase of ready to move in Max Loan Amt: Need Based. In other cases: Max. 36 months. 11. Calculator: To arrive
house/flat; For purchase of Min. Net Mly Salary: Rs. 35000/- (Intt. To be serviced as & when at loan amount eligibility - Powers vested with AGM RAM/iRAM, ZOCAC-I and above .
RBD(A) 81 under construction flat of Age of Borrower: Upto the age of levied) and calculation of EMI for to allow 10% higher deductions of Net Monthly salary
/17.08.2020 approved private builder; 40 yr. Period Monthly 120 M after moratorium under regular Housing finance scheme have been
Occupation: All salaried Other borrower whose income Repayment period and remaining EMI withdrawn under “PNB Gen-Next Housing Finance
Ann.2 employees with min 3 yr has been taken for arriving loan During Only interest thereafter, a calculator Scheme”, as Bank is allowing 1.25 times the loan amount
experience and Co-borrower eligibility—Max upto the age of 45 Mort. has been devised and calculated as per the regular housing loan method.
will also be salaried class. yr. Next 120M EMI 360 Monhts placed at ‘Special Links’
Where income of co-borrower has Remaining EMI of Loan o/s on the E-Circular site. - Net Monthly salary = Gross Salary – Statutory
not been taken for arriving loan Period during Remaining Deductions, such as Income Tax, PF etc.
eligibility and they are co-owner— period
392
No Age bar.
OBJECTIVE: To offer NATURE OF FACILITY: Term Repayment: -TL - As per HL
4. attractive variant to the Loan – 80% and overdraft -- 20%, Scheme Margin: Same as HL - OD drawing limit will be enhanced on regular basis at yearly
PNB customer, Scheme has ensuring margin of 20%/25%. - OD component: For borrower – intervals. Maximum Overdraft drawing limit, under no
FLEXIBLE allowed borrower, the circumstances, should exceed 50% of the total limit.
HOUSING advantage of substantial EXTENT OF LOAN: Borrower Below 55 yr – Servicing of intt as ROI: Same as HL & HL-
savings on the intt component shall be entitled to 20% increase and when charged upto age of 55 OD -The enhancement in OD drawing limit be allowed upto the
RBD(A) 81 by facility to deposit his in the original total limit yr. 55 yr & ab.- On monthly extent of reduction in TL amount.
/17.08.2020 surplus funds in the OD A/C & sanctioned after a lapse of 5 yr. reducing DP Max. Upto the age of Upfront Fee/Proc
- The first such revision of OD drawing limit facility be
withdraw the same at his/her 70 yr. Fee/Doc charges: Same
Ann.4 allowed, after a period of 03 yr and thereafter on yearly basis,
choice upto the extent of OD as HL. at the request of the borrower only.
limit. 6. Repayment: The borrower shall be required to service the intt - Aggregate of limits under TL & OD components shall not
ELIGIBILITY: Customers component only on the OD facility. exceed the original total limit sanctioned for the first 05 yr.
below the age of 50 yr. (The - The EMI shall comprise of EMI calculated on TL component + intt on OD -Borrower will be allowed to deposit his surplus funds in the
existing HL borrower be component. OD A/C, and withdraw the same.
allowed the benefit if their HL - On customers attaining the age of 55 years the OD facility shall be -The borrower shall be required to service the interest
A/C is regular & no IR allowed on monthly reducing DP basis, with reduction commencing from component only on the Overdraft facility.
irregularity is o/s). the month following the month when the customer attains the age of 55
PURPOSE: Loan be allowed years so as to ensure that whole of the OD limit, including TL limit, is - The EMI shall comprise of EMI calculated on Term Loan
for all purposes, except for adjusted by the age of 70 years. AGM RAM & ab. may relax repayment component + interest on overdraft component.
purchase of land/plot. period upto the age of 75 years.
OBJECTIVE: To attract housing EXTENT OF LOAN: Overdraft on monthly RATE OF INTEREST: (Under floating option only) 7. Conversion Charges:
5. loan borrowers especially high reducing Drawing Power (DP) basis: Minimum – i) If customer has paid Upfront Fees &
HOUSING Documentation Charges at the time of
income group who prefer to park Rs. 10 Lac Loan PNB Pride Others
FINANCE availing HL: Rs 2500/- + GST
their excess funds in loan Maximum – Need based Amount irrespective CIC score CI C score CIC score
SCHEME FOR ii) If customer has not paid Upfront Fees &
account for interest benefit in (as per HL Scheme for Public) of Risk 750 and 700 - 749 <than 700 Doc Charges at the time of availing Housing
PUBLIC
order to increase Housing Loans. In respect of existing Housing Loan borrowers, profile above Loan i.e. loan is sanctioned under Bonanza
“PNB MAX-
ELIGIBILITY: i) Prospective present outstanding of the loan amount be taken Upto 30 L RLLR + 0.50 RLLR + RLLR + 0.65 RLLR + 0.75 Offers or charges have been waived by the
SAVER
borrower: As per our existing into consideration for conversion of loan under having LTV % 0.50 % % competent Authority: Charges as per extant
(TL/OD guidelines applicable to HL.
housing loan scheme. ii) Existing this variant. upto 80%
borrower: Where complete 8. Borrowers which are falling under CRE
RBD(A) 81 Upto 30 L RLLR + 0.60 RLLR + RLLR + 0.75 RLLR + 0.85 will not be eligible under the scheme.
disbursement has been made. PURPOSE: Loan under this variant be allowed for
/17.08.2020 having LTV % 0.60 % % 9. HL (PNB MAX-SAVER) with moratorium
(The existing Housing Loan all purposes, which have been specified under HL
> 80 upto period:
Ann.3 borrower are also eligible if their scheme (except Housing Loan for Purchase of
i. TL & OD A/C to be opened on the same
HL A/C is running regular, no only land/plot which is not permitted under this 85%
date.
inspection irregularity is scheme). Above 30 RLLR + 0.75 RLLR + RLLR + 0.90 RLLR +1.00 ii. TL to be opened for the moratorium period,
outstanding, complete Lakh to 75 L % 0.65 % % with limit as per sanction. iii. OD A/C to be
disbursement has been made REPAYMENT: As per existing HL scheme to opened with initial limit of Rs.1/- and Drawing
and repayment has been started Public. >75 L RLLR + 1.00 RLLR + 1.10 Power (DP) should be “ZERO”.
in the A/C subject to fulfillment Drawing Power on the OD will be reduced on % 10. HL (PNB MAX-SAVER) without any
monthly basis to the extent of the principal moratorium period:
of all terms and conditions of this
Only OD A/C to be opened with limit as per
variant.) component of the EMI so that the overdraft is the sanction.
liquidated at the end of the loan tenure. 11. Scheme Code: TL- TLMAX; OD –
Interest will be recovered as and when levied. ODMAX;
12. All other terms and condition will be as per
the existing Housing Finance Scheme for Public. .
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PURPOSE: For meeting Earnest EXTENT OF LOAN: 100% of Repayment: Margin: NIL Nature Of Loan: Demand Loan.
6. Intt Table Code: EMDMR
Money Deposit (EMD) EMD subject to Max Rs. 15 Lac. To be adjusted ROI: RLLR + 0.25% {Six months Intt on loan
EMD Scheme Purpose of advance code: HFEMD in V
requirements to apply for Loaning power: Incumbents of through refund amt to be recovered upfront on refundable
detail
allotment of Plot/Flat /House authorized branches (by CH) after order /HL or basis for completed month.)
66 / Upfront fee & documentation charges:
under the Schemes floated by entering into MOU/Letter of through own SECURITY: The amount deposited with NIL
01.11.2019 State Housing Boards Comfort with the State Housing Sources in bullet State Housing Board/Urban Irrevocable Letter of Undertaking
(SHB)/Urban Development Boards/Urban Development payment. Development Authority/Local be obtained empowering the Bank to
Authorities (UDA)/ Local Authorities/ Local Improvement Improvement Trust. get the allotment cancelled if the
Improvement Trusts. Trustss GUARANTEE: NIL borrower fails to adjust EMD loan
ELIGIBILITY: Individuals, Joint within 15 days from the date of
Owners. allotment.
1. Purpose: For acquisition/construction of house (including 4. Loan Amount: Need Based as per the existing HL 6. Security: 8. Subsidy: Accounts opened on or after
repurchase). {Loans for Repair/Renovation/Extension of existing scheme. EM/RM of the 01.01.17 under Scheme Code TLPHL &
7. PMAY: dwelling unit are not eligible for subsidy under the scheme.} 5. Maximum loan tenure: As per existing HL scheme. TLPHA and fulfilling the criteria of CLSS -
property as per
Credit 2. Eligibility: Individuals from MIG category. Joint owners from the But, subsidy will be available for a max period of 20 years the existing HL MIG are eligible for subsidy under CLSS.
Linked same family are also eligible. The beneficiary family should not own a on Notional Basis. Loan for period beyond 20 years will scheme. Credit Linked Subsidy: The subsidy will
Subsidy pucca house either in his/her name or in the name of any member of be on non-subsidised rate. Moratorium Period: As per 7. Rate of be available at the following rates: MIG-I =
his/her family in any part of India AND not availed of central assistance HL scheme. 4% (Loan upto Rs 9 L) Max -- Rs 235068.
Scheme under any housing scheme from Govt of India. Particulars MIG1 MIGII
Interest: As per
MIG-II = 3% (Loan upto Rs 12 L) Max-- Rs
for Middle HL to public
3. Beneficiary Family: Husband, wife, unmarried sons and/or Household income (Rs. PA) >6L to >12 L 230156.
scheme.
Income unmarried daughters. An adult earning member (irrespective of marital 12L to 18L 9. Processing Fee & Doc Charges:
status) can be treated as a separate household; Provided that he/she (Floating ROI Loan up to Rs. 9L in MIG-I – NIL,
Group Interest subsidy PA 4% 3% only)
does not own a pucca house in his/her name in any part of India AND Loan up to Rs. 12 L in MIG-II – NIL.
(CLSS- in the case of a married couple, either of the spouses or both together Max. loan tenure in years 20 20 - Scheme Code- Beyond above: As per HL scheme.
MIG) in joint ownership will be eligible for a single house, subject to income Eligible HL amt. for 9L 12L 10. i. NRIs can be considered provided
eligibility of the household. subsidy TLPHA they are eligible under the scheme
(RBDA: 68/ - The scheme has been implemented initially in 2017 for a period of Carpet area of dwelling unit 160 200 -Additional guidelines and are also in compliance with
01.11.19) one year w.e.f. 01.01.17, upto 31.12.17. The Bank has registered with sq.mtr sq.mtr. details to be other GOI/RBI rules, if any, applicable to
NHB by signing MOU for CLSS for MIG on 22.03.17. Period of the Discount rate for NPV – 9% 9% filled in Menu NRIs.
credit Linked Subsidy Scheme for MIG has been extended upto calculation of interest option ii. NHB has advised that as the minimum
31.03.2020. subsidy “ADPMAY’ income is more than Rs. 6 Lakh, at least
- All Statutory Towns as per Census 2011 and towns notified one of borrower is expected to have a
subsequently will be eligible for coverage under CLSS for MIG PAN Number.
8. PMAY: 1. PURPOSE: “Housing for All” Mission for urban area is being implemented during 2015-2022 4. Loan Amount:Max Rs 9. Credit Linked Subsidy: Subsidy is available @6.50% for
(17.06.15 to 31.03.22) and this Mission will provide central assistance to implementing agencies 30 Lakh Max 20 years or tenure of the loan, whichever is earlier on
“PNB Hsg loan amount upto Rs. 6 Lac with maximum Subsidy amount
through States and UTs. Mission is being implemented as Centrally Sponsored Scheme (CSS) [For purchase of new
for All”-- dwelling will be Rs 267280/-. Interest subsidy will be credited to loan
Credit except for the component of Credit Linked Subsidy which will be implemented as a Central account after receipt of the same from NHB. Additional loans
unit/construction/addition of
Sector Scheme. rooms, kitchen, toilet etc beyond Rs. 6 Lac, if any, will be at nonsubsidized rate. The
Linked
2. ELIGIBILITY: Affordable Housing through Credit Linked Subsidy: Interest subsidy for EWS and (for conversion from Net present value of the interest subsidy will be calculated at a
Subsidy discounted rate of 9%. Interest subsidy will be credited upfront
LIG for new house or incremental housing: a) EWS: Annual Household Income upto Rs.3 L and kutcha/semi pucca to pucca
Scheme house) for existing dwelling to the loan account of beneficiaries after receipt of the same
for EWS & house size with carpet area upto 30 sq.mt; & b) LIG: Annual Household Income above Rs.3 L units.] Disbursement of loan from NHB. For loans sanctioned upto 31.12.16, intt subsidy
LIG and upto Rs.6 L and house size with carpet area upto 60 sq. mt. Carpet Area : The carpet area in maximum 4 installments. would be available for max loan tenure of 15 years. Subsidy
(CLSS- of houses under CLSS for EWS/ LIG scheme should be upto 30 square meters and 60 square 5. Repayment: Upto age of will be released to the Bank by the NHB in maximum of 4
70 years or repayment installments.
EWS &
394
LIG) meters for EWS and LIG respectively in order to avail of this credit linked subsidy. The period 30 years, including -All PMAY-CLSS claims in respect of housing loans
moratorium Period, sanctioned on or after 26.12.2018 would require capturing the
beneficiary, at his / her discretion, can build a house of large area but interest subvention would
(RBDA: 69/ whichever is earlier. Aadhaar number or in its absence, the Aadhaar enrolment
01.11.19) be limited to the first Rs.6.00 lacs of loan amount only. 6. ROI: As per HL to public number.
3. Beneficiary: The beneficiary family (comprise husband, wife and unmarried children) should scheme. (Floating ROI only) - The bank shall submit a consolidated utilization certificate
(RBDA: 16/ 7. Margin: Loan up to Rs on completion of the housing unit within 1 year from the
not own a ‘pucca’ house (an all-weather dwelling unit) either in his/her name or in the name of
19.03.20) 20 L-10%, Loan ab Rs 20 L completion of construction or a maximum of 36 months from
any member of his/her family in any part of India. An Affidavit to this effect is to be obtained. & upto Rs 30 L- 20%; the date of disbursement of 1st instalment of the loan amount.
- The houses constructed/acquired with central assistance under the mission should be in the (Cost. of stamp duty, - Central Nodal Agencies: HUDCO & NHB. Our Bank has
name of the female head of the household or in the joint name of the male head of the registration etc. may be signed MOU with NHB.
household and his wife, and only in cases when there is no adult female member in the family, included for the purpose of
the house can be in the name of male member of the household. This is applicable only for new calculating LTV ratio in 11. Service Charges: - Doc Chg: NIL; - Proc Fee: HL upto 6
cases where the cost of L- NIL, HL Ab 6 L—Normal Proc Fee.
purchases and not for new construction (on an existing piece of land) or for - In lieu of proc fee, the bank would be given a lump sum amt
house not exceed Rs.10
enhancement/repairs of an existing house. The male borrower may be allowed to include the of Rs 3000/- per sanctioned application.
name of female family member at later stage in registered title deed/sale deed, so that he can L)
8. Security: EM/RM of the
produce the necessary documentation to PLIs for availing the benefits of CLSS. NMS / I Max. deductions of NMS/I
property as per HL scheme.
- W.e.f. 27.06.17, it is advised that: “An adult earning member (irrespective of marital status) 40%
Upto Rs. 30000/-
can be treated as a separate household; Provided that He/she does not own a pucca house (an
50%
all-weather dwelling unit) in his/her name in any part of India. Also in the case of a married >30000/- - Rs. 50000/-
couple, either of the spouses or both together in joint ownership will be eligible for a single
house, subject to income eligibility of the household. - Scheme Code- TLPHA; - Additional details in “ADPMAY’
- Now, person with pucca house having built-up area less than 21 Sq. Mt may be included for
enhancement of existing dwelling units upto 30 Sq. Mt. But, if enhancement is not possible on
account of lack of availability of land/space or any other reason She/He may get a house under
PMAY (U) elsewhere.
Background: Borrowers under Retail Lending Schemes: 1) Pradhan Mantri Suraksha Bima Yojana [PMSBY] - for accidental death insurance.
9. Jan Jan Suraksha Scheme:--- During PSB Manthan in November, - Accidental/Disability Insurance coverage up to Rs. 2 Lacs. - The borrowers availing
Suraksh 2017, PSB reform agenda “Ease of Access Service - Age: 18 Yrs to 70 Yrs. - Premium: Rs.12/- per annum. credit under PMAY–
a Excellence” (EASE) was approved. In view of this it has been 2) Pradhan Mantri Jeevan Jyoti Bima Yojana [PMJJBY] - for life insurance cover. EWS/LIG and Education
advised by the ministry for expansion in Micro-insurance - Bank account holders are eligible in age group of 18 to 50 Yrs. loan under PNB-Kaushal
Scheme coverage by tagging with MSME, disbursements to cover - Cover upto Rs. 2 Lacs for death due to any reason. - Premium: Rs. 330/-- per annum. be tapped on priority basis
borrowing individuals & employees of borrowing entities, under 3) Atal Pension Yojana [APY] - Minimum guaranteed pension to citizens with a focus for availing the benefits of
(RBDA: Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri on un-organized sector. Security Schemes as the life
19/ Jeevan Jyoti Bima Yojana. The capital infusion by the - Fixed Pension Yojana, - All Citizens are eligible, - Age: 18 Yrs to 40 Yrs risk is covered under
15.03.18) Government is dependent on PSB performance on these - Minimum fixed pension at the age of 60 years depending upon the contribution. PMJJBY and PMSBY at a
reforms themes. nominal cost and regular
pension is guaranteed under
APY.
395
10. Met Optional Group Insurance Life Cover to Borrowers -- Met Loan & Life Suraksha’ (MLLS):--- Bank has in place a scheme ‘Met Loan & Life Suraksha’ (MLLS) -- a PNB Met Life
Product for extending Group Life Insurance Coverage for Housing Loan, Education Loan, Vehicle Loan and Personal loan borrowers of the Bank. The group insurance cover is an
Loan & Life
effective tool to safeguard the borrower’s family from the burden of repaying the loan outstanding and also to make these portfolios secured against the exigencies of the death of the
Suraksha
borrowers during the tenor of loan.
Now it has been decided to bring scheme of Finance Against Mortgage of Immovable Property under the ambit of optional Group insurance life cover. Salient features of the product is
(RBDA: as under:---
100/ 1. Policy Term: Minimum: 2 Yr for TL & 1 Yr for OD, Maximum: 30 Years;
05.11.18) 2. Age at Entry: 18-65 Yr, Coverage Ceasing Age: 70 Yr;
3. Sum Assured: Min—10000, Maximum—No Limit
11. PNB Saraswati: For PNB Saraswati: Repayment Period: PNB Saraswati, Margin: - Upfront Fee – NIL for studies in
pursuing higher, PNB Saraswati and PNB Parvasi Shiksha : Pratibha, Udaan, Honhaar: 15 yr (Excluding PNB Saraswati: Upto 4 Lac – NIL; Ab. 4 Lac – 5%. India.
Educatio professional and Scale I : Nil; Scale II to III : 10 L; Scale IV (RAM Repayment Holiday). Repayment Holiday/ PNB Udaan: Upto 4 Lac –NIL; Above 4 Lac – 15%. 1% with Min. Rs 10,000/- for
n Loan technical education Segment Hd) : 30 L, Moratorium: Course period + 1 year. PNB Pratibha: In case of Institutes covered at studies abroad (refundable)
in India, other than Scale 5 (iRAM) : 50 L if collateral 100%, 75 L PNB Kaushal:-- Annexure- ‘G’ & ‘H’: As per annexure. - Documentation charges: NIL
(5 premier Institutes For loans upto 50000/- --3yr; - Reimbursement of fee: May be
if collateral 150%. PNB Kaushal: Margin – NIL;
schemes) PNB Udaan: For
ZOCAC I : 75 L, ZOCAC II 100.00 L, if coll
From ab 50000/- to Rs.1 Lac- 5 yr;
PNB Honhaar: Margin – NIL; permitted by BH within 6 M from
pursuing higher, For loans ab 1 Lac- 7 yr. the date of payment of fees.
above 100% n up to 150%. RATE OF INTEREST:
professional and Moratorium:--- For courses upto 1 year 6 Reimbursement after six months
[RBDA: technical education PNB Udaan : M from the completion of the course. For
PNB Saraswati
& upto 01 year at Circle Head
Scale I : Nil; Scale II to III : 10 L; Scale IV (RAM (i) Loan upto Rs.7.50 L (covered under CGFSEL
CIR: abroad. courses ab 1 year12 M from the
Scheme) = RLLR + 2.00%
level. (except PNB Honhaar
PNB Pratibha: Segment Hd) 40 L, completion of the courses. (BH may permit scheme)
PNB Scale 5(iRAM) : 50 L if collateral 100%, 75 L if (ii) Loan above Rs.7.50L: RLLR+2.75%
For students getting extension in moratorium period upto max 02 - The expenses, which could be
collateral 150%. (iii) Loans irrespective of amt (where 100% tangible
admission in 199 yr) considered max upto 10% of the
Saraswati ZOCAC I : 100 lakhs, ZOCAC II : 200.00 lakhs if collateral security in the shape of IP, enforceable
Premier Institutes in 1. BM is empowered to permit extension in total tuition fees for the entire
under SARFAESI and/or liquid security is available):
82/ India. coll above 100% n up to 150%. moratorium period up to max 02 yr in course: Caution deposit, Building
RLLR+2.00%
PNB Kaushal: PNB Pratibha: deserving cases under reporting to CH. fund/refundable deposit
17.08.20; (iv) Education Loan to children of PNB’s Employees
For pursuing i. Studies in India – 2. Sanctioning Authority may consider
where employee is co-borrower/guarantor: RLLR
supported by Institution
PNB Vocational Education a. Max. Rs.35/25/20/15/12 L (150 extension of time for completion of course up
+0.25%
bills/receipts.
& Training/ Skill to max period of 2 yr. -The expenses (if not available in
Inst- Ann-G) 3. Sanctioning Authority may consider
PNB Pratibha:
development courses expenditure schedule of college,
Udaan: 82/ b. Max. Rs.10 L (180 Inst- Ann-H) (i) Students getting admissions in institutions
of duration of 2 M to telescoping of the repayment with stepped max upto 20% of total tuition
ii. All IIMs and IITs, opened in the other than IITs, IIMs & XLRI Jamshedpur:---
17.08.20; 3 Yr. up installment with passage of time over the
Loan upto Rs.7.50 L under CGFSEL=RLLR+0.75%
fees for the entire course:
PNB Honhaar: For recent past/ get subsequently repayment period. Purchase of books/equipments/
PNB Students done class opened and not included in the list 4. Existing Education Loan borrowers, with a
Loan above Rs.7.50 L= RLLR+0.25%
instruments/uniforms/ Computer
(ii) Students getting admissions in IITs, IIMs, XLRI
X & XII from Delhi & of 201 premier Institutes shall be repayment period upto 10 yr may be extended etc.
Jamshedpur & NITs: Loan upto Rs.7.50 L under
Pratibha: wish to pursue placed in Ann- G with ceiling of upto 15 yr, by the respective Sanctioning
CGFSEL: RLLR + 0.65%
- Concession for female
diploma or degree Authority and same shall not be treated as students: 0.50% in ROI for o/s
82/ level courses or
Loan Amt of Rs 15 L.
restructuring.
Loan above Rs.7.50 L: RLLR + 0.15%
upto 10 L & 0.25% for o/s ab.10 L
17.08.20; iii. ZM may sanction higher amt of Loan ab 7.50 L : RLLR + 0.10% for IIM Ahmedabad;
specified skill 5. Charges for change in terms & conditions of - No concession for loans
loan upto a max of 50% over & IIM Bengaluru; IIM Kolkata
PNB development courses sanction: 0.02% of loan amount (Min extended to children of PNB’s
above the ceiling prescribed for PNB Udaan:
in Delhi only. Rs.1,000/-, Max Rs. 5 L). Employees where interest rate
(i) Loan upto Rs.7.50 L (covered under CGFSEL
institutes mentioned in Ann-G & H. charged is RLLR+ 0.25%.
Scheme):
Kaushal: PNB Kaushal: Rs.5000/- to RLLR + 2.00%
-Simple Intt during Moratorium
Rs.1.50 L period.
24/ (ii) Loan above Rs.7.50 L: RLLR+2.75%
- 1% Intt concession: servicing
PNB Honhaar: Max. Rs.10 L (For (iii) Loans irrespective of amt (where 100% tangible
25.03.20; of intt during the repayment
Studies in Delhi) (Margin – NIL, No collateral security in the shape of IP, enforceable
PNB holiday/ moratorium period i.e. full
coll. Sec.; Parent/legal guardian to under SARFAESI Act, and/or liquid security is
course period + 1 yr and regular
be joint borrower) available): RLLR + 2.00%
repayment thereafter. The
Honhaar: Security: (PNB Saraswati, Udaan) (iv) Loan for pursuing education from premier foreign
concession shall not be available
396
23/ i) Upto Rs. 7.50 L: Parent(s)/guardian be made joint borrower. No tangible Security and/or 3rd party guarantee. universities and educational institutes (200) under PNB where the interest rate charged is
a) However, all eligible education loans up to Rs.7.50 L sanctioned shall be covered under CGFSEL. Udaan: RLLR + 2.00% RLLR + 0.25 % or RLLR +0.75%.
25.03.20; b) Education Loan to children of PNB’s Employees where employee is either co-borrower or guarantor are (v) Edu Loan to children of PNB’s Employees who is - Penal interest: Upto Rs. 25000/
(only for exempted for coverage under CGFSEL scheme. However in such cases the security norms shall be as under: Upto either co-borrower or guarantor: RLLR+0.25% PNB - NIL and above Rs. 25000/-: 2%.
Delhi Rs. 4 L: No Security. Parent(s)/guardian be made joint borrower. Above Rs. 4 L & upto Rs. 7.50 L: Besides the Kaushal: - Life Insurance policy: Optional
branches) parent(s)/guardian as joint borrower, collateral security in the form of suitable TPG be taken. (Sanctioning Authority (i) Loan upto Rs.1.50L (Covered under CGFSSD): ‘Met Loan & Life Suraksha’.
may waive TPG). RLLR+1.50% - Disposal of Application: within
ii) Above Rs.7.50 L: Tangible collateral security of suitable value acceptable to bank. Parent(s)/guardian: joint (ii) Education Loan to children of PNB’s Employees one week (cases of
borrower(s). where employee is either co-borrower or guarantor: Branch/RAPC) and within two
[Under PNB Udaan: Education loan to students for pursuing diploma & certificate courses other than aeronautical, a. Under CGFSSD (Optional) : RLLR +0.65% b. weeks (CH & ab power) from the
pilot training, shipping etc from abroad, not otherwise covered under the Scheme may be considered by Incumbents Others: RLLR + 0.25% date of receipt of complete
of S-IV & ab, where the loan is backed by liquid security valuing 125% of loan amt. Further, CH & above have been PNB Honhaar: RLLR+2.15% PNB Honhaar: The application.
empowered to accord permission to consider such cases where loan is backed by mortgage of IP, enforceable scheme provides guarantee to the bank by Higher -Top up loan: For pursuing
under SARFAESI Act, having RV of at least 200% of loan amount.] Education and Skill Development Credit further studies on merits by BH of
Further, in case of wards of staff members, Education Loan for Diploma/Certificate Courses for studies abroad Guarantee Fund in case of default of bank loans. Scale IV & ab subject to max amt
may also be permitted by CH & ab subject to availability of: Collateral Security in the shape of IP equivalent to the An Annual Guarantee Fee of 0.50% of the under the Scheme upto
amount of loan OR Where the residual value of IP already mortgaged is sufficient to cover the loan amount. outstanding amt as on the date of application of the Rs.30L/Rs. 40 L for studies in
Security (PNB Kaushal & Honhaar): No coll. Sec. Or TPG. (PNB Kaushal:covered under CGFSSD, Honhaar: guarantee cover is payable upfront. The Guarantee India/abroad respectively. CH &
under HESDCGF) fee shall not be recovered from the student upto ab may sanction higher amt.
SECURITY (PNB Pratibha): i. Co-obligation of parents/guardian as joint co-borrowers. However, the sanctioning sanctioned limit of Rs 7.50 L, but the Guarantee fee - Takeover: Takeover is permitted
authority may waiver parents/guardian as joint co borrowers, while considering loans for PGPMAX Course pursued shall be borne by the borrower for loans sanctioned from other Banks/ FIs subject to
at ISB Hyderabad/Mohali Campus. In case of 3 year part-time weekend PG Diploma program in Business ab Rs 7.50L to Rs 10 L. commencement of repayment.
management for Working Executives and Business Owners conducted by XLRI, the clause of Co-obligation of -Joint Borrower:
parents/guardian as joint co-borrowers has been waived. parent/guardian.
ii. No collateral security to be insisted upon for the amt up to the maximum loan amt as per Ann- G & H. However, In case of married person:
all eligible education loans up to Rs.7.50 L shall be covered under the CGFSEL. spouse or the
As per the reputation of the institutes /individual merit of the case, ZMs have been vested with the powers for parent(s)/parent(s)-in-law.
permitting waiver of the condition of making the parents as co-borrower. In case parents are not alive:
grandparent(s).
Sanctioning Authority may consider
joint borrower (other than
parent/guardian), in case of adverse
credit history of the parent/ guardian
of the student borrower.
Purpose & Eligibility Extent of loan Repayment period Margin, Security & Rate of Interest Other Imp. guidelines
12. 1. Background: Based on the recommendation of IBA, PNB has formulated a new 8. Loan Amount: Need based. 21. Scheme Code: (Term
education loan scheme for providing Education Loan to Overseas Citizens of India 9. Expenses considered for loan: All the expenses required to Loan)
(OCI)/ Students born to Indian Parents during their stay abroad (Overseas complete the courses including one time to and fro travel expense to TLOED: During moratorium
PNB- citizen by birth) namely “PNB-PRAVASI SHIKSHA LOAN” for pursuing Higher India. Hostel accommodation be included. Expenses for outside period,
Education in India. accommodation other than that provided by college/university will not TLEDO: After moratorium
Pravasi be considered. period
2. Objective: To provide financial support to meritorious students who are
Shiksha OCI/Students who are born abroad (Overseas Citizenship by Birth) for pursuing 10. Credit Information Report (CIR): CIR of NRI Individuals may be 22. Insurance Cover: Life
drawn from the external agencies providing the facility of credit score. Insurance Cover is mandatory
Loan higher education in India.
11. PNB Score: A separate variant “PNB Pravasi Shiksha Loan” is upto an amount equivalent to
3. Eligibility: OCI/Students who are born to Indian parents during their stay abroad available under existing score model. total loan amount including
(RBDA: (foreign citizens by birth) and should have secured confirmed admission for a higher 12. Margin: 20% interest accrued during
22/ education course in identified institutions in India. (Previously Persons of Indian 13. Rate of interest: RLLR+2.15% repayment holiday.
Origin (PIO) was also eligible under the scheme, now PIO will not be eligible 14. Interest Table Code: EDPSR 23. Upfront Fee: Upfront Fee
25.03.20) for availing education loan facility under the scheme). 15. Guarantee: Guarantee of Person(s) who is/are offering IP in India with 1% of loan amt, Min
4. Co-borrower: Not applicable or Liquid Security as Collateral Security for the loan is mandatory. Rs.10,000+GST (Non-
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5. Courses eligible: Full time regular Graduate/Post Graduate/Diploma (equivalent 16. Security: EM/RM of IP in India in the name of Guarantor(s) with refundable)
to Degree)/Executive Courses. Part time/Research/Certificate Courses are not value at least 125% of loan amount (IP must be other than agricultural 24. Document charges: Rs.
allowed. or plantation property or farm house). OR 450 + GST
6. Age criteria: No minimum age limit (Minor is not permitted) Liquid Security with value at least 125% of loan amount, in the shape 25. Passport is mandatory. In
7. Sanctioning Authority: of pledge of Govt Security, NSCs, KVPs, IVPs/PSU Bonds (where case of OCI borrowers OCI
A) Proposals for education loan under the scheme forwarded by overseas offices interest is being serviced regularly)/Bank's FDR/LIC Policies card is mandatory.
are to be received centrally at RAPC KAROL BAGH. The applications will be sent to (surrender value) etc. 26. The Loan amt not to be
17. Repayment Period: Max 10 years (excluding moratorium period) remitted outside India.
the branch offices authorized to deal in Forex or the branches permitted by CH.
18. Repayment Holiday/Moratorium Period: Course Period + 6 27. Disposal of Application:
B) Education Loan proposals of NRIs/PIOs, received directly by the inland months within 2 week (cases of Branch
branches, will be processed and sanctioned at:-- 19. Repayment mode: In EMIs, out of remittances from outside India level) and within 3 weeks
i. All the branches authorized to deal in foreign exchange (Category A & B). through normal banking channels or by debit to NRE/FCNR(B)/NRO (cases falling under the powers
ii. All the IBBs within their vested power. A/Cs. of CH & ab) from the date of
iii. Category-C branches not linked to RAPC but have been permitted by CH. 20. Penalty: Penal interest @2% on the default/ irregular portion receipt of complete application.
iv. RAPC will sanction loan proposal of NRIs/PIOs received through LGBs: above Rs.25000/- to be charged as applicable to Retail Advances. 28. Re-imbursement of Fees:
a. Which are authorized to deal in foreign exchange, b. Branches authorized by CH. Not permitted.
29. Top up loan: To be
considered on merits
(depending on the case) at
level of S-IV & ab.
30. Institutes covered: 143
Identified Educational Institutes
in India
13. . 1. Purpose: This scheme benefits all categories of economically weaker students for pursuing Professional/technical courses in India only and provides full interest
Central subsidy during the period of moratorium on Education loans taken by EWS students. The scheme is effective from the year 2009-10 and the scheme is an ongoing scheme
till further instructions to the contrary are received from IBA. Further, the modified scheme is applicable for the academic year 2018-19 & 2019-20 starting 01st April, 2018.
Scheme to 2. Nodal Bank: Canara Bank is the Nodal Bank for implementation and monitoring of the scheme.
provide 3. Applicability/Features of the Scheme: The Scheme is adopted by all Scheduled Banks and is linked with the existing Model Education Loan Scheme of the IBA and
Interest restricted to students enrolled in professional/technical courses only from NAAC accredited institutions or professional/technical programmes accredited by NBA or
Subsidy institutions of National Importance or Central Funded Technical Institutions (CFTIs). Those Professional institutions/programmes, which do not come under the ambit of NAAC
(CSIS) on or NBA, would require approval of the respective regulatory body viz, approval of Medical Council of India for Medical courses, Nursing courses, Bar Council of India for Law etc.
Education 4. Eligibility for Subsidy: The interest subsidy shall be available to the eligible students only once, either for the first undergraduate degree course or the post graduate
Loans to degrees/diplomas in India inclusive of integrated courses (Graduate + Post graduate).
EWS 5. Moratorium Period: Course Period + 1 year. On completion of moratorium period, the interest on the outstanding loan amount shall be paid by the student, in accordance
students with the provisions of the educational loan Scheme.
(RBDA: 72/ 6. Income Limit/Proof: The benefit is applicable to the student belonging to economically weaker sections (EWS), having parental income upper limit of Rs. 4.50 L per year
01.11.19) (from all sources).
7. 1% interest concession would be extended to the student borrower at the time of closure of account under the Central Sector Scheme of interest Subsidy, provided the
Government of India releases interest subsidy claims to the Banks on half yearly or yearly basis and the student borrower repays the Education loans regularly during the
repayment period. With respect to concession of 1%, it was clarified that where Government provides subsidy it is not applicable.
8. Subsidy Amount: For Education loans exceeding Rs.10 lakh the subsidy under the scheme is available up to Rs.10 lakh only for studies in India upto 31.03.2018. Further, subsidy amount
will be only for Rs.7.50 lakh irrespective of sanctioned loan amount (within the parameters of IBA Model Education Loan Scheme) for all loans taken w.e.f. 01.04.2018.
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14. 1. Introduction: i. Ministry of Social Justice & Empowerment (MoSJ&E) has launched “Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loan for Overseas Studies for
students belonging to Other Backward Classes (OBCs) & Economically Backward Classes (EBCs)”. It provides Interest Subsidy for meritorious students from OBCs communities & EBCs
communities/castes, who are not included in SC/ST/OBC categories so as to provide them better opportunities for higher education abroad and enhance their employability. The scheme is effective
Dr. from 2014-15.
Ambedkar ii. The scheme provides full interest subsidy during the period of moratorium on education loans taken by OBCs & EBCs for pursuing Post Graduate Diploma, Post Graduate degree
Central course/Masters, M.Phil & Ph.D from any Foreign University. Further, those students, who have completed M.Tech in India but is now pursuing MBA abroad and have received subsidy under
Sector CSIS/State Subsidy Scheme for the M.Tech course, are also eligible in this Scheme.
2. Conditions for Interest Subsidy: i. The Scheme is applicable for higher studies abroad. The interest Subsidy shall be linked with the existing Educational Loan Scheme of IBA and restricted to
Scheme of students enrolled for course at Masters, M. Phil and Ph. D level. ii. The interest subsidy under the scheme shall be available to the eligible students only once, either for Masters or Ph.D levels.
Interest Interest subsidy shall not be available to those students who either discontinued the course mid- stream due to any reason, or those who are expelled from the institutions on disciplinary or academic
Subsidy grounds. iii. The scheme be available on preferential basis for the professional courses first. iv. The students obtaining benefits under this Scheme shall not be given the interest subsidy if he gives up
(ACSIS) -- Indian citizenship during the tenure of the loan.
3. Eligibility: i. The students should have secured admission in the approved courses at Masters, M. Phil or Ph. D levels abroad for the eligible courses. ii. He/She should have availed loan from a
OBCS & scheduled bank under the Education Loan Scheme of the IBA for the purpose. iii. The students who have availed interest subsidy under any other scheme including the CSIS scheme for
EBCS undergraduate courses, shall also be admissible for interest subsidy under the present scheme. iv. The student should belong to the OBCs & EBCs communities. EBCs are those communities /caste
who are not included in SC/ST/OBC categories and whose family income is below Rs 2.50 lakh per annum.
(RBDA: 73/ 4. Income Ceiling:
01.11.19) i. For OBC candidates, total income from all sources of the employed candidate or his/her parents/guardians in case of unemployed candidate shall not exceed present Creamy Layer criteria i.e. Rs
8 L per annum.
ii. For EBC candidates, total income from all sources of the employed candidate or his/her parents/guardians in case of unemployed candidate shall not exceed Rs.2.50 L per annum.
iii. Under this Scheme, Income certificate produced by the student for availing Educational Loan viz. ITR/Form 16/Audited Accounts/Income certificate issued by the authority of State Government/UT
Administration is acceptable to determining Income ceiling.
5. Rate of Interest Subsidy: i. Under the scheme, interest payable by the students availing the education loans of the IBA for the period of moratorium (i.e. course period, plus one year or six
months after getting job, whichever is earlier) as prescribed under the Education Loan Scheme of the IBA, shall be borne by the Government of India. ii. After the period of moratorium is over, the
interest on the outstanding loan amount shall be paid by the student, in accordance with the existing Educational Loan Scheme as may be amended from time to time. iii. The candidate will bear the
Principal installments and interest beyond moratorium period.
6. Nodal Bank: Canara Bank is the Nodal Bank for implementation and monitoring of the scheme.
15.
Coverage 1. As per the scheme, all skill loans sanctioned with limits Rs.5000/- & above and up to Rs.1.50 lacs, under PNB kaushal on or after 15.07.2015 , without any collateral
of security and /or third party guarantee shall be covered under the CGFSSD scheme , subject to compliance of its parameters. Bank shall apply for Guarantee Cover in respect of
Education all eligible education loans up to Rs.1.50 lacs, sanctioned/disbursed, without any collateral security and /or Third Party Guarantee (subject to compliance of its parameters), in
Loan A/Cs the quarter April-June, July-September, October-December and January-March prior to expiry of the following quarter viz. July-September, October-December, January-
Under March and April-June, respectively.
“Credit 2. Loan Limit: The minimum and maximum loan limit under this Scheme is Rs.5000/- and Rs.1,50,000/- respectively, without any collateral security and/or third party guarantee.
Guarantee 3. Interest Rate: The Interest Rate to be charged by the Bank for skill loan to be covered under CGFSSD should not be more than 1.5 % p.a. over the MCLR.
4. Eligible Borrower: New or existing borrower with Indian Nationality who meets eligibility criteria prescribed under “Skill Loan Scheme” having the minimum qualification as
Fund
required by the enrolling institutions/organizations as per National Skill Qualification Framework (NSQF) and who has executed loan documents with the lending institution to
Scheme
avail skill loan. Parents/guardians will be the co-borrowers.
For Skill 5. NCGTC: National Credit Guarantee Trustee Company set up on March 28, 2014 by Government of India under the Companies Act 1956 to act as the Trustee to operate
Developme the Credit Guarantee Funds for Educational Loans, Skill Development Loans and any other funds to be set up by Government of India from time to time. All matters pertaining to
nt the operations of CGFSSD would be undertaken by NCGTC on behalf of the said Fund Trust.
(CGFSSD)” 6. Lock-in-period: The period during which no invocation of guarantee can be made. A lock-in-period of 12 months has been stipulated from the date of commencement of
–PNB guarantee cover or end of period of moratorium of interest, whichever is later.
KAUSHAL 7. Guarantee Fee: i. For availing the guarantee coverage, the Bank shall pay Guarantee Fee of 0.125% per calendar quarter (i.e. 0.50% p.a.) on the quarter end outstanding
(RBDA: portfolio balance (skill loans).
79/17.09.16 ii. Guarantee fee shall be paid within 16 days from the end of the calendar quarter. (The Bank would need to furnish a Management Certificate within 10 days from the end of the
399
98/02.12.16 calendar quarter, after which, a Credit Guarantee Demand Advice Note [CGDAN] would be issued by NCGTC within 3 day of receipt of Management Certificate and
69/10.08.17 subsequently, the guarantee fee shall be payable within 3 days from the issue of CGDAN).
38/04.06.18) 8. Invocation of guarantee: The Bank may invoke the guarantee in respect of Education loan within a maximum period of one year from date of NPA, if NPA is after lock-in period or within
one year of lock-in period, if NPA is within lock-in period, after satisfying certain conditions.
16. 1. BACKGROUND: i. The PM’s New 15 Point Programme for the Welfare of Minorities announced in June 2006, provides Interest Subsidy for meritorious students from minority communities
belonging to EWS of notified minority communities so as to provide them better opportunities for higher education abroad and enhance their employability. The scheme has been named as “PADHO
PARDESH” and is effective from 2013-14. ii. This central sector scheme provides full intt subsidy during the period of moratorium on education loans taken by EWS students belonging to minority
Padho communities for pursuing Post Graduate Diploma, Post Graduate degree course/Masters, M. Phil & Ph. D from any Foreign University. Further, those students, who have completed M. Tech in India
Pardesh but is now pursuing MBA abroad and have received subsidy under CSIS/state subsidy scheme for the M. Tech course, are also eligible in this Scheme. Six religious communities viz; the Muslims,
Scheme of Christians, Sikhs, Jains, Buddhists and Zoroastrians (Parsis) are notified as minority communities.
2. ELIGIBILITY: i. The student should have secured admission in the approved courses at Post Graduate Diploma, Masters, M. Phil or Ph. D levels abroad for the eligible courses
Interest
ii. He/ She should have availed loan from a scheduled bank under the Educational Loan Scheme of the IBA for the purpose.
Subsidy on iii. The loan sanctioned and disbursed from 2013-14 onwards will only be eligible for interest subsidy.
Education iv. The students who have availed interest subsidy under any other scheme including the CSIS scheme for undergraduate courses shall also be admissible for interest subsidy under the present
Loans For scheme.
Overseas v. The income certificate (issued by competent authority in the State/Union Territory) obtained at the time of availing loan shall determine the eligibility under the scheme.
studies for vi. The Minority Certificate issued by any Religious body issuing authority, School/College Principal or a Self Declaration of the student would be a proof to determine minority community.
Students of 3. Income Ceiling: Total income from all sources of the employed candidate or his/her parents/guardians in case of unemployed candidate shall not exceed Rs. 6 L per annum.
Minority 4. Rate of Interest Subsidy:
(RBDA: 74/ i. Under the scheme, interest payable by the students availing of the educational loans of the IBA for the period of moratorium (i.e course period, plus one year), shall be borne by the
01.11.19) Government of India.
ii. The interest subsidy shall be restricted to the disbursed component not exceeding Rs. 20.00 lakh.
iii. After the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the existing Educational Loan Scheme.
iv. The Candidate will bear the Principal installments and interest beyond moratorium period.
5. Nodal Bank: Canara Bank is the Nodal Bank for implementation and monitoring of the scheme.
17. 1. BACKGROUND: The Govt. of India through Ministry of HRD, Department of Higher Education has notified the Credit Guarantee Fund Scheme for Education Loan (CGFSEL)
vide Gazette Notification dated Sept 16, 2015 under the Trust Fund, Credit Guarantee Fund for Educational Loans (CGFEL). The fund and the scheme will be managed and
Credit operated by National Credit Guarantee Trustee Company Limited (NCGTC) which is a wholly- owned Trustee company of Government of India. The Scheme shall be effective
Guarantee on all Education loans sanctioned on or after 16.09.2015 (Date of notification) and complying to CGFSEL guidelines. The guarantee cover will commence from the date of
Fund payment of guarantee fee and shall run through the agreed tenure of the Education Loan.
Scheme 2. The scheme stipulate that all Education loan (for pursuing studies in India and Abroad) sanctioned upto Rs. 7.50 Lac without obtaining collateral security and/or third party
For guarantee and with Maximum Rate of Interest as Base Rate plus 2% (BR+2%), shall be covered, subject to payment of Annual Guarantee Fee (AGF) of 0.50% p.a. on the
outstanding loan amount. The Guarantee fee shall be borne by bank.
Educatio 3. The Bank shall apply for guarantee cover in respect of education loans disbursed in the quarter April-June, July-September, October-December and January- March
n Loans prior to expiry of the following quarter viz. July-September, October- December, January-March and April-June, respectively.
(CGFSEL 4. Extent of the guarantee: The Fund shall provide guarantee cover to the extent of 75% of the amount in default and would be settled as under:--- 75% of the guaranteed
) amount will be paid within 30 days and the balance 25% will be paid after all avenues for recovery have exhausted. The guarantee cover will commence from the date of
(RBDA: payment of guarantee fee and shall run through the agreed tenure of the Education Loan.
19/31.03.16 5. Guarantee Fee: For availing the guarantee coverage, the Bank shall pay Annual Guarantee Fee (AGF) of 0.50% p.a. of the outstanding amount as on the date of
78/17.09.16 application of guarantee cover, upfront to the Fund within 30 days from the date of Credit Guarantee Demand Advice Note (CGDAN) of guarantee fee. All subsequent
97/02.12.16 AGFs would be calculated on the basis of the outstanding loan amount as at the beginning of the Financial Year. The guarantee fee once paid by the Bank to NCGTC is non-
38/04.06.18) refundable, except under certain circumstances like: a) Excess remittance, b) Remittance made more than once against the same Education loan, & c) Annual guarantee fee
not due.
6. Invocation of guarantee: The Bank may invoke the guarantee in respect of Education loan within a maximum period of one year from date of NPA, if NPA is after lock-in
400
period or within one year of lock-in period, if NPA is within lock-in period, after satisfying certain conditions.
18. 1. Bank has entered into a Memorandum of Agreement (MoA) on 03.06.2013 for availing 100% refinance from National Handicapped Finance & Development Corporation
Concession (NHFDC) for extending concessional Education Loans to Persons with Disabilities (PwDs) under bank’s Education Loan Schemes.
al 2. Guidelines for providing concessional education loan to Persons with Disability (PwDs) under refinance scheme of NHFDC are applicable to all the existing
Education education loan schemes of the bank , subject to the following stipulations:
Loans To i. ‘Student Eligibility’ - Loan shall be available to any Student with 40% or more disability on the basis of Disability certificate issued by authorities empowered to issue.
Persons ii. ‘Expenses considered for Loan’ - Cost of 2-wheeler upto Rs.50,000/- shall be considered within the overall ceiling of loan amount.
With iii. ‘Rate of Interest’ – 4 % with an additional rebate of 0.50% for women beneficiaries, i.e. 3.50%. {In case of default, normal ROI (plus penal intt) shall be charged for the period
Disabilities of default}. No further concession in interest shall be available to any category of borrowers for regular servicing of interest during moratorium period.
(PWDS) iv. ‘Quantum of Finance’ -- Need Based, Studies in India - Max. Rs.10 lakh, Studies abroad - Max. Rs.20 lakh
(RBDA: 75/ v. The maximum repayment period of loan will be in conformity to the guidelines laid down in NHFDC scheme i.e. 7 years after commencement of repayment. The
01.11.19) repayment as per repayment schedule would commence 1 year after completion of course or 6 months after securing a job, whichever is earlier. Loans with repayment
period beyond the ceiling as above are not eligible for refinance under the aforesaid scheme.
vi. The other terms & conditions as envisaged in all existing Education Loan Schemes of the bank shall remain applicable to this scheme also.
3. Educated PwDs are eligible to avail 3% reservation in admissions and also in the government jobs. Besides, the government is also providing attractive incentives to private
sector for employing PWDs.
Scheme Purpose & Extent of Loan Margin, ROI & Security Other Imp. Guidelines
Eligibility
19. 1.Purpose: For 6. Repayment Period: New vehicles: 84 M, Old vehicle: 60 M. 11. Processing/Documentation charges:
3. Extent of Loan: For
purchase of: {Persons in agriculture & allied activities: 7 years (new vehicle) or 5 years (old vehicle) Upto Rs. 6 L- Rs. 1,000, Ab Rs. 6 L- Rs.
PNB CAR Individuals/ Proprietorship
New/Old (not older -CHs & ab may relax repayment period by 12 M for new cars. 1,500/- (excluding GST)
LOAN Concerns - 25 times net
than 3 yr) Age: Repayment to be ensured within 70 yrs for salaried persons with pension and 65 yrs prepayment charges: @2% on the
monthly
Car/Van/Jeep/MUV/S of age for others.ZOCAC I may relax the above criteria by 5 years. outstanding (under Fixed)
salary/income/pension.
3 variants UV; 7. MARGIN: For new vehicles: 15% of on road price (RAM/iRAM discretion 10%)
Max. Rs.100 L. (for 1 or
1. PNB [Reimbursement of Tie up arrangement: 10% of on road price OR NIL on Ex-showroom price. 12. Under PNB Pride: Full waiver of upfront/
more vehicles)
Car Loan cost of New vehicle For old vehicles: 25% of value (Value calculated by 15% straight line method depreciation on processing fees and doc charges for
[Incharge RAM/ iRAM &
purchased by current invoice price.) permanent Employees of Central/ State
ab may relax the criteria
individual/ corporate Govts/Defence personnel & paramilitary
2. Insta of number of times; AGM
out of own funds. 8. ROI: (Under Floating Option): forces
Vehicle (RAM/iRAM) & ab may
(Not more than 3 M 13. Tie up arrangement: 1. Maruti Suzuki
Loan relax the criteria and
old)—Margin: 25% Scheme / Borrower Rate of Interest ROI for wards/parents of Loan to India Ltd. (MSIL),
sanction need based
Scheme of On-Road Price. Type existing/Ex-Staff & Pre Defence/P 2. Tata Motors Ltd, 3. Mahindra & Mahindra
amount]
for Sanctioning approved Insta-Vehicle ara Ltd. (M&MIL),
Business Concerns: No
Existing Authority: {Branch Loan Scheme for Home Military 4. Honda Cars India Ltd. (HCIL), 5. Force
Ceiling.
Home – invoice date upto 1 Loan borrowers Under Motors Ltd. (FML).
4. Maximum Deduction:
M old. Circle Head - Rakshak Further, Circle Heads have been vested with
Loan New Car Old Car New Car Old Car
- invoice date upto 3 powers to enter into tie-up with local car
Borrower Plus
M old.] dealers.
s. 2. Eligibility: For GMS / I Max.ded. Women/ Irrespectiv RLLR + RLLR + RLLR + 0.50 RLLR + 1.50
Private use: of GMS/I PNB Pride/ e of CIC 0.75 % 1.75 % % % New Car –
3. PNB Individuals & Joint Coporates Score RLLR+
Upto 50%
Borrowers
401
Combo (parent/spouse Rs.500 Other CIC score RLLR + RLLR + RLLR + 0.50 RLLR + 1.50 0.50% Eligibility per Car Rates % Eligibility
Loan /Earning Children) 00/- Individual 750 and 0.75 % 1.75 % % % dealer per FY : Rates of loan per Sales
Scheme - Business above (% age of Loan Amt.) Amount executive
>50000/ 60%
concerns per FY
(Housing -
(Corporate & Non- CI C score RLLR + RLLR + RLLR + 0.65 RLLR + 1.65 Old Car – No.of Loan Amt.
Loan + Corp). RLLR +
700 - 749 0.90 % 1.90 % % % vehicles
Car Loan). i) Min income 1.50%
(RBDA: criteria for * (Ded: 10% extra by Upto 10 Upto 40L 1.50% 0.25%
ZOCAC-I & ab) CIC score RLLR + RLLR + RLLR + 0.75 RLLR + 1.75
79/ individuals/propriet <than 700 1.00 % 2.00 % % % 11 – 40 >40 Lakh 1.70% 0.30%
orship firms: 5. Loaning powers: As per
17.08.20) – 1.25Cr
Minimum net monthly the vested loaning power.
Loan for old car/ van/ jeep/ Above 40 >1.25 1.95% 0.35%
salary /pension/
MUV/ SUV to be allowed by crore
income: Rs 25000/-. ROI: (Under Fixed Option): Fixed for All (including PNB Pride): MCLR+0.95%, for new car
-Income of BH (Minimum Scale IV)/
RAM/IRAM & ab. and MCLR + 1.95% for old car. [CH may alter the payout ratio amongst Car
spouse/parents/ Dealer & Sales Executive, keeping in view
Earning children 10. Security inspection: a)
Where the loan A/C is 9. Security: Vehicle purchased to be hypothecated to the bank. the business mobilized, but within the overall
(max 1 co- maximum payout approved by the bank. The
borrower) can be running regular the 10. GUARANTEE/COLLATERAL SECURITY:
requirement of periodical i) Guarantee acceptable to the Bank in case of Gross Monthly salary is less than Rs. payout will be based on leads generated for
added. the Circle as a whole in branches in that
ii) AGM RAM/iRAM/ Inspection, including 50000/-
obtaining of PNB 551, may Circle and not on individual branch
ZOCAC-I & above ii) No guarantee required for permanent employees of Central Govt./State Govt./ basis.]
may relax the income be done away with. b) For
irregular/NPA A/Cs, the
PSBs/MNCs/Listed companies of BSE or NSC whose shares are actively traded 14. JRC (Joint Registration Certificate):
criteria. and quoted above par irrespective of income. To be extracted from the VAHAN portal
iii) No minimum inspection be done on
quarterly or at such shorter iii) Incumbents of Branches headed by Scale IV & above may waive the guarantee / (https://vahan.nic.in/nrservices). Any vehicle
monthly income is registered with the VAHAN Registry shall be
required in cases intervals as the situation collateral security on merits of each case.
demands and PNB 551 to deemed to be registered with the Central
where borrower Registry for the purpose of SARFAESI Act,
agrees to give 110% be obtained.
2002. Hence, Vehicle Details extracted from
of liquid security in VAHAN Portal must be treated equivalent to
shape of Term the copy of JRC provided by the borrower.
Deposit. But, In cases where details of JRC cannot
be extracted from “VAHAN POTRAL”, the
branch officials are advised to obtain the
copy of JRC from borrowers and held the
same on record.
15. Regularity of income:--- i. For all class of borrower(s): Latest salary slip, ITR (for the last 2 years) etc. be taken.
ii. a. For salaried class: Latest salary slip, Form16/ITR for the last 2 years be taken. Where 2 years ITRs/Form 16 is not available, sanctioning authority may
consider sanction of loan provided last 12 months salary is verified either from salary slips/form 16 or Stt of A/C. Form16/ITR is not to be insisted upon, in
case the proposed borrower is a confirmed/permanent employees of Central Govt./State Govt./ PSUs/ MNCs/ Listed Companies at BSE or NSE (whose
Shares are actively traded and quoted above par), drawing salary of an amt which does not categorize under taxable income i.e presently, upto the threshold
limit of Rs. 2.50 L p.a. and having salary a/c with our bank for the last 2 years. Further, Sanctioning Authority may consider sanction of loan provided last 12
months salary is verified from latest salary slips and Statement of Account in case of service is less than 2 years. In such cases, an undertaking from the
Employer to be obtained that salary a/c will not be transferred to other bank during the currency of the loan.
b. For other than salaried class: While ITRs and ABS (Wherever applicable) for the last 2 years of business/activity shall be taken and Assessment of
loan/Repaying capacity be arrived at on the basis of income as reported in the latest ITR. However, deviation regarding availability of ITRs/ABSs may be
402
permitted by AGM RAM & above subject to taking of minimum 1 year latest ITRs/ ABSs.
iii. For business concerns (Corporate/Non-corporate): Minimum DSCR should be at least 1.50:1 and min 2 years ITRs and Balance Sheet to be obtained.
iv. In case of persons engaged in allied agricultural activities and agriculturists, net income can be arrived at by sanctioning authority based on their land
holding, cropping pattern, yield, etc.
16. ROI: a. As per extant guidelines, for loan amount of Rs 5 lakh & above, score from two CICs are to be obtained. In such cases, the higher Score of the two
CICs scores will be considered for arriving at the applicable rate of interest.
b. In case where CIC score of applicant is having values (-1) or (0) i.e. no credit history, then rate applicable in bracket “CICs Score 700 and up to 749” will be
considered.
c. If more than one applicants are there, average of CIC scores of the applicants (whose incomes are considered for eligibility) to be considered for pricing. In
such cases, CIC score of applicant/s having values (-1) or (0) i.e. no credit history should be excluded for average calculation. d. In case of joint applicants,
individual CIC score of all the applicants (whose scores are considered for average calculation) should be minimum 700 for getting better rate of Interest. If any
of the joint applicant is having CIC score less than 700, then rate applicable in bracket “CICs Score of less than 700” will be considered.
e. In case of old car, the Rate of Interest is 1% over and above the card rate. f. Concession of 0.10% in case of e-vehicle under all slabs. g. Concession of
0.25% in rate of interest for the wards/ parents of existing/Ex-staff.
17. Under tie-up arrangement with PSUs, corporates, institutions or in case of bulk business: ZOCAC – I and ab may relax terms and conditions relating
to “Margin” (may reduce upto 10% of on-road price) and “Repayment period” (ZOCAC - I and ab may relax repayment period further by 12 months from the
existing 84 months in case of new Cars.). Guarantee: Guarantee of spouse, if employed/earning, OR third party guarantee acceptable to bank. No guarantee
required: If take home pay is more than Rs.30,000/ p.m. OR If there is no default in repayment of EMI in home/personal loan for the past three months, if any,
availed from PNB. (Bulk business would imply a minimum of 5 car borrowers from the same organization at one time (within a calendar quarter).
Assured repayments would imply obtention of: i) Irrevocable Letter of Authority from borrower authorizing the employer to remit salary/installment and other
amount payable to the Bank cum letter of acknowledgement from employer–Form -PNB 1134. However, requirement of PNB 1134 may be waived in case the
prospective borrower is a permanent employees of Central Govt./ State Govt./ PSUs/ MNCs/ Listed Companies at BSE or NSE (whose Shares are actively
traded and quoted above par) & is maintain his salary account with us from the last 12 months. In such cases, an undertaking from the customer to be obtained
that he/she will not transfer his/her Salary account to other bank during the currency of the loan. ii) A letter of undertaking from the employer acknowledging to
comply with instructions as per the irrevocable letter of authority of the borrower employee.
20. 1. Feature: PNB Combo Loan Scheme aims to provide Car Loan at 4. Margin: 10% of the On Road Price 8. Processing Fee: NIL for
PNB concessional Rate of Interest and attractive/lucrative Terms and of the Car. i.e. Eligible Housing Loan Car Loan under PNB
Combo conditions to Housing Loan Borrowers (Existing and New). Borrowers will be entitled for Loan to Combo Loan Scheme
Loan 2. Eligibility: Housing Loan Borrowers with Sanction Limit of Rs. 15 the extent of 90% of on road price of (Housing Loan + Car Loan).
Scheme Lacs and above are eligible on or after creation of security on House the Vehicle. 9. Other Terms and
(HL + Car Property under Housing Loan. Only Brand New 4 Wheelers will be 5. Rate of Interest: Concession of Conditions:
Loan) financed under PNB Combo Loan Scheme. Purchase of Old Car will not 0.25% in Interest Rate from Card Rate (i) For existing Housing
come under the purview of the scheme. in Car Loan Product. Loan Borrowers, the
(RBDA: 3. Gross Income: Minimum Gross Income for Salaried Customers - Rs. 6. Repayment Period: The Account should be
79/ 50,000/- per month. Repayment Period of the Car Loan standard with satisfactory
17.08.20) For Professional and Self Employed/Businessman: Minimum Annual should be less than or equal to left Track Record.
Post-Tax Income of Rs.6 L as per ITR (Average of last 3 years). over repayment period of Housing (ii) In case of takeover of
403
However, there should be consistent growth in Gross Income in last 3 Loan subject to maximum Repayment Housing Loan under this
years. Period of 84 Months. scheme, the Car Loan has
The total deduction from income including EMI of existing Housing Loan 7. Additional Security: Car Loan will to be fully liquidated before
and other Loan(s) and the proposed EMI of Car Loan should not be be secured through extension of takeover.
more than 60% of Gross income. Mortgage on the Existing Housing (iii) Car Loan under this
Loan Property scheme should not be
sanctioned before creation
of mortgage for Housing
Loan.
21. Insta - 1. Objective: To offer hassle free vehicle loan to existing Home Loan 9. Rate of Interest: - Process fee: Flat
Vehicle Borrowers. FLOATING: For four wheeler: RLLR+ Rs.1000/- exclusive of
Loan 2. Purpose: Purchase of car/two wheeler for personal use. 0.55% taxes.
(RBDA: 3. Target Group: All existing Home Loan Borrowers with satisfactory For two wheeler: RLLR + 1.80% - Prepayment Charges: NIL
79/ track record of 5 years. FIXED: Only for four wheelers - CIBIL: Fresh CIBIL to be
17.08.20) 4. Eligibility: All existing HL borrower A/Cs where the loan has run for Upto 3 years: 10% (One year MCLR + generated
minimum 5 years (excluding moratorium period) without a single default 1.25%) - Appraisal: Simplified
in EMI. Above 3 years: 10.25% process note.
5. Type of facility: Term Loan Penal Interest: 2% p.a. on overdue - Documentation: As per
6. Special features: No pre-sanction/ Fresh Income proof required amount. existing Car Loan Scheme.
7. Maximum Repayment period: Four Wheelers: 100 months, Two 10. Security: Hypothecation of vehicle - Delegated Powers: Same
Wheelers: 84 months. to be purchased. as per Loaning Power
8. Assessment of Limit: 90% of On road price of Car/two wheeler, 11. Insurance: Vehicle to be Chart
Maximum Rs. 10 Lacs. comprehensively insured. - Sanction Letter shall be
dispatched to the eligible
customers from Head
Office and list of such
eligible borrowers under
intimation to branches and
Circle Offices
404
22. 1. Purpose: For purchase of new Two wheelers--Scooter/Motor cycle/ Scooterrete/Moped. 5. Extent of Loan: 10. Upfront Fee &
2. Eligibility: a) For super bikes/hybrid two wheeler (Engine Documentation charges:
A) Individuals: i) Existing customers of PNB (erstwhile OBC and UBI) with at least 6 M satisfactory record OR capacity 200 CC & above) – Max Rs. 10 L. 0.50% of loan amount
Two new customer with satisfactory track record of last 01 yr with other Bank/FI in the age group of 18-65 years (Minimum- Rs.500/-, Maximum
Wheeler holding a valid driving license. Salaried persons with pension are eligible upto 70 years age. (AGM RAM/iRAM/ (AGM RAM/iRAM/ ZOCAC I & above: Rs.1000/-)
ZOCAC I and above may further relax the above criteria by 5 years). ii) Salaried individuals drawing Loans above 10 L) (Concession of 50% in
Loan- b) For all other Two Wheeler vehicles: Max applicable processing fee for
salary from PNB (erstwhile OBC and UBI) or under check off facility from the employer. iii) Students, 18 yr & ab
PNB till gainfully employed, with salaried parent as co-borrower drawing salary from our bank; Rs. 1.50 L. loan to the wards/parents of
SARTHI B) Business concern (Corporate or Non-Corporate): Such proposals be dealt with as conventional TL after 6. Repayment Period: existing/ Ex staff)
For Scooters/M-Cycles– 60 EMIs. 11. Permissible Deductions:*
being satisfied about the earning/ repaying capacity. (AGM RAM/iRAM/ ZOCAC I and above are empowered to
For Scooterrete – 30 EMIs. GMS / I P.M. Max.ded.of
relax eligibility criteria).
For Mopeds – 24 EMIs. GMS/I
3. Income Criteria/Pre – requisites: i) Minimum Net Monthly Salary/Income (GMS/I) of Rs.10,000/- p.m
including the proposed two wheeler loan installment. Upto 50%
7. Margin:
(RBDA: ii) Income of Spouse can be taken for determining loan amount/eligibility. In such case, the spouse be made co- Rs.50000/-
i) Where salary is being disbursed thr the
borrower. >50000/- 60%
CIR 94/ iii) In case of students, Income/salary proof of parent/guardian who will be co-borrower be considered.
concerned bank branch/under Check off
11.09.20 facility: 10% (of on road price).
iv) Income of other than salaried/check off facility borrowers is verified from ITRs & challans.
ii) Other than salaried/check off facility: 25%
However, waiver of Min income criteria for borrower who agrees to give 110% liquid security (term dep). (Deductions: 10% extra by
(of on road price).
4. Regularity of Income: For all class of borrower(s): Latest salary slip, ITR (for the last 2 years) etc. ZOCAC I & above)
a) For Salaried class: Latest salary slip, Form16/ITR for the last 2 years be taken, Assessment of Loan/ *Subject to minimum net take
8. Rate of Interest :
Repaying capacity be arrived at on the basis of latest salary slip and other regular income, i.e dividends, home income- Rs.10000/-
Salaried Person: RLLR + 2.75%
interests, rent etc. as declared in salary certificate, from 16 and/ or ITR. Where 2 years ITRs/Form 16 is not including the proposed two
Other than salaried including business
available due to lesser service period, the sanctioning authority may consider sanction of loan provided last 12 wheeler loan installment.
concern & Professionals: RLLR + 3.25%
months salary is verified either from salary slips/form 16 or Stt of A/c. 12. Tie up arrangement: With
[Concession of 0.25% in ROI to the
Note: Form16/ITR is not to be insisted upon, in case of confirmed/permanent employees of Central only Honda Motorcycle &
wards/parents of existing/Ex-staff.]
Govt./State Govt./ PSUs/ MNCs/Listed Companies at BSE or NSE (whose Shares are actively traded and Scooter India Ltd. (HMSI).
9. Guarantee:
quoted above par), maintain his salary account with us, drawing salary of an amount which does not categorize There is no payout package for
i) Loan upto Rs. 25,000/-: No guarantee
under taxable income i.e. presently, upto the threshold limit of Rs. 2.50 lakhs p.a. and having his salary account two-wheeler financing under the
ii) Loan above Rs. 25,000/-: TPG
with our bank for the last two years. Further, Sanctioning Authority may consider sanction of loan provided last tie-up arrangement.
iii)Sanctioning authority is empowered to
12 months salary is verified from latest salary slips and Statement of Account in case of service is less than 2 13. Loaning Powers:
waive the guarantee in the following
years. Sanctioning of these loans
circumstances:
b) For other than Salaried class: While ITRs & ABS (whatever applicable) for the last 2 years of backed by 100% liquid
a) Liquid Collateral Security (FDRs, NSCs,
business/activity shall be taken. Assessment of loan/Repaying capacity be arrived at on the basis of average security in the shape of FDRs,
LICs) having Present Value/Surrender Value
income as reported in the last two ITR. However, deviation regarding availability of ITRs/ABSs may be permitted NSCs, and KVPs etc. will be
of at least 60% of loan amount is offered.
by AGM RAM/iRAM/ ZOCAC I & above subject to taking of Min 1 year latest ITR/ABS. b) In case EM of IP is offered 100% amount of considered at all level of
c) For business concerns (Corporate/Non- corporate): Min DSCR be at least 1.50:1 and min 2 years ITRs & the loan. (CH may waive the guarantee) branches subject to ceiling of
BS to be obtained. the amt in terms of the scheme
(d) In case of persons engaged in allied agricultural activities and agriculturists, net income can be arrived at by and repayment capacity of the
sanctioning authority based on their land holding, cropping pattern, yield, etc. borrower. These proposals
shall be exempted from
application of PNB Score.
14. Where option of NACH/ECS
is applicable the same may
only be got exercised.
405
1. Eligibility: All types of pensioners drawing pension through our 3. Repayment Period: Max. 60 M up to the age of 78 yrs. OD to 8. SERVICE CHARGES:
23. - Upfront Fee: NIL.
branches. be liquidated by the age of 78 yrs.
Personal 2. Purpose: To meet personal needs including medical expenses. - Documentation charges: Rs 500/-
4. Margin: NIL
Loan 3. EXTENT OF LOAN: Minimum: Rs. 25000/- 5. ROI: DL/TL/OD: RLLR+ 2.50%
+ taxes.
9. Nature of Loan: DL/TL/OD on
Scheme 6. Security: monthly reducing DP basis.
For Age of Maximum Loan Amount - Guarantee of spouse eligible for family pension to be obtained. - Scheme Code- TLPPL
Pensioners Borrower - Where loan is given to family pensioners, guarantee of earning /DLPPL/ODPPL.
‘PNB Age upto 70 18 times of net monthly pension (Defence Pensioners - 20 children (Preferably Govt. Employee) to be taken. If no earning 10. Other Guidelines:
times) OR Max. Rs.10 Lac, whichever is lower. children, TPG with net means of equal or more than loan i) In case of pensioners availing the
Aabhar years facility through demand/term loan,
amount, to be taken.
Rin’ Above 70 yrs. 18 times of net mly pension (Defence Pensioners - 20 the monthly loan installment is to be
And upto 75 times) OR Max. Rs.7.5 Lac, whichever is lower. 7. Deductions: All deductions including the proposed Pension Loan
recovered on the date of crediting
(RBDA: installment should not exceed the prescribed ceiling as under:--
Above 75 12 times of net monthly pension OR Max. Rs. 5.00 Lac, monthly pension in the account.
77/ years whichever is lower Gross Monthly Pension Max. deductions of GMP ii) In case of Overdraft, the pension
17.08.20) Upto Rs. 30000/- 40% of borrower should directly be
Above Rs. 30000/- 50% credited to OD account, which will
immediately reduce the Drawing
Power, by the amount of EMI.
1. PURPOSE 5. LOAN AMOUNT: 8. REPAYMENT PERIOD: 10. Security:EM of IP. 12. SERVICE
24. For all personal purpose except i. Minimum: Rs. 2.00 lakh Overdraft – Overdraft on reducing Loans/advances shall be CHARGES:
speculative purpose. ii. Maximum: Rs. 500.00 lakh – DP basis to be liquidated in 10 sanctioned against the TERM LOAN/
(Borrower to disclose specific 6. ASSESSMENT OF LIMIT years. Drawing power will be Equitable/ Registered OVERDRAFT
PNB purpose of loan and also to give an a) 65% of the realizable value of the property. reduced on monthly basis to the Mortgage of the non- :
myPRO undertaking that the loan shall not be or extent of the principal component encumbered built up and self- 0.75% of the
used for any speculative purposes.) b) For Salaried: 36 times of gross monthly salary on the basis of of the EMI calculated on full occupied residential loan Amount,
PERTY 2) Eligibility: last/latest salary certificate. Whichever is lower of ‘a’ and ‘b’ sanctioned limit, so that the OD House/Flat/ commercial/ Maximum–
LOAN Individual, Joint owners are also eligible, c) For Non-Salaried: 36 times the average gross monthly limit is liquidated at the end of the industrial property having Rs.1.00 lakh
having immovable property to be income of last three years as reported in the last three ITRs. loan tenure. Restoration of limit is minimum residual life of 25 + GST.
mortgaged and sufficient income to Whichever is lower of ‘a’ and ‘c’. permitted after 3 years of years. The
(RBDA: repay the loan. (CIF/ Note: Income of spouse, parents, son(s)/ daughter(s) can be satisfactory conduct of the account. In case of partly rented processing
Customer ID of the borrower be considered for arriving at loan amount & eligibility. Projected/ Term Loan- Loan amount together properties, finance may be fee for
80/
created under Retail in CBS and future income will not be considered for determining loan with interest to be repaid In allowed against the value of overdraft
17.08.2020)
should not be under Corporate to eligibility. Income of maximum two co-borrower can be added. In maximum 120 Equated Monthly self-occupied portion only. facility to be
classify the loan under Retail) case of co-owners of the property, income of all the co-owners Installments (EMIs) OR up to the However, power for sanction recovered
3) Income Criteria: can be added. age of 65, whichever is earlier, of such proposals vests with upfront one
i. For salaried : Minimum net monthly 7. Repaying Capacity: subject to regular source of income. AGM (RAM) & above time
salary of Rs.25,000/- Particulars Max. deduction of AGM RAM and above are 11. Inspection of Property applicable for
ii. For other than salaried: Minimum GMS/ Income empowered to relax the age Mortgaged:--- three years at
net annual income of Rs.3,00,000/- Gross monthly total salary/income 60% criteria by 5 years on merits of a) Once every year for regular the time of
iii. Common for both categories: (i & up to Rs. 1.00 lakh each case. Repayment to be sanction.
accounts;
ii) Gross monthly total salary/income 70% ensured within the maximum Thereafter
b) Once every half year for
a. Income of spouse / earning children / above Rs. 1.00 lakh prescribe age limit once in three
parents can be taken into consideration irregular accounts; & years on
Deduction - All deductions for this purpose will include proposed c) At least once in three months reduced
for the purpose of EMI OR Servicing of mortgage loan installment, existing deductions i.e statutory 9. RESTORATION OF LIMIT: or
interest (for determining loan amount). for NPA accounts.
deductions, loan installments, actual interest on term loans, Bank, at the request of the restored limit.
In such cases, they should be made co- notional interest on full sanctioned limit of OD etc. and borrower, may consider restoration The period of inspection will be C)
borrowers. However, out of these only should not exceed the prescribed ceiling. of the original limit/ enhancement of January-December for regular Documentatio
n Charges:
406
two (maximum) co-borrowers are Repaying capacity/ assessment of loan, is to be calculated on the the limit after the lapse of 36 a/cs and January-June and July- a) For Loan
permitted. basis of latest salary slips for salaried borrower(s) and on the months, where the conduct of the December period for irregular upto Rs. 50
b. Income of any number of joint owners basis of the average of last three year ITR for other than salaried account is satisfactory, i.e., and four calendar quarters (Jan- Lakhs – Rs.
of property under consideration can be borrower(s). Further, regularity of salary/income is to be ensured borrower has shown good Mar, Apr-June, July-Sept & Oct- 2500/- + GST.
made co-borrowers however in such by taking latest salary slip /3 years ITRs/Form 16/ Balance Sheet repayment track record during the December) for NPA a/cs. b) For Loan
cases also maximum two co-borrower [Audited Balance Sheet wherever stipulated] for all borrower(s), tenure of loan; has adequate above Rs.50
are permitted in addition to co-owners of i.e., salaried & other than salaried. repayment capacity and adequate Lakhs – Rs.
the property. ‘Margin’ is available 5,000/- +
c. Regular income from all sources GST.
including Rental Income can be
considered provided the sanctioning 13.Loaning
authority is satisfied with the proof of Power: S-I-
income. In such cases it should be
substantiated by proof in the form of --NIL; BH
Latest I.T. Return/Latest salary slip with
Form 16 or Latest salary slip /Statement
GBB Sc II
of A/c for the last six months in which & ab : 10
income is being credited on regular
basis. Depreciation to be added back for L; RAM
income eligibility. Segment
4. NATURE OF FACILITY
a. Term Loan for Maximum 10 Years Head : Sc
b. Overdraft on monthly reducing III : 40 L,
Drawing Power (DP) basis for 10 years
subject to annual review. (Restoration of Sc IV--
OD limit is permitted after three years
subject to satisfactory conduct of
400L. AGM
account.) iRAM : 500
L
Based on CIC Revised ROI ( irrespective of loan tenure)
Score For Overdraft For Term Loan 13. Concessions in Rate of Interest
750 & above RLLR +2.40% RLLR +1.90% Available Realizable value of IP Concession
700 - 749 Above 200% & Upto 250% of loan amount 0.25%
RLLR +2.90% RLLR +2.40%
Above 250% & upto 300% of loan amount 0.50%
Less than 700 RLLR +3.50% RLLR +3.00% Above 300% of loan amount 0.75%
- For loan amount of Rs. 10.00 lacs and above, the higher CICs Score of the two CICs scores of the borrower/s will be considered for getting the interest
benefit.
- If more than one applicants are there, average of CICs scores of the applicants (whose incomes are considered for eligibility), to be considered for cut off
score for pricing. In such cases, CICs score of applicant/s having (-1) or (0) to be excluded for average calculation.
- In cases of joint applicants, individual CICs score of all the applicants (whose scores are considered for average calculation) should be minimum 700 for
getting the interest benefit. If any of these applicants is having CICs score less than 700 then rate applicable in bracket “CICs Score less than 700” will be
considered.
- In case where CIC score of applicant is having values (-1) or (0) i.e. no credit history, then rate applicable in bracket “CIC Score of 700 and more and upto
749” will be considered.
407
1. Purpose: For purchase of new Two-wheeler (Scooter/Motor cycle/ Scooterrete/ Moped). 3. Extent Of Loan: 11. SERVICE CHARGES:
25. 2. Eligibility: For ‘Women’ borrower only-- - Upfront fee: Rs. 500 +GST;
Max Rs 60,000/-
i) Salaried with minimum 6 months service in present organistaion; (ZOCAC 1 & above may sanction more - Documentation Charge: NIL
Two ii) Self-employed with experience of more than 01 year (Based upon declaration/bank amt) 10. SECURITY INSPECTION:
Wheeler account/ITR etc.) 4.Max permissible Deduction: First inspection at the time of
Vehicle to iii) Student with their parents/guardian as co-borrowers; 50% of GMS/I financing on PNB-551.
Women Note: Individuals should be in the age group of 18 -65 years and should hold valid driving (Incumbent RAM/iRAM/ ZOCAC I & above For irregular & NPA A/C,
borrowers license. In case of students age of parents/guardian is to be considered and in that case driving may permit deductions of GMS/I max upto inspection on quarterly or
PNB license may be in the name of Student/ Parents/ Guardian. 60%) shorter intervals on PNB-551.
- Having an account preferably in PNB or in any Bank for more than 6 M. In case of students 5. Repayment Period:-- Max. 36 EMI Where the loan account is
POWER
Bank account may be in the name of parents/guardian. 6. Margin: 10% of Ex show room price. running Regular the
RIDE 3. Income Criteria/Pre- requisites: requirement of periodical
7. ROI: RLLR + 1.90%
(RBDA: i) Minimum Net Monthly Salary/Income (GMS/I) of Rs.8,000/- p.m (including the proposed two Inspection, including obtaining
8. Security:
94/ wheeler loan installment). - Vehicle to be Hypothecated to the bank. of PNB 551, may be done
11.09.20 – ii) In case of students: Income/salary proof of parent/guardian who will be co-borrower be - Bill in the name of borrower with name of away with.
ANN-B) considered. financing bank and branch as hypothecate 13. Loaning Powers:
iii) Proof of Income: should be obtained; Sanctioning of these loans
a. Latest 3 salary slips along with Form 16/ITR of previous year in case of salaried borrower(s); -Joint Registration & Insurance of vehicle backed by 100% liquid
b. ITR of previous year in case of self employed individuals; with Bank clause. security in the shape of FDRs,
Note: Stipulation of obtaining ITR may be waived off in those cases where the income declared -Suitable Guarantee acceptable to the NSCs, and KVPs etc. will be
by the borrower is less than the ceiling prescribed under Income Tax Act for filing mandatory ITR. sanctioning authority. considered at all level of
Self-Declaration in the form of Affidavit in case of non ITR. branches subject to ceiling of
the amt in terms of the scheme
and repayment capacity of the
borrower. These proposals
shall be exempted from
application of PNB Score.
408
1. Purpose & Eligibility: - Loan to Individuals/Business Enterprises. 5. Margin: i) 35%, if borrower opts for bullet 11. Insurance: Banker's Indemnity Policy
26. - Adv. against the security of gold jewellery/ornaments and Gold Coins. repayment. taken by Retail Banking Division, HO covers
- For productive (agricultural/allied and other activities)/Non-productive purposes (meeting ii) 25%, if borrower opts to pay intt as and when levied. loss/damage to jewellery, pledged with the
Gold medical, educational, marriage expenses and other unforeseen expenses etc.), but not for {LTV ratio not to exceed 75% of the value of security Bank, cash, etc.
speculative purposes. during the entire currency of loan.}
Loan - No loan against bullion, primary/smuggled gold and against repledge of gold. 6. ROI: 12. Safe Custody Of Security: Jewellery
Schemes -Purpose & genuineness of the credit is to be ascertained. DL/TL: RLLR + 1.95% = 9.00%; OD: RLLR + 2.20% alongwith a list relating to each loan is to be
2 Variants 7. Security: Gold jewellery, ornaments and Gold coins kept in a separate pouch or cloth bag in the
2. Extent of Loan: Productive purposes & Non-productive purposes: issued by any schedule bank/our bank. {Weight of the cash safe under joint custody.
i) Minimum: Rs. 25000/-; Maximum: Rs.10 Lacs. coin(s) does not exceed 50 grams per
Advance customer.} 13. Misc: - Nature of Facility: DL/OD
- CR not required for adv upto Rs. 10000/-,
against 3. Repaying Capacity: Gold loans are to be sanctioned keeping in view the interest and 8. Verification By Shroff: Jewellery must be tested by
Above Rs. 10,000/- brief CR on PNB-905.
principal repaying capacity of the borrower i.e. the net monthly income (after deducting all and approved by shroff. The shroff should be those
Gold statutory and other dues/deductions/repayments including repayment of interest on approved by the Government. (If not available, CH may
- Disbursement of the loan in the SF A/C of
Jeweller present gold loan) of the borrower is sufficient to meet the monthly interest. borrower.
approve).
- The scheme to be handled outside the scope
y/Ornam 9. Upfront Fee & Documentation Charges
4. Repayment Period: The loan may be repaid by any of the following option:---- of RAPC model and exempted from application
(Including Valuation Charges)::
ents & a) Loans for Agricultural Purposes: of PNB Score.
Upfront Fee & Doc Charge: 0.75% of loan amt +
i. Interest required to be charged/recovered at yearly/half yearly intervals coinciding with taxes (inclusive of appraiser fee for testing and
Gold the harvesting of crops. However, the a/c be adjusted within a maximum period of 12 14. Precautions:
valuation of Gold Ornaments)
Coins} M (by CH upto 18 M) or as and when demanded. OD facility to be renewed annually. Min. Rs. 500/- + taxes, Max. Rs 5000/- + taxes
i. No loan to be sanctioned against bullion,
primary/ smuggled gold/Sikh Bangles/Kada
ii. Repayment through Bullet Payment i.e. payment of interest and principal at maturity. -Valuation Charges: Rs.3/- per thousand max Rs.
and against repledge of gold.
300/-.
ii. Silver and Diamond jewelerry not
b) Loans for Non Agricultural Purposes (Productive & Non productive): 10. Valuation: Rates of 22 carat gold for the purpose
acceptable.
i. Regular servicing of interest as and when levied. Principal being repayable within 12 of financing to be advised by RBD HO at prescribed
iii. Gold ornaments with names inscribed of
months or as and when demanded. OD facility to be renewed annually. intervals (presently monthly basis). In case Gold with
person other than borrower(s) not acceptable.
ii. Repayment through Bullet Payment i.e. payment of interest and principal at maturity. purity less than 22 carat is accepted as security, the
iv. Ornaments which are “stridhan” are
value be converted proportionately into 22 carat for
acceptable only when the female owner is co-
financing under the Scheme.
borrowers. However, loan may be extended in
single name, i.e., in the name of husband if a
NOC from wife of the borrower in favour of
Bank that she will not make any claim on the
said gold items being her ‘stridhan’ or any
ground.
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ii) Adv ag 1. Eligibility: i. A person resident of India, being an individual in his capacity as individual
or on behalf of minor child, or jointly with another individual. 10. General Instructions:
Sovereig ii. Trust, HUF, Charitable Institutions and University. i) It must be ensured that pledge/lien on bond is marked in the favour of the bank, with the depository
n Gold 2. Nature of facility: DL/OD and confirmation held on record.
Bonds 3. Quantum of loan: Minimum – Rs. 50000/-. Maximum - Rs.10 Lacs. ii) The SGBs should be held in demat form with the Depository Participant of NSDL only.
4. Disbursement: In case of DL, by way of credit in the operative A/C of the borrower. iii) Sovereign Gold Bonds are issued in the form of Government of India Stock and hence advance
5. Repayment Period: Till the date of maturity i.e. Maximum 8 years or residual period of against Sovereign Gold Bond has been exempted from Credit Risk rating & extraction of Credit
the Gold Bond, whichever is earlier. Information Report (CIR) from Credit Information Companies (CIC).
(RBDA: 25/
6. Margin: Individuals – 25%, Other than individuals – 40% iv) Interest will be charged on annual basis and will be serviced as and when levied. If the interest is
25.03.2020,
7. Security: Pledge/Lien on Sovereign Gold bond (in Dematerialized form only). not serviced, lien will be invoked after one year from the interest demand date.
Ann-A&B and v) Branches to monitor the loan account periodically and ensure the adequacy of margin, so that at no
73.2020 dt 8. ROI: Individuals: RLLR+1.15% Other than individuals: RLLR+ 2.15%
time the amount o/s in the loan account along with the unrecovered interest accrued/debited exceeds the
28.7.2020 value of security. Loan to Value ratio (75%) will be calculated and maintained on monthly basis based on
9. Upfront Fee and Documentation Charges: NIL
the Gold rate published by HO: RBD. In case of any shortage, the borrower should be asked to deposit
the same immediately.
1. Scheme Applicability: 5. REPAYMENT: 9. Margin: NIL 13. Upfront Fee
27. At the branches having a recovery i. Term Loan: Within remaining period of service or in maximum 60 EMIs. 10. Rate Of Interest: and Doc Charges:
PERSONAL rate of more than 90% and NPA ii. Overdraft: Within remaining period of service or in maximum period of 60 i. For public
LOAN level is not more than 2% under months by reducing DP equivalent to EMI amount.
Type ROI based on RLLR Upfront Fee:1% of
SCHEMES: the Personal Loan segment as at (Repayment period be allowed upto likely period of stay of the borrower). loan amt + Taxes
Loan to Govt. emp.
2 Variants the end of previous financial year iii. LIC AGENTS: 60 EMIs or upto 65 years of age of LIC agent, whichever is Documentation
Drawing salary from RLLR + 3.00%
or NPA level more than 2% but earlier. charges:
our bank / LIC Agents
upto 5% is concentrated in not iv. Defence Personnel including officials of Military Station Headquarters, BSF, Upto Rs. 2 L: Rs.
i) PNB
more than 5% account under CRPF, CISF, ITBP etc. shall be Repayable in maximum 60 EMIs. Loan to corporate 270+Taxes;
Sahyog Rin Personal loan scheme as at the 6. Maximum Deduction: All deductions including the proposed Personal employees drawing RLLR+4.00% Over Rs. 2 L: Rs.
– Personal end of previous financial year. Loan installment should not exceed the prescribed ceiling as under: salary from our bank 450+ Taxes.
Loan 2. Eligibility: Gross Monthly Salary/Inc. Max. deductions of GMS/I Loan to Defence/Para ii. For Defense
Scheme for i. Drawing salary from our Upto Rs. 30000/- 50% Military personnel RLLR+2.15% Personnel: Both
Public/ LIC Bank: Confirmed/ permanent drawing salary thru our charges: NIL
Above Rs. 30000/- 60%
Agents employees of Central/ State bank 14. Irrevocable
Govt/PSUs minimum 2 years of (CH/COCAC & ab may permit deductions of GMS/I Maximum up to 60% and Loan to emp. Under letter of authority
service, including service with the 70%) check off facility RLLR+5.00% (PNB-1134):
(RBDA: 78/ previous employer, if any. 7. Minimum take home after all deductions of proposed Personal Loan should authorizing the
17.08.20 ii. Check-off facility: be Rs. 15000/- in Metro/Urban centre & Rs. 10000/- in Semi Urban/Rural Note: All Corporate Tie-Ups of erstwhile OBC & UBI to employer to remit
Others minimum 3 years of centre. continue as per the present agreement with Rate of
Ann-1) salary-cum-letter of
service, including service with the - The GMS/I of spouse may be included to ascertain the repaying capacity Interest linked with present RLLR keeping the present acknowledgement
previous employer, if any. (CH where the spouse is confirmed/ permanent employee of Central/State absolute Rate of Interest unchanged. from employer to be
may consider lesser service.) Govt./PSB/PSUs and reputed companies/Institutions including Schools, 11. SECURITY: Suitable third party guarantee taken.
iii. LIC agents: Aged below 60 Colleges, Universities, Hospitals if his/her salary is with us. In such cases, the acceptable to the Bank subject to the condition that Note: However,
years with more than 5 years of spouse is to be made as co-borrower. requirement of PNB
agency, having regular and stable one employee will not stand as guarantor in more than
8. Regularity of Income: two accounts. Cross guarantee not permitted. 1134 may be waived
income and maintaining SF a/c For all class of borrower(s): Latest salary slip, ITR (for the last 2 years) etc. (CH & above may waive guarantee) in case the
with our branch. be taken. prospective borrower
3. Purpose: To meet all types For LIC Agents:
For Salaried class: Latest salary slip, Form16/ITR for the last 2 years be taken. is a permanent
of personal needs. i. Suitable third party guarantee acceptable to the
Where 2 years ITRs/Form 16 is not available due to lesser service period, the employees of Central
4. Amount Of Loan And Bank and assignment of LIC policy of self, with sum
sanctioning authority may consider sanction of loan provided last 12 months Govt./State Govt./
assured equivalent to loan amount. OR
Minimum Net Monthly salary is verified either from salary slips/form 16 or Statement of Account. PSUs/ MNCs/ Listed
- Form16/ITR is not to be insisted upon, in case the proposed borrower is a ii. Tangible Collateral Security of the value of 100% of Companies at BSE or
410
Income: confirmed/permanent employees of Central Govt/State Govt/ PSUs/ MNCs/ loan amount. NSE (whose Shares
Upto 15 times of Gross Listed Companies at BSE or NSE (whose Shares are actively traded and quoted 12. Nature of Loan: TL/OD with reducing DP. - are actively traded
above par), maintain his salary account with us and drawing salary of an amount Scheme Code: TLPDG & ODPER. and quoted above
Monthly Salary with a Max of
which does not categorize under taxable income and having salary account with par) & is maintain his
Rs. 10 L. our bank for the last two years. salary account with
us from the last 12
months.
In such cases, an
undertaking from the
customer to be
obtained that he/she
will not transfer
his/her Salary
account to other bank
during the currency of
the loan.
ii) PNB 1. Scheme Applicability: i.All Branches are permitted to generate/Procure loan applications for processing, sanctioning and financing under 11. Maximum Deduction: All deductions
the Scheme. ii. However, disbursement and further continuation of the account shall only be permitted at the branches having a recovery rate of including the proposed Personal Loan
Doctor’s more than 90% and NPA level is not more than 2% under the Personal Loan segment as at the end of previous financial year or NPA level more installment should not exceed the prescribed
Delight – than 2% but upto 5% is concentrated in not more than 5% account under Personal loan scheme as at the end of previous financial year. ceiling as under:
iii. Approval from Circle Head is required in case of branches for every block of 25 loans - status of portfolio/delinquency to be evaluated. GMS/Inc. Max. deductions of
Personal 2. ELIGIBILITY: i. Professionally qualified practicing/serving Doctors viz., MBBS, BDS & above having Net Annual Income/Salary of Rs.5 L & ab. GMS/I
Loan Doctors should be taxpayers for the last 02 years and the ITRs of the last 02 years duly receipted by ITO be kept on record. ii. Borrower should
Upto Rs. 50000/- 40%
Scheme have a continued occupancy at current place of residence, of a minimum of 02 years (Not applicable in Case of Doctors who are Employees of
Govt/Institutions. >50000/- - 50%
for 3. PURPOSE: For meeting expenses of professional/personal requirement. Rs.100000/-
Doctors 4. Nature Of Loan: TL & OD with reducing DP basis. 5. MARGIN: NIL, 6. ROI: RLLR+2.15% >100000/- 60%
7. Amount Of Loan & Minimum Net Annual Salary/Income: Minimum amount of loan will be Rs. 2 L and maximum amount of loan Rs. 15 L
(RBDA: (Deductions: 10% extra by AGM RAM & above)
or 20 times monthly net salary/income whichever is lower depending upon the repaying capacity & having Net Annual Income/Salary of Rs.5 L & Note: The GMS/I of spouse may be included
19/ 25.03.20 ab.
Ann-2) while ascertaining the repaying capacity where
8. REPAYMENT: i. Term Loan: within remaining period of service or in maximum 84 EMIs. the spouse is confirmed/ permanent employee
ii. Overdraft: within a maximum period of 84 months by reducing DP equivalent to EMI amount at the beginning of every month. of Central/ State Govt./ PSB/ PSUs and
iii. Repayment of the loan along with intt should not extend beyond the age of 65 years of borrower. CH & above may relax upto the age of 70 reputed companies/ Institutions including
years. Schools, Colleges, Universities, Hospitals
9. SECURITY: Suitable TPG acceptable to the Bank. CH & above may waive obtaining of guarantee OR Tangible Coll. Sec. of the value of 100% of provided her salary is with us. In such cases,
loan amt. the spouse is to be made as co-borrower in
10. Regularity of Income: The regularity of income of the borrower(s) over the entire span of loan should be clearly established before sanction of addition to personal guarantee of fellow
loan. Latest salary slip, ITR (for the two year) etc. be taken & perused. While ITRs for the last 2 years shall be taken to ascertain continuity of employee.
income, Assessment of loan/Repaying capacity be arrived at on the basis of income as reported in the latest Salary slip/ ITR. 12. Upfront Fee and Documentation
For Salaried Doctors: Latest salary slip, Form16/ITR for the last 2 years be taken. Assessment of Loan/Repaying capacity be arrived at on the Charges:
basis of latest salary slip. Upfront Fee: 0.90% of loan amount + Taxes.
Documentation charges: Rs.450+ Taxes.
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1. Background: State-owned BSNL/MTNL has launched VRS Scheme for their employees and it is ii. Scheme for Financing Purchase of Car by Public:
28. expected that the VRS optee employees of BSNL/MTNL will be getting a handsome amount on VRS Eligibility: BSNL/MTNL pensioners drawing pensions through our branches
Relaxations as retirement dues. To attract the VRS optee employees of BSNL/MTNL for keeping their retirement Income Criteria: Minimum net monthly salary/pension/ income – Rs 20000/-, But, No
to VRS Income criteria if terminal dues equal to loan amt held with us in the form of FDR under
benefit (Terminal Dues) with us, relaxations under various Retail Lending Schemes has been offered
Optees of Bank’s lien.
BSNL/
to VRS optees of BSNL/MTNL.
2. The relaxations have been offered in the following Retail Lending Schemes: Loan Amount: 25 times of Net Monthly Salary/Pension/Income or 100% of FDR kept
MTNL as security with a ceiling of Rs 100 lakh (for one or more vehicles)
Employees i. Personal Loan Scheme for Pensioners. ii. Scheme for Financing Purchase of Car by Public. iii.
DL/OD ag FDR. Permissible deduction: NMS/I upto Rs.30000: 40%, NMS >Rs.30000 to Rs.100000:
under Retail 50%.
Loan 3. The parameters where relaxations has been provided are as under:
NMS >Rs.100000: 60%. However, not applicable in case security in the shape of FDR
Schemes i. Personal Loan Schemes for Pensioners: of amt not less than loan amt is obtained as collateral security kept under Bank’s lien.
Eligibility: BSNL/MTNL pensioners drawing pensions through our branches Rate of Interest: RLLR+ 0.50%, irrespective of CIC score.
Rate of Interest: RLLR+ 2.00%; Repayment: Maximum 72 EMI Upfront fee & documentation charges: Nil
(RBDA: 06/ Upfront & Documentation Chg: NIL Guarantee/Collateral Security: Not required.
30.01.20) Security: Guarantee of spouse eligible for family pension to be obtained OR Lock in period of Terminal iii. Demand Loan/ Overdraft against FDR:
dues equal to loan amount till the currency of the loan. Rate of Interest: 0.50% over and above ROI applicable on FD (instead of
existing 1% over and above ROI applicable on FD)
1) Eligibility: All Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs) are eligible for loan under the Scheme.
29. 2) Purpose:For acquisition/construction/repair/renovation/improvement of flat/house owned by NRIs/PIOs in India and for purchase of Plot. This flat/house, may be used for self-
Housing occupation/letting out.
Finance 3) Amount of Loan, ROI, Guarantee clause, Quantum/extent of loan, Margin, Insurance cover, Repayment, Age and Service charges shall be as per the Housing Loan Scheme for
Public, applicable to resident Indians.
Scheme 4) Security:-- EM of the concerned property and, if necessary, lien on borrower’s other assets in India.
For NRI/ 5) Repayment:--- Within a period not exceeding 30 years (including moratorium period, if any), by remittances from abroad through normal banking channels or out of funds in his/her
PIOs NRE/FCNR(B)/NRNR/NRO/NRSR account in India or out of rental income derived from renting out the property acquired by utilization of the loan. Close relatives of the borrower in
India shall also be allowed to repay such loans, interest and other charges through their Bank account directly to the borrower’s loan account with the authorized dealer/identified
(RBDA: branch.
6) Disbursement:-- Loan should not be credited to NRE/FCNR(B)/NRNR account of the borrower. HL disbursement should be routed/monitored through NRO a/cs.
30 / 7) Rental Income:-- If the house/flat is rented out, the entire rental income, even it is more than the prescribed installment, should be adjusted towards repayment of the loan. If the rental
income is less than the prescribed installment, the borrower should remit the amount to the extent of shortfall from abroad or pay the difference out of his/her NRE/FCNR
20.07.19) (B)/NRO/NRNR/NRSR account in India.
8) Processing:-- Proposals for Housing Loan to NRIs/PIOs, forwarded by our overseas offices, be processed/sanctioned centrally at RAPC, Gurudwara Road, Karol Bagh, New Delhi.
Beyond the powers of this RAPC, will be forwarded to Circle Office, Central Delhi, for consideration. Loan to be disbursed as per the convenience of the customer, at branches authorized
to deal in foreign exchange or the branches permitted by Circle Head. Maximum time frame: Three weeks.
9) Processing:--- Housing Loan proposals of NRIs/PIOs, received directly by the inland branches, will be processed/sanctioned at:---
I. All branches authorized to deal in foreign exchange (Category A & B). II. IBBs, III. All RAPC, IV. Category C branches not linked to RAPC permitted by CH. (Loans beyond their
powers, by Circle Offices)
10) Branches may also consider granting loans where NRI/PIO is a principal borrower with resident close relative(s) (as defined in Section 6 of Companies Act 1956) as co-
obligant/guarantor or where the land is owned jointly by NRI/PIO borrower with resident close relative, subject to the condition mentioned as above. There will be no objection to
loans being granted to residents with NRI/PIO as a co-obligant.
Objective: To meet the financial needs of 6. Repayment Period: 7. Margin: 20% 12. Residual life of the
30. senior citizens owning self occupied EXTENT OF LOAN: Max. Rs. 100 L - Loan to be recovered 8. ROI: (Fixed, subject to re-set clause residential property should be at
property (house) for leading a decent life. (along with interest) to be paid monthly only after the death of 5 years): RLLR+2.75% least 20 years.
Purpose of Loan: For generating on reverse annuity basis. Lump sum amt of both the spouses. 9. Security: EM of Residential 13. Revaluation of IP:--The
PNB income/ supplementing pension/ other Max. 15 L permitted (at HO, RAD) for No loan repayment Property. Bank shall revalue the property
Baghban income for day to day requirements. medical exigencies of the borrower, during the lifetime of Where mortgage by deposit of title deed once in five years (at borrower’s
(A scheme Eligibility: The residential house/flat spouse and dependents, if any. Monthly
412
for House owner, who is resident of India, of the age payments to be allowed for a period the borrower. is not possible, borrower/s has/have to cost) and reduce or increase the
Owning of 60 yr & ab, is eligible to raise the loan between 10 to 20 years depending upon - The loan shall go for creation loan or installment, at its
Senior under this Scheme. In case of joint the age of senior citizen borrower. become due and discretion, depending on the
account, one of the spouse must be of WILL: The residential house/flat should payable: 6 M 10. Loaning power: Same as term valuation.
Citizens
the age of 60 yr & ab, while the age of be in his/her single name or jointly with (moratorium period) loan, taking into account the eligible amt 14. “Right of Rescission”: The
under other spouse should be min 58 yr. his/her spouse. In case it is in the single for calculating the monthly installments.
Reverse after death of last customer/ borrower will get 10
- No income or credit requirements to name of one individual, he/she should surviving spouse. days’ time to decide whether to
Mortgage qualify. give “will” in favour of the other spouse, 11. Safeguards: i) Borrower/s to provide
- Borrower may prepay avail the loan facility or cancel the
Concept) - Loan will be allowed only against who should be made co-borrower. In documentary evidence that he/she is the
self-acquired & self-occupied
the principal amount transaction, after sanction of the
case the spouse is not alive, he/she may only legal heir entitled to the property
residential property. In case of make “Will” in favour of his/her relative/s,
together with and that the said property is self-
loan, and get refund of the
residential property, which is ancestral who is/are otherwise his/her legal heirs. accumulated interest/ occupied. processing/upfront fee, already
(RBDA: other charges, at any paid by him, in case he opts to
and self-occupied, powers are vested The borrower will undertake that no fresh ii) Borrower/s to provide legal proof like
59/ time and repossess the cancel the transaction.
with Circle Head. The residential “will” shall be prepared during currency relinquishment/release deed, probate of
01.11.19) house/flat should be in his/her single of loan. property. will etc. 15. SERVICE CHARGES:
name or jointly with his/her spouse. - Upfront Fee – Half month’s
Loan Installment with Max.
Rs.15,000/- + taxes.
- Documentation/Inspection
Charges – NIL.
16. Disbursement/tenor of loan: The loan shall be extended as regular fixed monthly payments calculated as per the chart given in the circular during the loan period or till the
death of the last surviving spouse, whichever is earlier.
- The tenor of loan shall be 15 years to 20 years for the age group of individuals between 60 and 70 years and 10 years to 15 years for the age group of individuals above
70 years OR till survival of any of the spouse, whichever is earlier. In case of joint account, the minimum age of the other spouse for availing the loan under these two
categories of tenors will be 58 and 68 years respectively. The term of loan can be extended at the end of the tenor at the sole discretion of the Bank, depending on the security
cover available as per the realizable value of the property. The maximum tenor of the loan, in any case, will not be more than 20 years.
- The Bank will credit loan instalments to his/her SF A/C. In case the loan is in the name of both the spouses, a SF account will be opened in their joint names for the purpose of
crediting the monthly instalments with the “either or survivor” clause.
1. To strengthen the Banks tie-up with Department of Post (DoP) & India Post Payment Bank (IPPB) and to tap quality business opportunity available, it has been decided that
31. Customized Offerings under Retail Lending Schemes, i.e Housing Loan, Car Loan & Personal Loan scheme, be framed for confirmed employees of IPPB & DoP. In view of the above,
Retail concession in ROI under Housing Loan and Car Loan along with customized offerings under Personal Loan Scheme has been offered to the confirmed employees of DoP & IPPB.
2. Concession in the Rate of Interest:--- i. Housing Finance Scheme for Public. ii. Scheme for Purchase of Car by Public.
Loan Scheme Offered Rate of Interest to employees of DOP & IPPB Upfront & Doc. Charges
Schemes HL scheme for Public Limit upto Rs. 75 lakh Limit above Rs. 75 Lakh
for the Floating 1 Year MCLR + 0.10% 1 Year MCLR + 0.15% NIL
Employee Fixed Floating + 0.50% Floating + 0.50%
Car Loan Floating - 1 Y MCLR + 0.50% irrespective of CICs Score. Fixed – 1 Y MCLR + 0.85%.
s of DoP
The loans sanctioned under the above arrangement will mandatorily be required to be covered under Credit Life Insurance.
& IPPB 3. Personal Loan Scheme for Public/LIC agents:-- The parameters customized for Personal Loan Scheme for the employees of DoP & IPPB are as under:--
(RBDA: i. Nature of Loan: Term Loan; ii. Amount of Loan: Minimum –Rs. 10000/-; Maximum– Rs. 200000/- or 20 times monthly net salary whichever is lower depending upon the repaying
37/ capacity subject to minimum Net monthly salary of Rs. 12000/- in all population segment. iii. Repayment: Maximum 48 months or remaining period of service, whichever is less;
07.08.19) iv. Maximum Permissible deduction: 50% of Net Monthly Salary; v. ROI: 1 Year MCLR + 1.50%;
vi. Upfront Fee: 1% of loan amt. Min Rs. 400/-, Doc charges—Nil, Processing fee would be shared between PNB & IPPB to cover the processing cost in a 50:50 ratio.
vii. Security: No Third party guarantee. However, Loan to be covered by a Group Credit Life. Undertaking by IPPB & DoP for attachment of the terminal dues if loan is outstanding at the
time of superannuation of the employee. viii. PNB score will not be applicable. ix. All other T&C of “Personal Loan Scheme for Public/LIC agents” will remain unchanged.
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1. The provisions of the Act- Real Estate (Regulation & Development) ACT (RERA), 2016 made essential for every promoter to get the subject project registered with the Real
32. Estate Regulatory Authority (RERA). Consequently, the bank before undertaking any exposure for project/unit need to ensure that all compliance be made on the part of the promoters/
Housing developers so as to protect the interest of the consumers in the Real Estate Sector. The Act also provides for establishment of an adjudication mechanism for speedy dispute redressal
Finance and also to establish an Appellate Tribunal to hear appeals on the decision/ orders of the Real Estate Regulatory Authority. The said Act, being a central legislation, is further to be
adopted by the States and Union Territories. It is imperative that unless the subject project is registered with RERA and complied with its rules, no financing to the real estate be
Scheme undertaken.
For 2. Salient features of the Act are as under:---
Public – i) Registration of the project:-- No promoter without registration with the RERA under the Act, shall advertise, market, book, sell or offer for sale or invite person to purchase any plot,
apartment or building in any real estate project in any planning area. The projects which are on-going and for which the completion certificate has not been issued, are also required to be
RERA registered by the promoters within a period of 3 months. The Act empowers the RERA to enforce registration of the project even beyond the planning areas.
Guidelines However, no registration of the Real Estate Project shall be required:---
(RBDA: 07/ a) Where the area of the land proposed to be developed does not exceed 500 sq. mtrs. or the number of apartment proposed to be developed does not exceed 8 apartments. However,
02.02.19) the Act empowers the Central Govt. to reduce the aforesaid threshold limits below 500 or 8 apartments. b) Where it relates to only renovation, repair or redevelopment.
ii) 70% of the amount realised for the Real Estate Project from the allottees shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of
construction and the cost of the land and shall be used for that purpose. The promoter shall withdraw the amount from such separate account in proportion to the percentage of the
completion of the project. Such withdrawal from the separate account shall be made after it is certified by an engineer, an architect and a chartered accountant that the withdrawal is in
proportion to the percentage of the completion of the project. The promoter’s account shall be audited within six months after the end of every financial year and the promoter shall
produce a statement of account, duly certified, that the amount collected for a particular project have been utilised for the project and withdrawal has been in compliance with the proportion
to the percentage of completion of the project.
iii) Grant of Registration:-- On receipt of application for registration of the real estate project, the RERA shall within a period of 30 days, grant/reject registration.
iv) Cap of Advance:-- The Act provides that a promoter shall not accept a sum more than 10% of the cost of the apartment, plot or building as an advance payment or an application
fee from a person without entering into a written agreement for sale with such person.
v) Transfer of project:-- The promoter shall not transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without obtaining prior written consent
from the 2/3rd allottees and without prior written approval of the authority.
vi) Return of amount and compensation:-- If the promoter fails to complete or is unable to give possession in accordance with the terms of agreement for sale, he shall be liable on
demand to the allottees to return the amount received by him with interest at such rates as may be prescribed under the Act. Where an allottee does not intend to withdraw from the
project, the promoter shall pay him interest for every month of delay till the handing over of the possession.
vii) Right and Duties of Allottees:--The allottee shall be entitled to obtain information relating to sanction plan, stage wise time schedule of completion of the project, possession of
apartment, plot or building and also possession of common areas, necessary documents and plan etc. All along, the allottee shall be responsible to make necessary payments in the
manner and within the time as specified in the said agreement for sale and to take physical possession of apartment, plot or building within a period of two months of the occupancy
certificate issued for such apartment, plot or building.
viii) Filing of complaint with the authority: Any aggrieved person (including association of allottees or any voluntary consumer association) may file a complaint with the authority/ Adjudicating
Authority.
ix) Recovery of interest/penalty/compensation:-- If a promoter or an allottee fails to pay any interest/penalty/compensation imposed upon him by the Adjudicating Officer or the Regulatory Authority
or Appellate Authority, it shall be recoverable from such person in such manner as may be prescribed as an arrears of land revenue.
x) Punishment for non registration:-- A promoter who fails to get his project registered with the RERA within a time prescribed i.e. 3 months from the commencement of the Act, shall be punishable
to a penalty which may extend upto 10% of the estimated cost of the real estate project as determined by the authority. If he does not comply with the order or continues to violate the provisions
of Sec. 3 requiring registration of the project, he shall be punishable with imprisonment for a term which may extend upto three years or with fine which may extend upto a further 10% of the
estimated cost of the real estate project or with both.
xi) Bar of Jurisdiction of Civil Courts:-- No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which the authority, adjudicating officer or appellate tribunal
is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any powers conferred by
or under this Act.
33. 1. INTRODUCTION: PNB CLAPS (Centralised Loan Appraisal and Processing System) 3. Following Retail loan schemes will be processed in CLAPS w.e.f. 16.04.2019:--
is a new In-House web based application to appraise and process the retail loan i) HL (Including all Variants – PNB Gen Next, PNB Max Saver, PNB Flexible Housing, OD to
Centralized
applications received by the bank. It is independent and responsive browser and can existing Housing Loan borrowers); ii) PMAY (All Variants – EWS, LIG, MIG); iii) Car Loan;
Loan
support all available browsers like Chrome and Internet Explorer. PNB CLAPS is an iv) Two-Wheeler Loan (Sarthi and Power Ride);
Appraisal
414
And initiative taken by HO: RBD to prepare the software in user friendly manner keeping in v) Personal loan Scheme for Public (Including variants for LIC agents & PNB Doctor’s Delight);
Processing view the extant guidelines of retail loan schemes. The tool takes care of eligibility, loan vi) Personal Loan Scheme for Pensioners;
System amount calculation, integration of PNB score, appraisal, decision, documentation vii) Scheme for Finance against Mortgage of Immovable Property.
(CLAPS– and account opening in CBS. 4. Detail of URL address of CLAPS: URL for Home page to PNB CLAPS is
RETAIL) 2. All Retail Lending schemes (Except Education Loans, PNB Baghban, Advance https://10.192.18.33/CLAPS
RBDA: against Gold Jewellery/Gold Coins/Sovereign Gold Bond & EMD) are processed (This URL address not to be added in compatibility view setting)
18/16.04.19, through CLAPS w.e.f. 16.04.2019. Now, w.e.f. 01.01.2020 all education loan - CLAPS link is also available on Non CBS page --RBD ---CLAPS
85/30.12.19 applications will be mandatorily received in CLAPS through Vidya Lakshmi Portal - For better performance of CLAPS, it is advised to use Google Chrome 66 and above
under Education Loan Schemes namely PNB Saraswati, PNB Pratibha, PNB Udaan, version or Internet Explorer preferably Version 11. Updated Chrome Version may be
PNB Kaushal, PNB Honhaar and will be processed, sanctioned and account opened downloaded from CLAPS Login Page.
through CLAPS only.
34. Vidya Lakshmi Portal (VLP) an Electronic Platform to apply for Education Loan:----
1. Based on the recommendations of the IBA Working Group on Education Loan Scheme, NSDL e-governance has developed the portal, named as “Vidya Lakshmi
Vidya Electronic Platform”.
Lakshmi 2. The application lodged by the students are downloaded by the bank and processed by them. After the application is processed, the status is to be uploaded by the Bank on
Portal the Portal.
(VLP) 3. Role of Bank: The education loan applications lodged on the portal are stored in the respective Bank’s Folder on the Portal. The bank downloads the application alongwith
(RBDA: documents and forwards it to the Preferred Branch identified by the applicant for processing and disposal. The applications will be forwarded to the preferred branch at branch’s
05/19.01.16; Email ids with an endorsement to respective Circle Office. Presently, the user id on the Portal has been allotted to Retail Assets Division, HO.
34/08.05.17; 4. All the fresh education loan proposals from 01.02.2018 onwards should compulsorily be routed through Vidya Lakshmi Portal.
26/06.04.18) 5. Branches are required to focus on maximizing coverage of girl students in consonance with the priority of the Government of “Beti Bachao Beti Padhao”.
6. All education loan applications received at branches physically (other than received on line through VLP) are to be first entered in VLP Portal
(www.vidyalakshmi.co.in) by the student. If, due to lack of access to internet facility, any application is received in physical form, the same should be uploaded on VLP
immediately after sanction by the bank. Further, all education loan application sanctioned w.e.f. 01.02.2018 may be uploaded in VLP Portal immediately.
7. An enrolment charge of Rs. 100/- (excluding GST) is to be borne by the students whose application has been sanctioned after invoice is raised by NSDL.
35. 1. BACKGROUND: Presently Online Loan Application System for Housing, Vehicle & Personal Loan Scheme is hosted on the corporate website of the Bank (www.pnbindia.in). The
Online Loan Application System has been revamped and integrated with the PNB Score & CIR from credit rating agencies. Facility of uploading the scanned copy of documents required
Online for sanction of loans by the applicant has also been made available.
Loan 2. Salient features:--
Applicati i. A hyperlink ‘Apply on line for loans’ has been placed at Bank’s corporate website www.pnbindia.in.
ii. The allotment of circle will be on the basis of the branch opted for disbursement by the applicant.
on iii. Acknowledgement of `Online Application’ along with in-principal sanction shall be issued to the applicant by the system instantly.
System iv. Applicants have been provided with the facility to upload the relevant documents i.e KYC document, Income Proof, etc.
For 3. The Roles and Responsibilities of Zonal Office, Circle Office & Branches:---
A. Zonal Office:--
Housing, i. ZO to login into the portal at least twice a day, First at 11 am and second at 04 pm to ensure that no leads received by the Circles under their jurisdiction remain unattended for more
Vehicle than 48 hours.
& ii. HO will follow-up with the Zones to ensure that all the leads are attended within 48 hours of receipt of lead.
B. Circle Office:--
Personal i. COs to login the portal at least twice a day, First at 11 am and second at 04 pm to ensure that no leads received by the branch under their jurisdiction remain unattended for more
Loan than 48 hours.
Schemes C. Branches:--
RBDA: 23/ i. All branches are required to login the portal at least twice a day First at 11 am and second at 04 pm to ensure that no leads received by the branch remain unattended for more than
06.06.19 48 hours. ii. To contact the applicant through sending email/Fax/phone for further processing of the case under copy to Circle Office.
iii. To update the status of each application on daily basis i.e. approved/declined/under process.
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5.The Online Loan Application Monitoring application is accessible through URL: https://10.192.11.98/OnlineBackOffice/login.jsp
6. Accessibility:--- A link “Online Loan Application” for Housing, Personal and Car Loan is accessible through URL: https://www.pnbnet.org.in/ONLINELOAN/.
36.
1. Now, it has been decided to onboard the Retail Loan Products in the Online PSB Loans Portal. In the said process initially Housing Loan & Personal Loan Product has been
Contactle created in the Portal. The portal will convey ‘in principal’ approval for Retail loans under the above two schemes to the applicant. Complete Pre-Sanction appraisal to be carried out,
ss Loan before regular/final sanction.
To The 2. The portal integrates advances financial technology (Fin Tech) to ensure seamless loan approval. The process is under taken without human intervention and maximum data is
fetched from various portals. The portal will do various back end checks available at various portals for fraud and data available in bureau portal.
Retail 3. The platform has two main components: i) Borrower: Retail Loan Borrower, ii) Lenders: Bank’s & financial institutions.
Loans 4. Work flow of borrower applicant:-- The applicant borrower to visit the portal through www.psbloansin59minutes.com or through PNB specific URL i.e.
Borrower www.psbloansin59minutes.com/pnb.
Through The applicant borrower can also reach the portal through PNB’s web page www.pnbindia.in.
5. Work flow of Bank:--
Online i. Branches to visit the portal through www.psbloansin59minutes.com. The product creation of the bank has been done at HO Level. However, the monitoring of loan application
Portal submitted by the applicant till its sanction is to be done by branches.
“PSBLoans ii. The Zone, Circle and Branch level staff to login with the same users available with them to view MSME Loan applications received by the bank through market URL or PNB
in59minute specific URL. Branches to download the application for pre sanction processing.
s” iii. The branches will get complete data on real time basis from the portal in the following formats, which will be used for processing the loan proposal by the branch official, while
(RBDA: considering the same, as per extant guidelines:--- a. Customer profile, including co-borrower’s profile. b. Financial for the last three years (ITR). c. Risk score assessed through model,
43/ inbuilt in the portal.
31.08.19) d. Analysis of bank’s statement of the applicant for last six months. e. Loan eligibility amount/Assessment of limit. f. Provident fund check of applicant, if applicable.
g. CIBIL and other bureau data of the applicant. h. ‘Hunter analysis’ (Back end checks for multiple fraud, bureau checks, MCA site checks and bank’s product policy checks.)
6. The portal platform has three phases:---
Phase Portal platform Division Journey / Work to be executed by

Phase I Filing of application on portal by the applicant borrower Retail Loan Borrower / Applicant
Phase II Processing of in-principle approved application online through portal by the lender Banks / Lenders
Phase III Marking of final disposal of loan application by the lender Banks / Lenders
7. Different URLs of The Platform and its uses:--The platform has three main URLs:-- www.psbloansin59minutes.com, www.psbloansin59minutes.com/pnb,
www.psbloansin59minutes.com/sidbi
8. Once the users at HO are created, the user can login to the portal with two options as under:---
Option Mode of Login User id Password

I EMAIL ID Registered email id of user Default password “123456” then the user is to change password
II Mobile Number Registered mobile number of the user Instant “OTP” received on mobile
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37. 1. Fixation of Monthly EMI: EMI be fixed in such a manner that the 12. Monitoring/ follow-up actions of Retail Loans:---
due date of 1st installment falls due on the same date on which 1st i) Monitoring to start 30/7 days before due date of EMI
Monitorin disbursement has been made. - Follow-up for recovery to start 30/7 days before the due date of EMI through System generated SMS.
g of Loan 2. End Use Verification: On disbursement of loan, verification/ - In case of loan having moratorium period, the 1st SMS to be sent 30 days before the due date of EMI, followed
A/Cs Inspection of securities be done immediately. by
3. Recovery of EMIs: For effecting timely and regular recovery, it be 2nd SMS 7 days before the due date of EMI and 3rd SMS 1 day before the due date of EMI.
Under ensured as under: - In case of education loan 1st SMS to be sent 30 days before the repayment start date.
Retail i) At location where NACH (Debit) is available -- ii) Follow – up Actions to be taken within the first 30 days of irregularity (i.e. between 1 – 30 days):
Lending Recovery/repayment of EMIs in all Retail Loan accounts be considered - On the due date i.e. 1st day, EMI be collected. (HLADSP be used, wherever required.)
Schemes only through NACH (Debit) mandate of the customers for debiting - In case of non receipt of EMI on due date, a system generated SMS be sent on next day.
their accounts. - In case of non receipt of EMI upto 3rd day from the due date of EMI, again a SMS be sent on 4th day.
ii) At location where NACH (Debit) is not available – Recovery/ - Borrower(s) be contacted telephonically between 8th- 9th day from the due date of EMI..
(RBDA: repayment of EMIs in all Retail Loan accounts be considered through - If the irregularity is not rectified, borrower be contacted personally by branch official on 10th day.
08/ PDCs/Standing Instruction. - On 15th day, another telephonic contact with the borrower and first reminder be sent between 21st to 25th
18.02.19) 4. SMS ALERTS shall be used as one of the measures of escalation day.
for the purpose of monitoring of recovery in retail loans. - On the 30th day, 1st meeting of the borrower be held with Branch official and official of the Circle Office. If the
5. Recovery in Loans: To maintain better quality of the loan portfolio, borrower is not available, the family members be contacted.
timely recovery of bank’s dues is crucial. iii) Follow – up Actions to be taken between 31st days to – 60th day of irregularity:
6. Monitoring of Special Mention Assets (SMA): Monitoring of - On the 33rd day 2nd reminder be sent to borrower with a copy to guarantor. Borrower(s) be contacted for the
accounts under SMA will be done on daily basis by pulling the data 3rd time over telephone (3rd telephonic call) between 37th to 40th day from the date of default. Further, first
from CBS system and immediate steps shall be initiated for telephonic call to guarantor and Second reminder be issued with copy of the same endorsed to guarantor,
regularization of such accounts. wherever available.
7. Periodic actions: Maintenance of due date diary for monthly EMI, - On the 45th day from the due date of EMI, 2nd Meeting of borrower with Branch official and 2nd man of CO.
Periodical checking of security, Renewal of insurance and maintaining - On the 55th day from the due date of EMI, 3rd Meeting of borrower with Branch official and 2nd man of CO.
its due date register, Verification of office/residential address, Renewal iv) Follow – up Actions to be between 61st days to – 90th day of irregularity:
of CRs, Maintenance of record of PDCs/NACH, BC letters, Execution of - If the account remains overdue for 60 days, a Registered Reminder be issued between 61st to 65th day of
SI, Charging of incidental/Inspection charges and penal interest, etc. default/irregularity and a copy be endorsed to guarantor(s), wherever available.
8. Menu Options ‘HLADSP’: Loan Lien And Demand Satisfaction - In case EMI remains overdue upto 74th day, meeting of the borrower be held with Branch Incumbent and Circle
Process-- For recovering EMIs. By invoking HLADSP lien can be Head on 75th day, wherein he/she be explained the implications of non-rectification of default/irregularity
marked in the Operative A/c of the Customer to the extent of ‘Effective - Borrower(s)/ guarantor(s)/family members be contacted personally by Branch Head before the end of the 90th
Available Balance’. day from the date of default.
9. Menu Options ‘HLAODR’: For issuing system generated reminders. v) Follow–up Actions to be taken consequent to account being classified as NPA A/cs):
10. Menu Options ‘LETGEN’: For recording of follow-up action in - Asset classification norms for treating the account as NPA, be strictly adhered to.
CBS. - Follow up for recovery of Bank dues be made strictly in terms of extant guidelines.
11. Proper Track of Borrower/Guarantor: Incumbents to contact the 13. Advances given to person engaged in agriculture & allied activities: For advances given to persons
borrowers at regular intervals for updation of address, telephone/ engaged in agriculture & allied activities where repayment schedule has been fixed by sanctioning authority at
mobile numbers, UIN, PAN Number and e-mail id, etc., half yearly/yearly intervals coinciding with time of harvest, follow-up for recovery to start 3 days before the due
date and the follow-up to be made on continuous basis till recovery of Bank dues.
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38. List of schemes which are reported under Retail Loan
Classificat Segment has been amended as under: --
ion of Adv A) CORE RETAIL SCHEME:---
under a) Housing Finance Scheme (public), b) Overdraft Facility to B) NON- CORE RETAIL SCHEME:---
Retail existing HL borrowers for personal needs, a) Advance against Bank Deposits,
Segment c) Conveyance Loan (public) for car/scooter/motor b) Advance against Govt./Liquid Securities,
(RBDA: cycle/moped/bicycle, c) Earnest Money Deposit Schemes.
68/ d) Education loan scheme, e) Personal loan scheme for
14.09.18) public,
f) Personal loan scheme for Pensioners, g) Adv against gold
and jewellery/Sovereign Gold Bonds,
h) Finance against mortgage of immovable property
(sanctioned limit upto Rs. 5 crore),
i) Reverse Mortgage loan scheme.
Scheme A) Empanelment of B) Empanelment of Honorably retired C) Empanelment of Insurance/NSCs Agents, Govt. Approved
Builders/Developers and their sales employees & VRS optees of our Bank as Valuer/CAs/Tax Consultants, Real Estate Brokers etc., as
representatives as Marketing Marketing Consultants (MCs); Retail Loan Counselors (RLCs):
Associates (MAs);
39. 1. Objective: In line with Direct Selling Agents 1. Objective: It is one of the initiatives in the marketing 1. Objective: Focus of the bank in the matter of dispensation of credit is on Retail
(DSA)/ Marketing Agents engaged by many banks front to increase our market share. Our all Honorable and in order to catch the lead from various touch points, a policy, to empanel the
Empanel and HFCs/NBFCs for generating the business from retired employees/VRS optees irrespective of any Insurance Agents/NSCs Agents, Govt. Approved Valuer/CAs/Tax
ment of various touch points. Selection of housing loan cadre, may be empanelled as Marketing Consultants Consultants, Real Estate Brokers etc., as RLCs in line with the DSAs
provider is influenced by the advice of the (MCs) for sourcing Home Loan applications. empanelled by peer Public and Private Sector Banks, is framed.
MA/ builder/developer and their sales representatives
and they pass on information about the prospective 2. Empanelment of Marketing Consultants (MCs): 2. Empanelment of Retail Loan Counselors (RLCs): RLCs shall be empanelled
MC/ buyers to the banks/FIs for a consideration. Marketing Consultants shall be empanelled by the by the concerned ZM on the recommendations of concerned CH. For
concerned ZM on the recommendation of concerned CH. empanelment of Insurance Agents/NSCs Agents, Govt. Approved Valuer/CAs/Tax
RLC 2. Empanelment of Marketing Associates (MAs): Consultants, Real Estate Brokers etc as PNB’s RLCs, ZOs shall issue a notice
In order to be in tune with the market and not to 3. Eligibility Criteria: inviting interested Insurance Agents/NSCs Agents, Govt. Approved
lose business opportunities to our competitors, the (i) All Honorably Retired/VRS opted Employees Valuer/CAs/Tax Consultants, Real Estate Brokers etc for empanelment as RLC.
(RBDA: builders/developers & their sales representatives be (Irrespective of cadre);
75/ empanelled as our Marketing Associates (MAs) for 3. Eligibility Criteria:
10.08.17) promoting our Housing Loans. (ii) No adverse feature is observed in the latest CIR • Any Individual/entity working as Insurance Agents/ NSCs agent, Govt.
drawn from CIBIL and Equifax; Approved Valuer/CAs/Tax Consultants, Real Estate Brokers etc are eligible.
3. Eligibility Criteria: Only Builders/Developers • Age above 18 years, • Should have phone facility.
and their Projects approved by the CH are eligible; (iii) No case should be pending in CBI or before any
Court of Law; • Should be local resident/office and able to communicate effectively in local
4. Names of Center where Builders/Developers language.
and their Sales representatives may be empanelled (iv) Should preferably be a local resident of the area • Should operate from his place. Bank will not provide any
as MA:-- with fluency in local dialect; office/desk/infrastructure;
• Minimum qualification: Higher Secondary (HSC)/Sr. Secondary.
a) Major ‘A’ class cities with their Urban (v) Retired staff already empanelled as Recovery • His commitment, diligence and integrity should have been excellent during his
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Agglomerations- Delhi, Mumbai, Chennai, Kolkata, Agent by PNB may be empanelled as MCs; service.
Hyderabad, Ahmedabad, Bangalore. • No case of CBI or other law enforcement agencies should not be pending against
(vi) Should not be working as business sourcing agent him/her.
b) All State Capitals with their Urban for any other bank/FIs for sourcing of home loan leads; - RLC with sufficient means/resources/field experience will be considered for
Agglomerations. - MC with sufficient means/resources/field experience empanelment.
- Application for empanelment would be received only at - Application for empanelment would be received only at Circle office concerned.
c) Other 43 centers with their Urban Circle office concerned. -The CH shall recommend the name(s) of eligible candidate to concerned ZM for
Agglomerations. empanelment as RLC after obtaining Police verification reports of the
ZMs are permitted to add/delete the names of 4. Names of Centre where MCs may be appointed: antecedents of RLCs.
Centers within their Zones for empanelment of On PAN India basis.
builders/developers & their sale representatives as - RLC will provide security of Rs.50000/- by way of BG or FD (under Bank’s lien).
MA. 4. Names of Centre where RLCs may be appointed: On PAN India basis.
5. Service Charges to be paid to MA/MC/RLCs:---
i. 0.25% of the loan amt (inclusive of all taxes) for every lead forwarded to Bank which gets converted into business with a maximum of (MA—Rs. 100000/-, MC/RLC -- Rs
25,000/-) per lead.
ii. 50% of the service charges shall be paid after 1st disbursement and remaining 50% would be paid after making disbursement of 25% of housing loan amount
sanctioned.
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SERVICE CHARGES - GENERAL BANKING (L & A CIRCULAR NO. 93/2020)
Minimum Quarterly Average Balance (QAB) SB Partculars Charges
Account Issuance of Demand Draft Upto Rs. 10000/- : Rs. 50/-
Particulars Rural Semi Urban/Metro Above Rs. 10000/- Rs. 4/- per thousand or part thereof, Min 50/-,
Urban Max. Rs. 15000/-
Minumum QAB 500 1000 2000 Against Cash (Below Rs. 50000/-): @50% of over and above
Initital Depsoit 500 1000 2000 normal charges
Not Maintaining Minimum Balance (per quarter) Issuance of Duplicate Draft / Rs. 100/- per instrument
Upto 50% 50 100 150 Revalidation of Draft / Against tender of Cash (Below Rs. 50000/-) for any mode of
Above 50% 100 150 250 Cancellation of Drafts / Other Remittance : Rs.250/-
Minimum Quarterly Average Balance (QAB) CA Instruments
Account Cheques (Including ECS) / Inward returning charges :
Minimum QAB 1000 2000 5000 Bills Returning Charges Upto Rs. 1 lac : Rs. 200/- per instrument, > 1 lac to 1 cr. : Rs.
Initital Depsoit 1000 2000 5000 500/- per instrument.
Non Maint. Of 200 200 300 >1 crore : Rs. 2000/- 1st cheque and Rs. 2500/- per instance from
QAB 2nd cheque.
Duplicate Pass 100 with latest entry. Rs. 2/- per Outward retruning charges:
Book entry. Min Rs. 100/- Max. 1000/- Upto Rs. One lac: Rs. 100/- per instrument + out of pocket
Charges beyond Rs. 2/-per entry in excess of 40 expenses
free limit (SB) debits permitted in half year in SB Cheque above Rs. One lac: Rs. 200/- per instrument + out of
account (for non-cash transaction pocket expenses
excluding bank induced/ ATM/ i- Bills: Rs. 200/-+out of pocket expenses or 50%of collection
charges Whichever is higher.
Bank)
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BSBDA Rs. 5/-per debits in excess of Collection of Outstation Cheques upto Rs.10000/- : Rs. 50/-, > Rs.10000/- - Rs. 1 lac: Rs.
permitted 6 debits in a month. Cheques / Drafts 100/- > 1lac: 200/-
Personalized Digital Mode Rs. 3/- per leaf CASH HANDLING CHARGES- DEPOSIT (SB) Applicable on Base & Non Base Branch
Cheque Book Thru Branch Rs. 4/- per leaf Based on Transaction Based on Amount
Non- Personalised Cheque Book : Rs. 5/- per leaf 5 Transaction free per month thereof Rs. 25/- Up to Rs. 2 Lakh : Free
Free Cheque Book: per transaction (Except through alternate Above Rs. 2 Lakh: Rs. 1 per thousand, subject to
SB A/c:One Cheque book of 25 Leaves free per year channels i.e., BNA, ATM and CDM) minimum Rs. 25/-
BSBD Account:10 Cheque Leaves Free in a Year
Stop payment – Rs.100/- per instrument. Current / Cash Credit/ Overdraft and Other Accounts Applicable on Base & Non Base
SB Range of cheques Rs. 300/- (3 & Branch
above) Based on Amount : Up to Rs. 2 Lakh : Free Above Rs. 2 Lakh: Rs.1/- per thousand, subject to
minimum Rs. 50/- Max. Rs. 15000/-
Stop Payment - Rs.200/- per instrument.
CA Range of cheques Rs. 600/- (3 & CASH HANDLING CHARGES- WITHDRAWAL Applicable on Base & Non Base Branch
above) SB Accounts : Free: Maximum 5 withdrawals in a month. Thereafter, Rs. 2 per Rs. 1000/- or
Revocation of Stop Payment Rs.20/- per inst. part thereof.
Instructions PNB Smart Roamer Current Account: Free Amount per day as per their respective QAB.
Thereafter applicable charges will be: Rs. 2/- per Rs. 1000/-or part thereof.
Depositing Delayed Rs. 1/-per 100/- pm
Instalment Recurring Deposit irrespective of All other CA/CC/OD and other Accounts: Free up to Rs. 1 Lakh per day. Thereafter, Rs. 2
periodicity of deposits. per Rs. 1000/- or part thereof.
Account
Closure of account > 14 days RD : 100/-, SB : 300/- Locker Rent : Small : 1500/- , Medium : 3000/-, Large : 5000/-, Very Large : 7500/-, Extra
to less than 12 months CA: 600/- Large : 10000/-
Door Step Banking (DSB) to Senior Citizens Above 70 No. of locker visits per year-15 visits per year free; thereafter Rs. 100/- per visit.
One Time Registration Charges at The Time of Leasing Out of Lockers: Rural/Semi Urban :
Years & Differently Abled Persons : Non-financial
200/- Urban/Metro: 500/-
transaction : Rs. 60/- + GST : Financial transactions :
421
Rs. 100/- + GST Penalty for Delayed Payment of Locker Rent (of annual rent): 1st Qtr: 10%, 2nd : 25%, 3 :40%, 4th
:50%, More than one year: Break Open
Attestation / Certificate – per occasion : Rs. 100 /- (Individual) Rs. 150/- (Non Individual)
Old Record Enquiries: Up to one Year Old: 100/- per reference , Beyond 1 year : 300/- per reference
+ out of pocket exp.
DISCRETIONARY POWERS TO PERMIT WAIVER/RELAXATION (RBD-R CIRCULAR NO. 29/2020
Incidental Charges Chief Managers and above shall have FULL POWERS to waive incidental charges, stipulated for maintenance of QAB as well as
Initial Deposit Amount for opening of accounts on the basis of merits of each case.
One Time Registration • Circle Head can waive one time registration charges for branches in Rural & Semi- Urban areas in full, but no discretion for
Charges - Lockers waivement of one time Registration charges for branches in Metro & Urban areas. • No levy of one time Registration charges for
staff members/ exstaff members
Waiver of Locker Rent in • In cases where rent in arrears is outstanding for more than 3 years and where the locker is empty & being surrendered, Incumbents
case of Surrender of Lockers In- charge may consider waiver of locker rent by accepting Rs.100/- only + surrender of locker key provided there is no security
deposit/ balance available in the relative deposit accounts. • Circle Head may however, waive even Rs.100/
PARTICULARS Incumbent Incharges of Branches Other Officers excluding Circle Heads

Scale 1 II III IV IV V VI VII
Collection of Outstation Cheques NIL NIL NIL 50% 50% 75% 100% 100%
Remittances – Issuance of Draft 15% 15% 15% 50% 50% 75% 100% 100%
Cash Handling Charges 25% 25% 25% 50% 50% 75% 100% 100%
Circle Heads (irrespective of the Scale) shall have 100% powers for relaxation in service charges in respect of above mentioned specified services.
422
DIGITAL BANKING CHARGES
RTGS Charges FROM NEFT Amount of transaction Charges National Automated Clearing House (NACH)
Transaction Value Charges IMPS : Upto Upto Rs.10000/- Rs. 2.00
IBS/MBS : Above Rs.10000/- to Rs.1 Rs. 4.00 Mandate
Rs. 2 lakh to 5 lakh Rs.20/-+ GST Rs. 2 lakh : Above
lac Rs.1 lac to Rs.2 Rs.14.00
NIL Outward NACH Credit & Debit Transactions: Rs.
Above Rs. 5 lakh Rs.40/-+ GST Above
lac Rs. 2 lac Rs. 20.00
Rs. 5/-
2/- per record subject to a minimum of Rs. 500/-
Inward NACH Mandate Verification: Rs. 100/-
per mandate on acceptance
SMS Charges : Saving Fund : Rs. 15/- per quarter, Other than Saving Accounts : Rs. 25/- per quarter
Duplicate Password Charges of IBS/MBS : Rs. 50/- per event in case of offline request received through Branches. However, the incumbent In-charge can waive
off the charges looking into the genuineness of the case.
Bunch Note Acceptor (BNA) / Cash Deposit Machine (CDM) : Upto Rs. 2 lakh : Nil,
Above 2 Lakh (SB) : Rs. 1 per Rs. 1000/- or part thereof with a min. of Rs. 15/- per transaction ; CA/CC/OD : Rs. 1 per Rs. 1000/- or part thereof with a min. of
Rs. 25/-
For use of Bank’s own ATMs located in Metro and Non-Metro Areas : 5 Free transactions per month. Thereafter Rs. 10/- per transaction. Exempted: Staff/
Ex-staff, BSBDA, Pensioners & Defence Personal
For use of other Bank’s ATMs located in Metro and Non- Metro Areas : Free Financial and Non financial transactions : In metro : 3 & other then metro : 5
transaction per month, Thereafter Rs. 20/- per financial txn., Rs. 9/- per txn. For non financial.
423
DIGIKIT
Type of Instrument Other features
Rupay NCMC Classic Debit Card - Can be used at all PoS terminals across India
Withdrawal / POS/Ecom per day - Individual transaction up to Rs.2000/- allowed without PIN
ATM- 25000 POS –60000 at NFC enabled POS Terminals with Rs.10000/- as daily
overall limit.
Accidental Death cover & Lounge feature : Not
available
Rupay International Platinum Debit Card Customer may avail Personalised Card
- Can be used at all PoS terminals across India
Withdrawal / POS/Ecom per day - Debit card acceptable on Discover machines & terminals in India
ATM- 50000 POS/Ecom –125000 as well as outside India, if the machine / terminal is chip enabled.
Accidental Death cover : Rs. Two lakh Lounge feature :
Complimentary Airport lounge access, twice per quarter on
domestic lounges
RuPay NCMC Platinum Debit Card - Individual transaction up to Rs.2000/- allowed without PIN at N
Withdrawal / POS/Ecom per day enabled POS Terminals with Rs.10000/- as daily overall limit.
ATM- 50000 POS/Ecom –125000 Accidental Death cover : Rs. Two lakh Lounge feature : Complimen
Airport lounge access, twice per quarter on domestic lounges
RuPay Rakshak Classic Debit Card - Customers serving in Indian Army/Navy/Air Force & Indian Coas
Withdrawal / POS/Ecom per day - Domestic as well as International Usage
ATM- 25000 POS/Ecom –150000 Accidental Death cover & Lounge feature : Not available
RuPay Rakshak Platinum Debit Card - Customers serving in Indian Army/Navy/Air Force & Indian Coas
ATM- 50000 POS/Ecom –400000 - Domestic as well as International Usage
Accidental Death cover : Rs. Two lakh Lounge feature : Complimen
Airport lounge access, twice per quarter on domestic lounges
RuPay Select Debit Card - Ultra HNI Customers Domestic as well as International Usage
- Debit card acceptable on Discover machines & terminals in Ind
Withdrawal / POS/Ecom per day termnal is chip enabled.
ATM- 50000 POS/Ecom –125000 - Individual transaction up to Rs.2000/- allowed without PIN
Rs.10000/- as daily overall limit.
- One Complementary Spa Session Every Year from mentione
Aroma Thai, Kairali
- Complementary Health Checkup once in a year from mentioned
Accidental Death cover : Rs. Ten lakh Lounge feature : Complim
quarter on domestic & International lounges
RuPay Kisan Debit Card - For KCC customers for use only in India
Withdrawal / POS/Ecom per day - Can be used at all ATMs & PoS terminals(domestic)
ATM- 25000 POS –60000 across India
Accidental Death cover & Lounge feature : Not available
Master Classic Debit Card Non- Personalised as well as Personalised Classic Chip Debit Card
Withdrawal / POS/Ecom per day - Can be used at all ATMs & PoS terminals(domestic) across India
ATM- 25000 POS –60000 - Accidental Death cover & Lounge feature : Not available
Master International Debit Card - Non- Personalised as well as Personalised Classic Chip Debit Card
Withdrawal / POS/Ecom per day - Can be used at all ATMs & PoS terminals domestic & Internationa
ATM- 50000 POS/Ecom –125000 - Debit card acceptable on Euro Pay, MasterCard & Visa
machines & terminals in India as well as outside India, if
the machine / terminal is chip enabled. Accidental Death
cover & Lounge feature : Not available
Master Platinum Debit Card - Premium personalized Card with name and photo designed
Withdrawal / POS/Ecom per day for elite and valuable Customers of the Bank
ATM- 50000 POS/Ecom –125000 Accidental Death cover : nil
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Lounge feature : Complimentary Airport Lounge Access for
Active Card users, once per Card per Quarter
World Travel Card (Valid: 5 years) - Denominated in USD/ EURO/ GBP for the customers going abroa
ATM, PoS and Ecom Combined - Withdrawal through ATMs and POS terminals displaying Master
Limit - Accidental Death cover & Lounge feature : Not available
USD 1000, EURO 800, and
GBP 500
Suvidha Card Non-personalized Prepaid Card Individual Customer (for personal use
Valid for 5 years payments to their employees) having a KYC compliant Bank account
of Rs.100/- up to Rs.100000/- It can be reloaded by the purchaser free
is accepted at all ATMs, POS
Uphaar Card - Non-personalized Gift Card = Card can be issued for
minimum of Rs.100/- up to Rs.100000/- Can be used only
Valid for 5 years on PoS Terminals , Cash withdrawal and reloading is not
permitted
- Menu Options for prepaid cards:
PPISS : for issuance , PPCLTM : For loading / reloading,
PPSUR : For surrender, PPINQ : For inquiry, BPPISS : For
Bulk issuance, BPPCLTM: For bulk loading / reloading,
PPRPT : For reports.
Issuance of Debit Cards, Pre paid Cards, Duplicate or Add On cards through base/home branch only (DBD 25/20)
Debit Cards, Pre paid Cards, Duplicate or Add On cards shall now be issued through base/home branch only. All CBS user
remote locations other than the authorized users at base/home branch are barred from issuing Debit Cards, Pre paid Ca
Duplicate or Add On cards.
Green PIN for Debit Cards
Using the green PIN Model, now Debit cards are activated on real time basis. PNB Debit Card holders can set their PIN on
using PNB Corporate Website, Retail Internet Banking or through PNB ATMs. For resetting the card PIN using green P
facility, SMS DCPIN <Card Number> to 9264092640 or 5607040. Customer will receive an OTP on the registered Mo
Number with which he can set the Debit Card PIN at PNB ATMs or PNB Corporate Website or PNB Retail Internet Bankin
Blocking of Debit Card
By calling contact centre at Toll Free numbers 1800 180 2222, 1800 103 2222 or through paid helpline number 0120-24900
By sending SMS (HOT space Card Number) e.g. HOT 5126520000000013 to 5607040 from your registered mobile number
Blocking of channel through SMS forward
Customers have been provided with facility for reporting unauthorized transactions and blocking corresponding channe
IBS/MBS/Debit Card through which the transaction has taken place by forwarding the received transactional SMS.
occurrence of any transactions through IBS/MBS/Debit Card If it is not done by the customer he can report to bank
forwarding the SMS Alert message to 9264092640/5607040 without any change in text, to block the facility.
Retail Internet Banking
Anywhere and anytime banking through internet. It is quick, simple and convenient way of banking. This service is availa
for NRI customers also. Debit card holders can register online without visiting the branch. Registration is also availa
through any Branch, ATM and Contact Centre.
Online Registration facility Browse http://www.netpnb.com On Home Page, Click on the link “Register Here” (Be
New User) This would take to Login page. Click on the link “ New User” (On Right hand side) Enter Account Num
Select Type of facility “View Only” or “View & Transaction Both” Click on “Verify” OTP will be sent to
Registered Mobile Number Enter the OTP in “One Time Password” field After verification of OTP, User will be aske
validate account details/ Debit Card credentials
Corporate Internet Banking
Registration facility : Submit request for Corporate Internet Banking for issuance of corporate User ID and login passw
to Account administrator on Form no. PNB 1212 (Issue of User ID and Password) and PNB 1213 (Re-Issue of Password)
Branch will submit request through Relationship Manager corporate. All the activities performed by Relationship Manager
under maker-checker concept. After submission & verification of request for creation, System generates Corporate ID
Administrator Id. Corporate Relationship Manager is now to link pre-printed {sealed & labeled with Unique Identifica
Number (UID)} password with the Administrator Id.
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Mobile Banking (PNB ONE) : It provides banking on mobile handset anywhere and anytime. Facility is available to Re
Customers. Facility is also available to NRI Customers
SMS Banking : Customers with registered mobile number can avail following services in their accounts by sending keyw
through SMS on 9264092640 or5607040.
Balance Inquiry (BAL<space>16 digit a/c no) Mini statement (MINSTMT<space>16 digit a/c no) Cheque st
Inquiry (CHQINQ<space>Cheque no <space>16 digit a/c no)
Stop payment of Cheque (STPCHQ<space>Cheque no <space>16 digit a/c no)
Balance Inquiry over Missed Call : Account balance inquiry on missed call to Toll Free Numbers through registe
mobile number.
Toll Free No: 1800-103-2223/ 1800-180-2223. For NRI customer Missed call alerts number is-120 2303090
Immediate Payment Service (IMPS) : Available through Internet Banking/ Mobile Banking/ATMs. Funds can
transferred to other banks on real time basis 24x7, even on Holidays/ Sundays.
Services are enabled for IMPS Person-to-Person (P2P) payments, Person to account (P2A) & Merchant payments (P2M)
(P2P) - User can remit funds to other banks on real time basis by entering beneficiary's MMID (Mobile Money Identifier
registered mobile number. (P2A) - User can remit funds to other banks on real time basis using IFSC Code & acco
number of the beneficiary.
(P2M) - User can do payments to merchants on real time basis by entering merchant's MMID (Mobile Money Identifier
registered mobile number.
Unified Payment Interface (UPI) : Punjab National Bank Unified Payment Interface (UPI) Mobile app provides yo
secure and easy to use platform to pay and collect payments instantly by using your smart phone. You can use mult
delivery channels to make and receive payments and it is not necessary to provide bank account information to a payee
payer.
The user can install BHIM PNB from Google Play Store.
E- Statement: Customers may register for this facility through Branch, Internet Banking, Mail request
PNBestatementFREE@pnb.co.in and Contact Centre at toll free numbers 1800-180-2222 & 1800-103-2222.
PNB Welcome Kit: (DBD 15/2020): Welcome Kits to customers on opening of Saving Fund Accounts which would con
the following: - Welcome Letter - Non-Personalised Debit Card - User Guide for Debit Card. In case, the customer requir
Cheque Book, it may be issued to him as per extant guidelines of the bank.
Welcome Kit must be maintained by all branches and for replenishing their stock, fresh requisition must be placed well in t
through SPSD
“PIHU” –PNB’s Instant Help for yoU” : Chat-bot through Internet Banking & PNB One (DBD 49/2019): PIHU – wil
provided on pre login page of Internet Banking and PNB One. Query resolution portal with enhanced customer serv
experience - Cater to large number of customers/non-PNB customers in a cost efficient manner - 24 x 7 availability
resolution of FAQs.
PNB-Verify: Device Binding Solution for Retail Internet Banking (DBD 41/2019): 1. It provides stronger prevention aga
credential harvesting and phishing attacks on client side, 2. Identity binding (Device, App, User) creates an invis
multifactor authentication mechanism, 3. It provides stronger prevention against Man In the Middle (MITM) attacks, 4. Che
Device trustworthiness and Identity verification during app enrollment, 5. Notifications are received and visible only a
strong multifactor authentication, 6. Eliminates SIM-based frauds , 7. Shows complete transaction details encrypted us
secure channel to provide customer full transaction context at the time of transaction authorization, 8. Protect data
transactions over public internet/wireless by virtue of MITM proof secure channel, 9. Hacker cannot read the PNB-Ve
notification without login into this app, in the event of mobile phone of user gets hacked, whereas in case of SMS OTP it
easily be read, 10.The facility is very useful in cases where there is delayed / non delivery of SMS based OTP on registe
mobile number of customers, 11.Is consistently simple and fast way to authorize Internet Banking and Debit Card e-c
transactions.
BHIM/Bharat QR Code : Bharat/BHIM QR is Scan & Pay Mobile payment solution. This solution is mutually deri
among NPCI, Visa and Mastercard payment networks. Once the BQR codes are deployed at Merchant locations, Customer
pay by just scanning the Bharat/ BHIM QR code from any payment App.
Internet Payment Gateway (IPG) :
PNB Internet Payment Gateway is the service provided for facilitating online transactions. The infrastructure supp
unified, secure access to PNB Internet Payment Gateway services.
PNB Internet Payment Gateway accepts and validates Internet payments via Credit Card, Debit Card, Net banking
Bharat QR from the end customers.
Any Corporate / Society / Organization having a fully functional website or intending to have a website where they
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products, services, and accept payments, can be enrolled in PNB Internet Payment Gateway.
BHIM Aadhaar Pay
BHIM Aadhaar Pay” is the merchant version of Aadhaar Enabled Payment System (AePS) which enables mercha
(Individual or Sole Proprietor having Aadhaar Number) to accept payment from the Customer having Aadhaar enabled acco
using his/her Aadhaar number and Biometrics after authentication from Unique Identification Authority of India (UIDAI).
Enhancing Security of Debit Card Transactions: (6/2020): i. At the time of Issuance/ Re-issuance of Debit Cards
Commerce, Contactless and International transactions will be disabled by default, only Domestic ATM and POS transacti
will be enabled. ii. The facility to Enable/Disable (On/Off)Debit Card for all type of transactions such as domestic
international at POS, ATMs, E-Commerce, Contactless transactions will be available through ATM Channel w.e.f 16.03.20
iii. All the Cards that have never been used for International, E-Commerce, Contactless transactions shall be disabled for
respective transaction w.e.f 16.03.2020. SMSes have been sent to customers on their registered mobile number to this effect
All the cards which have not been used for E-Commerce, International, Contactless transactions in last 12 months wil
disabled w.e.f 16.03.2020. SMSes have been sent to customers on their registered mobile number to this effect. v. The faci
to set and modify limits (within overall Card Limits) for all type of transactions such as ATM, POS, E-commerce
Contactless will be available by logging into Internet Banking w.e.f 16.03.2020. vi. W.e.f 16.03.2020, alerts will be sent to
card holder through SMS whenever there is any change in the status of the card.
ATMs Transactions – Revision of Service charges (44/2019): No of free Transactions (successful financial transactions
our Bank’s ATMs ( i.e Onus Transaction): Five
Rs.10/- per Txn. (plus applicable taxes) after five transactions. The following categories of account holders are exempted fr
ATM transaction charges: • Staff • Ex-staff • Cards issued in SBBDA Account • Defence personnel and Pensioners.
PNB ONE- #Just One App DBD (26/2020)
PNBOne allows customers to get a single window view of all the accounts with the bank besides
undertaking transfer of funds [inter/intra bank], view account statement, manage debit card & credit card
and many other value added services on customer's fingertips. The PNBOne App is available for both
Android users at Play Store and for iOS users in App Store.
Eligibility for enrolling in PNB ONE: a) All KYC compliant retail customers having constitution code of
001 & 002 are eligible for PNB ONE. b) In finacle 10, all those customers under “Retail Entity” are
eligible for enrolling in PNB ONE. c) Customers having Joint account with mode of operation as E/S or
F/S are eligible for PNB ONE.
Registration process: For online registration, it is necessary to have active “Debit Card” issued in the
account on which customer is registering PNB ONE. a) In-App registration: (i) Click on “New User”. (ii)
Enter Account number and select appropriate option. (iii) An OTP will be delivered to registered mobile
number. Enter OTP to proceed further. (iv)Enter linked Debit Card number and PIN. (v) Set Transaction
password. (vi)After completing above mentioned steps, user will get a User id for login
(vii) Enter your User id and Set your MPIN to login into PNB One.
b) Register through PNB Retail Net Banking: (i) Login into your retail internet banking account. (ii) Click
on Value Added Services Register for Mobile Banking. (iii) It will display the Customer id for which
internet banking is registered. Click on “Continue”. (iv)OTP will be delivered on your registered mobile
number. Enter the OTP. (v) Enter Transaction password. (vi)Select your account number from dropdown
list. (vii) Set SMS Password for “SMS based Mobile Banking”. (viii) Click on “Complete Registration”.
Login into the application using same “USER ID” used for login in internet banking.
Transaction Limits:
The default limit of PNB ONE is 2 lakh, which customer can increase to 10 lakh.
Category wise limit:
Transaction Type Limit
Overall Limit Rs. 10 Lakh
IMPS Transaction Rs. 2 Lakh
Quick (Adhoc) Transfer within PNB (without adding beneficiary) Rs. 10000/-
Third Party Transfer Rs. 10 Lakh
NEFT or RTGS Transaction Rs. 10 Lakh
Term Deposit Rs. 99,99,999
UPI Transaction Rs. 50,000
Mobile/DTH Recharge Rs. 50,000
Bill Payments Rs. 50,000
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CREDIT CARDS
Eligibility : Individual, Corporates, Institutions maintaining deposits/advances, Employees of PNB Met Life, Employees o
 Age criteria for primary card is 21-65 years and for Add On card is 18-65 years and minimum education is 10th pa
 Cash Withdrwal Limit : 20% of Card Limit, Out of the above cash limit, single Transaction Limit will be 50% of th
 Balance transfer facility & EMI facility available. Interest free credit for 20-50 days
 Relationship with PNB: The applicant should have banking relationship with us with a satisfactory track record of m
Type of Income Card Joining Annual Other features
card Criteria Limit Fee Fee
Classic Rs. 250000/- Rs. Nil Nil One reward point valuing Rs. 0.50 for
p.a. 10000/- - every spend of Rs.100 /-
100000/-
Gold Rs. 350000/- Rs. Nil Rs.300/- One reward point valuing Rs. 0.50 for
p.a. 50000/- - + GST every spend of Rs.100/-
500000/-
Platinum Rs. 500000/- Rs. Nil Rs. Two reward point valuing Rs. 0.50 for
p.a. 50000/- - 500/- + every spend of Rs.150/-
1000000/- GST
Rupay Rs. 250000/- Rs. Nil Rs. Rs. 2.00 lakh on Accidental Death or
Platinum p.a. 25000/- - 500/- + Permanent Disability due to Accident.
500000/- GST One reward point valuing Rs. 0.50 for
every spend of Rs.100 /- Annual
charges, waiver if the card is used at
least once in each quarter
Rupay Rs. 500000/- Rs. Rs. Rs. Rs. 10.00 lakh on Accidental Death or Permanent
Select p.a. 50000/- - 500/- 750/- Disability due to Accident. Two reward point
1000000/- +GST +GST valuing Rs. 0.50 for every spend of Rs.150 /-.
Annual charges,
waiver if the card is used at least once in each
quarter.
For Primary and Add-on Card- 18-65
years,
In case of FDR, minimum age is 18
years and
no maximum age limit. For ex-staff,
maximum age limit is 70 years
Rakshak p.a. 25000/- - 500/- + Permanent Disability due to Accident.
Platinum 500000/- GST One reward point valuing Rs. 0.50 for
– Person every spend of Rs.100 /-
below Annual charges, waiver
officer if the card is used at least
rank once in each quarter.
Rakshak p.a. 50000/- - 750/- Permanent Disability due to Accident.
Select – 1000000/- +GST Two reward point valuing Rs. 0.50 for
Officer every spend of Rs.150 /-
rank Annual charges,
waiver if the card is
used at least once in
each quarter.
Special Schemes for PNB Global Credit Card issuance:

1. Scheme for PNB Global Credit Card for NRIs: PNB Global Credit Cards for NRIs is INR denominated Internati
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2. PNB Credit Card by Marking Lien on Term Deposit Held with Bank: In order to provide facility of credit card
maintaining Term deposit with the bank, a simplified scheme for issuance of credit cards has been worked out.
3. Credit Cards to Housing Loan Customers of PNB: Under this scheme, Credit cards with specific credit limits
and prospective housing loan customers.
4. Pre-approved Credit Card Limits for Staff Members: The staff members of the Bank at identified centres wou
maximum credit limit, cash withdrawal limit and add-on cards facilities to their family members.
Modes of Payment of credit card dues:
1. Depositing Cash in any branch of PNB 2. Transfer of funds through cheque 3. Auto Debit facility from PNB accoun
National Electronic Fund Transfer (NEFT).
6. Through PNB ATMs 7. Through Billdesk if accounts with bank other than PNB
SMS Services:
1. To Block/Hotlist a card, SMS HOT<space><last 4 digit of Card Number> to 7092200200
2. To Activate a Card, SMS ACTIV<space><last6digits><space><DOB in ddmmyyyy>to 7092200200
3. To Deactivate a Card, SMS DEACTIV<space><last6digits><space><DOB in ddmmyyyy>to 7092200200
4. To Generate PIN, SMS CARDPIN<space><last6digits><space><DOB in ddmmyyyy>to 7092200200
5. To get Mini statement, SMS CCBAL<space><last6digits><space>MMYY<month and year of which statement required
CBS MENU OPTIONS : CCAPP – Application Punching in system. GENDNLD -Application Schedule generat
CAPPLRPT-Report of Verified transactions CAPLURPT – Report of Unverified transactions CCTRANS - Report of C
Credit Card to Term Deposit Card Limit  All types of TDs except Tax saver, Capital gains, R
Holders (It is issued against Classic - 10000/ to and FD in the name of Minor are eligible.
FD (single or joint). 49000/-  Credit Card limit will be 90% of amount of TD i
Gold - 50000/- to multiples of 1000/-.
499000/-  Lien will be marked by the branch. No Income proof
Platinum- 500000 to required. There is no upper age limit.
1000000/-  Minimum age is 18 years. Any Individual having
“Term Deposit ‟ with PNB in his name either singly o
jointly with a family member, for a minimum amount o
Rs.12000/-.
Credit Cards to Individuals Credit cards with Pre-assigned credit limit linked to net salary: Rs. 7500/- to Rs. 40000/-p
Drawing salary from The Salary Range wise Limit would be as under:
account maintained with Net salary credit to Card Credit Limit
PNB (CCD CIRCULAR NO. account
06/2016) Rs. 7500/- to Rs. 8000/- 12000/-
Above 8000/- to Rs. 18000/-
12000/-
Above 12000/- to 15000/- 25000/-
Above 15000/- to 40000/- Two months average of last three months net salary.
The card limit will be fixed at the lower side of
multiples of Rs. 5000/- i.e. in case the income is Rs.
23000/- the card credit limit will be sanctioned for
Rs. 45000
Pre-approved Credit Card Cadre / Designation Limit on card in Rs. Add on c
limits for Staff Members Staff in service Retired staff (pensioner)
Cash withdrawal limit shall Subordinate 10000/- NIL NIL
be @20% of respective credit Clerical 50000/- 15000/- Two
limit (CCD CIRCULAR NO. JMG-1 100000/- 35000/- Two
06/2016) MMG – II & III 150000/- 50000/- Two
SMG IV & V 350000/- 100000/- Two
TEG VI 500000/- 150000/- Two
TEG VII 500000/- 150000/- Two
CMD/MD/CEO/ED 700000/- 250000/- Two
Corporate Credit Card with It will be issued The name of Executive (recommended by Corporate client) al
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Individual Liability (to Classic – 10000/- with name of Company will be engraved on the card. Executive wil
executives of Corporate for 100000/- personally liable for repayment. In case of failure, Company wil
meeting expenses on behalf Gold – 50000/- to responsible.
of the corporate. ) 500000/- Add on, Balance Transfer and EMI facilities are not applica
Applicant must be 10th pass in the age group of 21-65. Inco
criteria, KYC compliance and Satisfactory conduct. Minimum ann
income ; Classic : Rs. 100000/- Gold: Rs.200000/-
- All permanent officers and other staff Cadre Limit on card (Rs.) Cash l
PNB Credit Cards to members (excluding sub-staff) of Subordinate NIL NIL
employees of Regional RRBs sponsored by PNB may be Clerical 45000/- 9000/-
Rural Banks (RRBs) offered bank’s credit cards. JMG-1 90000/- 18000
sponsored by PNB. (CCD - Stipulation whereby ‘a credit card MMG – II & 135000/- 27000
CIRCULAR NO. 07/2017 applicant should have banking III
relationship with PNB with a SMG IV & V 315000/- 63000
satisfactory track record of minimum
6 months’ has been waived
- KYC compliance shall be ensured by
RRB officials
PNB’S CREDIT CARD Best in Industry- App is having one of the best User interfaces and features as under: i. La
MOBILE APP “PNB months Credit Card Statements ii. Details of unbilled transactions. iii. Instant Card Hot-list
GENIE” (5/2017) iv. PIN Generation. v. Registration of additional Credit Card vi. Access of Credit Card Pro
and Account Summary. vii. Submission of Service request & its tracker. viii. Activation
deactivation for International Usage. ix. Setting of credit card limits.
Rupay Insurance Programme 2020-21 for Debit Card Holders (DBD 16/2020)
The Rupay Insurance Programme in case of accidental death/ permanent disability, for the FY 2020-21 has been renew
which would cover all active Platinum and Select Debit Cards as per the following scheme:
Rupay Premium and Higher variant Cards: Customer should have performed minimum one successful transaction thro
Debit Card within 45 days prior to date ofaccident. Claim should be submitted within 90 days from the date of accident. In c
it is submitted after 90 days, the insurance company will carry out an investigation & it would be honored if all o
conditions are met as on date of accident. Cover amount: Rupay Platinum Debit Card : 2 lakh, Rupay Select Debit Card
lakh
Rupay PMJDY Debit Cards: Customer should have performed minimum one successful transaction through Debit Card wi
90 days prior to date ofaccident. - Claim should be submitted within 90 days from the date of accident. In case it is submi
after 90 days, the insurance company will carry out an investigation & it would be honored if all other conditions are met as
date ofaccident. For PMJDY Debit Cards issued in PMJDY Accounts opened after 28-08-2018, the insurance coverage
been enhanced from Rs. 1 lac to Rs. 2lacs
Claim intimation : All the claims where incident has happened in the financial year 2020-21, should be intimated to
dedicated claims id rupay@tataaig.com .
TATA AIG will register the claim and provide the claim number to the Member Bank within 2 working days with the po
number in subject line.
Escalation Matrix : For Claims & Policy Administration-

Sr.N Escalation level Name Designation Email
o.
1 First Dipa Gurav Deputy Manager Dipa.gurav@tataaig.com / rupay@tataaig.co
2 Sectond Milind Ambre Chief Manager Milind.ambre@tataaig.com

3 Final Dr. Vishal Sawat Associate Vice Vishal.sawat@tataaig.com
President
Document check list – For Accidental Death Claims: a) Claim Form duly completed and signed. b) Original or Certified c
of Death Certificate. c) Original or Certified copy of FIR/ Police report giving description of the accident. d) Origina
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certified copy of Post Mortem Report along with Chemical Analysis/ FSL reports (wherever applicable). e) Copy of all med
records, if hospitalised f) Copy of News paper cutting, if any. g) Original CKYC Form with KYC, NEFT documents
Nominee h) Aadhar copies of Cardholder and Nominee. i) Declaration from Card Issuing Banks duly signed by authori
signatory and bank stamp specifying that: 1. Cardholder is holding a RuPay card on RuPay issued IIN and mention the 16 d
card number 2. Compliance of 45 days transaction criteria (to be supported with complete transaction log / account statemen
45 days from the bank's system) 3. Nominee details (including NEFT details) as per bank. Nominee form submitted at the t
of account opening* 4. Brief description of Accident as per FIR translated in English or Hindi. 5. Bank official's Name
contact details with email ID.
Monetary Compensation Scheme for the family of active PNB Master Debit Card Users, in case of their acciden
death (DBD 49/18 & 37/19)
Benefit of Insurance will be available to the card holders who have performed minimum one successful financial transactio
any channel Within 45 days prior to date of accident including accident date for Platinum Master Card holders and Within
days prior to date of accident including accident date for Classic Master Card holders for the following amounts of cover.
Classic/ Kissan Debit Card : 50000/- (Rs. 500000/- for air accident death), Platinum/Gold Card/Rakshak Classic/ E
International/signature card: 200000/- , Rakshak Platinum for Lieutenants and above : 500000/- , PNB Business Debit Ca
200000/- (Rs. 10,00,000 for air accident death.)
All supporting documents relating to the claim must be submitted to respective Circle Office. The officials at Circle office
less than Chief Manager), after vetting the required documents submitted by the branch should send the eligible claim ca
within 150 days from date of death at the following address: DIVYA ARORA / HET RAM THE NEW INDIA ASSURAN
CO. LTD DELHI LARGE CORPORATE OFFICE 301, RG CITY CENTRE, LSC, BLOCK B, LAWRENCE ROAD, N
DELHI – 110035
Unified Mobile Banking Application- PNB ONE- #Just One App (DBD 67/2018)
Fuelled with innovation and automation, PNB ONE aims at revolutionizing the banking experience for its customers. Arm
with Unified Banking Experience, PNB ONE will strengthen the customer relation and up the ante for new digital bank
services. This application has been designed with cutting edge features and state of art technology to offer various bank
functionalities at the palm of your hand.
With our new digital offering, bank will leap into the list of few banks that have provided such elite and redefined mo
banking experience to its customers.
PNB ONE is an amalgamation of various banking processes being delivered through single platform. This, all in
application, allows you to transfer funds, view account statement, manage debit card & credit card and many other value ad
services at your fingertips. This application is available for both Android users at Play Store and will be available soon for
users in App Store.
Unified Payment Interface (UPI)- BHIM PNB (40/2019)
Features of BHIM PNB:
Manage your profile/ application password Select your existing bank and link it to the mobile app. Create vir
addresses for your bank accounts.
Set PIN for the added bank accounts to perform transactions. Add participants to pay money to /or collect money from
Pay and collect money securely and easily
Approve, decline, or defer collection transactions from payees View transactions for a period Raise complaints
view their status
Particulars Limit Particulars Limit (Rs.)
(Rs.)
Minimum Amount per Transaction 0.01 Maximum Transaction count per day 50 txns.
Maximum Amount per Transaction 25000/- Maximum No. of Virtual Address 5 Addresses
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per Account
Maximum Amount per day 50000/- Maximum period for Time Bound 200 days
Maximum Amount per Week 200000/- Virtual Address (in days)
Maximum Amount per Month 1000000/
-
Centralized issuance of personalized debit cards through SMS.
Terms & Condition for Debit Card Issuance through SMS:-
1- Only personalized debit cards will be issued in the name of primary account holder.
2- Customer can make request only through his mobile number registered in his bank account as per CBS record.
3- This facility is available in all the accounts, where debit cards have not been issued earlier, to the customer.
4- Debit cards and ATM pins will be dispatched separately at registered home address in deactivated state.
5- Final activation will be done from the base branch only.
SMS Process Flow:-
1- The customer/account holder sends an SMS by the registered mobile number to a centralized number: 5607040 w
the account number.
SMS can be DEBCARD <Account Number>.
2- Customer will get reply immediately as follows:-
a. If the account number provided does not exist: “Invalid account number received, please re-send with cor
account number”.
b. If the mobile number is not registered with account number: “Mobile number is not registered with
provided account number, please use your registered mobile number to re-send the SMS”.
c. If a debit card is already issued for that account number: “Debit card already issued on this account numb
and request will get cancelled automatically.
d. If the account number is correct and mobile number is registered with the provided account numb
“Request received, your request no is XXXXX. We will revert back soon with the card dispatch details”
request will be added in the DCARD menu of CBS.
e. SMS text to be sent after dispatch of debit card: “Your debit card has been dispatched at your registered ho
address. Please visit your base branch for activation after receiving the debit card and ATM pin”.
HOTLISTING OF DAMAGED CARD/ EXPIRED CARD / NON WORKING CARD can be done by:
o By calling contact centre at Toll Free numbers1800 180 2222, 1800 103 2222 or through paid helpline num
0120-2490000. Direct call to ATM Switch (011-23319972).
o IVRS module integrated with above toll free numbers. By sending SMS (HOT space Card Number) e.g.H
5126520000000013 to 5607040 from your registered mobile number to hotlist your card.
o Alternatively, to hotlist your card, SMS HOT<space>Card Number to 5607040.
o The hotlisting can be done through Finacle menu option “HOTLIST” under maker checker concept
AMOUNT DEBITED BUT CASH NOT DISPENSED / ONLINE TRANSACTION WAS NOT SUCCESSFUL:
a. Customer shall be guided to lodge the complaint at our contact centre numbers.
b. In case, refund is not provided, branch has to refer the matter with docket details to atmcrc@pnb.co.in & atmcell@pnb.c
i.e. to reconciliation department. Subject of email should be: Claim for unsuccessful transaction.
Debit cards not working at ATMs (Response codes):
a. Unauthorized Usage (Error code 050) - Error code 050 means that there is some restriction in the cardhold
account at branch level in CBS for withdrawal of money. In such cases branch is empowered to remove
restrictions, as they deem fit.
b. EXPIRED CARD (Error code 051) - It means that transaction was declined because the debit card is expired.
c. Cards invalid/unauthorized (52)- This message comes on ATM screen when debit card is not accepted by A
machine i.e. the problem may be with magnetic stripe of debit card or card reader. Debit card to be tried at ano
ATM and in case it fails, card to be replaced.
d. Invalid PIN (Error code 53): -It means that the cardholder has entered wrong debit card PIN. Debit card is bloc
for that day by system if customer enters wrong PIN at ATM machine for three times. Next day, debit card
function properly if used with correct PIN. In case customer forgets correct PIN, branch has to apply for new d
card PIN through menu option DPINREQ.
e. Ineligible account (Error code- 056)- Error code 056 comes when customer selects wrong a/c type, i.e. SF inst
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of CA or vice versa.
f. Apart from the above, below mentioned table shows normal response codes with their reasons for immed
understanding.
Response Meaning
Code
055 , 057 Ineligible transaction/ Transaction not supported.
058 , 059 Insufficient Fund in account.
061 Daily withdrawal limit exceeded.
062 Wrong PIN tried for more than 3 times.
063 Withdrawal Limit already reached.
70 Card not Active/ATM TM Keys Error.
72 Destination Not Available.
FINANCIAL INCLUSION
With the launch of PMJDY, the bank has opened more than 122.61 lacs accounts under PMJDY from BC locations till
31.12.2015. Out of these 77.14 lacs accounts opened through BC network. RuPay card is to be provided to all the
account holders and for eligibility under Accidental Insurance Cover of Rs.1.00 lac, RuPay Debit Card must be used at
least once in 90 days. These cards at present can be operated through ATMs, whose network is not adequate, particularly at
remote / far flung locations. The deployment of ATM at remote locations has got viability issues and therefore, Micro-ATM
can be deployed as substitute of ATM with only difference that BC agents will dispense cash after successful transaction
and also having lower cost of deployment and maintenance.
Deployment Micro-ATMs at Business Correspondent (BC) Locations
Services proposed to be delivered through Micro-ATMs:

Micro-ATMs would facilitate basic banking transactions i.e. (i) Cash Deposit and Withdrawal, (ii) Transfer of
Fund, (iii) Balance Enquiry, (iv) Mini Statement etc. Broadly transactions would be four types i.e. (i) RuPay /
Debit Card (PIN based authentication), (ii) Aadhaar Based Transactions (Aadhaar Enabled Payment
System – AEPS) ) through Biometric authentication from UIDAI data base (iii) e-KYC Account Opening and
(iv) FI transactions presently undertaken through KBS.
Summary of Benefits expected by deploying Micro-ATMs:

(i) Micro-ATM will enhance the BC network capability to deliver services particularly RuPay Cards i.e. PIN
based transactions leading to increase their viability and also FI operations.
(ii) At remote locations, adequate number of ATMs are not available as a result RuPay Cards delivered to
PMJDY account holders are not being used in majority of cases. Micro-ATMs will bridge this gap.
(iii) Door Step banking envisaged under FI/PMJDY will really get a boost.
(iv) Deployment of Micro-ATMs will comply with DFS & RBI guidelines also.
(v) In compliance of recent Supreme Court interim order wherein Aadhaar cannot be mandatory, therefore,
deployment of Micro-ATMs will facilitate inter-operable transactions through RuPay Cards.
(vi) RuPay/Debit Cards / AEPS transactions (Including Inter-operable) & help in keeping RuPay Card
holders eligible for accidental insurance claim.
(vii) Facilitate delivery of door step banking services (All villages / Wards).
(viii) Scaling up transactions at BC locations.
(ix) Help in reducing Zero balance account and Promoting other products / services under BC network.
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Delivery of demand notices by BCAs in NPA accounts
To intensify efforts for NPA recovery at micro level, involvement of the BCAs will definitely have positive
impact on recovery in allotted villages. Accordingly BCAs may be involved in follow up of recovery and
utilize their services for delivery of demand notices in the allotted villages.
For delivery of recovery notices in NPA accounts in service area villages, the BC will be paid a
remuneration, being the delivery charges @ Rs 10/- plus applicable service tax per notice/envelop.
Instances may be possible that few borrowers have left the village. For such cases, if BCA provides
authenticated changed address/ mobile no., a sum of Rs.5/- plus applicable service tax per case will be
paid. The BCA will be assigned this job of delivery of demand notices in his Sub Service Area (SSA) i.e.
allocated villages only.
REMUNERATION TO BUSINESS CORRESPONDENTS (BCS) FOR SEEDING OF AADHAAR NUMBER AND
ACTIVATION OF RUPAY CARDS.
Bank has extended the “Aadhaar Seeding facility at BC Locations” in addition to branches and Alternate Delivery Channels
(ADC).
Aadhaar Seeding at BC location Remuneration of Rs.5/- to Business

Correspondents for every successful
seedingofAadhaar number in the bank account
(One timeperaccount), opened at his/her location.
Aadhaar seeding in respect of accounts which
have not been opened at his/her location,
remuneration amount will be Rs.2/-(Onetime
peraccount).
RuPay CardsActivation by BCA through Remuneration of Rs. 5/- would be paid to

Micro-ATMs BCAs for every successful activation (one
time per account) to compensate for their
efforts for activation of RuPay Cards by way
of initiating financial/nonfinancial
transactions in the Bank accounts opened
at his/her location and the base branch
only.
INTRODUCTION OF MULTI BENEFIT TERM DEPOSIT (MBFD) SCHEME AT

BUSINESS CORRESPONDENT (BC) LOCATIONS UNDER KIOSK BANKING
SOLUTION (KBS).
Multi Benefit Terms Deposit Scheme (MBFD) is a variant of Fixed Deposit which is
This scheme has been customized at Kiosk Banking Solution (KBS) also to be used at BC locations with limited
functionalities. The functionalities available under BC network are summarized below:
(i) The Fixed Deposit (MBFD) shall be opened for customer/s having operative Saving Fund or Current
account/s in our Bank. In case, the prospective customer does not have an operative account, it would be
opened before opening of Fixed Deposit (MBFD).
(ii) BC Agent would obtain account opening form (PNB 1177 for existing customer) and fill up / enter required
details at BC location, which would be pushed to the CBS for opening of account in the CBS system.
(iii) After submission of required data under KBS at BC location, BC Agents would issue Provisional Fixed
Deposit Receipt which would be system generated.
(iv) Final FDR receipt would be issued by the Base Branch after completion of required formalities and deposit of
the amount in the MBFD account and the same shall be handed over to customer against acknowledgement
from the customer.
(v) Other than aforesaid activities like Payment / closure / premature payment, change in nominee, raising
OD/Demand loan etc would be carried out at the base branch / other branches as per the guidelines applicable.
PNB Turant (An Immediate Payment System (IMPS):
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IMPS allows interoperable “Fund Transfer facility” on real time to customers, the Immediate Payment Service
(IMPS) with Person to Account (P2A) mode and already Implemented through mobile phone, ATM and internet
banking facility (IBS).
IMPS facility is being launched through BC network both for account holder as well as walk-in customers.
Basic Requirement:
Sender:
 For Walk-in Customer : (i) Name , (ii) Father Name, (iii) City, (iv) State & (v) Mobile
Number
 Bank Customer : Account Number
Beneficiary: (i) Account Number & (ii) IFSC Code

Benefits: IMPS will serve following purposes.
 Fund may be remitted across the bank on real time basis
 Customer will have option to undertake cash 2 account or from A/c 2 A/c.
 It will improve customer base of the base branch/ BC location.
 Productivity of BC location will improve.
 Good source of fee based income
2.4 PNB Sanchay ( A Micro Deposit Scheme) :
Micro Deposit Scheme has been customized with focus to inculcate saving habit among low income groups like
small business man, vendors, rickshaw puller etc.
Basic Feature
Operational from Business Correspondent Network
Deposit Amount:
 Initial deposit of Rs.50/- and thereafter in multiple of Rs.50/-
 Maximum of Rs.5000/- at a time and maximum of Rs.60000/- p.a.
Period of deposit: 12 months to 36 months.
Penalty clause: No penalty on missed installments.
Payment of Interest:
 At CARD rate applicable to term deposits below Rs 1 Crore
 Interest shall be credited on half yearly basis of daily product
Nomination Facilities: Nomination facility is allowed.

Premature Closure: Facility available subject to certain conditions
Loan against Micro Deposit: Demand Loan will be available as per eligibility
3. Social Security Scheme of Government of India:
In the Budget 2015-16, following three ‘Special Security Schemes in Insurance and Pension Sector’ were
announced. Briefs on these Schemes appended below:
a) Pradhan Mantri Suraksha Bima Yojana [PMSBY]– for accidental death insurance.
b) Pradhan Mantri Jeevan Jyoti Bima Yojana [PMJJBY]– for life insurance cover
c) Atal Pension Yojana [APY]
Salient features of the schemes are as under:
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3.1 Atal Pension Yojana (APY): Atal Pension Yojana (APY) is a co-contributory fixed pension Yojana to
address the longevity risks among the workers in unorganized sector and to encourage the workers in
unorganized sector to voluntarily save for their retirement. The APY will be focused on all citizens in the
unorganized sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory
and Development Authority (PFRDA).
(i) Eligibility: All citizens in the unorganized sector who are not members of any statutory social security
scheme.
(ii) Age: 18 years to 40 years.
(iii) Benefit : The Central Government would co-contribute 50% of the subscriber’s contribution or
Rs.1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years,
i.e., from 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and who are not income
tax payers.
(iv) Pension : The subscribers would receive the fixed pension of Rs.1000 per month, Rs.2000 per
month, Rs.3000 per month, Rs.4000 per month, Rs.5000 per month, at the age of 60 years,
depending on their contributions, which itself would vary on the age of joining the APY.
(v) Launching: The APY would be launched from 1st June, 2015.
(vi) The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless
they opt out.
3.2 Pradhan Mantri Suraksha Bima Yojna (PMSBY):
(i) Renewable annual personal accident covers from 1st June to 31st May.
(ii) Eligibility: All Aadhaar linked bank account holders in the age group 18 to 70 years.
(iii) Cover : a) Accidental death or full disability : Rs.2 lakh
b) Partial disability: Rs 1 lakh Premium: Rs.12 per year + service tax (Rs.10 for insurance
co and Rs.1 each for Bank & BC / micro insurance agent).
(iv) Premium payment: Subscriber to fill subscription form and auto debit option by 31st May and amount
to be remitted by Bank to insurer in same month. Subscription period extendable in initial year till 31 st
August. Cover to commence from 1st of the month after premium is paid.
(v) Long term subscription / auto debit option, subject to continuation of scheme / terms as may be
revised, possible.
(vi) In case of joint accounts each account holder may take the cover by separately paying the premium.
(vii) Notwithstanding multiple accounts, a person can take only one cover through any one Aadhaar
linked bank account.
3.3 Pradhan Mantri Jivan Jyoti Bima Yojna (PMJJBY)
(i) Renewable annual life cover scheme from 1st June to 31st May
(ii) Eligibility: All Aadhaar linked bank account holders in the age group 18 to 50 years, with coverage
upto 55 years on payment of premium after attaining age 50.
(iii) Cover: Rs.2 lakh cover for death by any reason.
(iv) Premium: Rs.330 per year + service tax (Rs.289 for insurance company, Rs.11 for Bank & Rs.30
BC/micro insurance agent).
(v) Premium payment: Subscriber to fill subscription form and auto debit option by 31 st May and amount
to be remitted by Bank to insurer in same month. Subscription period extendable in initial year till 31 st
August. Cover to commence from 1st of the month after premium is paid.
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(vi) Long term subscription / auto debit option, subject to continuation of scheme / terms as may be
revised, possible.
(vii) In case of joint accounts each account holder may take the cover by separately paying the premium.
(viii) Notwithstanding multiple accounts, a person can take only one cover through any one Aadhaar
linked bank account.
(ix) IBA, PFRDA & GIPSA (General Insurance Public Sector Association) are in process of framing
guidelines for implementation of Atal Pension Yojna (APY) and Pradhan Mantri Suraksha Bima
Yojna (PMSBY).
Foreign Exchange
Foreign Exchange It includes all deposits, Credit and Balances payable in Foreign currency. It also
includes Drafts/TCs, LCs and Bills of Exchange payable in Foreign currency. In
means all claims payable abroad.
Forex Market It comprises of individuals and entities including banks across the globe without
geographical boundaries. Forex market is dynamic and it operates round the clock.
Exchange rate of major currencies change after every 4 seconds. It opens from
Monday to Friday except in Middle east countries where it is closed on Friday and
opens on Sunday and Monday.
Exchange Rate When settlement of funds and exchange of
mechanism currency takes place_________
TOD rate or Cash Rate Same day (it is also called ready rate)
TOM Rate Next working day
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Spot Rate 2nd working day (48 hours)
Forward Rate After few days/months
If Next day or 2nd day is holiday in either of the two countries, the
settlement will take place on next day. For example Spot deal is stuck on
23rd Dec. 25th is Christmas Day and 26th is Sunday. Under such
circumstances, value date will be 27th i.e. Monday.
 There are two types of rates- Fixed and Floating. Floating rates are
determined by market forces of Demand and Supply. India switched to
Floating exchange rates regime in 1993.
CARD RATES are rates calculated at beginning of day with full margin as advised
by FCTM, Mumbai and are indicative rates up to USD 5000.
Buy and Sell Maxim Buy Low Sell High
Buy rate is also called Bid Rate and Sell Rate is called Offer Rate.
Forward Rates It is required when currency is exchanged after few months/days.
Buy Transactions :
Spot Rate (+ ) premium OR ( - ) Discount
( Lower premium is added OR Higher discount is deducted )
Sale Transactions:
Spot Rate (+ )Higher premium OR (-) Lower discount
(So that currency may become cheaper while buying and dearer while selling)
In India, Forward Contracts are available for Maximum period of 12 Months.
Examples of Forward Euro 1 = USD$1.3180/3190
rates Forward differentials:
1M = 15/18, 2M= 30/37, 3M=41/49
Calculate 2M Bid rate and 3M Offer rate
2M Bid rate = 1.3180+.0030 = 1.3210
3M Offer rate = 1.3190+.0049=1.3239
Exchange Margin Exchange margin is deducted while buying and added while selling.
Direct, Indirect and Direct Rates

Cross Rates Foreign Currency is fixed ---say 1USD = INR 55.70
Indirect Rates
Local currency remains fixed---say Rs. 100 = 1.93 USD
At present, following 4 currencies are quoted in Indirect mode:
EURO, GBP, AUD and NZ$
Cross Rates
Cross rate is price of currency pair which is not directly quoted. It is arrived at from
price of two other currency equations.
1. Suppose bank has to Quote GBP against INR, but in India, GBP is not
quoted directly. In India,
1USD =48.10 and GBP/USD is quoted as 1GBP= USD1.6000.
Therefore 1 GBP = 48.10X1.6 = 76.96
2. An Import bill of GBP 100000 has to be retired. Rates are:
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1 GBP=1.5975/85 USD
1USD = 48.14/15 INR
TT margin =.20%
Here Cross selling rate of both currencies will apply. (Only Domestic
market)
1GBP=1.5985*48.15 = 76.9675 + Margin@.20% = 77.1214 (say 77.1225)
All currencies are quoted as per unit of currency whereas the following currencies
are quoted as 100 units of Foreign currency:
1. Japanese Yen
2. Indonesian Rupiahs
3. Kenyan Schilling.
4. Belgian Francs
5. Spanish Peseta
Intervening Currencies in India
1. US Dollar
2. British Pond
Cross Rates where two Suppose, In India, 1USD=42.8450/545 and in UK, 1USD=.7587/.7590 EURO. The
markets are involved customer intends to remit Euro and he desires to know 1 Euro = ? INR. We will buy
and one of them is Euro against sale of USD. (One is domestic market and other is International
international market market)
Calculation
Sell rate of 1USD = .42.8545 and Buy Rate of Euro is 1USD=.7587
.7587Euro = 1USD = INR 42.8545
1 EURO = 42.8545/.7587 = 56.48
In India, there is Full Convertibility of Current Account transactions.
Example Where one currency is bought and another currency is sold
A wants to remit JPY 100.00 million at TT spot with margin @.15%. Given
USD/INR at 48.2500/2600 and in Japan USD/JPY = 90.50/60
Solution:
We will buy Japanese Yen and sell USD and the rate to be applied is:
48.2600/90.50 = .533260 per JPY
Rate per 100 JPY = 53.3260 + Margin @.15%(.0799) = 53.4059 (say 53.4050)
TT Rates and Bill Rates
Following 4 types of buying and selling rates are important:
1. TT Buying rate
2. Bill Buying rate
3. TT Selling rate
4. Bill Selling rate
In Interbank market, exchange rate is quoted up to 4 decimals in multiples of 0.0025. e.g. 1USD=53.5625/5650
For customers the exchange rate is quoted in two decimal places i.e. Rupees and paisa. e.g. 1 USD =Rs. 55.54.
Amount being paid or received will be rounded off to nearest Rupee.

TT Buying Rate It is required to calculate when our Nostro account is already credited or being
credited without delay e.g. Receipt of DD, MT, TT or collection of Foreign bills.
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This rate is used for cancellation of Forward Sales Contract.
Calculation Spot Rate – Exchange Margin
Bill Buying Rate Bill Buying rate is applied when bank gives INR to the customer before receipt of
Foreign Exchange in the Nostro account i.e. Nostro account is credited after the
purchase transaction. In such cases.
Examples are:
 Export Bills Purchased/Discounted/Negotiated.
 Cheques/DDs purchased by the bank.
Calculation
Spot Rate + Forward Premium (or deduct forward discount) – Exchange margin.
TT Selling Rate Any sale transaction where no delay is involved is quoted at TT selling rate. It is
desired in issue of TT, MT or Draft. It is also desired in crystallization of Export
bills and Cancellation of Forward purchase contract.
Calculation
Spot Rate + Exchange Margin
Bill Selling Rate It is applied where handling of documents is involved e.g. Payment against Import
transactions:
Calculation
Spot Rate + Exchange Margin for TT selling + Exchange margin for Bill Selling
Examples
Q. 1
Bank received MT of USD 5000 on 15th Sep. The Nostro account was already credited. What amount will be
paid to the customer: Spot Rate 34.25/30. Oct Forward Differential is 22/24. Exchange margin is .80%
Solution
TT buying Rate will be applied
34.25 - .274 = 33.976 Ans.
Q. 2
On 15th July, Customer presented a sight bill for USD 100000 for Purchase under LC. How much amount will be
credited to the account of the Exporter. Transit period is 20 days and Exchange margin is 0.15%. The spot rate
is 34.75/85. Forward differentials:
Aug: .60/.57 Sep:1.00/.97 Oct: 1.40/1.37
Solution
Bill Buying rate of August will be applied.
Spot Rate----34.75 Less discount .60 = 34.15
Less Exchange Margin O.15% i.e. .0512 =34.0988 Ans.
( Transit period is rounded to next month since currency will be cheaper as it is buy transaction)
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Q. 3
Issue of DD on New York for USD 25000. The spot Rate is IUSD = 34.3575/3825 IM forward rate is
34.7825/8250
Exchange margin: 0.15%
Solution:
TT Selling Rate will Apply
Spot Rate = 34.3825 Add Exchange margin (.15%) i.e. 0.0516
TT Selling Rate = Spot Rate + Exchange Margin = 34.4341 Ans.
Q. 4
On 12th Feb, received Import Bill of USD-10000. The bill has to retired to debit the account of the customer.
Inter-bank spot rate =34.6500/7200. The spot rate for March is 5000/4500. The exchange margin for TT selling
is .15% and Exchange margin for Bill selling is .20%. Quote rate to be applied.
Solution
Bill Selling Rate will be applied.
Spot Rate + Exchange margin for TT Selling + Exchange margin for Bill selling = 34.7200+.0520+.0695 =
34.8415 Ans.
RATES TO BE APPLIED IN FOREIGN EXCHANGE TRANSACTIONS
Nature of transaction Rate to be applied
Encashing Foreign currency Currency Buying rate
Encashing Traveler Cheques TC Buying rate
Issue of Draft in Foreign currency TT Selling rate
Payment of draft where Nostro account stands TT Buying rate
credited already
Purchase of Export Bill Bill Buying rate
Purchase of Sight Bill i.e. DP under FOBP Bill Buying
Discounting of Usance Bill i.e. DA under FUBD Spot rate - Exchange Margin + Forward Premium
Payment of Imports Bill Selling
Repatriation of NRE deposits TT selling
Repatriation of FCNR deposits No rate
Crystallization of Overdue Export Bills on 30th day TT Selling rate or Original Bill buying rate
after Notional due date Whichever is higher
Crystallization of LC liability on 10th day Bill Selling rate or Contracted rate Whichever is
higher
Retirement of Import Bill Bill Selling rate
Crystallization of Import bill on 10 th day If there is Bill Selling rate or Contracted rate Whichever is
default by the buyer higher
Cancellation of Forward Purchase Contract on 7th TT selling rate
working day after due date
Cancellation of Forward Sales Contract on 7th TT buying rate
Working Day after due date
Forward Contract – Due date and Transit period
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(Bill Buying Rates and Bill Selling Rates)
If due date after adding transit period and forward period falls in a particular month
Buy Transactions
Quote rates applicable to lower month (if currency is at premium) and same month (if currency is at discount)
due to the reason that currency becomes cheaper and Buy low and Sell High
Sale Transactions
Quote rates applicable to Same month (if currency is at premium) and lower month (if currency is at discount)
due to the reason that currency becomes dearer and Buy low and Sell High
Forward contracts can be booked by Resident Individuals up to USD1lac.
Buy Transactions- Spot Rate on 16.07.2012 is 1 USD = 34.6850/7275
Currency at Premium Spot August = 4000/4200, Spot Sep = 7500/7700, Spot Oct = 1.05/1.07
Spot Nov =1.40/1.42
Transit Period is Transit Period = 25 days , Exchange Margin = 0.15%
rounded off to lower Calculate Forward Buying Rate of 3 M Usance bill.
month in which due Due date of realization of Bill = 16.7.2012 + 3M + 25 days = 9.11.2012
date falls By Rounding Transit period to lower month, Oct Rate will be as under:
34.6850+1.05 - .0536 (exchange margin) = 35.6814
Buy Transactions- On 22.7.2013,
Currency at Discount Spot Rate is 35.6000/6500 Forward 1M=3500/3000 2M=5500/5000
3M=8500/8000
Transit Period is Transit Period ----20 days Exchange Margin = 0.15%.
rounded off to same Find Bill Buying Rate & 2 M Forward Buying Rate
month in which due Solution
date falls Bill Buying Rate (Ready) : Bill Date +20 days = 11.8.2013
Spot Rate = 35.6000 Less Forward Discount 1M (0.3500) Less Exchange Margin
0.15% (0.529)
i.e. 35.6000-.3500-.0529(0.15% of 35.2500) = 35.1971
2 M Forward Buying Rate: = Transaction date +2M +20 days =11.10.13
3 Month Forward Buying Rate will be applied.
Spot Rate = 35.6000 Less Forward Discount of 3M (.8500) Less Exchange Margin
(.0521)
i.e. 35.6000-.8500-.0521(0.15% of 34.7500) = 34.6979 Ans.
Cancellation of Deal Cancellation of Buy contract is done at TT selling rate and cancellation of Sale
contract is done at TT buying rate.
Example
A bank purchased export bill of USD 50000 at Rs. 42.66, which was dishonored for non-payment. How much
amount will be recovered from exporter, if Spot rate is 42.2000/3000. Exchange margin is 0.15%.
Solution
TT selling rate will be applied to recover the amount
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TT Selling rate= Spot rate +Exchange margin
=42.3000+0.06345 = 42.36345= 42.3625 (Rounding off to nearest .0025)
Amount to be debited to customers’ account =50000*42.3625 =2118125 --------------Ans.
Value Date It is date on which payment of funds or entry to an account becomes effective.
Under TT transaction, value date is same. In other spot and forward contracts, Value
Date is the date when Nostro Account is actually credited.
Arbitrage It consists of purchase of one currency in one center accompanied by immediate
resale against same currency at other center.
Per Cent and Per Mille 1% is on part of 100 whereas per mille is 1 part of thousand
Authorized Dealers Authorized dealers are called Authorized Persons. The categories are as under:
AP category 1 -----AD banks, FIs dealing in Forex transactions.
AP category 2-----Money changers authorized to sell and purchase Foreign
currency notes, TCs and Handle remittances.
AP category 3----Only purchase of Foreign currency and Travelers Cheques. These
were earlier called “Restricted Money Changers.”
Forward Point Spot Rate
Calculation Euro 1 = US$1.3180
3 Month Forward Rate
Euro 1 = US$1.3330
Forward Point = 1.3330 – 1.3180 = 150 points
Arbitrage & Forward It consists of purchase of one currency in one center accompanied by immediate
Point Calculation resale against same currency at other center.
Example:
Let us borrow from one center and lend at other center at higher rate. In USA, rate
of interest is 6% whereas in Germany, rate of interest is 3% for EURO. We will
borrow from Germany and lend in USA where
1EURO =1.5 USD
Forward Point Calculation for 3 Months
Spot Rate x Interest rate difference x Forward Period
100 x Nos. of days in a year
= 1.5 x 3 x 90
100*360
=0.01125
3 month swap rate = 1.5 + 0.01125 = 1.5112
Calculation of Interest Differential
Forward Points x Nos. of Days x 100
Forward Period x Spot Rate
= 0.01125 x 360 x 100 =3% 1.5 x 90
Forex Dealing Room It is a service branch which deals Buying and Selling Operations of the bank. It
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operations manages Foreign currency Assets and Liabilities and also manages Nostro accounts.
A dealer has to maintain two positions:
1. Funds position
2. Currency Position
Currency position can be Overbought or Oversold. It is called Open position.
Hedging is done to square off the open position.
Mid Office deals with Risk Management.
Back Office takes care of settlement and Reconciliation.
FOREX RISKS AND DERIVATIVES
Foreign Exchange Risks  Exchange Risk (Transaction Exposure, Translation Exposure and
Operational Exposure)
 Settlement Risk
 Liquidity Risk
 Country Risk or Sovereign Risk
 Interest Rate Risk or Gap risk
 Operational Risk
 Legal Risk
 Buyer Risk, Seller Risk and Shipping Risk.
ICG (Internal control Overnight Limit Maximum exposure a bank can keep overnight
guidelines of RBI Day Light Limit : Maximum exposure a bank can expose at any time during a day.
Gap Limit: Maximum inter-period say a month exposure which a bank can keep.
Counter party limit
Country limit
Dealer limit
Stop Loss limit
Settlement limit
Deal Size limit
 Net Overnight Open Position (NOOPL) – for calculation of capital charge
on foreign exchange risk may be fixed by Board. Such limit should not
exceed 25% of total capital.
 Aggregate Gap limit (AGL) should not exceed 6% of total capital.
CCIL Clearing Corporation of India Limited is the institution created for clearing and
settlement of Forex deals amongst Primary dealers. It mitigates settlement Risks..
Both counter parties should be members of CCIL. It handles USD/INR deal
settlements with netted amounts.
Derivatives Instruments which reduce risk to an accepted level by future coverings are called
derivatives. Popular derivatives are:
1. Forward Contracts
2. Futures
3. Options
4. Swaps
Forward Contract It is a derivative product in which seller agrees to deliver goods on some future date
at fix price. The Quantity and delivery date is fixed as per requirements suited
to the party. These are OTC products.
Forward differentials are calculated on the basis of difference in interest rates of
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countries of currency.
Currency with lower interest would be at a premium and currency with higher
interest will be at a discount in future.
Futures It is a derivative product that is based on agreement to buy or sell an asset at certain
price in Future.
Futures are standardized contracts with regard to quantity and Delivery date
only. The delivery is not must. Margin is kept each day and it is adjusted. These
Futures are traded in Exchanges,
Difference between Futures and Forward Contracts
Forward Contract Futures
It is OTC (Over the Counter) Product It is Exchange traded product
It can be for any odd amount It is always for Standard amount
It can be for any Odd period It is always for Standard period
Delivery is essential Delivery is not must
Margin is not essential It is based on Margin requirement and Marked to
market
Options Option is Right to buy or sell an agreed quantity of currency or commodity without
obligation to do so. The buyer will exercise the option if market price is in favor or
otherwise option may be allowed to lapse.
Call Option
Right to buy at fixed price on or before fixed date.
Put Option
Right to sell at fixed price on or before fixed date.
 Final day on which it expires is called maturity.
CALL OPTION;
 If Strike price is below the spot price, the option is In the money.
 If Strike price is equal to the spot price, the option is At the money.
 If Strike price is above the spot price, the option is Out of money.
PUT OPTION
 If Strike price is more the spot price, the option is In the money.
 If Strike price is equal to the spot price, the option is At the money.
 If Strike price is less than spot price, the option is Out of the money.
American Option
Option can be exercised on any day before expiry.
European Option
Option can be exercised on maturity only.
Swap Transactions - Foreign Exchange transactions where one currency is sold and purchased for
another simultaneously.
Swap Deal may involve:
1. Simultaneous purchase of spot and sale of forward or vice versa.
2. Simultaneous sale and purchase, both forward but for different maturities. It
is called “Forward to Forward Swap”.
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Conditions of Swap Deal:
 There should be simultaneous buying and selling of same foreign currency
of same value for different maturities.
 The deal should be concluded with the understanding between the banks
that it is Swap Deal.
 Buying and Selling is done at same rate. Only Forward margin enters into
the deal as a Swap difference.
Example:
PNB approaches UCO bank to quote its Swap rate for spot to 3months. UCO bank
has to sell spot and buy forward. Swap deal is at forward differential of Rs.
1.40/1.35. UCO bank will sell spot and buy forward at a discount of Rs.1.40
(Higher discount at purchase). Swap Difference will be at Discount of Rs.1.40.
CORRESPONDENT BANKING
Correspondent Banking It is a relationship between two banks which have mutual accounts with each other:
Nostro accounts “ Our account with you “
E.g. SBI Mumbai maintaining USD account with City Bank, New York
Vostro accounts “Your account with us”
E.g.. City Bank New York maintains Rupee account with SBI Ludhiana.
Loro account “His account with them”
E.g. City bank referring to Rupee account of Bank of America with SBI
Mumbai.
Mirror account ---- It is replica of Nostro account to reconcile.
What is Swift?
Society for Worldwide Interbank Financial Telecommunications. There are 8300
members of the society. Financial messages are sent through Swift. The messages
are automatically authenticated through BKE (Bilateral Key Exchange). It is
operational 24 hours and 365 days. Swift has now introduced new system of
authentication system wherein banks are required to have authentication key
exchanged between them through a set format by use of RMA (Relationship
Management Application). This is called BIC or Bank Identifier Code).
CHIPS – New York
Clearing House Inter Bank Payment System.
CHIPS is major payment system in USA with 48 members. The participants use the
system throughout the day for sending and receiving electronic payment
instructions. These are netted at end of the day and net position is debited or
credited to Nostro account of Federal Reserve.
It is used for Foreign Exchange Inter bank settlements and Euro Dollar Settlements.
FEDWIRE -USA
It is US payment system being operated by Federal Reserve Bank. It handles
majority of domestic payments. All US banks maintain account with Federal
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Reserve Bank and are allotted ABA numbers to identify senders and receivers of
payments.
CHAPS – London
Clearing House Automated Payment System
It is UK based Settlement System. It handles receipts and Payments in UK.
It has 16 member banks and 400 Indirect members.
TARGET
The full form of TARGET is Trans-European Automated Real-Time Gross
Settlement Express Transfer System. It is Euro Payment System which comprises of
15 national RTGS systems working in EUROPE. It process high value payments
from 30000 participating institutions across Europe.
RTGS-plus
RTGS plus has over 60 participants. It is a German Hybrid clearing system and
operating as a European oriented RTGS and Payment system.
Who is Resident A person who resides in India for more than 182 days during preceding financial
Indian? Who is Non- year is Resident Indian. A person who is not resident is Non- Resident.
Resident
Who is NRI? A person who is citizen of India but resides outside India owing to:
 Employment, Business, vocation-------indicating indefinite period of stay
outside.
 Work abroad on assignment with Foreign Govt., UNO, and IMF etc.
 Deputation officially.
 Study abroad.
PIO - Persons of Indian PIO is a person who is citizen of any other country, but he at any time:
Origin  Held Indian Passport
 He or his grand-parents or grand grand parents were Indian citizens by
virtue of constitution of India or under Indian Citizenship Act.
 The person is spouse of Indian Citizen.
OCB – Overseas OCBs are firms, Cos, Society owned directly or indirectly to the extent of at-least
Corporate Bodies 60% by NRIs.
It also includes overseas trusts where at-least 60% irrevocable beneficial interest is
held by non-residents directly or indirectly.
Q1. Who is an NRI?
Answer: A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India.
Q2. Who is a PIO?
Answer: A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other than
Bangladesh or Pakistan or such other country as may be specified by the Central Government, satisfying the following
conditions:
a. Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
b. Who belonged to a territory that became part of India after the 15th day of August, 1947; or
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c. Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred to in clause (a) or
(b); or
d. Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person referred to in clause (a)
or (b) or (c)
A PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955.
Such an OCI Card holder should also be a person resident outside India.
Q3. What are the major accounts that can be opened in India by a non-resident?
Non-Resident (External) Rupee Foreign Currency (Non-

Non-Resident Ordinary Rupee
Particulars Account Scheme Resident) Account (Banks)
Account Scheme [NRO Account]
[NRE Account] Scheme [FCNR (B) Account]
(1) (2) (3) (4)
Who can open an NRIs and PIOs Any person resident outside India for
account putting through bonafide transactions in
Individual/entities of Pakistan and Bangladesh shall requires prior rupees.
approval of the Reserve Bank of India
Individuals/ entities of Pakistan
nationality/ origin and entities of
Bangladesh origin require the prior
approval of the Reserve Bank of India.
A Citizen of Bangladesh/Pakistan
belonging to minority communities in
those countries i.e. Hindus, Sikhs,
Buddhists, Jains, Parsis and Christians
residing in India and who has been
granted LTV or whose application for
LTV is under consideration, can open
only one NRO account with an AD bank
subject to the conditions mentioned
in as updated from time to time.
Post Offices in India may maintain

savings bank accounts in the names of
persons resident outside India and allow
operations on these accounts subject to
the same terms and conditions as are
applicable to NRO accounts maintained
with an authorised dealer/ authorised
bank.
Joint account May be held jointly in the names of two or more NRIs/ PIOs. May be held jointly in the names of two
or more NRIs/ PIOs.
NRIs/ PIOs can hold jointly with a resident relative on ‘former or survivor’
basis (relative as defined in Companies Act, 2013). The resident relative May be held jointly with residents on
can operate the account as a Power of Attorney holder during the life ‘former or survivor’ basis.
time of the NRI/ PIO account holder.
Currency Indian Rupees Any permitted currency i.e. a Indian Rupees
foreign currency which is freely
convertible
Type of Account Savings, Current, Recurring, Fixed Term Deposit only Savings, Current, Recurring, Fixed
Deposit Deposit
Period for fixed From one to three years, However, For terms not less than 1 year and As applicable to resident accounts.
deposits banks are allowed to accept NRE not more than 5 years
deposits above three years from
their Asset-Liability point of view
Permissible Credits permitted to this account are inward remittance from outside Inward remittances from outside India,
Credits India, interest accruing on the account, interest on investment, transfer legitimate dues in India and transfers
from other NRE/ FCNR(B) accounts, maturity proceeds of investments (if from other NRO accounts are
such investments were made from this account or through inward permissible credits to NRO account.
remittance).
Rupee gift/ loan made by a resident to a
Current income like rent, dividend, pension, interest etc. will be construed NRI/ PIO relative within the limits
as a permissible credit to the NRE account. prescribed under the Liberalised
Remittance Scheme may be credited to
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Care: Only those credits which have not lost repatriable character the latter’s NRO account.
Permissible Permissible debits are local disbursements, remittance outside India, The account can be debited for the
Debits transfer to other NRE/ FCNR(B) accounts and investments in India. purpose of local payments, transfers to
other NRO accounts or remittance of
current income abroad.
Apart from these, balances in the NRO

account cannot be repatriated abroad
except by NRIs and PIOs up to USD 1
million, subject to conditions specified in
Foreign Exchange Management
(Remittance of Assets) Regulations,
2016.
Funds can be transferred to NRE

account within this USD 1 Million facility.
Repatriablity Repatriable Not repatriable except for all current
income.
Balances in an NRO account of NRIs/

PIOs are remittable up to USD 1 (one)
million per financial year (April-March)
along with their other eligible assets.
Taxabilty Income earned in the accounts is exempt from income tax and balances Taxable
exempt from wealth tax
Loans in India AD can sanction loans in India to the account holder/ third parties without Loans against the deposits can be
any limit, subject to usual margin requirements. These loans cannot be granted in India to the account holder or
repatriated outside India and can be used in India only for the purposes third party subject to usual norms and
specified in the regulations. margin requirement. The loan amount
cannot be used for relending, carrying
In case of loans sanctioned to a third party, there should be no direct or on agricultural/ plantation activities or
indirect foreign exchange consideration for the non-resident depositor investment in real estate.
agreeing to pledge his deposits to enable the resident individual/ firm/
company to obtain such facilities. The term “loan” shall include all types of
fund based/ non-fund based facilities.
In case of the loan sanctioned to the account holder, it can be repaid
either by adjusting the deposits or through inward remittances from
outside India through banking channels or out of balances held in the
NRO account of the account holder.
The facility for premature withdrawal of deposits will not be available

where loans against such deposits are availed of.
The term “loan” shall include all types of fund based/ non-fund based
facilities.
Loans outside Authorised Dealers may allow their branches/ correspondents outside Not permitted
India India to grant loans to or in favour of non-resident depositor or to third
parties at the request of depositor for bona fide purpose against the
security of funds held in the NRE/ FCNR (B) accounts in India, subject to
usual margin requirements.
The term “loan” shall include all types of fund based/ non-fund based
facilities
Rate of Interest As per guidelines issued by the Department of Regulation
Operations by Operations in the account in terms of Power of Attorney is restricted toOperations in the account in terms of
Power of withdrawals for permissible local payments or remittance to the account Power of Attorney is restricted to
Attorney in holder himself through normal banking channels. withdrawals for permissible local
favour of a payments in rupees, remittance of
current income to the account holder
resident outside India or remittance to the
account holder himself through normal
banking channels. While making
remittances, the limits and conditions of
repatriability will apply.
Change in NRE accounts should be On change in residential status, NRO accounts may be designated as
residential status designated as resident accounts or FCNR (B) deposits may be allowed resident accounts on the return of the
the funds held in these accounts to continue till maturity at the account holder to India for any purpose
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from Non- may be transferred to the RFC contracted rate of interest, if so indicating his intention to stay in India
resident to accounts, at the option of the desired by the account holder. for an uncertain period.
resident account holder, immediately upon
the return of the account holder to Authorised dealers should convert Likewise, when a resident Indian
India for taking up employment or the FCNR(B) deposits on maturity becomes a person resident outside
on change in the residential status. into resident rupee deposit India, his existing resident account
accounts or RFC account (if the should be designated as NRO account.
depositor is eligible to open RFC
account), at the option of the
account holder.
Q4. Can a Bangladeshi/ Pakistani national or an entity owned/ controlled from Bangladesh/ Pakistan have an
account in India?
Answer: Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh
ownership requires prior approval of the Reserve Bank.
However, individuals of Bangladesh nationality can open an NRO account subject to the individual(s) holding a valid visa
and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO)
concerned.
Further, citizens of Bangladesh/Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs,
Buddhists, Jains, Parsis and Christians residing in India and who have been granted Long Term Visa (LTV) or whose
application for LTV is under consideration, are permitted to open only one NRO account with an AD bank in India subject to
the conditions mentioned in Notification No. FEMA 5(R)/2016-RB dated April 01, 2016, as updated from time to time.
Q5. What are the accounts that a tourist visiting India can open?
Answer: An NRO (current/ savings) account can be opened by a foreign national of non-Indian origin visiting India, with
funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The
balance in the NRO account may be paid to the account holder at the time of his departure from India provided the account
has been maintained for a period not exceeding six months and the account has not been credited with any local funds,
other than interest accrued thereon.
Q6. What is an SNRR account? How is it different from a NRO account?
Answer: Any person resident outside India, having a business interest in India, can open a Special Non-Resident Rupee
Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees
which are in conformity with the provisions of the Act, rules and regulations made thereunder.
The differences between SNRR account and NRO account are:
Feature SNRR Account NRO Account

Who can open Any person resident outside India, having a Any person resident outside India for putting through bonafide
business interest in India for putting through transactions in rupees.
bona fide transactions in rupees.
Individuals/ entities of Pakistan nationality/ origin and entities of
Opening of SNRR accounts by Pakistan and Bangladesh origin require the prior approval of the Reserve Bank of
Bangladesh nationals and entities incorporated India.
in Pakistan and Bangladesh requires prior
approval of Reserve Bank. However, a citizen of Bangladesh/Pakistan belonging to minority
communities in those countries i.e. Hindus, Sikhs, Buddhists, Jains,
Parsis and Christians residing in India and who has been granted
LTV or whose application for LTV is under consideration, can open
one NRO account with an AD bank subject to the conditions
mentioned in Notification No. FEMA 5(R)/2016-RB dated
April 01, 2016, as updated from time to time.
Type of Account Non-interest bearing Current, Savings, Recurring or Fixed Deposit;
Rate of interest – as per guidelines issued by Department of

Regulation.
Permissible Debits and credits specific/ incidental to the Credits:
Transactions business proposed to be done by the account
holder Inward remittances, legitimate dues in India, transfers from other
NRO accounts and any amount received in accordance with the
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Rules/Regulations/Directions under FEMA, 1999.
Debits:
Local payments, transfer to other NRO accounts, remittance of

current income, settlement of charges on International Credit
Cards.
Tenure Concurrent to the tenure of the contract / period No such restrictions on tenure.
of operation / the business of the account
holder and in no case should exceed seven
years, other than with approval of the Reserve
Bank.
Restriction of seven years is not applicable to

SNRR accounts opened for the purposes
stated at sub. paragraphs i to v of paragraph 1
of Schedule 4 of FEMA 5(R).
Repatriability Repatriable Not repatriable except for current income; and remittances by NRIs/
PIOs up to USD 1 million per financial year in accordance with the
provisions of FEMA 13(R).
Q 7. What are the deposits that foreign Diplomatic missions/ personnel and their family members in India can
hold?
Answer: The following accounts are permitted:
a. Foreign diplomatic missions and diplomatic personnel and their family members in India may open rupee deposits
with an AD Bank.
b. Diplomatic missions and diplomatic personnel can open special rupee accounts namely Diplomatic Bond Stores
Account to facilitate purchases of bonded stocks from firms and companies who have been granted special facilities
by customs authorities for import of stores into bond, subject to conditions. The funds in the account may be
repatriated outside India without the approval of Reserve Bank.
c. Diplomatic missions, diplomatic personnel and non-diplomatic staff, who are the nationals of the concerned foreign
countries and hold official passport of foreign embassies in India can open foreign currency accounts in India. The
account may be held in the form of current or term deposit account, and in the case of diplomatic personnel and
non-diplomatic staff, may also be held in the form of savings account Such accounts can be credited by way of
inward remittances and transfers (which are collected in India as visa fees) from the rupee account of the diplomatic
mission in India. Funds held in such account if converted in rupees shall not be converted back into foreign
currency. The funds in the account may be repatriated outside India without the approval of Reserve Bank.
Q8. Can persons resident in Nepal and Bhutan have accounts in India?
Answer: Persons resident in Nepal and Bhutan can open Indian rupee accounts with an authorised dealer in India.
Q9. Can multilateral organisation have deposits in India?
Answer: Any multilateral organization, of which India is a member nation, or its subsidiary/ affiliate bodies and officials in
India can open deposits with an authorised dealer in India.
Q10. Can an Indian company accept deposits from non-residents in compliance with section 160 of the Companies
Act, 2013?
Answer: Yes, such acceptance of deposit and refunds, if required, will be covered under current account transactions and
can be made freely without any restriction from FEMA perspective.
Q11. Can a Foreign Portfolio Investor or a Foreign Venture Capital Investor open a foreign currency account in
India?
Answer: Yes, a Foreign Portfolio Investor or a Foreign Venture Capital Investor, both registered with the Securities and
Exchange Board of India (SEBI) under the relevant SEBI regulations can open and maintain a non-interest bearing foreign
currency account for the purpose of making investment in accordance with Foreign Exchange Management (Non-Debt
Instrument) Rules, 2019.
Q12. Who can open an Escrow Account in India and for what purpose?
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Answer: Resident and Non-resident acquirers can open Escrow Account in INR with an AD bank in India as the Escrow
Agent, for acquisition/transfer of capital instruments/convertible notes in accordance with Foreign Exchange Management
(Non-Debt Instrument) Rules, 2019 as amended from time to time and subject to the terms and conditions specified under
Schedule 5 of Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time.
Liberalised Remittance Scheme

Q 1. What is the Liberalised Remittance Scheme (LRS) of USD 2,50,000 ?
Ans. Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to
USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination
of both. Further, resident individuals can avail of foreign exchange facility for the purposes mentioned in Para 1 of Schedule
III of FEM (CAT) Amendment Rules 2015, dated May 26, 2015, within the limit of USD 2,50,000 only.
The Scheme was introduced on February 4, 2004, with a limit of USD 25,000. The LRS limit has been revised in stages
consistent with prevailing macro and micro economic conditions.
In case of remitter being a minor, the LRS declaration form must be countersigned by the minor’s natural guardian. The
Scheme is not available to corporates, partnership firms, HUF, Trusts etc.
Q 2. What are the prohibited items under the Scheme?
Ans. The remittance facility under the Scheme is not available for the following:
i. Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes,
proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current
Account Transactions) Rules, 2000.
ii. Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty.
iii. Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market.
iv. Remittance for trading in foreign exchange abroad.
v. Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF)
as “non- cooperative countries and territories”, from time to time.
vi. Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing
acts of terrorism as advised separately by the Reserve Bank to the banks.
Q 3. What are the purposes under FEM (CAT) Amendment Rules, 2015, under which a resident individual can avail
of foreign exchange facility?
Ans. Individuals can avail of foreign exchange facility for the following purposes within the LRS limit of USD 2,50,000 on
financial year basis:
i. Private visits to any country (except Nepal and Bhutan)

ii. Gift or donation
iii. Going abroad for employment
iv. Emigration
v. Maintenance of close relatives abroad
vi. Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical
expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/
check-up
vii. Expenses in connection with medical treatment abroad
viii. Studies abroad
ix. Any other current account transaction which is not covered under the definition of current account in FEMA 1999.
The AD bank may undertake the remittance transaction without RBI’s permission for all residual current account
transactions which are not prohibited/ restricted transactions under Schedule I, II or III of FEM (CAT) Rules, 2000, as
amended or are defined in FEMA 1999. It is for the AD to satisfy themselves about the genuineness of the transaction, as
hitherto.
Q 4. Under LRS are resident individuals required to repatriate the accrued interest/dividend on
deposits/investments abroad, over and above the principal amount?
Ans. No, the investor can retain and reinvest the income earned from portfolio investments made under the Scheme.
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However, a resident individual who has made overseas direct investment in the equity shares and compulsorily convertible
preference shares of a Joint Venture or Wholly Owned Subsidiary outside India, within the LRS limit, then he/she shall have
to comply with the terms and conditions as prescribed under [Foreign Exchange Management (Transfer or Issue of any
Foreign Security) Regulations 2004 as amended from time to time] Notification No. 263/ RB-2013 dated August 5, 2013.
Q 5. Can remittances under the LRS facility be consolidated in respect of family members?
Ans. Remittances under the facility can be consolidated in respect of close family members subject to the individual family
members complying with the terms and conditions of the Scheme. However, clubbing is not permitted by other family
members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not
the co-owners/co-partners of the investment/property/overseas bank account. Further, a resident cannot gift to another
resident, in foreign currency, for the credit of the latter’s foreign currency account held abroad under LRS.
Q 6. Is the AD required to check permissibility of remittances based on nature of transaction or allow the same
based on remitters declaration?
Ans. AD will be guided by the nature of transaction as declared by the remitter in Form A2 and will thereafter certify that the
remittance is in conformity with the instructions issued by the Reserve Bank in this regard from time to time. However, the
ultimate responsibility is of the remitter to ensure compliance to the extant FEMA rules/regulations.
Q 7. Is it mandatory for resident individuals to have Permanent Account Number (PAN) for sending outward
remittances under the Scheme?
Ans. Yes It is mandatory for the resident individual to provide his/her Permanent Account Number (PAN) for all transactions
under LRS made through Authorized Persons.
Q 8. Are there any restrictions on the frequency of the remittance?
Ans. There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange
purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD
2,50,000.
Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be
eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought
back into the country.
Q 9. Resident individuals (but not permanently resident in India) can remit up to net salary after deduction of taxes.
However, if he has exhausted the limit of USD 2,50,000 as net salary remittance and desires to remit any other
income under LRS is it permissible as the limit will be over and above USD 2,50,000?
Ans. Resident individuals (but not permanently resident in India) who have remitted their entire earnings and salary and
wish to further remit ‘other income’ may approach RBI with documents through their AD bank for consideration.
Q 10. Para 5.4 of AP DIR Circular 106 dated June 01, 2015 states that the applicants should have maintained the
bank account with the bank for a minimum period of one year prior to the remittance for capital account
transactions. Whether this restriction applies to current account transactions?
Ans. No. The rationale is that remittance facility is up to the LRS limit of USD 250, 000 for current account transactions
under Schedule III of FEM (CAT) Amendment Rules, 2015, such as for private and business visits which can also be
provided by FFMCs. As FFMCs cannot maintain accounts of remitters the proviso (as mentioned in para 5.4 of the circular
ibid) has been confined to capital account transactions. However, FFMCs, are required to ensure that the "Know Your
Customer" guidelines and the Anti-Money Laundering Rules in force have been complied with while allowing the current
account transactions.
Q 11. Are there any restrictions towards remittances to Mauritius and Pakistan for permissible current account
transactions?
Ans. No, there are no restrictions towards remittances for current account transactions to Mauritius and Pakistan.
Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non- cooperative
countries and territories”, from time to time; and remittances directly or indirectly to those individuals and entities identified
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as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks are not
permissible.
Q 12. What are the requirements to be complied with by the remitter?
Ans. The individual will have to designate a branch of an AD through which all the capital account remittances under the
Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one
year prior to the remittance.
For remittances pertaining to permissible current account transactions, if the applicant seeking to make the remittance is a
new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance
of the account. Further, the AD should obtain bank statement for the previous year from the applicant to satisfy themselves
regarding the source of funds. If such a bank statement is not available, copies of the latest Income Tax Assessment Order
or Return filed by the applicant may be obtained. He has to furnish Form A-2 regarding the purpose of the remittance and
declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme.
Q 13. Can remittances be made only in US Dollars?
Ans. The remittances can be made in any freely convertible foreign currency.
Q 14. Are intermediaries expected to seek specific approval for making overseas investments available to clients?
Ans. Banks including those not having operational presence in India are required to obtain prior approval from Reserve
Bank for soliciting deposits for their foreign/overseas branches or for acting as agents for overseas mutual funds or any
other foreign financial services company.
Q 15. Are there any restrictions on the kind/quality of debt or equity instruments an individual can invest in?
Ans. No ratings or guidelines have been prescribed under LRS of USD 2,50,000 on the quality of the investment an
individual can make. However, the individual investor is expected to exercise due diligence while taking a decision
regarding the investments which he or she proposes to make.
Q 16. Whether credit facilities (fund or non-fund based) in Indian Rupees or foreign currency can be extended by
AD banks to resident individuals?
Ans. LRS does not envisage extension of fund and non-fund based facilities by the AD banks to their resident individual
customers to facilitate remittances for capital account transactions under LRS.
However, AD banks may extend fund and non-fund based facilities to resident individuals to facilitate current account
remittances under the Scheme.
Q 17. Can bankers open foreign currency accounts in India for residents under LRS?
Ans. No.
Q 18. Can an Offshore Banking Unit (OBU) in India be treated on par with a branch of the bank outside India for the
purpose of opening of foreign currency accounts by residents under the Scheme?
Ans. No.
Q 19. What are the documents required for withdrawal/remittance of foreign exchange for purposes mentioned in
para 1 of Schedule III to FEM (CAT) Amendment Rules, 2015?
Ans. Permanent Account Number (PAN) is mandatory for all transactions under LRS.
Q 20. Whether documents viz 15 CA, 15 CB have to be taken in all outward remittance cases including remittances for
maintenance etc.?
Ans. In terms of A. P. (DIR Series) circular No. 151 dated June 30, 2014, Reserve Bank of India will not issue any
instructions under the FEMA, regarding the procedure to be followed in respect of deduction of tax at source while allowing
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remittances to the non-residents. It shall be mandatory on the part of ADs to comply with the requirement of the tax laws, as
applicable.
Q 21. Will the expenses incurred by an LLP to sponsor the education expense of its partners who are pursuing
higher studies for the benefit of the LLP will be outside the LRS limit of such individuals (partners)?
Ans. LLP is a body corporate and has a legal entity separate from its partners. Therefore, if the LLP incurs/sponsors the
education expense of its partners who are pursuing higher studies for the benefit of the LLP, then the same shall be outside
the LRS limit of the individual partners and would instead be deemed as residual current account transaction undertaken by
the LLP without any limits.
Q 22. Clarification on remittance by sole proprietor under LRS.
Ans. In a sole proprietorship business, there is no legal distinction between the individual / owner and as such the owner of
the business can remit USD up to the permissible limit under LRS. If a sole proprietorship firm intends to remit the money
under LRS by debiting its current account then the eligibility of the proprietor in his individual capacity has to be reckoned.
Hence, if an individual in his own capacity remits USD 250,000 in a financial year under LRS, he cannot remit another USD
250,000 in the capacity of owner of the sole proprietorship business as there is no legal distinction.
Q 23. Whether prior approval is required to open, maintain and hold foreign currency account with a bank outside
India for making remittances under the LRS?
Ans: No.
Q 24. What are the facilities under Schedule III of FEM (CAT) Amendment Rules, 2015 available for persons other
than individual?
Ans. The following facilities are available to persons other than individuals:
a. Donations up-to one per cent of their foreign exchange earnings during the previous three financial years or USD
5,000,000, whichever is less, for- (a) creation of Chairs in reputed educational institutes, (b) contribution to funds
(not being an investment fund) promoted by educational institutes; and (c) contribution to a technical institution or
body or association in the field of activity of the donor Company.
b. Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India up to USD
25,000 or five percent of the inward remittance whichever is less.
c. Remittances up to USD 10,000,000 per project for any consultancy services in respect of infrastructure projects and
USD 1,000,000 per project, for other consultancy services procured from outside India.
d. Remittances up to five per cent of investment brought into India or USD 100,000 whichever is less, by an entity in
India by way of reimbursement of pre-incorporation expenses.
e. Remittances up to USD 250,000 per financial year for purposes stipulated under Para 1 of Schedule III to FEM
(CAT) Amendment Rules, 2015. However, all residual current account transactions undertaken by such entities are
otherwise permissible without any specified limit and are to be disposed off at the level of AD, as hitherto. It is for
the AD to satisfy themselves about the genuineness of the transaction.
Anything in excess of above limits requires prior approval of the Reserve Bank of India.
Q 25. Can a resident individual make a rupee loan to a NRI/PIO who is a close relative of resident individual, by of
crossed cheque/ electronic transfer?
Ans. A resident individual is permitted to make a rupee loan to a NRI/PIO who is a close relative of the resident individual
(‘relative’ as defined in Section 2(77) of the Companies Act, 2013) by way of crossed cheque/ electronic transfer subject to
the following conditions:
(i) The loan is free of interest and the minimum maturity of the loan is one year.
(ii) The loan amount should be within the overall LRS limit of USD 2,50,000, per financial year, available to the resident
individual. It would be the responsibility of the lender to ensure that the amount of loan is within the LRS limit of USD
2,50,000 during the financial year.
(iii) The loan shall be utilised for meeting the borrower's personal requirements or for his own business purposes in India.
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(iv) The loan shall not be utilised, either singly or in association with other person, for any of the activities in which
investment by persons resident outside India is prohibited, namely;
a. the business of chit fund, or

b. Nidhi Company, or
c. agricultural or plantation activities or in real estate business, or construction of farmhouses, or
d. trading in Transferable Development Rights (TDRs).
Explanation: For the purpose of item (c) above, real estate business shall not include development of townships,
construction of residential / commercial premises, roads or bridges.
(v) The loan amount should be credited to the NRO a/c of the NRI /PIO. Credit of such loan amount may be treated as an
eligible credit to NRO a/c.
(vi) The loan amount shall not be remitted outside India.
(vii) Repayment of loan shall be made by way of inward remittances through normal banking channels or by debit to the
Non-resident Ordinary (NRO)/ Non-resident External (NRE) / Foreign Currency Non-resident (FCNR) account of the
borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was
granted.
Q 26. Can a resident individual make a rupee gift to a NRI/PIO who is a close relative of resident individual, by of
crossed cheque/ electronic transfer?
Ans. A resident individual can make a rupee gift to a NRI/PIO who is a close relative of the resident individual [relative’ as
defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer. The amount should be
credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be
treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit of USD 250,000 per financial year
as permitted under the LRS for a resident individual. It would be the responsibility of the resident donor to ensure that the
gift amount being remitted is under the LRS and all the remittances made by the donor during the financial year including
the gift amount have not exceeded the limit prescribed under the LRS.
FAQs pertaining to On Tap TLTRO

Q1: Will banks be required to maintain specified securities for the amount received in TLTRO in HTM book at all
times?
Ans: Yes. The banks will have to maintain amount of specified securities for the amount received in TLTRO in its HTM
book at all times till maturity of TLTRO.
Q2: Will the bank have to necessarily continue to hold an amount equivalent to what it was holding as on March 26,
2020 in its HFT/AFS portfolio for the tenor of TLTRO borrowing?
Ans: Under TLTRO scheme, banks will have to invest the amount borrowed under TLTROs in fresh acquisition of securities
(i.e., over and above their outstanding statement in specified securities it was holding as on March 26, 2020) from
primary/secondary market. However, participation in TLTRO scheme will not impinge on the existing investment of the bank
and the bank may continue to operate their AFS/HFT portfolio, as hitherto, in terms of extant regulatory/internal guidelines.
Q3: Is there any maturity restriction on the securities to be acquired under TLTRO scheme?
Ans: There is no maturity restriction on the specified securities to be acquired under TLTRO scheme. However, the
outstanding amount of specified securities in bank’s HTM portfolio should not fall below the level of amount availed under
TLTRO scheme.
Q4: Will investment in a longer tenor specified security continue to be classified as HTM even after maturity of
TLTRO?
Ans: The specified securities acquired under TLTRO scheme will be allowed to remain in HTM portfolio till their maturity.
Q5: Can a bank categorise specified securities acquired under TLTRO scheme as AFS or HFT?
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Ans: The specified securities acquired under TLTRO scheme will be classified in HTM category. However, if a bank
decides to classify such securities under AFS/HFT category at the time of acquisition, it will not be allowed to later shift
such securities to HTM category and it should maintain sufficient records to demonstrate and separately identify securities
purchased under TLTRO scheme within the AFS/HFT portfolio. Further, all regulations applicable to securities classified
under AFS/HFT including those on valuation, will be applicable on such specified securities.
Q6: What happens if a bank fails to deploy the funds availed under TLTRO scheme in specified securities within
the stipulated timeframe?
Ans: The banks have already been given sufficient time to deploy funds availed under TLTRO scheme. It has now been
decided to allow up to 30 working days for deployment in specified securities for those banks who have availed funds under
the first tranche of TLTRO conducted on March 27, 2020. However, if a bank fails to deploy funds within the specified time
frame, the interest rate on un-deployed funds will increase to prevailing policy repo rate plus 200 bps for the number of days
such funds remain un-deployed. This incremental interest will have to be paid along with regular interest at the time of
maturity.
Q7: Under TLTRO scheme, the specified eligible instruments will have to be acquired up to fifty per cent from
primary market issuances and the remaining fifty per cent from the secondary market. Is this limit fungible
between primary and secondary market?
Ans: The deployment of funds availed under TLTRO in primary market cannot exceed fifty percent of the amount availed.
Apart from the above stipulation, the limits are fungible between primary and secondary market deployment.
FAQs pertaining to TLTRO 2.0
Q8: What happens if a bank fails to deploy the funds availed under the TLTRO 2.0 scheme in specified securities
within the stipulated timeframe?
Ans: Based on the feedback received from banks and taking into account the disruptions caused by COVID-19, it has been
decided to extend the time available for deployment of funds under the TLTRO 2.0 scheme from 30 working days to 45
working days from the date of the operation. Funds that are not deployed within this extended time frame will be charged
interest at the prevailing policy repo rate plus 200 bps for the number of days such funds remain un-deployed. The
incremental interest liability will have to be paid along with regular interest at the time of maturity.
Q9: Under the TLTRO 2.0 scheme, will the specified eligible instruments have to be acquired up to fifty per cent
from primary market issuances and the remaining fifty per cent from the secondary market. Is this limit fungible
between primary and secondary market?
Ans: In order to provide banks flexibility in investment, this condition will not be applicable for funds availed under TLTRO
2.0.
Q10: The Reserve Bank while announcing the fourth TLTRO on April 15, 2020 advised that the maximum amount
that a particular bank can invest in the securities issued by a particular entity or group of entities out of the
allotment received by it under the TLTRO shall be capped at 10 per cent. Is this condition also applicable to TLTRO
conducted before April 15, 2020? Will this condition apply for deployment of funds under TLTRO 2.0?
Ans: This condition applies only to the fourth TLTRO conducted on April 17, 2020. It does not apply to the TLTROs
conducted before April 17, 2020. It also does not apply to TLTRO 2.0.
Q11: Will the specified securities acquired from TLTRO funds and kept in HTM category be included in
computation of Adjusted Net Bank Credit (ANBC) for the purpose of determining priority sector targets/sub-
targets?
Ans: In terms of the press release 2237/2019-2020 dated April 17, 2020 notifying the TLTRO 2.0 scheme, at least 50
per cent of the total funds availed under the scheme has to be deployed in specified securities issued by small NBFCs of
asset size of ₹ 500 crores and below, mid-sized NBFCs of asset size between ₹ 500 crores and ₹ 5000 crores and MFIs.
The objective is to ease any liquidity stress and/or impediments to market access that these small and mid-sized entities
might be facing. In order to incentivise banks’ investment in the specified securities of these entities, it has been decided
that a bank can exclude the face value of such securities kept in the HTM category from computation of adjusted non-food
bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. This exemption is only applicable to
the funds availed under TLTRO 2.0.
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Q12: Para 1 of the press release dated April 17, 2020 on TLTRO 2.0 states that the objective of TLTRO 2.0 is to
channel liquidity to small and mid-sized corporates, including NBFCs and MFIs. However, in para 2 it has been
stated that the funds availed under TLTRO 2.0 will have to be deployed in investment grade bonds, commercial
paper (CPs) and non-convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs. Is
the current tranche of TLTRO 2.0 is targeted only for NBFCs and MFIs?
Ans: The funds availed under TLTRO 2.0 are to be deployed in investment grade bonds, commercial paper (CPs) and non-
convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs in the manner outlined in
the press release dated April 17, 2020.
FAQs pertaining to On Tap TLTRO/ reversal of TLTRO/ TLTRO 2.0 transactions
Q13: If a bank opts for repayment of funds availed under TLTRO/ TLTRO 2.0, whether the investments made by the
bank by utilizing these funds will continue to be allowed for classification under held to maturity (HTM) even in
excess of 25 percent of total investment permitted to be included in the HTM portfolio?
Ans: Banks can submit their request for exercising the repayment option till October 28, 2020. On repayment of funds
availed under TLTRO/ TLTRO 2.0, the associated securities shall be shifted out of the HTM category. The shifting of the
TLTRO/ TLTRO 2.0 investments out of HTM shall be in addition to the shifting of investments permitted at the beginning of
the accounting year and subject to adherence to the guidelines contained in the Master Circular – Prudential Norms for
Classification, Valuation and Operation of Investment Portfolio by Banks dated July 1, 2015 . These investments
under TLTRO/ TLTRO 2.0 against which funds are being repaid will not be exempted from reckoning under the large
exposure framework (LEF) and computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority
sector targets/sub-targets.
Q14: Whether banks need to first borrow from RBI under the on tap TLTRO scheme and then disburse under
eligible assets or alternatively, can the banks first create eligible assets and then avail funds before 31 March
2021?
Ans: Banks can use either of the alternatives. However, the request of the bank will be subject to availability of funds as on
date of application i.e., funds cannot be guaranteed in case the total amount of ₹1,00,000 crore is already availed.
Rupee Drawing Arrangement (RDA)
1. What is Rupee Drawing Arrangement (RDA)?
Rupee Drawing Arrangement (RDA) is a channel to receive cross-border remittances from overseas jurisdictions. Under
this arrangement, the Authorised Category I banks enter into tie-ups with the non-resident Exchange Houses in the FATF
compliant countries to open and maintain their Vostro Account.
2. Who are non-resident Exchange Houses?
These are companies and financial institutions which are licenced and regulated by the competent authority in the sending
country for sourcing the funds from the remitters.
3. What are the permissions needed for entering into such arrangements?
Only for the first arrangement which the AD Category–I bank enters into with the non–resident Exchange Houses for RDA
requires RBI permission. Subsequently, AD Category- I banks may enter into RDAs, subject to the prescribed guidelines
and inform the Reserve Bank (immediately).
4. What are the types of remittances which can be sent under RDA?
The cross- border inward remittances into India under RDA is primarily on private account. The remitter and the beneficiary
should be individuals barring a few exceptions. Remittances through Exchange Houses for financing of trade transactions
are also permitted up to certain limit. This scheme is not used for cross-border outward remittances from India.
5. Is there any limit on the amount of money which can be sent under RDA?
There is no limit on the remittance amount as well as on the number of remittances. However, there is an upper cap of
Rs.15.00 lakh for trade related transactions.
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6. Can cash payment be made to the beneficiary under RDA?
No cash disbursement of remittances is allowed under RDA. The remittances have to be credited to the bank account of the
beneficiary.
7. Can the remittance be credited to the bank account of the beneficiary even if the bank does not have any tie-up
with a non-resident Exchange House?
Yes, foreign inward remittances received by the AD Category-I Bank having RDA with a Non Resident Exchange House
may be credited directly to the account of the beneficiary held with a bank other than the AD Category-I Bank through
electronic mode, such as, NEFT, IMPS, etc.
Money Transfer Service Scheme (MTSS)
8. What is Money Transfer Service Scheme (MTSS)?
Money Transfer Service Scheme (MTSS) is a way of transferring personal remittances from abroad to beneficiaries in India.
Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring
foreign tourists visiting India are permissible. Under the scheme there is a tie-up between reputed money transfer
companies abroad known as Overseas Principals and agents in India known as Indian Agents who would disburse funds to
beneficiaries in India at ongoing exchange rates.
9. Who is an Overseas Principal?
The Overseas Principal should be a registered entity, licenced by the Central Bank / Government or financial regulatory
authority of the country concerned for carrying on Money Transfer Activities. The country of registration of the Overseas
Principal should be AML compliant. The Overseas Principal should obtain necessary authorisation from the Department of
Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and Settlement Systems Act
(PSS Act), 2007 to commence/ operate a payment system.
10. Who is an Indian Agent?
To become an Indian Agent, the applicant should be an Authorised Dealer Category-I bank or an Authorised Dealer
Category-II or a Full Fledged Money Changer (FFMC) or the Department of Posts. Further, the Indian agents can also
appoint sub-agents which can be retail outlets, commercial entities having a place of business, and whose bonafides are
acceptable to the Indian Agent.
11. What are the permissions needed for carrying out MTSS?
Indian Agents need permission from the Regional Office concerned of the Foreign Exchange Department, Reserve Bank of
India to operate under the MTSS framework. Further, the Overseas Principal also need to obtain necessary authorisation
from the Department of Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and
Settlement Systems Act (PSS Act), 2007.
12. What are the types of remittances which can be received under the MTSS?
Only cross-border personal remittances, such as, remittances towards family maintenance and remittances favouring
foreign tourists visiting India are allowed under this arrangement. Donations/contributions to charitable institutions/trusts,
trade related remittances, remittance towards purchase of property, investments or credit to NRE Accounts are not allowed
through this arrangement.
13. Is there any limit on the amount of money which can be sent under MTSS?
A cap of USD 2,500 has been placed on individual remittances under the scheme. In addition, thirty remittances can be
received by a single individual beneficiary under the scheme during a calendar year.
14. Can cash payment be made to the beneficiary under MTSS?
Amounts up to INR 50,000/- may be paid in cash to a beneficiary in India. These can also be loaded on to a pre-paid card
issued by banks. Any amount exceeding this limit shall be paid by means of account payee cheque/ demand draft/ payment
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order, etc., or credited directly to the beneficiary's bank account. However, in exceptional circumstances, where the
beneficiary is a foreign tourist, higher amounts may be disbursed in cash.
Q 1. Who is an Authorized Dealer (AD)?
Ans. An Authorised Dealer (AD) is any person specifically authorized by the Reserve Bank under Section 10(1) of FEMA,
1999, to deal in foreign exchange or foreign securities (the list of ADs is available on www.rbi.org.in) and normally includes
banks.
Q 2. Who are authorized by the Reserve Bank to sell foreign exchange for travel purposes?
Ans. Foreign exchange can be purchased from any authorised person, such as an AD Category-I bank and AD Category II.
Full-Fledged Money Changers (FFMCs) are also permitted to release exchange for business and private visits.
Q 3. How much foreign currency can be carried in cash for travel abroad?
Ans. Travellers going to all countries other than (a) and (b) below are allowed to purchase foreign currency notes / coins
only up to USD 3000 per visit. Balance amount can be carried in the form of store value cards, travellers cheque or
banker’s draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya who can draw foreign exchange in the form
of foreign currency notes and coins not exceeding USD 5000 or its equivalent per visit; (b) travellers proceeding to the
Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States who can draw
entire foreign exchange (up-to USD 250,000) in the form of foreign currency notes or coins.
For travellers proceeding for Haj/ Umrah pilgrimage, full amount of entitlement (USD 250,000) in cash or up to the cash limit
as specified by the Haj Committee of India, may be released by the ADs and FFMCs.
Q 4. How much Indian currency can be brought in while coming into India?
Ans. A resident of India, who has gone out of India on a temporary visit may bring into India at the time of his return from
any place outside India (other than Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India
notes up to an amount not exceeding Rs.25,000. A person may bring into India from Nepal or Bhutan, currency notes of
Government of India and Reserve Bank of India notes, in denomination not exceeding Rs.100. Any person resident outside
India, not being a citizen of Pakistan and Bangladesh and also not a traveller coming from and going to Pakistan and
Bangladesh, and visiting India may bring into India currency notes of Government of India and Reserve Bank of India notes
up to an amount not exceeding Rs. 25,000 while entering only through an airport.
Any person resident in India who had gone to Pakistan and/or Bangladesh on a temporary visit, may bring into India at the
time of his return, currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding
Rs. 10,000 per person.
Q 5. How much foreign exchange can be brought in while visiting India?
Ans. A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the
aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds
USD 10,000 or its equivalent and/or the value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be
declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.
Q 6. Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad?
Ans. Foreign exchange for travel abroad can be purchased from an authorized person against rupee payment in cash
below Rs.50,000/-. However, if the sale of foreign exchange is for the amount equivalent to Rs 50,000/- and above, the
entire payment should be made by way of a crossed cheque/ banker’s cheque/ pay order/ demand draft/ debit card / credit
card / prepaid card only.
Q 7. Is there any time-frame for a traveller who has returned to India to surrender foreign exchange?
Ans. On return from a foreign trip, travellers are required to surrender unspent foreign exchange held in the form of
currency notes and travellers cheques within 180 days of return. However, they are free to retain foreign exchange up to
USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their Resident Foreign Currency
(Domestic) [RFC (Domestic)] Accounts.
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Q 8. Should foreign coins be surrendered to an Authorised Dealer on return from abroad?
Ans. The residents can hold foreign coins without any limit.
Q 9. Is there any category of visit which requires prior approval from the Reserve Bank or the Government of
India?
Ans. Dance troupes, artistes, etc., who wish to undertake cultural tours abroad, should obtain prior approval from the
Ministry of Human Resources Development (Department of Education and Culture), Government of India, New Delhi.
Q 10. Whether permission is required for receiving grant/donation from abroad under the Foreign Contribution
Regulation Act, 1976?
Ans. The Foreign Contribution Regulation Act, 1976 is administered and monitored by the Ministry of Home Affairs whose
address is given below:
Foreigners Division, Jaisalmer House, 26, Mansingh Road, New Delhi-110011
No specific approval from the Reserve Bank is required in this regard
Q 11. Who is permitted to hold International Credit Card (ICC) and International Debit Card (IDC) for undertaking
foreign exchange transactions?
Ans. Banks authorised to deal in foreign exchange are permitted to issue International Debit Cards (IDCs) which can be
used by a resident individual for drawing cash or making payment to a merchant establishment overseas during his visit
abroad. IDCs can be used only for permissible current account transactions and the usage of IDCs shall be within the LRS
limit.
AD banks can also issue Store Value Card/Charge Card/Smart Card to residents traveling on private/business visit abroad
which can be used for making payments at overseas merchant establishments and also for drawing cash from ATM
terminals. No prior permission from Reserve Bank is required for issue of such cards. However, the use of such cards is
limited to permissible current account transactions and subject to the LRS limit.
Resident individuals maintaining a foreign currency account with an Authorised Dealer in India or a bank abroad, as
permissible under extant Foreign Exchange Regulations, are free to obtain International Credit Cards (ICCs) issued by
overseas banks and other reputed agencies. The charges incurred against the card either in India or abroad, can be met
out of funds held in such foreign currency account/s of the card holder or through remittances, if any, from India only
through a bank where the card-holder has a current or savings account. The remittance for this purpose, should also be
made directly to the card-issuing agency abroad, and not to a third party. It is also clarified that the applicable credit limit will
be the limit fixed by the card issuing banks. There is no monetary ceiling fixed by the RBI for remittances, if any, under this
facility. The LRS limit shall not apply to the use of ICC for making payment by a person towards meeting expenses while
such person is on a visit outside India.
Use of ICCs/ IDCs can be made for travel abroad in connection with various purposes and for making personal payments
like subscription to foreign journals, internet subscription, etc. However, use of ICCs/IDCs is NOT permitted for prohibited
transactions indicated in Schedule 1 of FEM (CAT) Amendment Rules 2015 such as purchase of lottery tickets, banned
magazines etc.
Use of these instruments for payment in foreign exchange in Nepal and Bhutan is not permitted.
Q 12. How much jewellery can be carried while going abroad?
Ans. Taking personal jewellery out of India is as per the Baggage Rules, governed and administered by Customs
Department, Government of India. While no approval of the Reserve Bank is required in this case, approvals, if any,
required from Customs Authorities may be obtained.
Q 13. Can a resident extend local hospitality to a non-resident?
Ans. A person resident in India is free to make any payment in Indian Rupees towards meeting expenses, on account of
boarding, lodging and services related thereto or travel to and from and within India, of a person resident outside India, who
is on a visit to India.
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Q 14. Can residents purchase air tickets in India for their travel not touching India?
Ans. Residents may book their tickets in India for their visit to any third country. For instance, residents can book their
tickets for travel from London to New York, through domestic/foreign airlines in India. However, the same (air tickets) would
be a part of the traveller’s overall LRS entitlement of USD 250,000.
Q 15. Is meeting of medical expenses of a NRI close relative, in India, by Resident Individuals permitted?
Ans. Where the medical expenses in respect of NRI close relative [‘relative’ as defined in Section 2(77) of the Companies
Act, 2013) are paid by a resident individual, such a payment being in the nature of a resident to resident transaction may be
covered under the term “services related thereto” under Regulation 6(2) of Notification No. FEMA 14(R)/2016-RB dated
May 2, 2016.
Q 16. Can a person resident in India hold assets outside India?
Ans. In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is
free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if
such currency, security or property was acquired, held or owned by such person when he was resident outside India or
inherited from a person who was resident outside India.
Further, a resident individual can also acquire property and other assets overseas under LRS.
1. Who is a person resident in India?
Answer: Sec 2(v) of the Foreign Exchange Management Act, 1999 (FEMA) defines a person resident in India as:
(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial
year but does not include-
(A) a person who has gone out of India or who stays outside India, in either case-
a. for or on taking up employment outside India, or

b. for carrying on outside India a business or vocation outside India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than-
a. for or on taking up employment in India, or

b. for carrying on in India a business or vocation in India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in India;
Q2. What is a foreign currency account?
Answer: A Foreign Currency Account is an account held or maintained in currency other than the currency of India or
Nepal or Bhutan.
Q3. What are the major foreign currency accounts that can be opened in India by a resident individual?
Answer: Some of the foreign currency accounts that can be opened by resident individuals with an Authorised Dealer bank
in India, along with their features are given below:
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Exchange Earners Foreign Resident Foreign Currency Resident Foreign Currency (RFC)
Particulars
Currency (EEFC) Account (Domestic) [RFC(D)] Account Account
Who can open
Exchange Earners Individuals Individuals
the account
Joint account Jointly with eligible persons; Jointly with any person eligible Same as EEFC
to open the
or
With resident relative(s) on former or

survivor’ basis.
Relative as defined under

Companies Act, 2013 (viz. members
of HUF, spouse, parents, step-
parents, son, step-son, daughter-in-
law, daughter, son-in-law,
brother/sister, step-brother/ step-
sister)
Relative joint account holder cannot

operate the account during the life
time of the account holder
Type of Current only Current only Current/ savings/ term deposits
Account
Interest Non-interest earning Non-interest earning De-regulated (As decided by the AD
bank)
Permitted 1) 100% of foreign exchange 1) Foreign exchange received 1) Foreign exchange received by him as
Credits received on account of export as payment/ service/ gift/ superannuation/ other monetary
transactions. honorarium while on visit benefits from overseas employer
abroad or from a non-resident
2) advance remittance received by who is on a visit to India 2) Foreign exchange realised on
an exporter towards export of goods conversion of the assets referred to in
or services 2) Unspent amount of foreign Sec 6(4) of FEMA
exchange acquired from AD for
3) Repayment of loans given to travel abroad 3) Gift/ inheritance received from a
foreign importers person referred to in Sec 6(4) of FEMA
3) Gift from close relative
4) Disinvestment proceeds on 4) Foreign exchange acquired before
conversion of ADR/ GDR 4) Earning through export of the July 8, 1947 or any income arising
goods/ services, royalty on it held outside India with RBI
5) professional earnings like permission
director’s/ consultancy/ lecture fees, 5) Disinvestment proceed on
honorarium and similar other conversion of shares into ADR/ 6) Foreign exchange received as
earnings received by a professional GDR earnings of LIC claims/ maturity/
by rendering services in his surrendered value settled in forex from
individual capacity 6) foreign exchange received an Indian insurance company
as earnings of LIC claims/
6) Interest earned on the funds held maturity/ surrendered value 7) Balances in NRE/ FCNR (B)
in the account settled in forex from an Indian accounts on change in residential status
insurance company
7) Re-credit of unutilised foreign
currency earlier withdrawn from the
account
8) Payments received in foreign

exchange by an Indian startup
arising out of sales/ export made by
the startup or its overseas
subsidiaries
Permitted 1) Any permissible current or capital Can be used for any No restrictions on utilisation in/ outside
Debits account transaction permissible current/ capital India.
account transactions.
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2) Cost of goods purchased
3) Customs duty
4) Trade related loans and

advances
Q4. In what form can a foreign currency account in India be opened?
Answer: Unless otherwise specifically stated in the features of the account, a foreign currency account maintained by a
person resident in India with an authorized dealer in India can be opened, held and maintained in the form of current or
savings or term deposit account in cases where the account holder is an individual, and in the form of current account or
term deposit account in all other cases. The account can be held singly or jointly in the name of person eligible to open,
hold and maintain such account.
Q5. When can a resident individual open a foreign currency account outside India?
Answer: A resident individual can open a foreign currency account with a bank outside India in the following cases:
1) A resident student who has gone abroad for studies for the period of stay abroad. All credits to the account from India
should be made in accordance with FEMA and the rules and regulations made thereunder. On the student’s return to India
after completion of studies, the account will be deemed to have been opened under the Liberalised Remittance Scheme
(LRS).
2) A resident who is on a visit to a foreign country for the period of stay abroad. The balance in the account should be
repatriated to India on return of the account holder to India.
3) A person going abroad to participate in an exhibition/ trade fair for crediting the sale proceeds of goods. The balance
should be repatriated to India within one month from the date of closure of the exhibition/ trade fair.
4) The following persons for remitting/ receiving their entire salary payable to them in India:
a. A foreign citizen resident in India, who is an employee of a foreign company and is on deputation to the office/ branch/
subsidiary/ joint venture/ group company in India;
b. An Indian citizen who is an employee of a foreign company and is on deputation to the office/ branch/ subsidiary/ joint
venture/ group company in India; and
c. A foreign citizen who is a resident in India and is employed with an Indian company.
5) For the purpose of sending remittances under the Liberalized Remittance Scheme.
Q6. Can a resident continue to maintain an account outside India which was opened by him when he was a non-
resident?
Answer: A person resident in India may maintain a foreign currency account outside India if he had opened it when he was
resident outside India or inherited it from a person resident outside India.
Q7. What is the status of the account held outside India on the demise of the account holder?
Answer: A resident nominee of an account held outside India has to close the account and bring back the proceeds to India
through banking channels
EARNERS’ FOREIGN CURRENCY (EEFC) ACCOUNT

EXCHANGE EARNERS’ FOREIGN
Q 1. What is an EEFC Account and what are its benefits?
Ans. Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised
Dealer Category - I bank i.e. a bank authorized to deal in foreign exchange. It is a facility provided to the foreign exchange
earners, including exporters, to credit 100 per cent of their foreign exchange earnings to the account, so that the account
holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing the transaction costs.
Q 2. Who can open an EEFC account?

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Ans. All categories of foreign exchange earners, such as individuals, companies, etc., who are resident in India, may open
EEFC accounts.
Q 3. What are the different types of EEFC accounts? Can interest be paid on these accounts?
Ans. An EEFC account can be held only in the form of a current account. No interest is payable on EEFC accounts.
Q 4. How much of one’s foreign exchange earnings can be credited into an EEFC account?
Ans. 100% foreign exchange earnings can be credited to the EEFC account subject to the condition that the sum total of
the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the
succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments.
Q 5. Whether EEFC Account can be opened by Special Economic Zone (SEZ) Units?
Ans. No, SEZ Units cannot open EEFC Accounts. However, a unit located in a Special Economic Zone can open a Foreign
Currency Account with an Authorised Dealer in India subject to conditions stipulated in Regulation 4 (D) of Foreign
Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations dated January 21, 2016.
Q 6. Is there any Cheque facility available?
Ans. Yes, Cheque facility is available for operation of the EEFC account.
Q 7. What are the permissible credits into this account?
Ans. i) Inward remittance through normal banking channels, other than remittances received on account of foreign currency
loan or investment received from abroad or received for meeting specific obligations by the account holder;
ii) Payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or
(b) Software Technology Park or (c) Electronic Hardware Technology Park for supply of goods to similar such units or to a
unit in Domestic Tariff Area;
iii) Payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in the Special
Economic Zone (SEZ);
iv) Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade.
(Counter trade is an arrangement involving adjustment of value of goods imported into India against value of goods
exported from India in terms of the Reserve Bank guidelines);
v) Advance remittance received by an exporter towards export of goods or services;
vi) Payment received for export of goods and services from India, out of funds representing repayment of State Credit in
U.S. Dollar held in the account of Bank for Foreign Economic Affairs, Moscow, with an authorised dealer in India;
vii) Professional earnings including directors’ fee, consultancy fee, lecture fee, honorarium and similar other earnings
received by a professional by rendering services in his individual capacity;
viii) Re-credit of unutilised foreign currency earlier withdrawn from the account;
ix) Amount representing repayment by the account holder's importer customer in respect of trade related loan/advances
granted by the exporter (subject to compliance with the extant guidelines) holding EEFC account; and
x) The disinvestment proceeds received by the resident account holder on conversion of shares held by him to ADRs/GDRs
under the Sponsored ADR/GDR Scheme approved by the Foreign Investment Promotion Board of the Government of India.
Q 8. Can foreign exchange earnings received through an international credit card be credited to the EEFC
account?
Ans. Yes, foreign exchange earnings received through an international credit card for which reimbursement has been made
in foreign exchange may be regarded as remittance through normal banking channel and the same can be credited to the
EEFC account.
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Q 9. What are the permissible debits into this account?
Ans. i) Payment outside India towards a permissible current account transaction [in accordance with the provisions of the
Foreign Exchange Management (Current Account Transactions) Rules, 2000] and permissible capital account transaction
[in accordance with the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000].
ii) Payment in foreign exchange towards cost of goods purchased from a 100 percent Export Oriented Unit or a Unit in (a)
Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park
iii) Payment of customs duty in accordance with the provisions of the Foreign Trade Policy of the Central Government for
the time being in force.
iv) Trade related loans/advances, extended by an exporter holding such account to his importer customer outside India,
subject to compliance with the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations,
2000.
v) Payment in foreign exchange to a person resident in India for supply of goods/services including payments for airfare and
hotel expenditure.
Q 10. Is there any restriction on withdrawal in rupees of funds held in an EEFC account?
Ans. No, there is no restriction on withdrawal in Rupees of funds held in an EEFC account. However, the amount
withdrawn in Rupees shall not be eligible for conversion into foreign currency and for re-credit to the account.
Q. 11. Whether the EEFC balances can be covered against exchange risk?
Ans. Yes, the EEFC account balances can be hedged. The balances in the account sold forward by the account holders
have to remain earmarked for delivery. However, the contracts can be rolled over.
Q. 12. Whether EEFC Account is permitted to be held jointly with a resident relative?
Ans : Resident individuals are permitted to include resident relative(s) [as defined in section 2(77) of the Companies Act,
2013] as joint holder(s) in their EEFC account on ‘former or survivor’ basis.
DIAMOND DOLLAR ACCOUNT (DDA) SCHEME:
The Diamond Dollar Account scheme has been introduced to facilitate growth in exports and achieve the target
to double India’s exports in goods and services from $465 billion to $900 billion and upping the Indian share of
the world exports from the current 2% to 3.5% over the next five years.
ELIGIBILITY:
a) Firms and companies dealing in purchase / sale of rough or cut and polished diamonds / precious metal
jewellery plain, minakari and / or studded with / without diamond and / or other stones, with a track record of at
least 2 years in import / export of diamonds / colored gemstones / diamond and colored gemstones studded
jewellery / plain gold jewellery.
b) Having an average annual turnover of Rs. 3 crores or above during the preceding three licensing years
(licensing year is from April to March).
c) They may be allowed to open not more than five Diamond Dollar Accounts with their banks.
d) Eligible firms and companies may apply for permission to their AD Category – I banks in the format
prescribed.
e) AD Category-I banks are required to submit quarterly reports to the Foreign Exchange Department, Reserve
Bank of India, giving details of name and address of the firm / company in whose name the DDA is opened,
along with the date of opening / closing the DDA, by the 10th of the month following the quarter to which it
relates.
f) AD Category - I banks are required to submit a statement giving the data on the DDA balances maintained by
them on a fortnightly basis within seven days of close of the fortnight to which it relates, to RBI.
BENEFITS:
Permissible Credits:
Amount of pre-shipment and post-shipment finance availed in US Dollars.
Realisation of export proceeds from shipments of rough, cut, polished diamonds and diamond studded
jewellery.
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Realisation in US Dollars from local sale of rough, cut & polished diamonds.
Permissible Debit:
Payment for import / purchase of rough diamonds from overseas / local sources.
Payment for purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local
sources.
Payment for import/purchase of gold from overseas / nominated agencies and repayment of USD loans
availed from the bank. Transfer to rupee account of the exporter. The above transactions are subject to the
provisions of Foreign Trade Policy of Government of India, issued from time to time.
LETTER OF CREDIT
LC is a document:
 Issued by Buyer’s bank at his request.
 Carrying undertaking to pay to the seller
 Upon presentation of documents evidencing shipping of goods.
 In compliance with terms and conditions.
ILC is Inland Letter of Credit and FLC is Foreign Letter of Credit. The parties to LC are as under:
Applicant Buyer or Importer
Beneficiary Seller or Exporter
Issuing Bank It is opening Bank which ultimately pays on behalf of importer in the
Importer’s country.
Advising Bank or Bank in Exporter Country through which LC is advised. It acts as agent
Notifying Bank without responsibility to pay unless it confirms.
Negotiating Bank or Bank in Exporter Country which makes payment to exporter or accepts Bill of
Nominated Bank Exchange.
Confirming Bank In Exporter’s country. It may be advising bank also if it adds confirmation.
This bank will be responsible for default, if any.
Reimbursing Bank The bank which re-imburses the negotiating bank. (Usually, it is the bank
having Nostro account of Opening Bank.
It is a publication of ICC (international Chamber of Commerce). It does not apply by default. There must be
special mention in LC about applicability of UCPDC – 600. It has 39 articles. Some of the important are here
under:
 Issuing Bank gets Reasonable time for acceptance/refusal of Documents which is 5 Banking days after
presentation.
 Bank to deal with documents and not with goods. Bank not to check quality of the goods. However
shipping documents must contain the particulars of commodity shipped which should match with LC.
 Bank is not concerned with underlying contract of buyer and seller.
 Courts refrain from passing injunction on complaint of importer regarding any discrepancy of goods.
 Amount of Bill may differ from LC amount ±10% (Tolerance limit)
 Quantity of Bill may differ from LC specification ±5% (Tolerance limit).
 Documents are original if it carries original signatures, stamp mark and label of issuer.
 Documents must be presented for negotiation within 21 Calendar days from date of Shipment. It
becomes stale thereafter.
 If expiry of LC falls on Public holiday, under such situations documents can be submitted on Preceding
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banking day.
LC Type Features
Revocable It is an LC which can be amended or cancelled without consent of all parties. UCPDC
600 does not allow issue of such LC.
Irrevocable It is LC which cannot be cancelled or amended without consent of all parties.
Confirmed LC If confirmed by some bank in exporter country.
Transferable LC It can be transferred in Full or part by advising bank at the request of issuing bank.
ONLY ONCE
Red Clause LC It enables the beneficiary to avail pre-shipment credit
.
Green Clause Besides pre-shipment, advising bank can allow advance for storage and shipment.
Letter of Credit
Revolving LC Where bills are negotiated and LC is automatically renewed.
Back to Back LC Beneficiary Uses LC to open another LC in favor of local suppliers.
Standby LC It is issued in lieu of Guarantee. It is substitute of guarantee and is used in countries like
US where guarantees are not used.
 If nothing is mentioned, LC will be Irrevocable, non-transferable.
Documents under LC
1. Bill of exchange.
2. Invoice
3. Transport Documents: Bill of Lading & Airway Bill
4. Insurance Documents (Insurance is done at 110% of CIF value)
5. Certificate of Origin
Short Bill of Lading: Which does not carry detailed terms and conditions
Thorough Bill of Lading covers entire voyage with several modes of transport
Straight Bill of Lading is issued directly in the name of consignee.
Clause Bill of Lading: It bears super imposed clause that declared defective condition of Goods.
Clean Bill of Lading: It has no such super imposed clause declaring goods or packaging as defective.
It is incumbent upon the issuing bank to make payment immediately.
In case of sight documents, the issuing bank can hold documents for maximum period of 10 days. In case the
bill is not retired or paid within this period, the issuing bank will crystallize the liability on 10th day at Bill
Selling rate or the rate at which the contract was booked (whichever is higher)
In case of Usance bill, Forex liability will be crystallized on due date into Indian Rupees at Bill Selling rate or
Contracted Rate (which is higher)
INCOTERMS
Ex-Works
Exporter says that goods can be picked up from Factory. Exporter will not pay the freight. The transport cost and
risk will be borne by the Importer.
FCA (Main Freight Paid by Buyer)
Free Carrier means seller hands over the goods to first Carrier.
FAS (Main Freight Paid by Buyer)
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Free alongside ship i.e. Goods will be delivered by exporter to shipping co.
FOB (Main Freight Paid by Buyer)
Free on Board (Say FOB Mangalore) means Goods will be loaded on ship/Aero plane (main carriage still
unpaid by the exporter)
CFR (Cost and Freight Paid by Seller)
Seller will pay cost and freight till destination
CIF (Cost, Insurance and Freight paid by Seller)
The cost, Insurance and Freight will be borne by seller.
 UCPDC does not apply by default. It is required to be mentioned on LC
 Shipping Documents can be dated prior to the date of LC. It means LC covers the shipping done prior to
the issue of letter of credit. But, the shipping done after expiry of LC is not permitted.
 On or about date means ±5 Calendar days. If it is mentioned on LC that date of credit is on or about
31.12.2015. This implies that date of expiry of LC can be after 5 calendar days after 31.12.2015.
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Government's banking transaction
1. What is RBI's role with regard to conduct of Government's banking transaction?
In terms of Section 20 of the RBI Act 1934, RBI has the obligation to undertake the receipts and payments of the Central
Government and to carry out the exchange, remittance and other banking operations, including the management of the
public debt of the Union. Further, as per Section 21 of the said Act, RBI has the right to transact Government business of
the Union in India.
State Government transactions are carried out by RBI in terms of the agreement entered into with the State Governments in
terms of section 21 A of the Act. As of now, such agreements exist between RBI and all the State Governments except
Government of Sikkim. Thus, the legal provisions vest Reserve Bank of India with both the right and obligation to function
as banker to the government.
2. How does Reserve Bank of India discharge its statutory obligation of being 'Banker to Government'?
RBI carries out the general banking business of the governments through its own offices and commercial banks, both public
and private, appointed as its agents. Section 45 of the Reserve Bank of India Act, 1934, provides for appointment of
scheduled commercial banks as agents at all places or at any place in India, for purposes that it may specify, “having
regard to public interest, convenience of banking, banking development and such other factors which in its opinion are
relevant in this regard”.
Reserve Bank of India maintains the Principal Accounts of Central as well as State Governments at its Central Accounts
Section, Nagpur. It has put in place a well-structured arrangement for revenue collection as well as payments on behalf of
Government across the country. A network comprising the Government Banking Divisions of RBI and branches of agency
banks appointed under Section 45 of the RBI Act carry out the government transactions. At present all the public sector
banks and select private sector banks act as RBI's agents. Only designated branches of agency banks can conduct
government banking business.
3. How payment into government account is made?
All monies for credit to government account like taxes or other remittances can be made by filling the prescribed challans of
the Government/Department concerned. The tax payers are encouraged to pay dues to Government electronically by login
in to respective government portals. However, if they prefer to pay dues by way of cash, cheque, demand draft, these are
required to be tendered with the authorized agency bank branches along with requisite challan.
4. When is the receipted challan for payment made into government account made available?
The receipted challans in case of cash tender are generally handed over to the remitter immediately across the counter. In
case of payments made by cheque/DD, the receipted challan is issued only on realization of the instruments based on the
clearing cycle of the local Clearing House. In all such cases, a paper token is issued to the depositor indicating the date on
which the receipted challan will be ready for delivery. The receipted challan will have to be collected within a specified
number of days from the date of delivery, as indicated on the paper token, by surrendering the paper token.
5. What if the paper token is misplaced / lost?
In case of loss of original token, on a specific request and on payment of prescribed fees, the receipted challan is issued.
6. What if the Receipted Challan is misplaced?
No duplicate challan is issued under any circumstances. Instead, a 'Certificate of Credit' is issued on specific request with
the requisite particulars and payment of prescribed fee.
7. Are agency banks compensated for conduct of Central/State Government banking?
The accredited banks are paid remuneration by RBI for conduct of State/Central Government transactions. Such
remuneration is called Agency Commission. The rates of agency commission applicable at present (from July 1, 2019) are
as under:
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o. Type of Transaction Unit Revised Rate
a. (i) Receipts – Physical mode Per transaction ₹ 40/-
(ii) Receipts – e-mode * Per transaction ₹ 9/-
b. (i) Payments – Pension Per transaction ₹ 75/-
(ii) Payments – Other than pension Per ₹ 100 turnover 6.5 paise
*In this context, it may please be noted that ‘Receipts – e-mode’ indicated against Sl. No. a(ii) in the above table
would refer to those transactions involving remittance of funds from the remitter’s bank account through internet
banking as well as all such transactions which do not involve physical receipt of cash / instruments.
8. What is RBI’s role in Goods and Service Tax regime?
The Reserve Bank of India is the aggregator for accounting of all GST collections in the respective government accounts.
Agency banks who collect the GST for challans generated by tax payers online on the GST portal report the collections for
settlement to government accounts to RBI. RBI has also facilitated payment of GST by tax payers directly into government
accounts at RBI by using NEFT / RTGS payment options provided in GST portal.
Scheme for Payment of Pension to Central Government Pensioners by Authorised Banks
Payment of pension to retired government employees, including payment of basic pension, increased Dearness Relief
(DR), and other benefits as and when announced by the governments, is governed by the relevant schemes prepared by
concerned Ministries/Departments of the Government of India and State Governments. RBI has issued certain instructions
in this regard which is available in the Master Circular – Disbursement of Government Pension by Agency Banks
dated September 9, 2019. Clarifications, in the form of questions and answers, on certain issues related to the
instructions issued by RBI is given below.
1. Whether a Joint Account can be continued for family pension after death of a pensioner?
Yes, the banks should not insist on opening of a new account in case of Central Government pensioner if the spouse in
whose favour an authorization for family pension exists in the Pension Payment Order (PPO) is the survivor. The family
pension should be credited to the existing account without opening a new account by the family pensioner for this purpose.
2. When is the pension credited to the pensioner's account by the paying branch?
The pension paying banks credit the pension amount in the accounts of the pensioners based on the instructions given by
the Pension Paying Authorities.
3. Can the pension paying bank recover the excess amount credited to the pensioner’s account?
Yes, details of the uniform procedure for recovery of excess/wrong payments made to pensioners drawing pensions under
the Scheme for payment of pension to Central /Civil/Defence/Railways pensioners through agency banks, have been put in
place by RBI in consultation with Government of India are given below:
(a) As soon as the excess/wrong payment made to a pensioner comes to the notice of the paying branch, the branch
should adjust the same against the amount standing to the credit to the pensioner’s account to the extent possible including
lump sum arrears payment.
(b) If the entire amount of overpayment cannot be adjusted from the account, the pensioner may be asked to pay forthwith
the balance amount of overpayment.
(c) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension
payments to be made to the pensioners. For recovering the overpayment made to pensioner from his future pension
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payment in instalments 1/3rd of net (pension + relief) payable each month may be recovered unless the pensioner
concerned gives consent in writing to pay a higher instalment amount.
(d) If the overpayment cannot be recovered from the pensioner due to his death or discontinuance of pension, then action
has to be taken as per the letter of undertaking given by the pensioner under the scheme.
(e) The pensioner may also be advised about the details of over payment/wrong payment and mode of its recovery.
4. Should acknowledgement be given by pension paying banks while accepting Life Certificates from pensioners?
There have been complaints that life certificates submitted over the counter of pension paying branches are misplaced
causing delay in payment of monthly pensions. In order to alleviate the hardships faced by pensioners, agency banks were
instructed to mandatorily issue duly signed acknowledgements. They were also requested to consider entering the receipt
of life certificates in their CBS and issue a system generated acknowledgement which would serve the twin purpose of
acknowledgement as well as real time updation of records.
5. Who is responsible for deduction of Income Tax at source from pension payment?
The pension paying bank is responsible for deduction of Income Tax from pension amount in accordance with the rates
prescribed by the Income Tax authorities from time to time.
6. Can a pensioner withdraw pension from his/ her account when he/she is not able to sign or put thumb/toe
impression or unable to be present in the bank?
Yes, instructions have been issued by RBI to pension disbursing banks to allow withdrawal of pension by following certain
procedures which are given below :
Withdrawal of pension by old/ sick/ disabled/ incapacitated pensioners
(i) In order to take care of problems/ difficulties faced by sick and disabled pensioners in withdrawal of pension / family
pension from the banks, agency banks may categorise such pensioners as under:
(a) Pensioner who is too ill to sign a cheque / unable to be physically present in the bank.
(b) Pensioner who is not only unable to be physically present in the bank but also not even able to put his/her thumb
impression on the cheque/ withdrawal form due to certain physical defect / incapacity.
(ii) With a view to enabling such old/sick/incapacitated pensioners to operate their accounts, banks may follow the
procedure as under:
(a) Wherever thumb or toe impression of the old/sick pensioner is obtained, it should be identified by two independent
witnesses known to the bank, one of whom should be a responsible bank official.
(b) Where the pensioner cannot even put his/her thumb/ toe impression and also would not be able to be physically present
in the bank, a mark can be obtained on the cheque/withdrawal form, which should be identified by two independent
witnesses, one of whom should be a responsible bank official.
Agency banks have been asked to display the instructions issued in this regard on their notice board at the branches so
that sick and disabled pensioners can make full use of these facilities.
7. How the payment of Dearness Relief at revised rate is to be paid to the pensioners?
The pension paying agency banks have to revise the Dearness Relief based on the copies of government orders supplied
by government to them through post, fax, e-mails or by accessing the information from the website of the concerned
governments, and authorize their pension paying branches to make payments to the pensioners immediately.
8. Whether a pensioner is entitled for any compensation from the agency banks for delayed credit of pension/
arrears of pension?
Yes, pension paying banks should compensate the pensioner for delay in crediting pension/ arrears thereof at a fixed
interest rate of 8 per cent per annum for the delay after the due date of payment. This compensation should be credited to
472
the pensioner's account automatically without any claim from the pensioner on the same day when the bank affords credit
for revised pension/ pension arrears, in respect of all delayed pension payments made since October 1, 2008.
RECOVERY TOOLS
LOKADALAT
 Created under Legal Services Authority Act 1987.

 Decision are consent decree and cannot be appealed against.
 Civil Procedure Code is applicable. They are civil courts.
 Banks can call Lok Adalt with application to High Court.
 Amount - Normal Lok Adalt : Up to Rs.20 lac (wef Aug03, 2004)
 Above the aforesaid cut-off of RS.20 lac - DRT Lok Adalat.
 Eligible accounts - NPA (Loss and doubtful).
 Decree for principal and interest should be sought.
 After full payment clischarge should be given:
 Repayment: Preferably down-payment. Max in 1-3 years.
(SARFAESI ACT) 2002

Securitisation & Reconstruction Of Financial Assets and Enforcement of Security Interest Act 2002
 Applicable wef Aug 23, 2002 in entire India, including J&K. (Act amended in 2004 on Supreme Court
. intervention in Mardia Chemicals vs Union of India and others).
 Rights of bank - To take possession, take over management, appoint manager, recover money receivable from 3rd
parties.
. .
 Authorised officer - Scale IV and above in banks OR officers approved by BoD of the bank.
 ConsortiumIBIFR cases : In case of joint/consortium financing consent of 60% (by value) creditors
required for action. BIFR cases can be recalled back with consent of 75% of creditors
Loans not eligible - (a) Amount up to RS.l lac, (b) agricultural land cannot be sold, (c) pledge & lien (d)
recovery up to 80% of due amount already affected (e) limitation expired. Possession - 60 days notice before
possession. >
 Remedy to borrower - If borrower objects, bank to send reply within 15 days borrower still not satisfied
could approach DRT within 45 days without deposit.ofany amount. ,
 DRT's decision is appealable (within 30 days)before DRAT after deposit of 50% of amount that could be reduced to
25% by DRAT.
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 Sale - Before sale 30 days notice. Sale price min at reserve price to be fixed by bank. Below reserve price consent of
the borrower. Sale by public tenders or through public auction. If sale through public auction, public notice in two news
papers (one of which regional) Sale is confirmed by bank on receipt of 25% amount immdly and balance is payable in
15 days.
 DRT pending case: Banks can make use of SARFAESI Act for sale of security for such cases (Transcorevs Union of
India).
DEBT RECOVERY TRIBUNAL
 Created under Recovery of Debt Due to Banks & FIs Act 1993 (except JK). These are like other civil courts for a special
purpose of helping in quicker NPA recovery in large account.
 DRT headed by President (President assisted by Registrar and Recovery Officer) and DRAT by Chairperson
 Eligible account - Loans of banks and FIs with recoverable dues of Rs.10 lac or more.
 Jurisdiction: No other court has jurisdiction over such cases.
 Time limit - On receipt of application, show cause notice within 30 days. Disposal is expected in 180 days.
Disposal of appeal by DRAT also maximum 180 days .
• ' Appeal - Order by DRT appealable (by bank Of borrower) to DRAT within 45 days from date of receipt after. Borrower
to deposit 75% of due amount. bRAT may reduce or waive the amount.
 Order- After claim is upheld, Recovery certificate is issued. Recovery officer has powers such as
attachment etc. under Income Tax Act.
 Appeal to President of DRT against order of Recovery Officer within 30 days and appeal against Registrar within 15
days.
 Fee. - Rs.12000. For eacb- additionalcRs.1 lac Rs.1000 •. Max 1.50 lac. For appeal Rs.12000 for debt less than
Rs.10 lac, , 20000/- (l0 lac to-less than Rs.30Lac} and:Rs.30000(Rs.30Iac&-above);
ASSET RECONSTRUCTION COMPANIES
 Set up for taking over distressed assets from banks/FIs and reconstruct or re-pack for sale. Recovery plan should be
maximum of 5 years (3 years with permission of BoD).
 (First ARC - ARCIL).
 To be set up as ajoint stock company. RBI registration must before commencement for business as ARC.
 Business to be commenced within 6 months of registration with RBI. RBI can extend it by another 1 year in aggregate.
 Net worth not less Rs.I 00 cr or 15% of acquired assets, whichever lower.
 Capital adequacy ratio min 15% of Risk Weighted Assets.
 ARC to invest at least 5% in security receipts created out of each securitization.
CORPORATE DEBT RESTRUCTURING SYSTEM
 A mechanism outside BIFR or DRT. Not a judicial system, based on mutual agreement. Before a reference to CDR, 2
agreements required i.e. debtor-creditor agreement and inter-creditor agreement.
 3-tier Structure: CDR Forum (at top - policy making having Chairman of banks as members), CDR
Empowered Group (sanctioning authority having EDs of banks as members) and CDR Cell (operating wing).
 Eligible: (a) Corporate account (b) Multi-lender alc (c) Fund/non-fund exposure - Rs.10 cr or more.
 Reference for Category I accounts (Standard & Substandard accounts) by a creditor with 20% share (by value). (If DF
is up to 10% of total exposure, it is to be part of category I CDR)
 Category II accounts (Doubtful account) reference jointly by creditors with 75% shares by value & 60% by number.
 Suit filed alc eligible with consent of 75% creditors by value & 60% by number.
Fraud & willful default cases not also eligible. Large value BIFR cases, can be taken up on specific
recommendation of CDR core group.
 Stand still clause - Debtor & creditors to sign Debtor-Creditor agreement, for no legal action for 90 days (extendable to
180 days).
 Creditors to enter into Inter-creditor Agreement, valid for 3 years.
 Benchmarks - Unit to become viable in 5 years (infrastructure 8 years) and restructured debt should be paid within
10 years.
i. ROCE at least equivalent to 5 year Govt. security yield plus 2%.

ii. DSCR greater than 1.25 within 5 years period. On year-to-year basis, above 1. Normal D$CR for 10 years
repayment, should be around 1.33.
474
iii. GilP between IRR and cost of capital, should be at least 1%.
iv. Loan life ratio (LLR) should be 1.4 (to give a cushion of 40% to the amount of loan to be serviced). LLR = Present
value of total available cash flow during the loan life perlod (including interest and principal) I Maximum amount of loan
Promoter contribution: At least 20% of sacrifice of lenders or 2% of the restructured debt, whichever is higher, to be
brought upfront.
 Implementation on approval: Decision binding on all creditors where 75% by value and 60% by number agree.
Asset classification: If approved package implemented within 4 months, asset classification at the time of reference, to be
restored.
DEBT RESTRUCTURING - SME
 Eligible - (a) All non-corporate SMEs. (b) All Corporate SMEs enjoying limits from single bank. (c) For corporate
multiple banking accounts funded and non-funded o/s up to RS.l 0 cr.
 Viability criteria - Unit to become viable in 7 years and restructured debt should be paid within 10 years.
 Additional finance to treated standard for] 2 months initially after the date when first payment of interest or of principal
falls due under the approved structure. Subsequently classification to be based on record of recovery .
 Asset classification: During the specified period of one year, the asset classification status of rescheduled accounts
would not deteriorate if satisfactory performance of account is demonstrated .
.• Time schedule: 90 days.
SALE & PURCHASE OF NPA BY BANKS
 Guidelines applicable to banks,_FIs and NBFCs.·

 Time for realisation of purchased NPAs -3 years . Not less than 10% should be recovered in first year and 5% in each
following HY.
 Minimum age of NPA in the books of selling bank – without any initial holding period (earlier it was 2 years).
 Seller bank can sell (a) on cash basis (b) on without recourse basis and (c) cannot re-purchase the sold account.
 Minimum period the purchasing bank is to keep the account with it, if it wants to sell to another bank: 12 month from
date of purchase. (Earlier it was 15 months)
 Asset classification of NPA by purchaser bank - For first 90 days, it will be treated standard. If recovery is not as
planned, the treatment to be given as sub-standard.
 For CAR purposes, for purchased NPA risk weightage = 100%.
What are Financial Ratios?

475
Financial ratios are created with the use of numerical values taken from financial
statements to gain meaningful information about a company. The numbers found on a
company’s financial statements – balance sheet, income statement, and cash flow
statement – are used to perform quantitative analysis and assess a company’s liquidity,
leverage, growth, margins, profitability, rates of return, valuation, and more.
Financial ratios are grouped into the following categories:
 Liquidity ratios
 Leverage ratios
 Efficiency ratios
 Profitability ratios
 Market value ratios
Uses and Users of Financial Ratio Analysis
Analysis of financial ratios serves two main purposes:
1. Track company performance
Determining individual financial ratios per period and tracking the change in their values
over time is done to spot trends that may be developing in a company. For example, an
increasing debt-to-asset ratio may indicate that a company is overburdened with debt and
may eventually be facing default risk.
2. Make comparative judgments regarding company performance
Comparing financial ratios with that of major competitors is done to identify whether a
company is performing better or worse than the industry average. For example, comparing
the return on assets between companies helps an analyst or investor to determine which
company is making the most efficient use of its assets.
Users of financial ratios include parties external and internal to the company:
 External users: Financial analysts, retail investors, creditors, competitors, tax

authorities, regulatory authorities, and industry observers
 Internal users: Management team, employees, and owners
Liquidity Ratios
Liquidity ratios are financial ratios that measure a company’s ability to repay both short-
and long-term obligations. Common liquidity ratios include the following:
476
The current ratio measures a company’s ability to pay off short-term liabilities with current
assets:
Current ratio = Current assets / Current liabilities
The acid-test ratio measures a company’s ability to pay off short-term liabilities with quick
assets:
Acid-test ratio = Current assets – Inventories / Current liabilities
The cash ratio measures a company’s ability to pay off short-term liabilities with cash and
cash equivalents:
Cash ratio = Cash and Cash equivalents / Current Liabilities
The operating cash flow ratio is a measure of the number of times a company can pay off
current liabilities with the cash generated in a given period:
Operating cash flow ratio = Operating cash flow / Current liabilities
Leverage Financial Ratios
Leverage ratios measure the amount of capital that comes from debt. In other words,
leverage financial ratios are used to evaluate a company’s debt levels. Common leverage
ratios include the following:
The debt ratio measures the relative amount of a company’s assets that are provided from
debt:
Debt ratio = Total liabilities / Total assets
The debt to equity ratio calculates the weight of total debt and financial liabilities against
shareholders’ equity:
Debt to equity ratio = Total liabilities / Shareholder’s equity
The interest coverage ratio shows how easily a company can pay its interest expenses:
Interest coverage ratio = Operating income / Interest expenses
The debt service coverage ratio reveals how easily a company can pay its debt obligations:
Debt service coverage ratio = Operating income / Total debt service
Efficiency Ratios
477
Efficiency ratios, also known as activity financial ratios, are used to measure how well a
company is utilizing its assets and resources. Common efficiency ratios include:
The asset turnover ratio measures a company’s ability to generate sales from assets:
Asset turnover ratio = Net sales / Average total assets
The inventory turnover ratio measures how many times a company’s inventory is sold and
replaced over a given period:
Inventory turnover ratio = Cost of goods sold / Average inventory
The accounts receivable turnover ratio measures how many times a company can turn
receivables into cash over a given period:
Receivables turnover ratio = Net credit sales / Average accounts receivable
The days sales in inventory ratio measures the average number of days that a company
holds on to inventory before selling it to customers:
Days sales in inventory ratio = 365 days / Inventory turnover ratio
Profitability Ratios
Profitability ratios measure a company’s ability to generate income relative to revenue,

balance sheet assets, operating costs, and equity. Common profitability financial ratios
include the following:
The gross margin ratio compares the gross profit of a company to its net sales to show how
much profit a company makes after paying its cost of goods sold:
Gross margin ratio = Gross profit / Net sales
The operating margin ratio compares the operating income of a company to its net sales
to determine operating efficiency:
Operating margin ratio = Operating income / Net sales
The return on assets ratio measures how efficiently a company is using its assets to
generate profit:
Return on assets ratio = Net income / Total assets
The return on equity ratio measures how efficiently a company is using its equity to
generate profit:
478
Return on equity ratio = Net income / Shareholder’s equity
Market Value Ratios
Market value ratios are used to evaluate the share price of a company’s stock. Common
market value ratios include the following:
The book value per share ratio calculates the per-share value of a company based on the
equity available to shareholders:
Book value per share ratio = (Shareholder’s equity – Preferred equity) / Total
common shares outstanding
The dividend yield ratio measures the amount of dividends attributed to shareholders
relative to the market value per share:
Dividend yield ratio = Dividend per share / Share price
The earnings per share ratio measures the amount of net income earned for each share
outstanding:
Earnings per share ratio = Net earnings / Total shares outstanding
The price-earnings ratio compares a company’s share price to its earnings per share:
Price-earnings ratio = Share price / Earnings per share
479
IMPORTANT CBS MENU
Sl.No Operation SB CA TD OD CC LOAN
1 A/C opening HOAACS HOAACC HOAACT HOAACO HOAACC HOAACLA

B A D D C
2 Modification HOAACM HOAACM HOAACM HOAACM HOAACM HOAACM
before S CA TD OD CC LA
verification
3 Verification HOAACV HOAACV HOAACV HOAACV HOAACV HOAACVL
SB CA TD OD CC A
4 Modification HACM HACM HACMTD HACM HACM HACMLA
after
verification
5 To find new OLDTON OLDTON OLDTON OLDTONE OLDTON OLDTONE
A/C No. EW EW EW W EW W
6 To issue HICHB HICHB XXXXX HICHB HICHB XXXXX
cheque book
7 To issue HICHBA HICHBA XXXXX HICHBA HICHBA XXXXX
Adhoc
Cheque
8 PCBrequest CPCBRE CPCBRE XXXXX CPCBRE CPCBRE XXXXX
G G G G
9 ChequeBook HCHBM/ HCHBM/ XXXXX HCHBM/ HCHBM/ XXXXX
Inquiry HCHBI HCHBI HCHBI HCHBI
10 To verify HCHBM HCHBM XXXXX HCHBM HCHBM XXXXX
issue of
Cheque Book
11 Cheque HUCS HUCS XXXXX HUCS HUCS XXXXX
status
updation
12 Cash Deposit HCASHD HCASHD HCASHD HCASHD HCASHD HLASPAY
EP EP EP EP EP
13 Cash HCASHW HCASHW HCASHW HCASHW HCASHW HLADISB
Withdrawal D D D D D
14 Transfer HXFER/HTM HLADISB
15 Bulk upload HTTUM HTTUM XXXXX HTTUM HTTUM XXXXX

16 A/C Balance HACCBA HACCBA XXXXX HACCBAL HACCBA HACCBAL
Inquiry L L L
17 A/C Details HACCDE HACCDE HACCDE HACCDET HACCDE HACCDET
Inquiry T T T T
18 Correction of HCRT HCRT XXXXX HCRT HCRT XXXXX
wrong entry
19 Enabling ECS HOAACS HOAACC HOAACT HOAACO HOAACC XXXXX
– New A/C B A D D C
20 Enabling ECS HACM HACM HACM HACM HACM XXXXX
– Existing
A/C
21 Verification – HOAACV HOAACV HOAACV HOAACV HOAACV XXXXX
NewA/C SB CA TD OD CC
22 Verification – HACM HACM HACM HACM HACM XXXXX
Existing A/C
480
23 ECS Mandate HECSM HECSM HECSM HECSM HECSM XXXXX
Registration
24 To allow TOD HACTOD HACTOD XXXXX HACTOD HACTOD XXXXX
M M M M
25 Verification of HACTOD HACTOD XXXXX HACTOD HACTOD XXXXX
TOD M M M M
26 Passbook HPBP HPBP HPBP HPBP HPBP HPBP
Printing
27 Statement HPSP HPSP XXXXX HPSP HPSP HPSP
Printing
28 Inquire A/C HINQAC HINQAC XXXXX HINQACH HINQAC XXXXX
No. for a HQ HQ Q HQ
cheque
29 A/C interest HAITINQ HAITINQ HAITINQ HAITINQ HAITINQ HAITINQ
inquiry
30 A/C HACLI HACLI HACLI HACLI HACLI HACLI
transaction
inquiry
31 A/C selection HACS/ HACS/ HACS/ HACS/ HACS/ HACS/
based on HACSP HACSP HACSP HACSP HACSP HACSP
criteria/Printin
g
32 Deposit XXXXX XXXXX HDRP XXXXX XXXXX XXXXX
receipt
printing
33 Duplicate XXXXX XXXXX HDUDRP XXXXX XXXXX XXXXX
receipt
printing
34 RD XXXXX XXXXX HPLIST XXXXX XXXXX XXXXX
instalment
inquiry
36 Entry of Form XXXXX XXXXX MTDSE XXXXX XXXXX XXXXX
15G/15H
37 Sweep Batch HSWOPS XXXXX HSWOPS XXXXX XXXXX XXXXX
operations
38 TDSactivity XXXXX XXXXX HTDSIP XXXXX XXXXX XXXXX
39 Generation of XXXXX XXXXX XXXXX CBSRAC CBSRAC CBSRAC
sanction
reference
40 Rescheduling XXXXX XXXXX XXXXX HLARA HLARA HLARA
of loans &
verification
41 Demand XXXXX XXXXX XXXXX HLADGEN HLADGE HLADGEN
Generation N
42 Interest XXXXX XXXXX XXXXX XXXXX XXXXX HACINT
calculation
43 Loan maturity XXXXX XXXXX XXXXX XXXXX XXXXX HLAMATP
Processing
44 Settlement of XXXXX XXXXX XXXXX XXXXX XXXXX HPAYOFF
loan &
verification
45 Overdue XXXXX XXXXX XXXXX XXXXX XXXXX HLAOPI
position
inquiry
481
46 General XXXXX XXXXX XXXXX XXXXX XXXXX HLAGI
Inquiry
47 Repayment XXXXX XXXXX XXXXX XXXXX XXXXX HLARSH
schedule
report
48 Limit Node XXXXX XXXXX XXXXX HLNM HLNM XXXXX
Maintenance
49 Inquiry into XXXXX XXXXX XXXXX HASSET HASSET HASSET
Asset
Classification
50 A/C Lien HALM HALM HALM HALM HALM XXXXX
51 A/CFreeze HAFSM HAFSM HAFSM HAFSM HAFSM XXXXX
52 Stop HSPP HSPP XXXXX HSPP HSPP XXXXX
Payment of
cheque
55 Stop HPR HPR XXXXX HPR HPR XXXXX
Payment
letter
56 Standing HSSIM HSSIM HSSIM HSSIM HSSIM XXXXX
Instruction
57 Transfer of HACXFR HACXFR HACXFR HACXFRS HACXFR XXXXX
accounts SC SC SC C SC
between
schemes
58 Transfer of HACXFS HACXFS HACXFS HACXFSO HACXFS HACXFSO
accounts OL OL OL L OL L
between
SOLs
59 Loan fee XXXXX XXXXX XXXXX XXXXX XXXXX HLAFACB
assessment
and collection
60 Report for the XXXXX XXXXX XXXXX XXXXX XXXXX HLAFACR
above
482
INVENTORY
Activity description Menu Option
Movement of inventory between locations & HIMC
verification
Split inventory–Ownlocation HISAI
Split inventory – All locations including own location HISIA
Mergeinventory–Ownlocation HIMAI
Merge inventory – All locations including own HIMIA
location
Inventory Movement inquiry HIMI
Inventory Movement Report HIMR
Inventory Status Report HISR/HISRA
View & Print Reports HPR
OFFICE ACCOUNTS
OAB–Transactions and Verification HCASHDEP/HCASHWD/HXFE
R/HTM
OAP – Original transaction & Verification HCASHDEP/HCASHWD/HXFE
R/HTM
OAP – Reversal transaction & Verification HTM
OAP–Transaction inquiry HIOT
Non-system Charges – Collection & Verification HGCHRG
HO transactions – Originating & Verification HTM
HO transactions Report HOCRPT
Account Ledger Inquiry HACLINQ
Account Ledger Printing HACLPOA
Age wise outstanding Report HMSOIRP
Outstanding items Report HMSGOIRP
GL Progressive Report CGLRPT
DEMAND DRAFTS
DD Issue & Verification HDDMI
DD Payment & Verification HDDMP
Printing of DD HDDPRNT
Batch Printing of DD HDDBP
All pending DDs for printing HDDPALL
Reprinting of DD HDDRPRNT
Cancellation of DD HDDC
Lost DD marking HDDLOST
Revalidation of DD HDDSM
DD status modification & Verification HDDSM
Modification of DD HDDMOD(Payee name only)
DDi ssued inquiry (Single DD) HDDII
DD issued inquiry (Range of DDs/credits) HDDIC
DD Paid inquiry (Single DD) HDDIP
DD Paid Inquiry ( Range of DDs) HDDID
DD issue summary Report HDDIR
483
PAYMENT SYSTEMS – NEFT/RTGS
NEFT/RTGSrequest & verification HPORDM
RTGSMessageMaintenance & verification HRMM
RTGS/NEFT Inward Suspense – Processing and HRISP
verification
RTGS/NEFTOutward/InwardReport CPAYREP
NEFT Beneficiary Registration CATMREG
ATM Linkage Maintenance CATAMMP
Cash Replenishment transaction inquiry CCRTE
Debit Card Maintenance HCDM/CCSTCH
SECURITIES FOR CC & TERM LOAN
Lodging & Verification HCLM
Linking to account & verification HSCLM
Look up (view of all securities to an account) HCLL
Modification & verification HCLM
Account limit history HACLHI
Account limit modification HACLHM
INTEREST CONCEPTS
Interest rate inquiry HINTTI
Interest table code inquiry HINTCI
OUTWARD CLEARING
Zone Opening HMCLZOH
File upload to Lodge Instruments HCLUPLD
Lodge Instruments Manually HOCTM
Lodge Instruments by Upload HCLUPLD
Zone Balancing HMCLZOH
Cheque Inquiry in Zone HIOCLS
Verify Lodged Instruments HOCTM/HOCIV /HOCTV
Verify Manually if any transaction is inentered state HTM
Suspending the Zone HMCLZOH
Un-suspending the Zone–if need be HMCLZOH
Zone Releasing to Shadow Balance HMCLZOH
Marking of Clearing Extension HMARKPEN
Removal of hold up cheques HREVPEND
Regularize the Zone and release funds to customer HMCLZOH
Printing of Clearing Schedule HPCLSO
Printing of Waste Report HPWO
Inquiry on Shadow Balance Of an A/c HACSBIO
Inquiry of Part Trans HOPQ
Inquiry on Outward Clearing Instruments HOIQ
Cheque Truncation System Encoding CTSNEC
Clearing Reject Report CREJREP (Customized)
484
INWARD CLEARING
Open Zone HMICZ
Lodging Instruments in zone – Upload HRMI
Lodging Instruments inzone–Manually HICTMO
Lodging of Instruments by Upload HRMI
Verification of Lodged Instruments HICTMO
Validation Run for Reporting HMICZ
Rejecting/Returning a cheque HICTMO
Suspending the zone HMICZ
Posting the zone HMICZ
Close the zone HMICZ
Printing of Clearing Waste Report HPICW
Printing of Inward Clearing Schedule HPICS
Printing of Advice & Schedule of Rejected Cheques
INWARD REMITTANCE
Lodge Instrument HIRM
Purchase Instrument HIRM
Realize Instrument HIRM
Dishonour of Instrument HIRM
Generate Inward Remittance Details Report HINWREMI
OUTWARD REMITTANCE
Issue TCs, Currency, DDs – Lodge & Realize HORM
Generate Outward Remittance Details Report HOUTREMI
BILLS
Inward Bill MIIB
Outward Bills MEOB
SAFE DEPOSIT LOCKERS

Assign Locker Keys to Locker HLKKM
Issue Locker to Customer HLKCM
Collect Rent & Charges HLKRCM
Locker Check-in / Check-out HLKOPS
Generate Locker Report LKREPM
Locker Customer Master Maintenance HCLKCM
ACCOUNT CLOSURE
Recovery of Charges before Closure of SB/CA/CC/OD& HCACC
Verification
Closing of SB/CA/CC/OD Account &Verification HCAAC
Close TD A/c HCAACTD
Verify closure of TD A/c HCAACVTD
Loan account closure & verification CAACLA
Refund of TDS HRFTDS
TDS inquiry & Reports printing HTDSIP
485
END OF THE DAY
Checking of EOD Validation HSVALRPT
SOL Change ofOperating Date HSCOD
SOL Closure Operations HSOLCOP
SOL Closure for Last Day HSCOLD
SOL Status Inquiry HSSI
CUSTOMER MASTER CREATION, MODIFICATION & VERIFICATION

Checking existence of duplicate CIF Black List and Negative CRM– Dedup CRM–
List Blacklist CRM – Negate
Creation of Retail/ Corporate CIF CRM–New Entity
Modification Before Verification CRM–Entity Queue–Reject
Verification of CIF Creation CRM–Entity Queue–
Approve
Modification after verification or modification in existing CIF CRM–Edit Entity
ID
Death of a customer CRM–Edit Entity
Suspension of CIF CRM– Suspension
Linkage of new CIF generated & Verification HCCFM
486
राजभाषा अनुभाग
1 – दवश्व दहिंिी दिवस कब मनाया जाता है .

दसतम्बर 2.14 जून 1.14
जून 14 .4 जनवरी 3.10
2. दहिंिी दिवस कब मनाया जाता है –
दसतम्बर 2.14 जून 1.14
जून 14 .4 जनवरी 3.10
3. राजभाषा दनयम के अनुसार लखनऊ दकस क्षेत्र में आता है ?
-1घ .2 क
-3ख .4 ग
4– राजभाषा अदिदनयम को कब सिंशोदित दकया गया .
1.1967 1963 .2
3.1965 1968 .4
5 )4(8 दनयम .क्या है -
.1व्यक्तिश आिे श : .2कायाालय आिे श
.3राजभाषा अदिदनयम .4राष्ट्रपदत आिे श
6दनयम( दहन्दी में प्राप्त पत्र . 5 )का उत्तर दकतने प्रदतशत दहन्दी में िे ना चादहए -
%99 .1 %10 .2
%100 .3 %50 .4
7. दहन्दी को राजभाषा का िजाा कब प्राप्त हुआ -
1949 दसतम्बर 14 -1 14 -2दसतम्बर 1950
1947 दसतम्बर 14 -3 1951 दसतम्बर 14 -4
8. सिंघ की राजभाषा दहन्दी व दलदप – है ...........................
-1गुरुमुखी -2रोमन
-3दहन्दी -4िे वनागरी
– सिंसि में एक सिस्य दकस भाषा में अपनी बात रख सकता है 9
-1दहन्दी या अिंग्रेजी – 2अिंग्रेजी
-3मातृभाषा -4उपयुाि तीनोिं
10. राजभाषा उप दनयम के अनुसार कायाालय में राजभाषा नीदत का पालन करने की ...........
दजम्मेिारी कायाालय प्रमुख की होती है
1- 12 17 -2
15 - 3 19 -4
11. नगर राजभाषा कायाांवयन सदमदत की बैठक वषा में दकतनी बार आयोदजत की जाती है -
1- वषा में एक बार -2 वषा में चार बार
– 3 वषा में तीन बार -4वषा में िो बार
12. राजभाषा कायाांवयन सदमदत की दतमाही बैठक वषा में दकतनी बार आयोदजत की जाती है -
487
13. राजभाषा अदिदनयम )3(3 की िारा 1963को कब लागू दकया गया था-
से 1963 जनवरी 26 -2 से 1965 जुलाई 26 -1
से 1976 जनवरी 26 -4 से 1965 जनवरी 26 -3
14. सिंसि द्वारा राजभाषा सिंकल्प कब पाररत दकया गया ?
1963 .2 1.1967
1968 .4 3.1965
15. इनमें से कौन सी भाषा िे वनागरी दलदप में नही िं दलखी जाती है –
.1दहन्दी .2 सिंस्कृत
.3गुजराती .4 मराठी
16. वतामान में सिंसिीय राजभाषा सदमदत में कुल दकतनी उप – सदमदतयााँ हैं-
.1कुल .2 सदमदतयााँ -उप 4कुल सदमदतयााँ -उप 3
.3 कुल .4 सदमदतयााँ -उप 2 कुल सदमदतयााँ -उप 1

17. राजभाषा दनयम के अिीन िे श को दकतने क्षेत्रोिं में वगीकृत दकया गया है –
2 .1 3 .2( क, ख, ग )
4 .3 5 .4
18. सिंदविान की आठवी िं अनुसूची में दकतनी भाषाएिं हैं –
18 .1 20 .2
21 .3 22 .4
19. सिंदविान की आठवी िं अनुसूची में बाि में दकतनी नयी भाषाएिं जोड़ी गयी िं –
18 .1 5 .2
4 .3 6 .4
20. राजभाषा अदिदनयम कब पाररत हुआ था ?
1963 .2 1.1967
1968 .4 3.1965
21. राजभाषा अदिदनयम कब सिंशोदित हुआ था ?
1963 .2 1.1967
1968 .4 3.1965
22. शाखाओिं द्वारा राजभाषा ररपोर्ा , वेब पोर्ा ल पर समाप्त दतमाही के बाि प्रेदषत करने की
अिंदतम दतदथ ...?
1. 5 2. 10
3. 15 4. 20
23. राजभाषा ररपोर्ा ,प्रिान कायाालय को वेब पोर्ा ल पर समाप्त दतमाही के बाि प्रेदषत करने की
अिंदतम दतदथ ...?
1. 5 2. 10
488
3. 15 4. 20
24. गृह मंत्रालय, राजभाषा विभाग अनुसार कायाा लय में खरीद की जाने िाली पु स्तको पर % ............
अवनिाया रूप से वहं दी की पुस्तको की खरीद की जाए ।
1. 40% 2. 50% 3. 60% 4.
80%
25. गृह मंत्रालय, राजभाषा विभाग अनुसार वषा में दकतनी बार ‘दहिंिी कायाशाला ‘आयोदजत की
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Handbook On Promotion 2021

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Compiled by …….SATISH RELHAN

ZONAL RISK MANAGEMENT CELL, JODHPUR

Global NIM increased to 3.09 % in Q3FY21 against 2.49% in Q3FY20.

Global Cost of Deposits declined to 4.23% in Q3FY21 from 4.48% in Q2FY21.

GNPA ratio at 12.99 % in Dec’20 declined by 44 bps from 13.43 % in Sep’20.

NNPA ratio at 4.03 % in Dec’20 declined by 72 bps from 4.75 % in Sep’20.

Business Performance in Key Parameters

❖ Achievement under Agriculture is 18.59% at Rs. 1,24,549 Crore as on Dec’20.

❖ Global Yield on Advances was at 7.72% in Q3FY21 against 7.88% in Q3FY20.

13914 ATMs. 12346 BCs.

❖ POS installed increased YoY by 31% to 1,09,266.

❖ Bharat/BHIM QR Code installed increased to 4,53,859

❖ Enrollment under PMJJBY, PMSBY & APY:-

JANSURAKSHA SCHEME ENROLLMENT UP TO 31.12.2020

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) 33.1

❖ 174 surround applications have been made live.

❖ Gram Sampark Abhiyan – (Launched on 2nd October 2020): 11 Lakh customers

Awards and Accolades

Social Media Presence of the Bank: (No. of Followers)

❖Facebook: 9,85,945 (https://www.facebook.com/pnbindia/)

* Short-term lending rate (repo) stands at 4 pc;

The global economic recovery slackened in Q4 (October-December) of 2020 relative to Q3 (July-

RBI/2020-21/76 DOR.RRB.No.28/31.01.001/2020-21 dt December 4, 2020

RBI/2020-21/75 DOR.BP.BC.No.29/21.02.067/2020-21 dt December 4, 2020

1. Direct Dispatch of Shipping Documents

2. ''Write-off'' of unrealized Export bills

Particulars Limit Limit (%) In relation to

Self-write-off by an exporter 5% Total export proceeds realized

Self-write-off by Status 10%

Write-off by AD Category-1 10%

3. Set-off of Export receivables against Import payables :

The AD bank may allow set-off of outstanding export receivables

Refund of Export Proceeds :

RBI/2020-21/69 A.P. (DIR Series) Circular No.07 dt November 23, 2020.

(viii) Housing Finance Institutions.

1 Category-wise transaction where the AD Category-II Monthly

2 Category-wise, transaction-wise AD Category- II Monthly

3 Statement of Purchase transactions of FFMCs and AD Monthly

4 Extension of Liaison Offices (LOs) AD Category-I As and when

5 Extension of Project Offices (POs) AD Category-I As and when

6 FII / FPI daily: Daily inflow / outflow of AD banks Daily

7 FII / FPI Return (Monthly): Data AD Category-I Monthly

9 Reporting of Inflow / Outflow details Asset Quarterly

10 Market value of FII Investment in India AD Category-I Fortnightly

11 Market value of FII Investment in India AD Category-I Monthly

12 FII holdings as percentage of floating AD Category-I Monthly

13 Form DRR for Issue / transfer of Custodian At the time of issue /

14 ADR / GDR Movement Report- two AD Category-I Monthly

15 Repatriation of Sales proceeds of Custodian Monthly

16 GDR / ADR underlying shares issued, Custodian Monthly

17 Monitoring of disinvestments by AD banks Monthly

RBI/2020-21/66 A.P. (DIR Series) Circular No.05 dt November 13, 2020

RBI/2020-21/63 FIDD.CO.Plan.BC.No.8/04.09.01/2020-21 dt November 5, 2020

RBI/2020-21/62 DOR.No.BP.BC.27/21.04.048/2020-21 dt November 2, 2020

i. The two interoperable QR codes in existence – UPI QR and Bharat QR – shall

An SRO is a non-governmental organisation that sets and enforces rules and

Eligibility for Recognition of an SRO by RBI

- The SRO shall be set-up as a not-for-profit company under the Companies

For details, please refer,

RBI/2020-21/56 DOR.No.BP.BC.24/08.12.015/2020-21 dt 16.10.2020.

a. 21.00 per cent as on June 30, 2022