Documentation

DOCUMENTATION
02nd October 2022
Positive Attitude Change Everything
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RBI and Bank’s guidelines. Ever, however, users are advised to go through Bank’s Circular and guidelines for details
Contents at a Glance
Subject Page No.
1. Significance of Documentation, Need and the Essential

03
Features
2. Constitution & Facility-Wise Documentation 15
3. List of Document Formats with Purpose 24
4. Facility wise & Product wise Documentation- General 31

Advances
5. List of Documents required in FOREX Advances 35
6. List of Documents required in MSME/MID Corporate/Large 45

Corporate Advances
7. List of Documents required in Retail Advances 52
8. List of Documents required in Government Sponsored and 55

Agriculture Advances
9. Essentials of Mortgages & CERSAI 71
10. Format : “Communication of Exact Repayment Start/ Due 81

Date to Borrowers for their Liability of Loan EMI /
Instalment”
11. Format : Title Search Report 87

Significance of Documentation,
Need and the Essential Features
Significance of Documentation:
Documentation is a process of obtaining documents in proper form and in accordance with

various statutes in force. It is the primary evidence for establishing contracts, rights and
liabilities between parties. Banks can only enforce their rights on the basis of proper documents
available
Need for Documentation in Banks:
Loan proposal is processed based on Technical feasibility and economic viability of the project,
Credit worthiness of the borrower/s. In spite of the above account turns bad due to one or more
reasons. When other avenues of recovery fail, ultimate recovery of loans depends on the case
filed by the Bank in the court of law based on loan documents. Hence Security documents alone
provide legal protection to lending Banks
Document definition:
As per section 3 of the Indian evidence act 1872, a document means any matter expressed or
described upon any substance by means of letters, figures or marks or by more than one of
these means, intended to be used or which may be used, for the purpose of recording “that
matter”
What are Documents?
❖ They may include one or more of

❖ Security documents (SD)
❖ Supporting / auxiliary documents (AD)
❖ Agreements
❖ AODs / DBCs
❖ Vouchers
❖ Ledger extracts
❖ Account opening forms
❖ Electronic agreements, messages, computer print outs etc. also constitutes primary
evidence (Information technology act 2000)
❖ Any communication between borrower and Bank or vice versa
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Significance of document / documentation:
❖ Acts as written evidence for transaction and security created

❖ Identification of borrower
❖ Security & type of charge created
❖ Details of terms & conditions of sanction
❖ Terms of repayment
❖ Rights and liabilities of parties to contract
❖ Calculation of limitation period
❖ Enforcement in the court of law legally in case the a/c turns bad.
❖ To take care of RTI queries
A document is useful only when:
❖ It is properly executed and complete in all respects, by mentioning date, month and
year of execution
❖ Place of execution is mentioned
❖ It is not materially altered
❖ Details of primary / collateral securities is mentioned
❖ It is stamped as per Stamp Act - Indian/ state
❖ It is attested / witnessed wherever necessary
❖ Registered as per relevant acts
❖ Is not barred by limitation period
❖ executed by a legally competent persons
Common instances of defective documentation:
❖ Inappropriate documents / forms used

❖ Not properly filled in / half- filled / not filled
❖ Documents under stamped / not stamped
❖ Stamps affixed after execution of documents
❖ Unauthenticated corrections / overwriting
❖ Documents not executed by authorized persons as per bye law / resolutions
Consequences of not obtaining documents:
❖ No evidence
❖ Charges cannot be created
❖ Securities not enforceable
❖ Loss to the lending bank
❖ Penalty / fine
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❖ Staff accountability
❖ Contest by borrower cannot be replied
Who cannot execute the documents?
Minors /Lunatics / Undischarged Insolvent / Convicts /Heavily drunk people
Who are competent to execute documents?
✓ Persons who are competent to contract / Individuals /Proprietor /Partnership firms

/ Companies / HUF/ Trusts/LLP
Who are also competent to execute documents?
✓ Illiterate persons
✓ Blind persons
✓ Married women
✓ Purdanashin lady
✓ Cooperative societies
✓ Government bodies
Precautions in documentation at various stages:
➢ Pre-execution stage
➢ During execution and disbursement stage
➢ After disbursement stage
Precautions to be taken during execution of Documents:
✓ Document to be executed in the presence of officials of bank and should be recorded by

a certificate mentioning the name of the official (MSME/168 dated 06.05.2013)
✓ Fill in one sitting/ one ink/ one pen without blanks
✓ No witnessing of documents except while registering SM or EM
✓ Obtain photographs of all borrowers / guarantors, (for illiterate borrowers/ obtain their
thumb impression)
✓ In case of illiterate borrowers, a certificate duly witnessed, should be held on record,
stating that the contents of documents are explained in vernacular language, and the
same has been understood by the party
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✓ If the borrower is a left hander, a small note to that effect be annexed along with
documents
✓ If borrowers do not understand the language of document a certificate duly signed by
borrower that it is explained to him in his language and he understood the contents
clear and loud
✓ Preferably get the documents executed by borrower or bank official can fill up.
✓ Fill the documents today itself before disbursement.
✓ Nobody knows what will happen tomorrow.
✓ Before signing ask borrower to confirm contents
✓ Signing on revenue stamps across (cancellation)
✓ Each page to be signed in full ,no initials
✓ No blanks to be left
✓ All corrections and alterations to be duly authenticated in full signature. if many
corrections are there, obtain fresh set
✓ Mortgage strictly as per set rules
Precautions to be taken Post execution of Documents:
✓ To be verified before sending for safe custody

✓ To be entered in documents register
✓ To be kept in a cover/ docket in document safe under joint custody
✓ Do not punch or make holes
✓ Do not allow unauthorized persons to verify or remove the security documents
✓ Have periodical check and verification
✓ Photocopies of documents to be given to party against acknowledgement after they are
filled and signed. (IC 9037 dated 18.08.2011).
✓ CPA audit to be done wherever applicable for loans above Rs.100.00 lacs
✓ CPA to be done for retail loans also
➢ Rs.10.00 lacs and above for rural & SU branches
➢ Rs.50.00 lacs and above for urban and Metro branches
✓ Obtain fresh set of documents from legal heirs in case of death of the borrower
✓ In case of KCC Loans the limits above Rs.25.00 Lac CPA should be carried out invariably
and for project like fisheries the CPA officer shall be given additional assignment to
verify the genuineness of land records, seasonality for Pisci culture and cash flow etc.
Vetting of documents before release of limit :
❖ Loans up to Rs. 10.00 lacs – by BM or Advance officer
❖ Loans above Rs.10.00 lacs to up to Rs.100.00 lacs – by law officer /Panel Advocate
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❖ Loans beyond Rs.100.00 lacs – by Panel Advocate other than the advocate who has
given legal opinion
❖ The vetting certificate should clearly state that documents are properly executed,
adequately stamped, duly registered and are enforceable in the court of law.
Stamping of documents:
Section 17 of Indian Stamp Act, 1899 stipulates that the instruments executed in India must be
stamped before or at the time of execution. Sections 35 of Stamp Act states that the
instruments not duly stamped are inadmissible in evidence.
In order to constitute a document as duly stamped the following things are to be satisfied
• The document should be stamped adequately.
• Correct description of stamps is to be used.
• The stamps used are duly cancelled.
• Only one instrument can be written on one stamp paper (u/s 14)
PRECAUTIONS IN HANDLING POWER OF ATTORNEY (PA)
• Agents /P.A. holder- handle with extra care and with proper legal opinion (GPA or
SPA)(IC 3275 dated 04/07/1986-operation of customer’s a/c by PAs)
• PAs should be authenticated by a Notary public, court, judge or magistrate.
• PA should be forwarded by the principal (customer) to the Bank
• Bank to register the PA in their books and acknowledgement to be sent to the
principal
• Details of PA should be entered in our PA register by giving a number to it and our
stamp and registration number should be noted of original PA
• As a matter of caution all request letters for sanction of loan, documents, DBCs
should be signed by principal.
• Only day to day operations as permitted by PA can be allowed by the Bank to the PA
holder
• A General PA (GPA) cannot be used to transfer immovable property (Suraj lamp &
Industries Vs State of Haryana, SC ruling dated 11.10.2011)
• As far as possible hold original PA in our record.
• Wherever possible bind the PA holder to the loan / transaction by taking him as a
guarantor.
• PA to be registered with registration authority before finance.(IC 6281 dated
07.09.2001)
• ROs are required to give permission to branches on case by case basis to finance
Housing loans built on plots acquired through PAs (IC 6281 dated 07.09.2001)
• PA gets automatically terminated with the death, insolvency of the principal.
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STAMP ACTS
Central act – Entry 91 of Union list - 10 instruments (Revenue Stamps) for DPN, Bills of
Exchange, Share transfer, Bill of Lading, insurance policy, debentures, proxies, letter
of credit, money receipts and cheques (exempted from stamp duty). Respective state
acts – (special adhesive / embossed) for agreements, PAs, AOD, DBCs, mortgage deeds
etc. other than those mentioned above.
SD 22 and SD 23 to be stamped with Re.1.00 revenue stamp + stamp duty applicable as

per state stamp duty.
There are 03 types of stamps

1. Judicial stamps- used in courts for paying court fees etc.
2. Non-judicial stamps (NJ stamps)- validity- 6 months for refund.
• NJ stamp paper may be E – Stamp paper also
• If E stamps are purchased, verify the code of transaction before purchase
• NJ stamp should normally be purchased at the time of documentation
3. Postal stamps
Non- judicial stamps:
• Adhesive stamps – like revenue stamps, share transfer stamps, notary stamp
They are affixed on DPN, money receipts, balance confirmation letter etc.
• Special adhesive stamps – substitute for non-judicial stamp paper

Can be affixed on all types of agreements and deeds, but care to be taken to verify the
authority for cancellation of these stamps
• Embossed or impressed stamps – Non judicial paper having embossed/impressed stamp

from Registrar/ sub registrar after remitting required stamp duty to SRO
Section 12 states that the adhesive stamps are to be cancelled in such a manner that
they cannot be used again. An adhesive stamp can be cancelled either by writing the
name or by signing by the executants across the stamp. Though drawing of diagonal or
parallel lines on the stamp is treated as cancellation, it is advisable to get the adhesive
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stamps cancelled by signature or thumb impression (in case of illiterates) of the
executants. An instrument with adhesive stamp not cancelled in the above manner will
be treated as unstamped and is made inadmissible in evidence. {u/s 12(1)}
Use of Non- judicial stamp paper:
✓ The entire document may be written or typed on the stamp paper OR

✓ A few lines of the printed document may be cancelled by pen and
✓ The same should be written on the stamp paper
✓ A portion of the printed matter should come on each sheet of stamp paper
✓ Each stamp paper should be signed by borrower/s
✓ The cancelled portion on the printed document should be duly authenticated by
borrowers with their full signatures
Execution of documents outside India – (u/s 18):
Any document other than DPN, or BOE to be stamped at the time of execution relevant
to that place and is subsequently brought to India, will have to be stamped once again
by the first holder within 03 months of its arrival to India.
Execution in more than one state:
Stamp duty to be paid relevant to the state where it is signed first and then sent to
second state for signature/s. In case duty is high in 2nd state, difference has to be paid
before the person signs then the document to be sent to stamp office which certifies the
documents.
Earlier Instruments like D.P. Note, Bill of Exchange (Usance), Acknowledgement of Debt,
which are not duly stamped will be void-ab-initio (i.e., invalid from the very beginning).
Such instruments were not admissible in evidence even on payment of deficit and
penalty- (u/s 35) .But now all documents can be validated by paying penalty as per
amendment to Indian stamp act in 2006 (court judgments varies). Other types of
documents can be admissible on payment of deficit stamp duty and penalty which may
be up to a maximum of ten times the duty chargeable, with a minimum of Rs.5/-.
Section 19 – A promissory note / bill of exchange (Demand / usance) executed outside
India should be stamped by its first holder in India before presenting it for acceptance,
payment or negotiation.
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Local stamp acts:
The state governments are permitted to amend the Indian stamp act or enact
completely new acts or prescribed different rate of stamp duty for instruments not
covered under Entry 91 of the union list.
Adjudication:
As per the provisions of Section 31 and 32 of Stamp act, an instrument before execution
or after execution with stamp or without stamp can be brought before the Collector
within 30 days of execution for adjudication. On payment of required fee, the Collector
decides as to the adequacy of stamp and certifies accordingly. In case of
unstamped/under stamped documents executed, he will collect the deficit duty and
prescribed fee and then certify accordingly. No penalty is levied for insufficient
stamping or un-stamping of a document produced to Collector under section 31, within
30 days of its execution.
Impounding:
State stamp law authorities can enter the premises of Bank for inspection. They have
powers to impound/seize any improperly stamped documents. (u/s 33)Registrar of
stamps / collector has powers to levy penalty. Offences against stamp laws are liable
for prosecution even after payment of penalty (u/s 43)
LAW OF LIMITATION:
The limitation act 1963 provides period of limitation for different types of suits, appeals
and applications. The law favours the diligent & not the indolent. Limitation period is
the time limit within which action can be taken in a court of law to enforce any legal
right. The limitation period bars the remedy of filing a suit. It does not take away the
right of recovering the debt. If different parties put their signatures on different dates,
the date on which the last party signs is the “date of document execution” Limitation
starts from the last date of execution
Limitation exclusions:
✓ Lien
✓ Right of set off
✓ Pledge
✓ If otherwise not specified limitation period is normally three years commencing from
the subsequent date of document.
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Periods excluded for calculating limitation:
• Section 4 – when the court is closed

• Section 14 – suit filed in wrong court by mistake
• Section 12 – first day of the cause of action can be excluded in computing period of
limitation.
• Section 15 (5) - in computing limitation period for any suit, the period for which
defendant has been absent from India shall be excluded.
• The period the party in prison or mental asylum to be excluded
• Section 15 (1) – when cause of action is restrained by injunction from court such period
of injunction is to be excluded for the purpose of computing limitation.
How to extend limitation period?
Before expiry of document

• Acknowledgement of debt –section 18 binds the person who has signed.
• Part payment , slip signed by party – section 19
• Ordinary letter where liability of the bank is admitted
• Revival letter
• Mention in balance sheet.
To extend limitation period in our Bank – Formats:
• Simple DBC (SD 22)– to be obtained once in half year from borrower
• Composite DBC – (SD 23) preferably once in a year, both from the borrower/s and
guarantor/s.
• SD 23 - extends the limitation of mortgage also (IC 3733 dated 13.07.1988)
• SD 23A – to be taken once along with usual DBC subsequent to shift from BASE RATE to
MCLR
• SD 23B – to be taken once along with usual DBC subsequent to shift from MCLR to EBLR
• Even though liability of guarantor is co extensive with that of borrower (u/s 128 of ICA,
1872), as an abundant caution signature/s of guarantor/s are also obtained on SD 23 ,
SD 23A& SD 23B
Regularizing time barred debts:
• Obtaining an express & unconditional agreement to pay the time barred debt.
[section 25(3) of the contract act ]
• This agreement is a valid consideration for fresh promise to pay.
• Format available in e-Manual “Documentation” (format 29)
• If possible fresh & full set of documents may be obtained
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Limitation period for various documents:
Nature of Doc. Limitation Period

DP NOTE 03years from the subsequent date of execution.
Term Loan Document 03 years from the due date of each installment
SD-1, 03 years from the date of cause of action. 03

Deed of Guarantee years from the date of recall of advance from the
guarantor. (as a abundant caution- 03 yrs from
date of SD 01)
SD-02, Bank can dispose the pledged good after notice

Pledge Agreement and recover the advance even if document is time
barred.
SD-03, SD 06 etc., 03 years from the subsequent date of execution.

Hypothecation Agreement However if goods are taken into possession and
kept in pledge, then no limitation for disposal.
Mortgage 12 years from the date of cause of action. (money

becomes due and payable)
Abundant caution – 12 yrs from date of Mortgage)
Letter of Hypothecation of Three years from date of each bill.

Bill
Counter Indemnity Three years from the date of payment of the

invoked amount.
For balance due on a 03 years from close of financial year in which last
mutual, open and current item/ transaction is admitted
a/c, CC a/c
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Limitation in case of suit filed accounts
Appeal to high court against lower court 90 days from decree date
Appeal to other courts on the decree at 30 days from date of decree

lower court
Execution of decree 12 years from date of decree
LAW OF REGISTRATION (INDIAN REGISTRATION ACT – 1908):
Documents to be registered (u/s 17)

• Gift deed for immovable properties
• Transfer deed (sale deed)
• Immovable property of value Rs.100/- or more except wills.
• Mortgage deeds
• Sale deeds
• Lease deed ( 12 months or more)
• Memorandum of deposit of title deed signed by borrower
• A will has to be attested by two independent witnesses & as it involves transfer of
property, it has to be registered. (Narinder Singh RaoVs AVM Mahinder Singh Rao and
others, SC ruling dated 22.03.2013)
Charges requiring registration under Companies Act-2013 with ROC:

• A charge on any immovable property
• A charge, not being a pledge, on any movable property of the company
• A charge on the book-debt of the company
• A floating charge on the undertaking or property of the company including stock in
trade.
• Within 30 days from date of execution and with fine another 30 days is permitted.
Time limit for registration of documents with SRO executed in India:
• A document is to be presented for registration within a period of four months from the
date of its execution, u/s – 23
• Condonation of delay may be for another 04 months
• Subsequent delay may attract penalty up to 10 times the prescribed fees
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• Place of registration – section 28 & 29A - document must be presented for registration
in the office of the sub-registrar within whose sub-district the whole or a portion of the
property is situated.
Registration of documents executed outside India:
• When documents are executed outside India, it should be registered within 04 months
of its arrival to India
• Non- registration of documents requiring registration, cannot be admitted as an
evidence (u/s 49)
• It is the date of document intended to operate, and not the date of registration from
which the priority would be reckoned (u/s 47 & 48)
ATTESTATION OF DOCUMENTS:
• The term attestation has been defined in section 3 of the TP act, 1882.
• Attestation means witnessing of the documents by two or more witnesses each of whom
has seen the executants sign or affix his mark on the instrument
• Any person who is not a party to the document may witness
• Pledge letter, hypothecation deeds and letter of guarantee are not required to be
attested.
• Mortgages (except mortgage by deposit of title deeds) are required to be attested.
• However EM requiring registration has to be attested
• A will has to be attested by two independent witnesses & as it involves transfer of
property, it has to be registered. (Narinder Singh RaoVs AVM Mahinder Singh Rao and
others, SC ruling dated 22.03.2013)
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Constitution & Facility-Wise Documentation
Documentation may be -
✓ As per constitution
✓ As per charges
✓ As per Facility
Different constitutions (type of borrowers):

➢ Individuals
➢ Joint individuals
➢ Proprietor
➢ Partnership
➢ LLPs
➢ HUF
➢ Companies
➢ Trusts
➢ Non -trading entities
➢ Associations/clubs/societies
Minor accounts:
❖ A minor is one who has not completed 18 years of age (u/s 3 of Indian majority act,
1875, amended wef. Dec.16, 1999)
❖ A minor is not competent to enter into contract (u/s 11 of ICA)
❖ A contract by minor cannot be ratified by him even after he attains majority
❖ Guardian of the minor can raise a loan for the benefit of minor after obtaining
permission from the court stating that the loan is for benefit of minor
❖ This loan can be recovered u/s 68 of ICA out of the property of the minor (no personal
liability)
Rules relating to minor’s contract:
❖ A minor cannot be declared as an insolvent even though there are dues from him.
❖ U/S 30 of ICA, minor can be admitted for only benefits of partnership firm, but he
is not liable for losses
❖ Bank cannot proceed legally against a minor, when he has falsely represented
himself as a major (Rule of Estoppel)
❖ A major who gives guarantee to a loan a/c of minor is also not liable for the loan
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Loan against minor properties:
❖ Handle with extra caution. Loan should be for the benefit of minor.
❖ DC / Judicial Magistrate permission is required to take minor’s property for
mortgage.
❖ As an abundant caution take separate legal opinion and next higher authorities
consent to finance on Minors’ property
PARTNERSHIP ACCOUNTS (Indian partnership Act 1932):
❖ U/s 4 of IPA, a partnership is the relationship between two or more persons who agree
to share profits of business carried by all or any of them acting for all
❖ Contract may be oral or in writing
❖ Written contract is called partnership deed
❖ Deed has to be stamped as per state stamp act
❖ Partnership firm may be registered with Registrar of Assurances or non-registered
o (U/s 69 of IPA)
❖ Registered partnership firm – can sue their debtors
❖ Unregistered partnership firm – cannot sue their debtors
❖ Max. number of partners in a partnership firm– 100
Who can be a partner in partnership firm?
✓ Persons having legal capacity to contract

✓ A company
✓ A trust (due care as to whether trust deed permits the same)
Who cannot be a partner?
➢ Minor, insane and insolvents

➢ HUF (as per supreme court judgment 1998)
➢ NBFCs (as per RBI directions dated 30-03-20110)
Change in constitution of the firm:

❖ New partner admission – New partner is not liable for the existing debt unless he
expressly agrees for the same
❖ He should give consent to the mortgage also
❖ Retirement – such partner cannot be held liable for advance made subsequent to the
receipt of his retirement notice
❖ Bank can release such partner and accept the new partner, OR
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❖ If retiring partners liability is to be retained, the a/c should be ruled off, and
operations may be allowed in a new a/c (to avoid Clayton's rule)(IC 2017 dated
27.10.1976)
Documents for Partnership firm:

❖ CAs certificate may be obtained to verify the details of partners and the present
status of the firm
❖ All partners to sign documents on behalf of the firm and also in their personal
capacities
❖ DP Note –
❖ AD 07 – Declaration of Partnership in individual capacity without seal
❖ Hypothecation agreements (SD 03/06/18/19/20)
❖ SM/EM of property (SD 14/15/AD13)
❖ SD 01 in personal capacities
❖ AD 09 (M)- letter of continuity
❖ AD 11 – U/T of Partners
HINDU UNDIVIDED FAMILY (HUF):

❖ HUF is not a separate person in the eye of law
❖ Co-parceners are related by birth for three generations
❖ Essential feature is presence of ancestral property
❖ Karta- senior most coparcener.
❖ Karta may be male or female
❖ HUF cannot be a partner in a partnership.
❖ HUF declaration gives explicit powers to avail loan for family purposes ONLY
❖ When a suit is filed against a HUF, the burden lies with the Bank to prove that loan was
taken for the benefit of HUF
❖ Coparceners are liable to the extent of ancestral property ONLY, not in personal
capacities
❖ HUF properties should not be taken as security for loans other than to HUF
Documents for HUF:

❖ Application signed by Karta and all major coparceners
❖ DPN
❖ AD 08 – Declaration of HUF (signed by all major coparceners)
❖ AD 09 (M) – letter of continuity
❖ SM/EM (SD 14/15/ AD 13)
❖ SD 01 in personal capacity of all coparceners
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TRUST ACCOUNTS:
❖ A trust is formed for the benefit of a person(s) or purpose u/s 3 of Indian Trust Act 1882
❖ Registered trust deed has to be obtained
❖ Resolution passed by all trustees to open and operate the account including availing
loan
❖ List of trustees with full address and their signature.
❖ Permission from charity commissioner to avail loan from Bank in case of Public Trust.
❖ It is advisable to obtain SD 01 from trustees in individual capacity to bind them
personally
Documents for Trust
❖ Application signed by all trustees

❖ Resolution to avail loan, purpose should be as per trust deed
❖ DPN
❖ SM/EM (SD 14/15/AD 13)
❖ SD 01 in individual capacities of trustees
NON TRADING ASSOCIATIONS, CLUBS, CO OPERATIVE SOCIETIES
❖ Should have been registered under co - operative societies Act.

❖ No loan for unregistered societies.
❖ Bye laws duly certified- explains activities of societies
❖ Resolution passed by Managing body to open and operate the account, to avail the loan,
as to who will execute documents.
❖ Permission from Registrar of Cooperative societies
Documents for Non- trading Associations, clubs, societies
❖ Application signed by persons authorized as per resolution

❖ DPN
❖ SM/EM (SD14/15/AD 13)
❖ SD 01 in personal capacities of office bearers
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Non- Trading Entities
❖ Non- trading entities are those who are not publishing P & L statements, but cash
surpluses exist.
❖ Eg. Schools, hospitals, NGO’s etc.
❖ Constitution – details of persons who have interest in the organization.
❖ Bye laws.
❖ Resolution.
LIMITED COMPANIES:
❖ Private and Public limited companies are governed by Companies Act.1956& 2013.
❖ Company is a legal entity having no physical existence but operated through
authorized persons
❖ Certificate of incorporation- birth certificate of artificial entity.
❖ Certificate of commencement of business- for Public Ltd. Co.
❖ Memorandum of Association (MOA) for outdoor management- specifies the
relationship of the company with outside world. It has name clause, registered office
clause, object clause (powers of the company for achieving its objectives),
authorized capital clause, liability clause of shareholders (limited or unlimited) and
association clause
❖ Borrowing powers of the company is stated in MOA
❖ Notice to be given to regd. office address only
❖ Charges are to be registered in ROC where regd. office is situated within 30 days (
date of registration is the essence and not the date of execution)
❖ Filing of charge with ROC to be done electronically in Ministry of Corporate Affairs -
project 21 (MCA – 21) by using the following forms and digital signature(IC 7520
dated 17.10.2006)
New loan CHG 1
Modification of CHG 1
existing charge
Satisfaction of charge CHG 4
❖ Articles of Association (AOA) for indoor management-specific clauses, internal

management, rights and powers of directors, borrowing powers, use of common seal,
nature of business etc.
❖ Borrowing powers of its directors are stated in AOA
❖ No onerous / confusing clauses in MOA and AOA.
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❖ Borrowing powers of the company should be explicit.
❖ Shareholders are owners of the company
❖ It functions through its Board of Directors
❖ Resolution passed by Board of directors in a duly held meeting– for opening of the
account Or for availing loan from the bank (u/s 292)
❖ Resolution should be signed by the chairman of the meeting and counter signed by
the secretary
❖ Normally credit facilities should not be sanctioned against “OMNIBUS” resolutions
❖ Common seal of the company to be affixed as per AOA or Board resolution (not
mandatory)
❖ Search report to be obtained from ROC before granting any credit facilities to verify
that assets offered by the company as security are not already charged to others
(u/s 130)
❖ List of Directors with their addresses , PAN numbers, and their signatures with photos
of directors who are authorized to avail and operate the account as per resolution
Documents for credit facilities to companies:

❖ Application, MOA, AOA, COI,
❖ Certificate of commencement of business in Public Ltd. Companies
❖ Search report
❖ Resolution passed by Board of Directors
❖ DPN
❖ AD 09 (M) letter of continuity
❖ SM/EM of properties (SD 14/AD 14)
❖ SD 01 in personal capacities of Directors
❖ AD 10 signed in personal capacities by directors – letter of U/T
❖ AD 12 – negative lien (to be stamped)
❖ Charges to be registered with ROC
❖ Form CHG – Ito be filed with ROC within 30 days
Limited Liability Partnership (LLP):
❖ Limited Liability Partnership (LLP) is formed as per as per statute provided under
LLP Act 2008
❖ It came into force wef.01.04.2008
❖ LLP is a business organization that combines the limited liability features of a
company and operational flexibility of a partnership firm
❖ It is suitable for CAs, advocates, Venture capital funds, and small enterprises
❖ LLP cannot be formed for CHARITY
❖ Name should be approved by ROC and should end with “LLP”
❖ This structure is already operating in UK, USA, Australia, Singapore etc.
19
Similarities between Company and LLP:
✓ Both are Corporate body (Incorporated under law and issued with COI by ROC)
✓ Separate legal entity (legal identity distinct from partners, it can hold assets and
liabilities of its own)
✓ Perpetual succession (it exists even when there is change in partnership/ all partners)
✓ Limited liability of shareholders /partners (to the extent of individual contribution, does
not extend to personal assets)
✓ One partner is not liable for another partner’s misconduct or negligence
Similarities / differences between partnership firm and Limited Liability Partnership
✓ LLP agreement is like partnership deed

✓ Rights and responsibilities of partners are governed by LLP deed
✓ Management is by partners and not by Board
✓ Partners in a partnership firm are liable jointly with all partners, but in LLP they are
liable only to the extent of their contribution
Who can be a partner in an LLP?
❖ Individuals, Companies and LLP can be a partner in an LLP

❖ In the absence of deed, schedule 1 of LLP Act will apply
Important features of an LLP:
❖ Minimum number of partners : 02

❖ Maximum number : No limit
❖ Minimum designated partners : 02
❖ Min. designated partner RESIDENT in India :01
❖ Only individual can be a designated partner
❖ The nominee of a company as per resolution can be a designated partner
❖ LLP to be registered with ROC
❖ Certificate of incorporation is necessary
❖ Designated partners have to obtain DPIN (designated Partner’s Identification
Number) and Digital signature from ROC for filing E returns
❖ LLP is to be audited if contribution is more than Rs.25.00 lacs and turnover is more
than Rs.40.00 lacs
❖ It can sue others and can be sued by others
❖ LLP cannot raise funds from public
❖ Documentation for loans is as per Companies
20
Advantages of an LLP:
❖ Comparatively lower cost for formation

❖ Lesser compliance requirements
❖ Easy to manage the business
❖ No requirement of minimum capital contributions
❖ Partners are not liable for the acts of others
❖ No minimum alternate tax to LLP (as on date)
TYPES OF CHARGES:
❖ Fixed charge- Ex. For Land& Building, plant and machinery

❖ Floating charge- Ex. On stocks in a CC a/c
❖ Pari-Passu charge – when several creditors are there (simultaneous charge, may be
in specified proportion OR in the ratio of loans )
❖ Exclusive charge – charge of only one Bank
❖ First charge – charge created in favour of first creditor
❖ Second charge – asset already charged to first creditor, and the charge of second
Bank are subject to the rights of first charge holder
Mode of creating charges:
Lien / Pledge /Hypothecation /Mortgage /Assignment
LIEN:
❖ Right of creditor to retain the possession of goods and securities of borrower /

guarantor till loan is adjusted (Ex. Bills, cheques, share certificates)
❖ Banker’s lien is a General lien (u/s 171 of ICA)
❖ Negative lien – An undertaking to bank stating that-He is the owner of the assets
and assets are free from encumbrances, he will not dispose of the asset OR create
any other charge without permission from the Bank.
Right of setoff:
❖ Adjustment of credit balance to debit balance

❖ Prior notice to be issued to the depositor
❖ Loan should be due, cannot be exercised for future debts
❖ Can be exercised for time barred debts
21
❖ Loan and deposits should be in same name
❖ Guarantors funds can be attached after giving due notice
❖ Though right can be made on term deposit, it can be made only after the term
deposit matures
Pledge:
❖ Section 172 of the Indian contract act,1872,defines the term pledge as under :
❖ The bailment of goods as security for payment of a debt or performance of a promise
is called pledge.
❖ Ex. Pledge of Gold
❖ Ownership is with borrower, while the possession is with the bank
❖ Only goods {u/s 2(7) of sales of goods act} can be pledged
❖ Bank to take care of goods pledged to it including insurance
❖ Can be sold/ auctioned only after giving notice to borrower
Hypothecation:
❖ In hypothecation, the possession of the property offered as security remains with

the borrower and an equitable charge is created in favour of the lender.
❖ “It is a charge against property to secure a debt -where neither ownership nor
possession is passed to the creditor”.
❖ Ex. Hypothecation of stocks, vehicles
❖ Defined in SARFAESI act (U/S 2-n)
❖ Hypothecated goods can be taken to possession only after giving due notice to the
borrower
Assignment:
❖ Assignment is the process by which one can transfer his right/ interest/ title over
his actionable claims (existing or future) to another. (section 130 of transfer of
property act) Eg. life policies
❖ Loan amount to be decided on the basis of surrender value of the policy
22
List of Document Formats with Purpose
Note: Branches to ensure payment of appropriate stamp duty as per their respective
State Act as applicable for various documents under various Articles of the Stamp Act.
Branches to consult their Law Officers at RO or the local Advocate about the stamp duty
payable on each of the document.
STANDARD DOCUMENTS (SDs)

DOC
NAME OF PURPOSE/TO BE USED FOR REMARKS
NO.
DOCUMENT
• To be signed in all
Obtaining personal/corporate pages by the
guarantee guarantors in their
personal capacity.
• In the last page

below the signature
Deed of
SD-01 guarantors have to
Guarantee
write their full name
with address &
mobile no
• One SD-01 can be

used irrespective of
no. of guarantors
Pledge facility like CC Pledge
Pledge
SD-02 (separate pledge form
Agreement
available for gold loan)
CC facility given only against
stocks and not book debts
Hypothecation Wherever movables like
SD-03 (Goods) vehicles, plant & machinery
Agreement etc. are taken as collateral for
a CC account, SD-03 to be
used.
For any enhancement given in
SD- Supplementar
the existing CC or wherever an
03(S) y to SD-03
adhoc limit is given.
Packing Credit Packing credit facility
SD-04
Agreement
Hypothecation For either CC or OD is given
SD-05 (Book Debts) against borrower’s Book Debts
Agreement
23
Any enhancement is given in
SD- Supplementar the existing CC/SOD (against
05(S) y to SD-05 book debts) or an ad-hoc limit
is given.
For CC facility against both
stocks and book debts.
Hypothecation
Wherever movables like
SD-06 Agreement of
vehicles, plant & machinery
Goods & Debts
etc. are taken as collateral for
a CC against stocks and book
debts, SD-06 to be used.
For any enhancement given in
SD- Supplementar the existing CC (stocks & book
06(S) y to SD -06 debts) or an ad-hoc limit is
given.
Hypothecation All the loans given for
Agreement agricultural activity
SD-07
(Agricultural
Advances)
Guarantee Guarantee is obtained for
Deed agricultural advances
SD-08
(Agricultural
advances)
Hypothecation Consumer durable goods like
(Consumer fridge, TV, washing machines
SD-09
Goods) etc. are taken as security
Agreement
Hypothecation Financing of vehicles – under
SD-10 of Vehicle Union Miles or Union Transport
Agreement etc.
Housing Loan All Housing Loans
SD-11
Agreement
Mortgage Simple mortgage deed for To be registered with
Deed mortgage of agricultural SRO
SD-12
(Agricultural properties
Advances)
Agricultural loan where
movable assets are not
Simple Loan created. E.g. land
SD-13 Agreement development, digging of well
(Agricultural) etc.
Where movable assets are
created, SD-07 to be used
Simple Creation of simple mortgage 2 witnesses are required
Mortgage on an immovable property for this document. To
SD-14
Deed belonging to the borrower be registered with SRO
(By Borrower)
24
Simple Simple mortgage on an 2 witnesses are required
Mortgage immovable property belonging for this document. To
SD-15
Deed to the guarantor be registered with SRO
(By Guarantor)
Pledge of securities like
Agreement for
Shares, Debentures, NSCs,
SD-16 Pledge of
Govt. Promissory Notes
Securities
Hypothecation of Bills (Bills
Letter of
Discounting/Bills purchase
SD-17 Hypothecation
limits) covered by
of Bills
DBP/FDBP/FUDBP/UDBP
Union Mortgage Loans. SD-20 does not contain
repayment schedule for
Where Term Loan is a part of Term Loan. Hence, this
General Term composite loan for which SD- document (SD-18) also
SD-18 Loan 20 is taken, this document is to to be taken which shows
Agreement be taken the repayment
schedule.
SD-18 is not a charging
document.
Term Loan If movables are financed as
Agreement part of Term Loan, this
SD-19
(Hypothecatio agreement is to be taken
n of Movables)
Composite loan, i.e. more than
Composite one limit is given to a borrower
SD-20 Hypothecation including non-fund based
Deed limits like CC Hypo, SOD, Term
Loan, LG etc.
To be used where any
SD- Supplementar
additional limit/enhancement
20(S) y to SD-20
in existing limit is given
DP note combined includes all
types of borrower ,where fixed
SD-21 DP Note
rates are charged
SD-21 DP Note for MCLR loans

A DP Note combined to include all type of
(MCLR) borrower
SD-21 DP Note for EBLR loans
B DP Note combined to include all type of
(EBLR) borrower
Simple Debit To be taken from the This can also be
Balance borrowers for all loans generated from the
SD-22 system (FINACLE-
confirmation-
cum- SDBCL).
25
Intimation To be taken at half
Letter yearly interval
To be taken where both debt To be obtained once in

Composite
and securities(EM/SM of 3 years before expiry of
SD-23 Debit Balance
property) are involved original limitation
Confirmation
period
To be obtained in all existing Should be obtained in all
SD- Letter of loan accounts at the time of existing loans at the
23(A) confirmation switch over to MCLR time of switch over of
interest to MCLR.
To be obtained in all existing Should be obtained in all
SD-23 Option/Reque loans if the borrower opts for existing loans at the
(B) st Letter switch over to EBLR time of switch over of
interest to EBLR.
26
AUXILIARY DOCUMENTS (ADs)
DOC
NO. NAME OF DOCUMENT PURPOSE REMARKS
Declaration/Undertakin To be taken where

g for creation of EM/SM is not created
AD-01
mortgage (Agricultural now for any reason
advances)
Letter of Lien To be taken for all loans

AD-02 against deposits
(Loan against Deposits)
Letter of general lien To be taken in all loans To be stamped as

AD-02(A)
and set off simple agreement
To be obtained
wherever Bank
Guarantee is issued.
Counter-Indemnity
AD-03 Where BG limit is
(For Letter of
sanctioned, then Format
Guarantee)
28(Omni-bus counter
indemnity) to be
obtained
Application for Letter Application form for

AD-04
of Credit (Import) Import Letter of Credit
Inland Letter of Credit Application form for

AD-05
Application Inland Letter of Credit
To be taken for DA
(Documents against
AD-06 Trust Receipt
acceptance) bills under
LC
To be taken for To be signed by the

partnership firm at the partners in their
Declaration of
AD-07 time of opening of individual capacity,
Partnership
account and also while without firm’s seal
giving loan
27
To be taken in case of To be signed by the
HUF while opening karta and all the
Declaration of Joint
AD-08 account and also while major/ adult co-
Family
giving advances parceners, without
HUF seal
AD- To be taken wherever

Letter of Continuity
09(M) DP Note is taken
To be taken where the To be signed by the

Directors have not given Directors in
Letter of Undertaking
the guarantee at individual capacity
AD-10 from Directors (Limited
present.(This is the
Companies)
undertaking to give the
guarantee in future)
Letter of Undertaking To be taken in case of To be signed by all

from Partners advances to partnership the partners with
AD-11 accounts firm’s seal
(Loans granted to
partnership firms)
To be taken for all Cash

Letter of Undertaking Credit facilities where
AD-12 not to alienate the Hypothecation of
hypothecated goods stocks/machinery is
taken as security
Memorandum of Deposit To be drawn in case of To be signed by two

of Title Deed (Equitable Equitable Mortgage for officers to whom
AD-13 Mortgage) other than companies title deeds were
delivered by the
(For individuals) mortgager
To be drawn where the To be signed by two

Memorandum of Deposit
property mortgaged officers to whom
of Title Deed (Equitable
AD-14 belongs to a company title deeds were
Mortgage)
delivered by the
(For Companies)
mortgager
To be taken from the
Letter of Consent
AD-15 borrower where
(Refinance)
refinance is available
28
To be obtained
wherever Cheques,
Bills, Hundis and other
Instruments with or
without
Letter of authorization
AD-16 Share Certificates or
in Bills facilities other Documents
attached, lodged with
the bank for Collection
and/or Discount and/or
Purchase from time to
time
29
Facility wise & Product wise Documentation
GENERAL ADVANCES
FACILITY SECURITY DOCUMENT
SECURED LOAN Fixed Deposit a) Appropriate D.P.Note

/ SECURED Receipt b) AD 09 (M) Letter of Continuity
OVERDRAFT c) AD-02(A) Letter of general lien & set off
d) Request Letter from the Depositor for granting
advance against the deposits and no-objection
for creating lien on the deposits.
e) FDR duly discharged by borrower/s(depositors)
f) Letter of consent (No objection) from the
depositor/s where FDR is in the name/s other
than that of the Borrower/s
g) AD-02 - Letter of Lien duly executed by the
depositors.
h) If the deposit is in the name of a minor, suitable
undertaking from the Guardian to be obtained
that the loan shall be utilized for the benefit of
the minor
Cumulative a) Appropriate D.P.Note

Deposit b) AD 09 (M) Letter of Continuity
c) AD-02(A) Letter of general lien & set off
d) Cumulative Deposit Pass Book
e) AD-02 - Letter of Lien duly executed by the
depositors.
f) An endorsement to be obtained from the
Borrower/s under his/their signature/s on the
last page of the relevant Pass Book as (undated):
g) “Pay yourselves against the loan of Rs……
Advanced to me/us”
h) Below the aforesaid statement the signature/s of
the borrower/s should be obtained. The pass
book should be kept along with the security
document.
Government a) Appropriate D.P.Note

Promissory b) AD 09 (M) Letter of Continuity
Note c) AD-02(A) Letter of general lien & set off
d) G.P. Note duly endorsed.
e) Pledge Agreement of Securities (SD –16)
f) Letter of Lodgement
g) All previous endorsements should be prima-facie
in order and chain of endorsements not broken.
30
h) They should be got verified by the P.D.O. of
Reserve Bank of India, particularly when any
endorsement is that of a firm or Limited
Company
i) At least one endorsement cage as well as renewal
cage must be blank at the time of lodgement or
otherwise security must be got reissued.
j) Interest on the security should not remain
uncollected for a long period
k) Payment of interest should be enfaced at the
local treasury or at place where the Bank has a
branch.
l) Inscribed Stock certificates should not be
accepted as security unless these are first
transferred in the Bank’s name in the Books of
Public Debts office of Reserve Bank of India.
m) No advance should be made against Zamindari
Abolition or Compensation Bonds issued by any
State Government without the permission of
Central Office.
a) Appropriate D.P.Note
b) AD 09 (M) Letter of Continuity
d) In case of shares in the physical form, the
following to be obtained:
i. Fully paid up shares accompanied by
blank transfer deed signed by all the
shareholders.
ii. Pledge Agreement of Securities (SD-16)
e) The transfer deeds should be in the prescribed

form duly stamped by the Registrar of Companies
but the date of such stamp not being older than
Shares
6 months from the date of lodgement with the
Bank. The transfer deeds are valid for 12 months
(excluding the period the shares remain pledged
to the Bank.)
f) A declaration should be sent to the Company that
the shares are under charge to Bank though not
transferred to Bank’s name.
g) Where the facility is above Rs. 10 lacs, the shares
should be transferred to Bank’s Name.
h) (Instruction above shall not apply to advances to
recognized brokers of Stock Exchange for whom
separate stipulations will be prescribed by
Sanctioning Authority)
i) A register showing particulars of shares,
company-wise, held as security should be
31
maintained to ensure compliance with Section
19(2) of the Banking Regulation Act under which
the Bank is not permitted to hold as pledgee or
otherwise shares of any company in excess of 30%
of the total paid-up capital of the Company.
j) In the case of advances against shares in
Dematerialized form, please refer to Instruction
Circulars (1) 5797 dated 30-12-1998 (2) 5750
dated 23-09-1998 and (3)6131 dated 04-12-2000
Units of a) Appropriate D.P.Note
approved b) AD 09 (M) Letter of Continuity
Mutual Funds c) AD-02(A) Letter of general lien & set off
d) SD-16 Agreement for pledge of securities
e) Blank transfer deed (specially meant for units)
duly executed by the unit holder/s along with the
unit certificates
f) Necessary letter signed by the unit holder/s
should be obtained and sent by the Bank to the
approved Mutual Fund requesting it to note that
the certificate in question is held by the Bank as
security
National a) Appropriate D.P.Note
Savings b) AD 09 (M) Letter of Continuity
Certificates c) AD-02(A) Letter of general lien & set off
d) SD - 16 Agreement for pledge of securities
e) Form IV duly executed by the Borrower in favor
of the Bank should be sent to the issuing Post
Office with the relevant certificate with an
endorsement thereon in favor of the Bank.
L.I.C. Policy a) Appropriate D.P.Note
d) SD-16 Agreement for Pledge of securities
e) Age of the assured should be got admitted by LIC
f) Premium receipt for having paid the premiums
upto date should be obtained periodically to
ensure that the policy is in force
g) Wherever feasible standing instructions to pay
the premiums to the debit of borrower’s account
(only within sanctioned limit/Drawing power be
obtained unless the policy is paid up.)
h) Assignment should be got registered with the
insurance Company
i) The policy taken for the benefit of wife under
Married Women’s Property Act creates a
statutory trust implied in favor of the wife and in
such a case a separate deed of revocation
executed by the wife on stamp paper is necessary
32
before accepting the policy assigned by the
assured
j) A letter should be obtained from the assured to
the LIC authorizing surrender value to the Bank
as and when required without any further
reference to the borrower
33
LIST OF DOCUMENTS REQUIRED IN FOREX ADVANCES
1. IMPORT TRANSACTIONS/DEALS
Standard Security
S.NO ACTIVITY Documents / Other Other Documents / Reports relevant
documents (as specified to Forex Advances / Transactions
in sanction advice)
(4)
(1) (2)
(3)
IMPORTS – LC Transaction
(for Inland LC see facility-wise documents

under General Advances)
i) At the time i) Hypothecation i) Importer Exporter Code

of Opening Agreement (Goods) Number Copy issued to
LC SD-03 (one time importer by DGFT (One time
exercise at the time of exercise – at the time of
sanction / renewal of sanction of limits for the first
limits) time)
ii) Hypothecation ii) LC Application (AD 04 – for
Agreement (Goods & Imports & AD-05 for Inland) for
Debt) SD-06 (one time each transaction within
exercise at the time of sanctioned limits, duly stamped
sanction / renewal of iii) Original Import License, if
limits) restricted item
iii) Original deposit receipt iv) Proforma Invoice / Order copy
duly discharged with from seller, countersigned by
lien letter – towards buyer agreeing to terms and
margin stipulated in conditions specified therein.
the sanction advice. v) *Valid / Satisfactory Credit
iv) Any other document report on overseas seller if LC
expressly specified in value exceeds USD One lac and
the sanction advice above
vi) Composite Declaration Form
NOTE: All security vii) Marine Insurance Policy (ICC- A)
documents / Agreements in case the trade terms quoted
to be adequately stamped in the contract indicate that
as per respective State transit insurance is to be borne
Laws. by Buyer (Eg: FOB,CFR, FCA,
CPT etc)
viii) Specific recommendations from
‘C’ category branch, If LC is
opened on behalf of their
customer
34
ix) Any other document expressly
specified in the sanction advice
ii) On receipt of i) Discrepancy acceptance letter, if
documents any
under LC ii) Accepted Bill of Exchange / Hundi
by importer (applicable for
usance bills)
iii) Additional margin, if any to be
taken as per Sanction terms
iv) Authorization letter from drawee
for delivery of documents
v) Trust Receipt – AD-06 (duly
stamped as per State’s Stamp
Act) – Only in case of Usance
documents.
vi) In case of ‘C’ Category branch
customers, due recommendation
of the branch for release /
payment of documents and
confirmation for having
earmarked funds (applicable for
sight documents) in the operative
account
vii) Stock Statement in case of DA
document
viii) Exchange control copy of Bill of
entry as evidence of import
iii) On Copy of Bill of Entry (Evidence of
retirement Import)
of i) Sight documents: Within 3
documents months from the date of
remittance
ii) Usance documents :At the time
of remittance
2 Imports –
Collection
Bills
i) On receipt of i. Importer Exporter Code Number copy
documents (one time exercise)
ii. Request letter for Release / Payment
of document duly signed by
Authorized signatory
iii. Accepted Bill of Exchange / Hundi by
importer (applicable for usance bills)
iv. Composite Declaration Form
35
v. In case of ‘C’ Category branch
customers, due recommendation of
the branch for release / payment of
documents and confirmation for
having earmarked funds (applicable
for sight documents) in the operative
account
ii) On Copy of Bill of Entry (Evidence of
retirement Import)
of documents i) Sight documents: Within 3
months from the date of
remittance
ii) Usance documents :At the time
of remittance
3 Imports –
Advance
Remittance
for Import
of Goods
i) At the time a) Applicable upto USD i) Import Export Code Number copy
of 200,000/- without (one time exercise)
remittance insisting for Bank ii) Request letter duly signed by
Guarantees (other Authorized signatory
than PS / PSUs / GOI/ iii) Performa Invoice / Contract,
State Govts.) indicating Payment Terms as
‘Advance’ and duly accepted by the
Applicant
iv) Original Import License, if restricted
item
v) Composite Declaration Form
vi) If the value of the imports is equal to

USD100,000/- and above, *Valid /
Satisfactory Credit Report of the
Overseas supplier obtained from the
Empanelled Credit Report Providing
Agency
b) Applicable for Apart from obtaining above sets of
remittance exceeding documents, branches need to comply
USD 200,000/- and with bank’s policy guidelines issued
upto USD 5,000,000/- vide IBD: Cir: 6654 dt 19.11.2015
without insisting for
Bank Guarantee
(Other than PSUs of
Central / State
Govt/s)
36
NOTE: A Public Sector
Company or a Dept. /
Undertaking of the GOI
/ State Govt/s which is
not in a position to
obtain guarantee from
an international bank
of repute against
advance payment, is
required to obtain a
specific waiver for the
bank guarantee from
the Ministry of
Finance, GOI before
making advance
remittance exceeding
USD 100,000 or its
equivalent.
ii) On receipt of Copy of Bill of Entry (evidence of
goods import) along with other supporting
documents viz., Bill of Lading, Invoice
copy etc.
4 Imports –
Direct
Receipt of
Documents
At the time Applicable for value of Imports i) Importer Exporter Code
of Payment not exceeding USD 300,000/- Number copy (one time
and subject to compliance of exercise)
terms and conditions specified ii) Request letter duly signed
by RBI. by Authorized signatory
iii) Original Import License, if
restricted item
iv) Composite Declaration Form
v) One set of all the relevant
documents
vi) Evidence of import
vii) Report on Overseas supplier
from the Overseas banker or
reputed Overseas credit
rating agency – for KYC
compliance
*Credit Report is valid for a period of One year from the date of report.
37
2. EXPORTS TRANSACTIONS/DEALS
i) Pre- i) Appropriate D.P.Note & AD i. Import Export Code Number

shipment 09 (M) Letter of Continuity copy (one time exercise)
Finance ii) AD-02(A) Letter of general ii. Application for Packing credit
lien & set off advance signed by the
iii) Letter as per prescribed Authorized signatory for each
format for variation in transaction within sanctioned
interest rates (along with DP limits (Prescribed format)
Note) iii. Confirmed Export order /
iv) PC Agreement -SD-04 Contract / Performa Invoice /
v) Hypothecation Agreement LC issued by Prime Bank
SD-03 / 06 iv. Approval from ECGC, if
vi) Letter of continuity - shipment to Countries in
AD-09(M) restricted cover group of
vii) Letter of free access ECGC
viii) Rent receipt, in case of v. ECGC – Buyer wise policy
leased building vi. Satisfactory credit report on
ix) Insurance in the Bank name the overseas buyer for orders
A/c Borrower exceeding USD25000 or its
x) Any other document equivalent. Credit report
expressly specified in the need not be obtained,
sanction advice wherever ECGC has approved
Buyer-wise limit.
In case, Pre-shipment finance
is availed in Foreign
Currency, then the
documents mentioned at
Sl.Nos. i, ii and iii should also
be executed in Foreign
Currency
ii) Post i) Appropriate D.P.Note & AD i) Importer Exporter Code
shipment 09 (M) Letter of Continuity Number copy (one time
Finance (Whenever PC w/w FDBP exercise)
limits are sanctioned ii) Request letter signed by the
separate DP note need not Authorized signatory along
be obtained) with all relevant documents
ii) AD-02(A) Letter of general iii) Relevant Order / Contract /
lien & set off Proforma Invoice / LC
iii) Letter as per prescribed iv) Indemnity letter
format for variation in v) Crystallization letter
interest rates (along with vi) For Shipments under order,
DP Note) buyer-wise ECGC policy
iv) Letter of Hypothecation of vii) Open General License (OGL)
Bills. SD-17 Declaration (if freely
importable) with ITC(HS) code
viii) FEMA Declaration
38
3. TRADE CREDITS
Trade i. Appropriate D.P.Note & AD i. Request letter signed by the

Credits 09 (M) Letter of Continuity Authorized Signatory
(Buyers ii. AD-02(A) Letter of general ii. Form ECB (Prescribed
Credit / lien & set off application for Trade Credits)
Suppliers iii. Letter as per prescribed iii. Composite Declaration Form
Credit) format (along with pronote) iv. Original Import License, if
iv. Hypothecation Agreement restricted item (depending on
(Goods) SD-03 (one method of import)
time exercise at the time of v. A – 2 form
sanction / renewal of limits) vi. Letter accepting all terms and
a. Hypothecation conditions of Offer
Agreement (Goods & vii. Trust Receipt AD-06
Debt) SD-06 (one viii. Counter Indemnity AD-03
time exercise at the
time of sanction /
renewal of limits)
v. Any other document
expressly specified in the
sanction advice
4. FOREIGN CURRENCY LOAN/FOREIGN CURRENCY TERM LOAN
Foreign Following documents are to be obtained, in addition to

Currency security documents being obtained for Rupee Finance:
Loan / 1. Request letter in prescribed format
Foreign 2. DP Note in Foreign Currency
Currency 3. Board Resolution to avail loan in Foreign Currency
Term Loan 4. Agreement of Hypothecation to avail Working capital
directly in Foreign
Currency (IC 5712 dt 03.08.98)
5. Draft agreement of modification (for disbursal of
working capital demand loans in substitution of
finance outstanding in INR) (IC 5712 dt 3.08.98)
6. Agreement relating to currency of account
(IBD:Cir:6521 dt 13.07.13)
7. Undertaking to execute any other additional
documents
5. OUTWARD REMITTANCES (NON IMPORTS)
Outward Remittance
(Non-Imports)
i) Private Visit i) Application cum Declaration for
(Release of forex upto purchase of foreign exchange under
USD 250,000 or its LRS scheme of USD 2,50,000
39
equivalent in one ii) A – 2 form (not required up to USD
financial year for one 25000/-. Only simple letter)
or more private visits) iii) FEMA declaration
iv) Copy of Passport with Tourist / Visit
Visa
v) Copy of Travel Ticket
ii) Business Visit / i) A – 2 form (not required upto USD
International 25000/-. Only simple letter)
Conference / Seminar ii) FEMA declaration
/ Training iii) Copy of Passport with Business Visa
(Release of forex upto iv) Copy of Travel Ticket
USD 250,000 or its v) Sponsorship Letter from Company /
equivalent per visit) Firm and / or letter of brochure for
the conference seminar / training
vi) Application cum Declaration for
purchase of foreign exchange
under LRS scheme of USD 2,50,000
iii) Employment i) A – 2 form (not required upto USD
(Release of Forex upto 25000/-. Only simple letter)
USD 250,000/- or its ii) FEMA declaration
equivalent thereof) iii) Copy of Passport with employment
Visa
iv) Application cum Declaration for
purchase of foreign exchange
under LRS scheme of USD 2,50,000
iv) Emigration i) A – 2 form (not required upto USD
(Release of forex up to 25000/-. Only simple letter)
USD 250,000 or its ii) FEMA declaration
equivalent amount iii) Copy of Passport with emigration
prescribed by the visa / Letter from Embassy
country of emigration iv) Application cum Declaration for
purchase of foreign exchange under
LRS scheme of USD 2,50,000
v) Medical Treatment i) A – 2 form (not required upto USD
(Release of forex 25000/-. Only simple letter)
a) up to USD 250,000/- ii) FEMA declaration
or its equivalent iii) Estimate from Overseas Hospital or
(OR) local Doctor
b) up to the estimate iv) Application cum Declaration for
given by the doctor purchase of foreign exchange
in India or abroad, under LRS scheme of USD 2,50,000
if estimate is more
than USD 250,000/-
vi) Medical Treatment – i) Application cum self-declaration
Maintenance expenses Form (prescribed by RBI)
(Release of forex upto ii) A – 2 form (not required up to USD
USD 25000 or its 25000/-. Only simple letter)
equivalent. If iii) FEMA declaration
40
attendant is iv) Copy of Passport with Visa
accompanying patient (wherever applicable)
going abroad – an
amount of USD 25000/-
for the attendant)
vii) Education Abroad i)

A – 2 form (not required up to USD
(Release of forex upto 25000/-. Only simple letter)
USD 250000/- or the ii) FEMA declaration
estimate from the iii) Admission letter from Overseas
institution abroad Education Institution
whichever is higher per
iv) Application cum Declaration for
academic year) purchase of foreign exchange under
LRS scheme of USD 2,50,000
viii) Liberalized i) A 2 Form (not required upto USD
Remittance Scheme 25000/-. Only simple letter)
(Release of Forex upto ii) FEMA Declaration
USD 250,000/- per iii) Copy of PAN Card
financial year. This iv) Documentary evidence in support
limit is subsumed with of declared purpose(wherever
the already available applicable)
for private travel, v) Application cum Declaration for
business travel and purchase of foreign exchange
medical treatment) under LRS scheme of USD 2,50,000
NOTE: In addition to the above, branches may obtain any other
information / documents from the applicants to satisfy
themselves that the transaction is not designed to contravene or
evade the provisions of FEMA or any other law in force.
Inward Remittance
i) For non-exports i) Declaration from beneficiary with

regard to purpose of receiving
remittance
ii) FEMA Declaration
ii) For Exports i) Declaration from beneficiary with
regard to purpose of receiving
remittance
ii) FEMA Declaration
iii) OGL Declaration
iv) Undertaking to fulfill export
obligation and submission of export
documents to bank within one year
41
6. FORWARD CONTRACTS
Forward Contracts – i) Request letter signed by authorized

Contracted Exposure signatory/ies
Method ii) Underlying confirmed contracts
(Importers / iii) An undertaking that the same
exporters) underlying exposure has not been
(Ref: IC: 8932 dt covered with any other bank.
06.04.11) iv) Quarterly certificate from the
statutory auditors of the users, that
the contracts outstanding at any point
of time with all banks during the
quarter did not exceed the value of
underlying exposures
v) Forward contract agreement duly
signed by authorized signatory/ies and
stamped as per respective state laws
(on booking the forward contract)
Forward Contracts – i) Request letter signed by authorized
Past Performance signatory/ies
Basis ii) Board resolution (applicable for
(Importers / company accounts)
exporters) iii) Risk Management Policy copy of the
(Ref: IC: 8932 dt company
06.04.11) iv) An undertaking from customer that
supporting documentary evidence will
be produced before maturity of all the
contracts booked
v) Quarterly declaration, duly certified
by CFO & CS regarding amounts booked
with other banks under this facility. In
the absence of Company Secretary, the
CEO or COO shall co-sign the
declaration along with the CFO.
vi) Forward contract agreement duly
Aggregate outstanding contracts in
excess of 50 % of eligible limit will be
permitted on submission of following
certificates duly singed by CFO and CS
vii) A declaration that all guidelines have

been adhered to while utilizing the
facility and
42
viii) A certificate of import / export
turnover of the customer during the
past three years.
Forward Contracts – i) Request letter signed by Authorized

SME Borrowers signatory
(For booking FC ii) Self-declaration for booking FC
without submission of without production of underlying
underlying) documents for hedging their direct /
(Ref: IC: 8932 dt indirect exposure to foreign exchange
06.04.11) risk
iii) Declaration regarding amount of FC
booked with other ADs. (Bank to
ensure that total FCs booked are
within eligible limits)
iv) An undertaking from customer that
supporting documentary evidence will
be produced before maturity of all the
contracts booked
v) Forward contract agreement duly
Note: Contracts booked on the basis of
underlying will be outside the purview of
the above guidelines. In such case
guidelines as applicable to contracted
exposure method will apply.
43
LIST OF DOCUMENTS REQUIRED IN MSME/MID
CORPORATE/LARGE CORPORATE ADVANCES
Note:
1. Broadly facilities given are Term Loan, Cash Credit, Overdraft, Bills facilities and Non-Fund
based facilities like LG/LC.
2. Below are the harmonized products/scheme introduced by Bank which is effective from
01.04.2020. Under all these Schemes, the facilities will be one or more of what is mentioned
in point No.1 above. Hence, furnished here below are the security documents to be taken
for various facilities as per the schemes.
FUND BASED FACILITIES
Sl Facility Security Documents

No
1 TERM LOAN a) Appropriate D.P.Note

c) AD-02(A) Letter of General lien and Set off
d) SD-19 Term Loan Agreement (Against Hypothecation of
Movables) or SD-18 General Term loan agreement
(wherever prime security not available for
hypothecation)
e) SD-10(M) (if Term Loan given only for vehicle)
f) SD-01 Deed of Guarantee (where ever applicable)
g) AD-07 / AD-08 /AD-10 / AD-11 (depending on
constitution)
h) Memorandum of deposit of title deed (AD-13/AD-
14)/Simple Mortgage of property (if stipulated) (SD-
14/SD-15). Memorandum of Entry (Format 4) be taken
wherever EM is extended for enhanced limit
i) AD-12 (Letter of undertaking not to alienate
hypothecated goods ), (Wherever hypothecation
agreement is obtained)
j) CIBIL undertaking from Borrower and Guarantor
2 CASH CREDIT HYP a) Appropriate D.P.Note

c) AD-02(A) – Letter of general lien & set off
d) SD-03 (Hypothecation of Goods Agreement) Or
- Against Stocks SD-06 (Hypothecation of Goods & Book Debts)
- Against Book Debts e) SD-01 Deed of Guarantee (where ever applicable)
f) AD-12 – Letter of undertaking not to alienate
hypothecated goods (Letter of negative lien)
44
g) AD-07 / AD-08 / AD-10 /AD-11 (depending on
constitution)
h) Memorandum of deposit of title deed (AD-13/AD-
14)/Simple Mortgage of property (if stipulated)(SD-
i) CIBIL undertaking from Borrower and Guarantor
3 CASH CREDIT / SOD a) Appropriate D.P.Note
(PLEDGE) c) AD-02(A) Letter of general lien & set off
d) SD 02 (Pledge Agreement)
e) AD-07 / AD-08 / AD-10 / AD-11 (depending on
constitution)
g) Memorandum of deposit of title deed (AD-13/AD-
h) CIBIL undertaking from Borrower and Guarantor
4 COMPOSITE LOAN – a) Appropriate D.P.Note
CC HYP, TERM LOAN, L/G, c) AD-02(A) – letter of general lien & set off
PACKING CREDIT ETC. d) SD-20 Composite Hypothecation Deed(which covers all
limits)
e) SD-18 (where Term Loan is a part of composite loan)
g) AD-07 / AD-08 / AD-10 / AD-11 (depending on
constitution)
h) AD-12 Letter of undertaking not to alienate hypothecated
goods ( Letter of negative lien)
i) Memorandum of deposit of title deed (AD-13/AD-
j) CIBIL undertaking from Borrower and Guarantor
5 SOD (TITLE DEEDS) a) Appropriate DP Note
b) AD-09(M) Letter of Continuity
d) SD-01 Deed of Guarantee (where ever applicable)
e) AD-07 / AD-08 / AD-10 / AD-11 (depending on
constitution)
f) Memorandum of deposit of title deed (AD-13/AD-
g) CIBIL undertaking from Borrower and Guarantor
45
6 BILLS a) Appropriate DP Note
PURCHASED/DISCOUNTED b) AD 09 (M) Letter of Continuity
d) SD-17 (Letter of hypothecation of Bills)
e) SD-01 Deed of Guarantee (where ever applicable)
f) AD-16 Letter of Authorization in Bills facilities
g) CIBIL undertaking from Borrower and Guarantor
7 CONSORTIUM ADVANCE The existing uniform documentation evolved by IBA under
single window concept shall be obtained. Any
modification/change required shall be done in consultation
with legal Dept of member banks and our Law Officers at
RO/FGMO.
a) Board resolution by the borrowing company
b) Resolution by the member Banks to appoint first and
second lead Bank (resolution to be signed by all members
except I and II lead Banks)
c) Letter of authority by member Banks in favour of 1st and
2nd lead Bank to sign and obtain all documents on their
behalf
d) Working capital consortium agreement (WCCA) signed by
lead Bank (on its behalf and on behalf of member Banks)
and borrower
e) It indicates the share of each bank as agreed between
Bank members and borrower
f) This is an agreement as well as an indemnity
g) This is not a security document to create charge on assets
of the company
h) Joint deed of Hypothecation – a security document which
has to be stamped. It charges the assets of company to
Banks.
i) Inter se agreement – agreement among Banks specifying
the rights and responsibilities of Banks. To be signed by
Banks and stamped.
j) SD-01 Deed of Guarantee (where ever applicable)
k) Memorandum of deposit of title deed (AD-13/AD-
l) Letter from borrower to create pari-passu charge on
fixed assets
m) Chargeable security documents to be filed with ROC by
lead Bank
n) Revival letter for the purpose of limitation
o) In case Term Loans, relevant document may be drafted
by the consortium in consultation with legal Departments
of the participating banks
p) If we are not the leader, copy of documents executed by
borrowers to be obtained from Lead Bank
46
8 CLEAN OVERDRAFT a) Appropriate D.P. Note
LIMIT c) AD-02(A) Letter of general lien & set off
d) CIBIL undertaking from Borrower and Guarantor
9 ADVANCE AGAINST SUPPLY a) Appropriate D.P.Note & AD 09 (M) Letter of Continuity

BILLS b) AD-02(A) Letter of general lien & set off
c) Receipted challans
d) Duly stamped Power of Attorney duly executed by the
Borrower authorizing Bank to collect the proceeds of Bills
(Format 13/14/15 as applicable)
e) CIBIL undertaking from Borrower and Guarantor
10 INFRASTRUCTURE LOANS Documents are specific to the activity/unit and are specially
got drafted from the Legal Advisor and approved by Legal
Dept at RO/FGMO
11 UNION RENT a) Appropriate D.P Note

d) Memorandum of deposit of title deed (AD-13/AD-14).
f) General power of attorney(notarized)by the borrower in
favour of Bank authorizing to collect the rent as per
Annexure A of IC 1927:2020 dated 17.03.2020/ Format 8
g) Letter of Undertaking as per Annexure B of IC 1927:2020
dated 17.03.2020/Format 9
UNION STAND UP INDIA Under all these Schemes, limits are Term Loan, Cash Credit
or both.
12 UNION MSME SUVIDHA
If the limit sanctioned is in the nature of term loan, then
UNION NARI SHAKTI documents stipulated as per Sr. No 1 to be taken
UNION MUDRA
UNION PROGRESS If the limit sanctioned is in the nature of Cash Credit, then
documents stipulated as per Sr. No 2 or 3 to be taken (As per
UNION START-UP sanction)
UNION AYUSHMAN
UNION ALANKAAR In case of Composite loan, documents stipulated at Sr No 4

UNION TURNOVER PLUS to be taken
13 UNION PARIVAHAN a) Appropriate D .P Note

c) SD 10-Hypothecation of Vehicles Agreement
d) AD-02(A) Letter of general lien & set off
e) SD-01 Deed of Guarantee (where ever applicable)
47
f) Form E duly signed by borrower instructing the supplier
to register Bank’s lien with R.T.A. Bank’s lien to be noted
with RTA and endorsement to that effect be recorded in
the TC/RC Book
g) Bank’s lien to be noted with RTA on the vehicle and
endorsement to that effect to be recorded in the TC/RC
Book
h) Duplicate/ Copy of Registration Certificate from RTA
evidencing registration of Bank’s lien on vehicle
i) Blank TTO (Transport Transfer Order)/HPTR forms to be
executed by the borrower and 2 sets of such blank forms
to be held on record: Form 28,29,30,34 & 35
j) Comprehensive insurance including third party liability
to be obtained in the name of Bank A/c…………(Borrower)
k) Memorandum of deposit of title deed (AD-13/AD-
wherever EM is extended for enhanced limit (If
stipulated)
l) CIBIL undertaking from Borrower and Guarantor
Documents stipulated as per Instruction Circular (IC)

1912:2020 dated 16.03.2020
14 UNION LIQUI Documents stipulated as per Sr. No 1 or 5 to be taken
PROPERTY SCHEME
15 UNION PROFESSIONAL Documents stipulated as per Sr. No 1 to be taken
16 UNION GST GAIN SCHEME Document stipulated as per Sr. No 2,3,4 to be taken (As
per sanction)
48
NON FUND BASED LIMITS:
1 LETTER OF GUARANTEE a) AD-02(A) Letter of General lien and Set off

b) AD 03 - Counter Indemnity – for single transaction Or
Format 28 Omnibus Counter Indemnity for LG limit
c) Format 25 (A) or (B) – Lien on Deposits
d) Memorandum of deposit of title deed (AD-13/AD-
14)/Simple Mortgage of property (if stipulated) (SD-14/SD-
15). Memorandum of Entry (Format 4) be taken wherever
EM is extended for enhanced limit (If stipulated)
2 LC (LETTER OF CREDIT) a) AD-02(A) Letter of General lien and Set off

b) LC Application (AD 04 – for Imports & AD-05 for Inland) for
each transaction within sanctioned limits
c) SD-03 (Hypothecation of goods) or SD-06(Hypothecation of
For import LC, please goods & debts) as the case may be
refer to Chapter on
d) Original deposit receipt duly discharged with lien letter –
Forex Documentation towards margin stipulated in the sanction advice.
f) Any other document expressly specified in the sanction
advice
On receipt of documents under LC:
g) Trust Receipt - AD-06

h) Discrepancy acceptance letter, if any
i) Accepted Bill of Exchange / Hundi by buyer (applicable
for usance bills)
j) Additional margin, if any to be taken as per Sanction terms
k) Authorization letter from drawee for delivery of
documents
49
SANCTION STIPULATIONS ADDITIONAL DOCUMENTS:
Following formats/letters/Certificate/Statement/Document to be taken as per sanction

stipulation:
WHERE a) List of Machinery proposed to be hypothecated along with the

HYPOTHECATION OF copies of relative invoices after due verification with the
MOVABLES/PLANT & originals.
MACHINERY/STOCK, b) Certificate should be obtained from the borrower every half year
BOOK DEBTS ETC that the machinery is in good order and working condition.
STIPULATED c) Machinery should be insured against fire, riot, strike, burglary
malicious damages etc. and where necessary/requested by the
Borrower against flood, cyclone etc. also in the name of the Bank
– ‘Account Borrower’
d) Bank’s name plate should be affixed on the machinery to indicate
the Bank’s charge thereon
e) Rent receipts of the premises to be checked to ascertain that
rent is being regularly paid and that the premises is in fact rented
by the borrower and proof in this regard to be held on record.
f) Letter of free access from the land lord should be obtained
wherever premises of business/godown is rented/leased (Format
16)
g) Stock statement / Book Debts statement as per prescribed
periodicity
h) Goods should be insured in the name of the Bank Account
borrower against fire, strike, riot, malicious damages, flood,
cyclone, burglary etc., where applicable/necessary.
i) Any other documents stipulated in sanction advice
50
LIST OF DOCUMENTS REQUIRED IN RETAIL ADVANCES
PRODUCT LIST OF SECUITY DOCUMENTS
1. AD-02(A) letter of general lien and set off

2. SD 11 Housing Loan Agreement
UNION HOME 3. SD-01 Deed of Guarantee (where ever applicable)
4. Memorandum of deposit of title deed (AD-13/AD-14).
Memorandum of Entry (Format 4) be taken wherever EM is
extended for enhancement
5. Undertaking for disclosure to CIBIL from
borrower/guarantor
6. Appropriate DPN and AD-09 M (Letter of Continuity)
7. Any other documents as stipulated in sanction advice.
UNION SMART SAVE In addition to the documents taken for regular home loans
(except SD-11), the following documents duly stamped to be
taken:
Union Home (Smart Save) Agreement (IC 01851:2020 dated

12.02.2020)
UNION AWAS-HOME LOAN SAME AS UNION HOME
FOR RURAL AND SEMI
URBAN AREAS
UNION MORTGAGE PLUS- 1. SD 18-General term Loan Agreement

FOR EXISTING HOME LOAN 2. Memorandum of deposit of title deed (AD-13/AD-14).
BORROWERS Memorandum of Entry (Format 4) be taken wherever EM
is extended for enhancement
3. SD-01 Deed of Guarantee (where ever applicable)
6. Any other documents as stipulated in sanction advice.
2. SD 10(Modified) Hypo. of vehicles agreement
UNION MILES 3. SD-01 Deed of Guarantee (where ever applicable)
4. AD-07 -Declaration of partnership (in case loan to
(VEHICLE LOANS) partnership firms.) (In case loan to partnership firms.)
5. AD-11- Letter of undertaking from partners (in case loan
to partnership firms.)
borrower/guarantor.
8. RTO transfer forms - Form- 28, 29, 30 and 35 as applicable
in respective States along with the letter from borrower.
51
9. Board resolution –in case of company.
10. Any other documents as stipulated in sanction advice
2. SD 18 General Term Loan Agreement
Personal loan– Scheme for 5. Relevant undertaking from employee/employer
salaried individual other
6. Undertaking for disclosure to CIBIL – from both borrower
than Govt employee. and guarantor
Personal loan– Scheme for
Non-salaried individual. and guarantor.
1. DPN –Demand Promissory note (for overdraft limit)
Personal loan– under 3. SD 18 General Term Loan Agreement
special Retail lending 4. SD-01 Deed of Guarantee (where ever applicable)
Scheme for Govt 5. AD-09 (M) Letter of Continuity for overdraft limit.
Employee. 6. Relevant undertaking from employee/employer
and guarantor.
4. Appropriate DPN and AD 09 M (Letter of Continuity)
UNION CASH 5. Undertaking for disclosure to CIBIL
1. Appropriate DPN and AD 09 M (Letter of Continuity)
UNION MORTGAGE 3. SD 18 General Term Loan Agreement
borrower/guarantor
Memorandum of Entry (Format 4) be taken wherever EM
1. DPN –Demand Promissory note and AD 09 (M)-Letter of
Continuity
2. Union Reverse Mortgage loan Agreement (IC 1933:2020
dated 12.03.2020)
UNION REVERSE MORTGAGE 3. Arrangement letter ((IC 1933:2020 dated 12.03.2020)
52
Memorandum of Entry (Format 4) be taken wherever EM
borrower/guarantor
6. Registered will(whenever required)
7. list of legal heirs
8. Life certificate
UNION EDUCATION 1. Education Loan Agreement
3. D.P. Note to be executed jointly by student and
parent/guardian in case student is a minor and AD 09 (M)
Letter of Continuity
4. LIC policy duly assigned in favour of the Bank and
registered with LIC (wherever applicable)
5. Undertaking from parent/guardian that he is having
independent/regular source of income
6. Mortgage/Transfer Deed depending upon security of land
or pledge of shares, NSC etc. as per procedure stated
hereinabove (wherever applicable)
53
LIST OF DOCUMENTS REQUIRED IN GOVERNMENT SPONSORED
SCHEMES AND AGRICULTURE ADVANCES
Sl PRODUCT/ FACILITY SECURITY DOCUMENTS TO BE TAKEN

No
1. KISAN CREDIT CARD ❖ One time documentation at the time of first availment
SCHEME and thereafter simple declaration (about crops
raised/proposed) with Debit Balance Confirmation
(UNION GREEN CARD) (DBC) by farmer from the second year onwards are to
be taken.
❖ The scheme provides fixation of scale of Finance for
the first year and subsequent increase for every
successive year. Therefore documentation will be
done by the Bank only for maximum limit so that there
is no need of documentation during the validity of
account.
❖ Within the sanctioned limits, drawing power may be
fixed each year as per scale of finance.
❖ Where the validity period of UGC is 5 years there might
be a legal requirement to renew the account by taking
a fresh letter from the farmers after every 3 years.
However no other documents be obtained from the
farmer.
❖ Documents should not be filled with 7% ROI even for
crop loans up to ₹ 3.00 lakhs.
❖ The security documents should be filled in and
obtained on the basis of rate of interest applicable to
the entire limit based on our interest rate circular to
avoid any problem later on.
❖ Documentation at the Fresh Sanction/Enhancement:
✓ Appropriate DP Note
✓ Hypothecation agreement - SD-07
✓ Deed of Guarantee - SD –08
✓ Declaration /Undertaking for Agriculture Advance-
AD-01
✓ Mortgage deed– SD–12 (for SM) OR AD-13(for EM)
✓ Letter of Continuity – AD 09(M)
✓ Letter of General Lien and set off – AD 02(A)
✓ Letter of undertaking from borrower/Guarantor for
disclosure to CIBIL.
✓ Any other document stipulated in Sanction advice
❖ Documentation at the time of annual review:
✓ A request letter from borrower for renewal of limit
with details of crops grown.
54
✓ Simple DBC – SD 22 (wherever mortgage and guarantee
are not obtained – say for loans up to ₹ 1.60 lakh).
✓ Composite DBC – SD 23 (wherever mortgage and
guarantee are obtained – say for loans above ₹ 1.60
lakh)
2. KISAN CREDIT CARD- ❖ Appropriate DP Note
Allied activities ❖ Hypothecation agreement - SD-07
(ANIMAL HUSBUNDRY & ❖ Deed of Guarantee - SD –08
FISHERY) ❖ Declaration/Undertaking for Agriculture Advance-AD-
01
❖ Mortgage deed– SD–12 (for SM) OR AD-13(for EM)
❖ Letter of Continuity – AD 09(M)
❖ Letter of General Lien and set off – AD 02(A)
❖ Letter of undertaking from borrower/Guarantor for
disclosure to CIBIL.
❖ Any other document stipulated in Sanction advice
3. FARM MECHANISATION ❖ Appropriate DP Note
SCHEME. ❖ Letter of Continuity – AD 09(M)
❖ Hypothecation agreement - SD-07
A- ❖ Deed of Guarantee - SD –08 if specified
❖ Declaration/Undertaking for Agriculture Advance-AD-
For purchase of new
01
Tractors /new Combine ❖ Mortgage deed– SD–12 (for SM) OR AD-13(for EM)
Harvester/ new Power
Tillers with
❖ Undertaking from borrower/Guarantor for disclosure
accessories:-
to CIBIL
❖ Comprehensive insurance policy of the asset financed
with 3rd party coverage.
❖ Lien of Bank in RC book for tractor and trailer.
❖ Blank transfer (TTO) forms – 28, 29, 30&35.
B- ❖ Appropriate DP Note
For repairs/ ❖ Hypothecation agreement - SD-07
overhauling of ❖ Deed of Guarantee - SD –08
tractors:- ❖ Declaration/Undertaking for Agriculture Advance-AD-
01
to CIBIL
❖ Comprehensive insurance policy of the asset financed.
❖ Lien of Bank in RC book for tractor and trailer
❖ Blank transfer (TTO) forms – 28,29,30 & 35.
❖ Any other document stipulated in Sanction advice.
C- ❖ Appropriate DP Note
55
Finance for all other ❖ Deed of Guarantee - SD –08
Farm equipment : - ❖ Declaration/Undertaking for Agriculture Advance-AD-
01
to CIBIL
❖ Comprehensive insurance policy of the asset financed.
❖ Lien of Bank in RC book if any
❖ Blank transfer (TTO) forms – 28,29,30 & 35 if any,
4. UNION AGRI SERVICES ❖ Appropriate DP Note
Cash Credit / Term Loan ❖ Hypothecation agreement - SD-07
❖ Deed of guarantee - SD –08(If applicable)
❖ Hypothecation of Vehicle Agreement-SD-10
❖ Comprehensive insurance policy of vehicle with 3rd
party coverage.
❖ Lien of Bank in RC book.
❖ Blank transfer (TTO) forms – 28,29,30 & 35
5. FARM DEVELOPMENT ❖ Appropriate DP Note
SCHEME ❖ Letter of Continuity – AD 09(M)
❖ Deed of Guarantee - SD –08
01
to CIBIL
6. FARM IRRIGATION ❖ Appropriate DP Note
SCHEME ❖ Letter of Continuity – AD 09(M)
01
to CIBIL
7. FINANCE TO HIGH TECH ❖ Appropriate DP Note
AGRI PROJECTS ❖ Letter of Continuity – AD 09(M)
56
Term Loan / ❖ Deed of Guarantee - SD –08
Cash Credit 01
to CIBIL
8 DEBT SWAP SCHEME ❖ Appropriate DP Note
01
disclosure to CIBIL
9. KISAN ALL PURPOSE ❖ Appropriate DP Note
TERM LOAN (KAPTL ❖ Letter of Continuity – AD 09(M)
❖ One time documentation for the sanctioned limit
❖ Hypothecation agreement (for agricultural advances)–
SD 07
❖ Simple / Equitable mortgage of land as per legal
opinion (SD12 / AD13)
❖ Deed of guarantee (for agricultural advances) – SD 08
(if stipulated)
❖ Letter of General Lien and set off - AD-02(A)
❖ CIBIL – Letter of undertaking from the borrower /
Guarantor
10 KISAN TATKAL LOAN ❖ Appropriate DP Note
01
disclosure to CIBIL
11 PURCHASE OF LAND ❖ Appropriate DP Note
FOR AGRI PURPOSE ❖ Letter of Continuity – AD 09(M)
01
57
disclosure to CIBIL
12 FARM TRANSPORT ❖ Appropriate DP Note
SCHEME(2/3/4 WHEELER ❖ Letter of Continuity – AD 09(M)
LOAN TO FARMERS) ❖ Hypothecation agreement - SD-07
❖ Hypothecation of Vehicle Agreement-SD-10
❖ Deed of guarantee - SD –08(If applicable)
❖ Comprehensive insurance policy of vehicle with 3rd
party coverage.
❖ Lien of Bank in RC book.
❖ Blank (TTO) forms – 28,29,30 & 35
13 ESTATE PURCHASE ❖ Appropriate DP Note
LOAN ❖ Letter of Continuity – AD 09(M)
01
to CIBIL
14 RENEWABLE ENERGY ❖ Appropriate DP Note
EQUIPMENTS ❖ Letter of Continuity – AD 09(M)
A- ❖ Deed of Guarantee - SD –08
Financing solar energy 01
based pump set loans: ❖ Mortgage deed– SD–12 (for SM) OR AD-13(for EM)
to CIBIL
B- ❖ Appropriate DP Note
Solar water heater: ❖ Hypothecation agreement - SD-07
01
to CIBIL
58
C- ❖ Appropriate DP Note
Solar Home lightening ❖ Hypothecation agreement - SD-07
Scheme: ❖ Deed of Guarantee - SD –08
01
to CIBIL
D- ❖ Appropriate DP Note
Gobar/Bio Gas Plant: ❖ Hypothecation agreement - SD-07
01
to CIBIL
15 FINANCE TO NURSERY ❖ Appropriate DP Note
Term Loan /Cash Credit ❖ Hypothecation agreement - SD-07
01
to CIBIL
❖ Appropriate DP Note
16 FINANCE TO SEED ❖ Hypothecation agreement - SD-07
PRODUCTION ❖ Declaration/Undertaking for Agriculture Advance-AD-
Term Loan /Cash Credit 01
disclosure to CIBIL
59
17 FINANCE TO ❖ Appropriate DP Note
PLANTATION & ❖ Letter of Continuity – AD 09(M)
HORTICULTURE ❖ Hypothecation agreement - SD-07
01
to CIBIL
18 FINANCE TO SERI ❖ Appropriate DP Note
CULTURE ❖ Letter of Continuity – AD 09(M)
Term/Cash Credit ❖ Deed of Guarantee - SD –08
01
to CIBIL
19 FINANCE TO DAIRY ❖ Appropriate DP Note

SECTOR ❖ Letter of Continuity – AD 09(M)
I. ❖ Deed of Guarantee - SD –08
Financing to Mini 01
Dairy Unit: (Union
White Card Scheme
is now renamed as
Mini Dairy Unit) to CIBIL
Term Loan /Cash ❖ Any other document stipulated in Sanction advice
Credit
II. ❖ Appropriate DP Note
Financing to ❖ Letter of Continuity – AD 09(M)
Commercial Dairy ❖ Hypothecation agreement - SD-07
Unit: ❖ Deed of Guarantee - SD –08
Term Loan /Cash Credit 01
to CIBIL
60
20 FINANCE FOR SHEEP, ❖ Appropriate DP Note
GOAT, PIG REARING ❖ Letter of Continuity – AD 09(M)
Term Loan /Cash Credit ❖ Deed of Guarantee - SD –08
01
to CIBIL
21 FINANCE TO POULTRY ❖ Appropriate DP Note
SECTOR ❖ Letter of Continuity – AD 09(M)
Term Loan /Cash Credit ❖ Deed of Guarantee - SD –08
01
to CIBIL
22 FINANCE FISHERY ❖ Appropriate DP Note
SECTOR (INLAND & ❖ Letter of Continuity – AD 09(M)
MARINE) ❖ Hypothecation agreement - SD-07
01
to CIBIL
23 GOLD LOAN SCHEME ✓ Documents to be obtained will be as under:
✓ Application (available on UBINET) / appraisers
1) Gold Loan- valuation (available on UBINET)/ Recommendation
(Agriculture) / sanction advice
2) Gold Loan-(Other ✓ Appropriate DP Note
Priority Sector) ✓ Letter of Continuity – AD 09(M)
3) Gold Loan-(Non ✓ Gold loan pledge form (available on UBINET)
Priority Sector) ✓ Hypothecation of crops / assets- agriculture (SD07)
✓ Hypothecation of asset - other than agriculture -
SD03/SD 06
✓ Letter of general Lien and set off – AD 02 (A)
✓ Hypothecation of Crop or Other Assets (in case of
loans to Agril, MSE etc.) should be obtained as
Primary Security by executing necessary
documents. Wherever it is not possible for the
61
Borrower to execute such documents or not
inclined to execute such documents, Gold
Ornaments/Coins will be treated as Primary
Security.
Branches should not insist any collateral security
where Gold is primary security or any other
collateral security where gold is collateral security.
24 LOAN AGAINST SILVER ❖ Appropriate DP Note
❖ Agreement for pledge of Gold ornaments
❖ Hypothecation of Asset –other than Agriculture-SD-03/
SD-06
to CIBIL
❖ Any other document stipulated in sanction advice.
25 SHG FINANCE ❖ Appropriate DP Note
Term Loan /Cash Credit ❖ Application by the SHG
❖ Copy of by laws
❖ Copy of proceedings/ resolution
❖ Inter-se Agreement by all members.
❖ Articles of Agreement by authorized members.
❖ Appropriate DPN
❖ Hypothecation Agreement – SD-07 in case of
agriculture loans / SD-03 for all other loans (in case
assets are created)
❖ General Term Loan Agreement – SD18
❖ Mortgage deed– SD–12 (for SM) OR AD-13(wherever
applicable)
❖ Third party guarantee (SD 08 / SD 01) if stipulated
❖ Comprehensive insurance of assets created
to CIBIL
Important: Loan documents have to be obtained for the
loan amount and ROI applicable to the 5th year limit in
respect of CC accounts.
A Common Application Form for SHGs is available on

UBINET. Regional/Zonal Offices are advised to provide
sufficient copies of the new Document form to all the
Branches and if required the same may be translated into
Regional languages and supplied to branches.
62
26 JLG FINANCE Documents as suggested by NABARD/RBI to be taken:
Model A:
(Financing Joint ❖ Introduction form
Liability Groups(JLG) ❖ Application cum appraisal form
❖ Letter of guarantee
Term Loan/ Cash Credit ❖ Joint liability agreement(Formats for a,b,& c-
IF:11277 dt 9.3.2010)
❖ Hypothecation of asset financed
❖ CIBIL- Letter of undertaking from
borrowers/Guarantors
Model B: Documents as applicable to SHGs are to be

obtained.
27 FINANCE TO BEE ❖ Appropriate DP Note
KEEPING ❖ Letter of Continuity – AD 09(M)
01
disclosure to CIBIL
28 FINANCE TO VERMI ❖ Appropriate DP Note
CULTURE ❖ Letter of Continuity – AD 09(M)
01
to CIBIL
29 FINANCE AGAINST WARE ❖ Application form (Annexure –Ill to the IC No.9630 dt.
HOUSE RECEIPT (WHR 03.07.2013)
FINANCE) ❖ Appropriate DP Note
(Scheme for ❖ Pledge Agreement (SD-02) / Term Loan Agreement;
agricultural produce ❖ AD 11 (if applicable)
63
storage/ marketing loan ❖ Undertaking from borrower/Guarantor for disclosure
to farmers) to CIBIL
❖ Warehouse/Storage/Cold Storage Receipts standing in
the name of the borrower, duly endorsed in Bank's
favour;
❖ Our lien/pledge over the agricultural
commodities/stocks stored in the Warehouse/
Godown/Cold Storage should be registered with the
Central/State Warehousing Corporation or approved
private Warehouses/ Godown/Cold Storage or
Accredited Collateral Manager's Storage Area, as the
case may be;
❖ Where the produce stored at own rural godowns or
otherwise at his own place separately without
engagement of Collateral Manager, hypothecation
agreement & an undertaking from the borrower that
Produce shall not be disposed of before adjustment of
loan shall be obtained in lieu of duly endorsed
receipts/ pledge agreement.
Other documents ❖ An undertaking from the Warehouse/Godowns/Cold
Storage owners accepting unrestricted charge of the
Bank over the agricultural commodities stored with
them and conveying that they have no lien or charge
over the commodities and agreeing to deliver the
stocks to the Bank/ its nominee against surrender of
receipt by the bank and also agreeing that the stock
shall not be delivered to anyone or disposed of in any
manner without written consent/instruction of the
Bank (Annexure –IVto the IC No.9630 dt.
03.07.2013).
❖ An agreement (Annexure-VII to the IC No.9630 dt.
03.07.2013) shall be executed between private
Warehouse/Godowns/ Cold Storage units, and the
Bank. This agreement is not necessary if services of
approved Collateral Manager are availed and goods
pledged are under exclusive custody of Collateral
Manager or produce is stored at CWC/SWC warehouses
or finance is extended against valid Negotiable
Warehouse Receipt issued by Warehouses/Cold Storage
accredited by WDRA.
❖ If services of approved Collateral Manager are availed
in a private Warehouse /Godowns/Cold Storage and
goods pledged are not under exclusive custody of
Collateral Manager, then a tripartite agreement shall
be executed among the Collateral Manager, the Bank
and the private Warehouse/Godowns/Cold Storage in
lieu of bipartite agreement. A reference with the
64
existing Collateral Management Agreement shall be
made in the tripartite agreement.
❖ A letter of Guarantee/indemnity/Acknowledgement
shall be obtained from the approved Warehouse
/Godowns/Cold Storage owners, agreeing to indemnify
the Bank against all losses arising out of following:-
✓ Delivery to farmer/other persons without explicit
consent of the Bank;
✓ Deterioration in quality and/or quantity of stock
due to malfunction of Warehouse /Godowns/Cold
Storage or any other reasons, whatsoever ;
✓ Wrongful disposal of stock;
✓ Loss of stocks due to any other reasons.
30 FINANCE TO FOOD & For Term loan-
AGRO PROCESSING
UNITS ❖ Appropriate DP Note
Term Loan/Cash Credit ❖ SD-19 Term loan Agreement(Hypothecation of
Movables) or SD-18 General Term loan Agreement
❖ SD-01 Deed of Guarantee (where ever applicable)
❖ AD-07, AD-08, AD-10, AD-11(Depending upon
constitution)
❖ AD-12 Letter of undertaking not to alienate
hypothecated goods
applicable)
❖ Undertaking from borrower/Guarantor for disclosure to
CIBIL
For Cash Credit-
❖ SD-03/SD-06-Hypothecation of Goods and Book debts
constitution)
hypothecated goods
applicable)
CIBIL
65
31 Govt. Spon-PMEGP For Term loan-
❖ SD-19 Term loan Agreement(Hypothecation of
Movables) or SD-18 General Term loan Agreement
constitution)
hypothecated goods
applicable)
CIBIL
For Cash Credit-
❖ SD-03/SD-06-Hypothecation of Goods and Book debts
constitution)
hypothecated goods
applicable)
CIBIL
32 Govt. Spon-NRLM ❖ Application by the SHG
❖ Copy of by laws
❖ Copy of proceedings / resolution
❖ Inter-se Agreement by all members.
❖ Articles of Agreement by authorized members.
❖ Hypothecation Agreement – SD 07 in case of agriculture
loans / SD 03 for all other loans (in case assets are
created)
❖ Mortgage deed– SD–12 (for SM) OR AD-13 (wherever
applicable)
❖ Third party guarantee (SD08 / SD01) if stipulated
66
❖ Undertaking from borrower / Guarantor for disclosure
to CIBIL
33 Govt. Spon-NULM ❖ Appropriate DP Note
Movables)
❖ SD-18 General Term loan Agreement
constitution)
hypothecated goods
applicable)
CIBIL
❖ (In case of finance to SHG under DAY-NULM, documents
should be as applicable to DAY-NRLM)
34 Govt. Spon-Manual ❖ Appropriate DP Note
Scavengers ❖ Letter of Continuity – AD 09(M)
Movables)
constitution)
hypothecated goods
applicable)
CIBIL
35 Govt. Spon-DRI ❖ Appropriate DP Note
❖ AD-02(A) Letter of General lien and Set off
❖ SD-03 or SD-07 (Against Hypothecation of Movables)
❖ AD-12 (Letter of undertaking not to alienate
hypothecated goods), (Wherever hypothecation
agreement is obtained
36 Agri. Marketing Infra ❖ Appropriate DP Note
67
Movables)
constitution)
hypothecated goods
applicable)
CIBIL
37 Agri. Clinic ❖ Appropriate DP Note
Agri. Business ❖ Letter of Continuity – AD 09(M)
❖ SD-03 or SD-06
❖ CIBIL undertaking
❖ Any other document stipulated in sanction advice
❖ For limit above Rs.1 lakh, following additional
documents to be taken as per sanction stipulation
❖ Simple mortgage (SD-12) or EM of land and / or
❖ Third party guarantee (SD-08)
38 Finance to MFI ❖ Appropriate DP Note
(Policy Discussion) ❖ Letter of Continuity – AD 09(M)
❖ Hypothecation of Book Debts
❖ SD 18 Term Loan agreement
❖ Duly discharged ( Cash collateral) deposit receipts
❖ Letter of lien (for cash collateral)
❖ Any other documents as per the requirements
applicable)
❖ CIBIL undertaking
39 Finance to FPO ❖ Application
❖ Copy of by laws(wherever applicable)
❖ Copy of proceedings / resolution(wherever applicable)
❖ Inter-se Agreement by all members (wherever
applicable)
❖ Articles of Agreement by authorized members
(wherever applicable)
❖ Hypothecation Agreement – SD 07 in case of
agriculture loans / SD 03 for all other loans (in case
assets are created)
68
applicable)
❖ Undertaking from borrower / Guarantor for disclosure
to CIBIL
CREATION OF MORTGAGE:
The practice and procedure being followed in Union Bank of India for creating Equitable
Mortgage (EM)/Registered Mortgage/Extension of EM shall be applicable to the Branches of e-
AB &e-CB in order to maintain uniformity. (Refer to E-Manual on UBINET-CRD-Documentation).
DEMAND PROMISSORY NOTES:
Appropriate DP Note to be taken as per the nature of interest rate as shown hereunder:
For Fixed Interest based loans SD-21
For MCLR linked loans SD-21-A
For EBLR linked loans SD-21-B
DEBIT BALANCE CONFIRMATION (DBC)
It is advised that the simple DBC (SD-22) has to be obtained from the Borrower on half-yearly
intervals. The composite DBC (SD-23) for Debts & Securities duly filled in and duly signed by
Borrowers and Guarantors may be obtained once in a year within the validity of original/prior
security documents.
69
Essentials of Mortgages & CERSAI
MORTGAGE:
As per section 58 of transfer of property act 1882 Mortgage is defined as-

“The transfer of an interest in specific immovable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, an
existing or future debt, or the performance of an engagement which may give rise
to a pecuniary liability.”
Ex. Mortgage of land and Building. Normally properties under mortgage can be attached
and sold with court permission. However immovable properties other than Agri. lands
can be taken to possession and sold under SARFAESI act.2002.The mortgager only parts
with the interest in the property but not the ownership. Possession of the property
remains with the borrower, except in the case of usufructuary mortgage
Essential features of Mortgage:
• It covers existing or future loans or advances

• Relationship- creditor and debtor relationship (including guarantee)
• Future debt –existing of debt is not necessary. Even application for a debt and its
acceptance establishes the relationship
• SM or EM becomes effective from the date of mortgage
• Supplementary deed is necessary for enhanced limits
• On repayment of debt, mortgage does not remain valid
Types of mortgages:
• Simple mortgage
• Equitable mortgage
• Mortgage by conditional sales
• Usufructuary mortgages
• English mortgage
• Anomalous mortgage
Normally SM / EM is used by Banks
70
Simple mortgage- definition:
As per section 58(b) of TP Act-Where, without delivering the possession of mortgaged

property, the mortgagor by creating a deed, binds himself personally to pay the
mortgagee money and agrees, expressly or impliedly.
Features of Simple mortgage:
That in the event of his failing to pay according to his contract, the mortgagee shall
have the right to cause the mortgaged property to be sold and the proceeds of sale to
be applied so far as may be necessary, in payment of mortgage money. This transaction
is called simple mortgage. Bank can sell the property through court intervention.
However under SARFAESI, Bank can sell the property by giving due notice to borrower.
Bank has no right to get any rent payments from the mortgaged property. Possession
will be with the borrower and Registration of mortgage is compulsory.
Creation of simple mortgage (SD 12):
• Simple mortgage is always in writing and it attracts stamp duty as per the state law.
• Investigation on the title is done, title search report / legal opinion report obtained
before creation of Mortgage.
• The stamped mortgage deed duly executed by the mortgager in favour of the bank &
attested by 02 witnesses is to be registered with the registrar of assurance.
• SM to be registered in the jurisdiction of the SRO where property is located
• The mortgage deed executed by the owner of the property should be lodged with the
sub registrar within 4 months (120 days)of execution and followed up to ensure that the
same is registered. (u/s 23 of Indian Registration Act)
• In case of companies , mortgage has to be registered with ROC within 30 days (u/s 125
of companies act)
• It is advantageous to the bank for the reason that bank's charge on property gets
registered in the books of registrar of assurance, which itself is a public notice.
Mortgage deeds in our bank:
• SD-12 (AGRICULTURAL ADVANCES)

• SD-14 SIMPLE MORTGAGE DEED (other than agricultural advances)(BY BORROWER)
• SD-15 SIMPLE MORTGAGE DEED (other than agricultural advances)(BY GUARANTOR)
71
Simple Mortgage – important points:
SM is a single shot mortgage. SM created once cannot be extended to new loans.
However, if limits are enhanced in the same account, supplementary deed to be
executed, in such case payment of stamp duty for the difference amount is paid and
registration is necessary.
Creation of charge on land:
As per respective states provisions - Form III Declaration (in Karnataka) should be
prepared in 3 copies (all original not carbon copy) of which one original will be sent to
Sub Registrar of Assurance & copy duly endorsed as true copy should be sent to Tehsildar
for noting the change on record of rights.
Equitable Mortgage: (IC 3072 dated 13.06.1985, and IC 3570 dated 02.11.1987)
• Definition of Equitable Mortgage [as per section 58(f) of TP act]
“Where a person in any one of following towns, namely the towns of Kolkata, Chennai
and Mumbai and in any other town in which the state government concerned, mayby
notification in the official gazette, specify in this behalf
• delivers to a creditors or his agent,
• document (s) of title to immovable property with
• intention to create a security there on,
• In a notified place, the transaction is called a mortgage by deposit of title deeds".
Equitable mortgage – Essential ingredients:
A Mortgage by deposit of title deeds or an equitable mortgage is created when the owner
of immovable property or his duly authorized agent, delivers documents of title to
immovable property to a creditor or his agent,in a notified town/area,with intent to
create security thereon.
What are title deeds?

• Sale deed
• Lease deed
• Partition deed
• Gift deed
• Deed of assignment
• Deed of relinquishment
• Probated will Or such documents
72
Process flow for Creation of Equitable mortgage:
• Inspection of immovable property offered for mortgage.
• Obtain bank's empanelled advocate’s legal opinion / non- encumbrance / search report
in prescribed format.
• Valuation of property from empanelled valuer in prescribed format with BM’s certificate
• Income tax clearance : (sec. 28(1) of IT act)
• Exercise caution in handling properties with PA holders and with minor properties
• Prior permission of income tax department required but in cases where permission is
delayed, branches may obtain a notarized and stamped affidavit from the mortgagor
(format 10- IC 6118 dt 15.11.2000)
• The title should be clear / marketable & free from all encumbrances.
• Property can be located anywhere in India, but the deposit of title deeds should be in
notified place
• EM can be created only in notified town.
• CANTONMENT areas may not be notified places in some states
• The title holder or his duly authorized agent should personally call on the branch for
making the deposit of title deeds with the intention of creating mortgage.
Creation of EQUITABLE MORTGAGE when original title deeds are not available:
• Only original title deeds to be deposited normally

• FGM / Zonal Head only if they are otherwise satisfied about the credential of the
borrower and other inherent risk element may permit to create EM with certified copies
of title deeds. [Declaration as per IC 6118 dt 15.11.2000]
• Public notice as newspaper publication is desirable in case originals are not available.
• Such newspaper should form a part of documentation
• Notarized Affidavit to be obtained from party stating that originals are lost and are not
deposited elsewhere (as per IC 6118 dated 15.11.2000)
• Police complaint should be lodged and their closure report to be taken
Can an EM be created with copies of Partition deed?
• No, however, the parties concerned can request SRO for more originals of the same
document
• One document will bear full stamp duty, which may remain with the eldest person
• Other copies will have nominal stamp duty, but these are Registered copies
• EM can be created with these Registered copies
73
• If other persons have already availed loans based on their Registered copies, a
certificate may be obtained from that FI, that there is no charge on the share of our
borrower
How to create EM in an ancestral property?
• An affidavit from party stating that the property is ancestral

• A certificate from local authorities stating that the properties are ancestral and there
are no title deeds to the said properties
• Tax receipts paid by the party for last 03 years
• RTC extracts from revenue authorities and SRO
• EC for last 30 years
• Party may obtain a declaratory decree from a proper court regarding his ownership over
the property
• Alternatively SM can be created
How to create EM for flats?
• The builder may execute a sale deed in respect of undivided share of the land. This
conveyance deed along with flat development agreement may be deposited for creating
a valid EM
• If the flat is constructed as per respective state’s Apartment act, then the normal
procedure for creating EM to be followed
• If the flat is as per respective state’s cooperative societies act, following additional
precautions to be taken –
• The registered agreement of sale from builder/ promoter/ society
• Share certificate issued by society
• NOC from society / owner’s welfare association for creating EM of the flat
• The transfer form duly signed by the borrower
• Possession certificate
• After creating EM, society to be informed
Creation of EQUITABLE MORTGAGE:
• Where the title of the property vests with a corporate body a resolution should be passed
by such company authorizing a person by name to make the deposit of deeds with the
bank.
• No writing or documents signed by the mortgager is needed to create an EM. If any
document is signed or executed by which a charge is created the same will attract stamp
duty as per law & will require registration with Sub Registrar of Assurance. (our Bank
insists that EM are to be registered wherever possible)
74
• In some states registration of EM is mandatory like Maharashtra.
• In many of the states, EM attracts stamp duty
• Issuance of acknowledgement of title deed /security as per format (IC 9037 dt
18.08.2011).
• Language of the memorandum throughout should be in past tense
• Notarized declaration to be taken from borrower/ guarantor whose property is being
mortgaged along with photo (format-2/3 – guide on documentation manual)
• Separate memorandum for company AD-14 & for others AD-13.
• Memorandum of deposit of title deed should be typed on the branch letter head and
signed by two officers with whom the title deeds were deposited by the mortgager/s.
• Where registration of EM is done, borrowers also will be required to sign
• Schedule of property along with boundaries to be mentioned in the memorandum
• Thereafter memorandum must be entered in the title deed / EM register and signed by
the same officers.
• Stamp duty if applicable.
• Noting of EM with the concerned revenue authority wherever possible (IC 6118 dated
15.11.2000)
• Vetting by bank’s law officer /bank’s panel advocate
Extension of EM for additional limits:
• Branch has to draw a supplementary memorandum and make a fresh entry in the title
deed register. (Reference: e-Manual Mortgage chapter)
• It is by constructive delivery
• For such extension of mortgage stamp duty prevailing in that particular state should
also be paid for the difference amount
• Fresh EM is to be created , when a new loan is sanctioned, even though the EM created
for an earlier loan and the loan account is closed
Limitation for Equitable Mortgage:
• 12 years from the date of cause of action( when money becomes due and payable)
• Extension of limitation period can be done by obtaining a security confirmation letter/
DBC from mortgager/ guarantor as per IC 3005 dated 19.02.1985 and IC3733 dated
13.07.1988 (SD-23)
• Fresh EM can be created for a time barred debt
Check points for mortgage:

• All documents should be original.
• Tips to identify color xerox / fabricated deeds –check for pencil marks / original seal
marks
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• Normally agricultural lands should not be taken as collateral security for other than
agricultural loans. Exercise caution as per credit dept. CO, circular No.1046/A/2003
dated 29.04.2003
• EM to be registered with sub registrar wherever possible (LSD/CIR/005 dt 20.3.2007)
• EM attendance register to be maintained
• Registration of EM in Maharashtra is mandatory (wef 01.04.2013)
• Memorandum and declaration / affidavit is now combined in a single format for
Maharashtra (LSD/210/2013 dated 16.04.2013 and LSD/260/2013 dated 30.04.2013)
• Latitude and longitude of the property to be mentioned in valuation report. This is
required for filing form 1 as per CERSAI (refer CC & MSME letter no. 10138 dated
12.05.2011)
• Irrevocable POA to be obtained from Mortgager favouring Sub Registrar seeking dispatch
of original Title deeds directly to Bank in case loan is disbursed prior to creating EM
(format IC 6118 dated 15.11.2000)
• Residential properties given as security by borrowers / guarantors should never be
substituted with commercial/ tenancy occupied properties
• Declaration to be obtained from guarantor if his property is being mortgaged about his
interest in the transaction (IC 8132 dt 10.10.2008)
• Charges created by SM and EM should be noted with Revenue authorities (wherever
possible) Format as per CLD/PSP/276 dt. 07.02.1987 (Refer e-Manual)
Frauds in SM / EM - Common indicators:
• Deposit of fake and fabricated title deeds

• Deposit of color Xerox title deeds
• Deposit by persons who are not owner of the property
• Mortgage of property which does not exist
• Mortgage of properties other than for which legal opinion and valuations are taken
• Mortgage of same properties to different Banks
• The schedule of property registered in sale deed does not fall under the jurisdiction of
that SRO
• Stamp duty is not in accordance with the normal stamp duty which varies from 10% to
14%
• Unusual sequencing of dates of purchase of stamps, execution and registration
• To verify whether witnesses have signed as well as put their thumb impressions
• Each page is properly numbered and there are no missing numbers.
• If total number of pages is 17, it will be numbered as 1 of 17, 2 of 17 etc.
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CENTRAL REGISTRY OF SECURITIZATION, ASSET RECONSTRUCTION AND SECURITY
INTEREST OF INDIA (CERSAI)
❖ A long awaited financial sector demand fulfilled with RBI and government gazette
notification in pursuant to the announcement made by the Finance Minister in the
budget speech for 2011-12, with the setting up of Central Registry of Securitisation,
Asset Reconstruction and Security Interest of India (CERSAI).
❖ It became operational with effect from 31.03.2011.
What is CERSAI?
✓ CERSAI is a company licensed u/s 25 of the companies act, 1956 and registered by the
Registrar of Companies, New Delhi.
✓ It is established by central government u/s 20(1) of the Securitization, Reconstruction
of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI act 2002).
✓ The company is a government company with majority of the shareholding of 51% by the
Central Government.
✓ Select public sector banks and the National Housing Bank are also shareholders of the
company.
✓ CERSAI is an office like any other registration office such as Sub Registrar Office (SRO)
or Registrar of Companies (ROC).
What are the charges that can be registered with CERSAI?
❖ Securities created by Banks in India for their loans have to be registered with CERSAI.
Various types of charges that can be registered with CERSAI are
❖ Equitable Mortgage
❖ Immovable properties by mortgages other than mortgage by deposit of title deeds
❖ Hypothecation of movables / current assets / book debts/intangible assets
❖ And any other security interest giving rights to the banks over properties of borrower
/ guarantor.
What are the charges that cannot be registered with CERSAI?
The charges that cannot be registered with CERSAI:

✓ General lien / particular lien on goods or deposits
✓ Pledge
✓ Ship / Vessel
✓ conditional sale& hire purchase
✓ Charge/ mortgage on Agricultural land
What is the type of charge that can be registered as on date?

77
As per amendment vide letter no CERSAI/COO/2016-1328 dt.18.05.16, following type of
security interest are now also required to be filed on CERSAI portal along with Equitable
Mortgages.
✓ Immovable properties by mortgages other than mortgage by deposit of title deeds (EM).
✓ Hypothecation of plant, machinery, stock, book debts, receivables etc.
✓ Intangible Assets LIKE KNOW-HOW, PATENT, COPY RIGHT, TRADE MARK, LICENSE,
FRANCHISE or any other commercial right of similar nature.
Whether the filing of charges with CERSAI is mandatory or is it optional?
❖ As per the notification, registration of EMs with CERSAI has been made mandatory
and is in the nature of statutory requirement.
❖ Failure to complete the registration within the stipulated time result in default on
the part of the bank which may result in penalties and reputation risk in addition to
giving scope for multiple finance.
Whether there are any specific formats for filing of charges?
❖ Yes, under the Central Registry rules, the following formats have been prescribed.
❖ Format 1- for filing the charges with CERSAI
❖ Format 1 – for extension of mortgage to other limits or enhancement of limits
❖ Format 2 – for filing satisfaction of charges to release the securities.
❖ (The formats can be downloaded from the web site mentioned below)
Who has to pay the fees?
• The fees are recovered from the borrowers
How to file the registration of charges?
• The charges are to be registered ONLINE with CERSAI through the web portal
http://www.cersai.org.in/
78
Whether multiple finance on the same property and frauds can be really
reduced by registering the charges with CERSAI?
✓ YES, as the full property details, its identification number, area, measurement, address
along with exact location of the property, its latitude and longitude are given at the
time of registration.
SARFAESI Act Chapter IV(A)

➢ SARFAESI Act Chapter IV(A) brought in to force from 24.01.2020
W/w-
❑ Charges Registered with CERSAI would get priority over

charges not so Registered
❑ Recovery under SARFAESIA would not be possible if charge

on security taken is not Registered with CERSAI
-------------------------------------------------------------xxxxxxxxxxxx------------------------------------------------------------
79
Format :
”Communication of Exact Repayment Start/ Due Date to Borrowers for
their Liability of Loan EMI / Instalment”
IBA standing committee on the suggestions of RBI, has come out with draft on the
subject matter to maintain a uniformity among Banks and compliance of RBI
guidelines stated above. Accordingly, the draft letter enclosed as annexure
✓ Shall be obtained from all new borrowers with immediate effect.
✓ The annexure should be treated as part of sanction advice invariably.
✓ In case of existing loan accounts the enclosed annexure should be taken
invariably at the time of very next review / renewal.
From:
Mr/Ms/ M/s .........................

(Name and address of the borrowers)
To:
The Branch Head,
(Name of the lending Institution and address)
Dear Sir,
With reference to the Credit facility/ies sanctioned to me/us vide sanction

Letter ref No dated………………., and being availed by us today, I/ we
confirm having understood the following concepts and illustrative examples
related to due dates , classification of our borrowal accounts as SMA/NPA in the
course of the conduct of the accounts.
Concepts / clarifications / Illustrative examples on Due dates and
specification of SMA / NPA classification dates
Dues:
mean, the principal / interest/ any charges levied on the loan account
which are payable within the period stipulated as per the terms of
sanction of the credit facility.
80
Overdue:
mean. the principal / interest/ any charges levied on the loan account
which are payable , but have not been paid within the period stipulated
as per the terms of sanction of the credit facility In other words, any
amount due to the bank under any credit facility is 'overdue' if it is not
paid on the due date fixed by the bank.
Relevance of the Principle of 'First In First Out' (FIFO) in appropriation of

payments into the borrowal account:
The Principle of FIFO i.e., 'First In, First Out' accounting method is relevant
to arrive at the No. of days of overdue for determining the SMA / NPA
status. The FIFO principle assumes that. the oldest outstanding dues in the
loan account needs to be cleared first .The FIFO method thus requires that
what is due first must be paid by the borrower first. For example;
if in any loan account as on 01.02.2021 there are no overdue s and an

amount of Rs. X is due for payment towards principal
instalment/interest/charges . any payment being credited on or after
01.02.2021 in the loan account will be used to pay off the dues outstanding
on 01.02.2021
Assuming that nothing is paid /or there is partial payment (Rs Y) of dues during
the month of February , the overdue as on 01.03.2021 will be Rs .X-Y.
Additionally, an amount of Rs.Z becomes due as on 01.03.2021. Now any

payment /partial payment into the account on or after 01.03.2021 will b e
first utilized to pay off the partial due of 01.02.2021 ( Rs X - Rs.Y) . If
there is more recovery than the Rs X - Rs. Y. then. after recovering dues
of 01 02 2021, the remaining amount will be treated as recovery towards
due of 01.03.2021.
Age of oldest Dues:
The age of oldest dues is reckoned in days from the date on which the oldest
payment is due and continues to remain unpaid . In the aforesaid illustration, if
the Dues relating to 151 February 2021 remain unpaid till 01.03 2021, the age of
the oldest dues is reckoned as 29 days on 02.03.2021.
Classification as Special Mention Account (SMA) and Non-Performing Asset

(NPA)
Lending institutions will recognize the incipient stress in loan accounts,

immediately on Default, by classifying them as Special Mention Accounts (SMA).
The basis of classification of SMA / NPA Category shall be as follows:
81
Loans in the nature of Term Loans Loans in the nature of cash
credit/overdraft
SMA Sub- Basis for SMA Sub- Basis for

categories classification — categories
Principal or interest classification —Outstanding balance
payment or any other remains continuously in excess of the
amount wholly or sanctioned limit or drawing power,
partly overdue whichever is lower, for a period of
SMA-0 Upto 30 days

SMA-1 More than 30 days SMA-1 More than 30 days and upto 60
and upto 60 days days
SMA-2 More than 60 days SMA-2 More than 60 days and upto 90
and upto 90 days days
Non-performing Asset:
Non-Performing Asset (NPA) is a loan or an advance where:
i. interest and/ or instalment of principal remains overdue for a period
of more than 90 days in respect of a term loan,
ii. the account remains 'out of order' as indicated below in respect of an
Overdraft/Cash Credit (OD/CC),
iii. the bill remains overdue for a period of more than 90 days in the case
of bills purchased and discounted,
iv. the instalment of principal or interest thereon remains overdue for
two crop seasons for short duration crops,
v. the instalment of principal or interest thereon remains overdue for
one crop season for long duration crops.
'Out of Order' Status:
An account shall be treated as 'out of order' if:
i. The outstanding balance in the CC/OD account remains continuously in

excess of the sanctioned limit/drawing power for 90 days, or
ii. The outstanding balance in the CC/OD account is less than the
sanctioned limit/drawing power but there are no credits
continuously for 90 days, or the outstanding balance in the CC/OD
account is less than the sanctioned limit/drawing power but
82
credits are not enough to cover the interest debited during the
previous 90 days period.
Illustrative movement of an account to SMA category to NPA

category based on delay / nonpayment of dues and subsequent up
gradation to Standard category at day end process:
Age of SMA / NPA SMA since NPA

Due date of Payment Categorisati NPA
Payment covers oldest dues Date /SMA categoriz
payment Date Date
in days class date ation
on
01.01.2022 01.01.2022 Entire dues upto 01.01.2022 0 NIL NA NA NA
01.02.2022 01.02.2022 Partly paid dues of 01.02.2022 1 SMA-0 01.02.2022 NA NA
01.02.2022 02.02.2022 Partly paid dues of 01.02.2022 2 SMA-0 01.02.2022 NA NA
01.03.2022 Dues of 01.02.2022 not fully paid 29 SMA-0 01.02.2022 NA NA

01.03.2022 is also due at EOD 01.03.2022
Dues of 01.02.2022 fully paid , Due for 1 SMA-0 01.032022 NA NA

01.03.2022 not paid at EOD 01.03.2022
No payment of full dues of 01.02.2022 and 01.02.2022

31 SMA-1 NA NA
01.03.2022 at EOD 03.03.2022 /
03.03.2022
Dues of 01.02.2022 fully paid ,Due for

1 SMA-0 01.03.2022 NA NA
01.03.2022 not fully paid at EOD 1.03.2022
01.02.2022
No payment of dues of 01.02.2022 /
01.04.2022 ,01.03.2022 and amount due on 60 SMA 1 NA NA
01.4.2022 at EOD 01.04.2022
03.03.2022
01.02.2022
No payment of dues of 01.02.2022 till
61 SMA 2 NA NA
01.04.22 at EOD 02.04.2022
/ 02.04.2022
01.02.2022
01.05.2022 90 SMA 2 / NA NA
01.05.22 at EOD 01.05.2022
02.04.2022

91 NPA NA NPA 02.05.2022
01.05.2022 at EOD 02.05.2022
83
SMA / NPA
Categorisati SMA since NPA
Due date of Payment Payment NPA
Age of oldest dues in days Date /SMA categoriz
payment Date covers Date
class date ation
on
01.06.2022 01.06.2022 Fully Paid dues of 01.02.2022 at EOD 01.06.2022 93 NPA NA NPA 02.05.2022
01.07.2022 01.07.2022 Paid entire dues of 01.03.2022 & 01.04.2022 at 62 NPA NA NPA 02.05.2022
EOD 01.07.2022
Paid entire dues of 01.05.2022 & 01.06.2022 at

01.08.2022 01.08.2022 32 NPA NA NPA 02.05.2022
EOD 01.08.2022
01.09.2022 01.09.2022 Paid entire dues of 01.07.2022 & 01.08.2022 at 1 NPA NA NPA 02.05.2022
EOD 01.09.2022
Standard 1022 STD

01.10.2022 01.10.2022 Paid entire dues of 01.09.2022 & 01.10.2022 0 Account NA NA from
with No 01.10.2022
Overdues
I/we also understand that the aforesaid few examples are illustrative and
not exhaustive in nature covering common scenarios, and that, the IRACP
norms and clarifications provided by RBI on the subjects referred above
will prevail
Yours faithfully,
(Borrower/s)
Date:
Place:
For Branch / Office purpose only
In case of Agriculture advances and NBFCs the terms to be conveyed as under:
84
In case of NBFCs, the reference to 90 days for SMA-2 / NPA classification to be
read as per the applicable norms and also subject to the provisions of the RBI
Circular DOR.CRE.REC.No.60/03.10.001/2021-22 dated October 22,2021on 'Scale
Based Regulation (SBR): A revised Regulatory framework for NBFCs. Also, the
asset classification norms of Agricultural advances which are based on Crop
Season shall continue as hitherto.
________________________________________________________________________
85
Format : ”Title Search Report”
Based on Annexure I.C.5729 Dated 05.01.2022
TITLE SEARCH REPORT (TSR)

To.
The Branch Manager
……………..Branch
Date of receipt of Name & designation Date of delivery of

original title of the official who original title Name & designation of the
deeds/documents delivered the original deeds/documents official to whom the original
from the Branch. title deeds/documents along with Title title deeds/documents along
Search report. with Title Search report is
1 delivered.
Name of the Account and details of the Borrower

2
Full Description of the Property

Nature of Immovable Property
(Please describe the property details with boundaries here
3.1 properly. General and vague description should be
avoided)
(i) Survey No
(ii) Hissa No
(iii) Ghat No
(iv) Town Survey No
3 (v) Khasra No.
3.2 (vi) Patta No.

(vii) Khatha No.
(viii) Plot No.
(Local name of the field as applicable
including sub-divisions should be
mentioned)
86
Number/Identification details as per (Mention here numbers like flat numbers etc mentioned
3.3 building map/plan as per map/plan in the case of
flats/condominium/apartments)
Extent of Property (Please mention as described in document/title deed

3.4 and show it in Sq.ft also)
Name/s of the Owner/s (Full description of the owner/s with present address
3.5 should be given)
Nature of Ownership
❑ Freehold
❑ Lease hold (mention the residual
lease term clearly)
❑ License
❑ Undivided Interest (mention the
shares)
❑ Trust Property (mention
whether the borrower is a
Trustee or beneficiary)
❑ Assignee/Grantee of Govt.
3.6
❑ Cultivating tenant
❑ Title only by possession
(mention whether adverse
possession/or others)
❑ As a member/share holder of
society
❑ As a mortgagee
❑ As a servient owner of easement
right
❑ Any other (Please mention the
nature of ownership here)
87
88
Tracing of Title
The Advocate submitting the opinion should give a flow chart for 30-year title ordinarily. In the event it is not possible, it should be at
least for a period of 13 years giving reasons why 30 years is not possible in terms of circular IC No: 6118 dated 15th November 2000.
The flow chart ideally should be as follows:
First Owner

4 Second Owner ….

Borrower
It should be clearly brought out how ownership came to be acquired by each of the owners both
predecessor in interest and successor. While tracing the title deeds, the Advocate has to verify all original
title deeds/link deeds and its genuiness.
Title deeds/document details under which ownership is acquired
Name/Nature of Deed Details like office of the Regn., Regn.

No & Date
First Owner
5 Second Owner
So on... up to the
present
owner/mortgagor
List of encumbrances
1) Nature of encumbrance:
❑ Charge under contract

❑ Mortgage
❑ Negative Lien
❑ Lease/tenancy
6 ❑ Right of Maintenance /reversion
❑ Charge by operation of Law
❑ Preemption rights
❑ Right to specific performance under an agreement to
sell
❑ Liens/First Charge under laws
❑ Right of reversion to Government
❑ Lis pendens
89
2) Name of the person in whose favor encumbrance is subsisting
3) Date on which encumbrance has come into existence.
View on encumbrance
In the case of encumbrance, the advocate should clearly opine as to:
❑ how far such an encumbrance would affect the value of the property.
7
❑ Any permission/approvals are required for the Bank to create security
❑ The extent to which Bank's security would be jeopardized because of encumbrance
Manner and cost of removal of encumbrance
Regulatory Issues:
Clearly provide the following details: -
❑ Whether the property is affected by Land Ceiling Law

❑ Whether the property is affected by Land fragmentation Law
❑ Whether the property is affected by Forest law
❑ Whether the property is affected by Planning Law
❑ Whether the property is affected by Urban Land Ceiling Law
8
❑ Whether the property is affected by rent restriction/control Law
❑ Whether the property is affected by Environment Law
❑ Whether the property is affected by user restrictions under Municipal/revenue Law
❑ Any other regulatory issue relating to property such as requirement of permission from
Development Authority under Law relating to industrial parks
Advocate has to give a report clearly that property is not subject any regulatory issues, if nothing above
is applicable
Views on regulatory hurdles

If the property is affected by regulatory issues, the Advocate has to give a clear view, as to: -
9 ❑ how far such an encumbrance would affect the value of the property.
❑ Any permission/approvals are required for the Bank to create security
❑ The extent to which Bank's security would be jeopardized because of encumbrance
❑ Manner and cost of removal of encumbrance
List of documents/deeds provided to the Advocate and perused by him

10 The Advocate has to give full description of the documents received and perused by him one by one
90
List of documents found out, while examining the deeds as above and in the search in the offices of
registrar/revenue authorities affecting the property and examined
11 Advocate should take out certified copies and examine the same in the case of documents found out by
him during examination as above in column 10.
List of further documents called for, examined, and perused

❑ Advocate should provide the list of further documents asked for and examined
12
❑ In case further documents are not necessary, the Advocate should make a statement here that further
documents are not necessary
Whether the documents examined are duly Advocate should clearly state as to whether the
13 stamped as per the Stamp Act documents are duly stamped are not as per stamp act
Whether the Registration endorsements are in Advocate should clearly state as to whether
14 order registration endorsements are regular
Certificate of examination
The Advocate has to give certificate as follows:
15
"This is to certify that I have examined each and every page of the documents required for giving the title
clearance certificate and do not find that transactions under the documents sham and fictitious"
Certificate of title
Title Clearance certificate should be as follows: -
"This is to certify that the title to the property of the borrower is clear and marketable without any further
act on the part of borrower"
OR
16
"This is to certify that the title to the property of the borrower is clear and marketable, if the following
acts/deeds are done or caused to be done: -
1. xxxxxxxxxxxxxxxxxxxxxx
List of documents to be deposited for creating the mortgage by deposit of title deeds
1. xxxxxxxxxxxxxxxxxx
17
2. xxxxxxxxxxxxxxxxxx
3. xxxxxxxxxxxxxxxxxxxxx
91
"This is to certify that the above documents if taken would create valid mortgage by deposit of title deeds"
Any other suggestion or Advise to protect the security interest of the Bank
18
92

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DOCUMENTATION

02nd October 2022

Positive Attitude Change Everything

1. Significance of Documentation, Need and the Essential

2. Constitution & Facility-Wise Documentation 15

3. List of Document Formats with Purpose 24

4. Facility wise & Product wise Documentation- General 31

5. List of Documents required in FOREX Advances 35

6. List of Documents required in MSME/MID Corporate/Large 45

7. List of Documents required in Retail Advances 52

8. List of Documents required in Government Sponsored and 55

9. Essentials of Mortgages & CERSAI 71

10. Format : “Communication of Exact Repayment Start/ Due 81

11. Format : Title Search Report 87

Documentation is a process of obtaining documents in proper form and in accordance with

Need for Documentation in Banks:

What are Documents?

❖ They may include one or more of

❖ Acts as written evidence for transaction and security created

A document is useful only when:

Common instances of defective documentation:

❖ Inappropriate documents / forms used

Consequences of not obtaining documents:

Who cannot execute the documents?

Minors /Lunatics / Undischarged Insolvent / Convicts /Heavily drunk people

Who are competent to execute documents?

✓ Persons who are competent to contract / Individuals /Proprietor /Partnership firms

Who are also competent to execute documents?

Precautions in documentation at various stages:

Precautions to be taken during execution of Documents:

✓ Document to be executed in the presence of officials of bank and should be recorded by

Precautions to be taken Post execution of Documents:

✓ To be verified before sending for safe custody

Vetting of documents before release of limit :

❖ Loans up to Rs. 10.00 lacs – by BM or Advance officer

PRECAUTIONS IN HANDLING POWER OF ATTORNEY (PA)

SD 22 and SD 23 to be stamped with Re.1.00 revenue stamp + stamp duty applicable as

There are 03 types of stamps

Non- judicial stamps:

• Special adhesive stamps – substitute for non-judicial stamp paper

• Embossed or impressed stamps – Non judicial paper having embossed/impressed stamp

Use of Non- judicial stamp paper:

✓ The entire document may be written or typed on the stamp paper OR

Execution of documents outside India – (u/s 18):

Execution in more than one state:

• Section 4 – when the court is closed

How to extend limitation period?

Before expiry of document

To extend limitation period in our Bank – Formats:

Regularizing time barred debts:

Nature of Doc. Limitation Period

SD-1, 03 years from the date of cause of action. 03

SD-02, Bank can dispose the pledged good after notice

SD-03, SD 06 etc., 03 years from the subsequent date of execution.

Mortgage 12 years from the date of cause of action. (money

Letter of Hypothecation of Three years from date of each bill.

Counter Indemnity Three years from the date of payment of the

Appeal to other courts on the decree at 30 days from date of decree