Loan Policy Latest

Annexure II

ORIENTAL BANK OF COMMERCE

CORPORATE OFFICE, GURGAON

DELEGATED POWERS FOR

LOANS & ADVANCES

RISK MANAGEMENT DEPARTMENT

(FOR INTERNAL CIRCULATION ONLY)

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DELEGATED POWERS FOR LOANS & ADVANCES-INDEX

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CONTENTS Page No.

CHAPTER 1

GENERAL GUIDELINES FOR EXERCISE OF DELEGATED POWERS

1.1 Judicious Exercise of Delegated Powers 1

1.2 Compliance of Loan Policy Guidelines, Instructions in the Advances Manual & Loan Circulars Issued by Head Office from time to time

1

1.3 Infrastructure for proper appraisal of Loan Proposals, disbursement, post-disbursement Supervision & Control over Advances

3

CHAPTER 2

DEFINITIONS

2.1 Exposure 4

2.2 Fund Based Secured Limits 4

2.3 Fund Based Unsecured Limits 5

2.4 Powers that can be exercised over and above the Delegated Powers for Single Borrower

5

2.5 Group Concern 6

2.6 Corporates and Non-Corporates 7

2.7 Real Estate 7

2.8 Third Party Collateral 8

2.9 Definition of Close Relative 8

CHAPTER 3

CREDIT COMMITTEES AT VARIOUS LEVELS & RESPECTIVE DELEGATED POWERS

3.1 Constitution of Credit Committees 9

3.2 Credit Committees at various levels 9

3.3 Sanctioning Authorities and their Delegated Powers for Loans & Advances 10

3.4 Credit Approval Committee (CAC) & Functioning 11

3.5 Head Office Level Credit Committee(HLCC) & Functioning 13

3.6 Regional Office Level Credit Committee(RLCC) & Functioning 15

3.7 Terms & Conditions for exercising Delegated Powers by HLCC-ED & RLCC-RH 17

CHAPTER 4

CLEARANCE BY NEW BUSINESS GROUP

4.1 Background 19

4.2 Constitution of New Business Group 19

4.3 Categories of Advances Exempted from NBG 20

4.4 Functioning of NBG 21

4.5 Cut-Off Limit and Coverage of Proposals for Fresh / Additional Credit Facilities for Expression of Interest from New Business Group (NBG) at Head Office

22

CHAPTER 5

EXERCISE OF DELEGATED POWERS

5.A. Delegated Powers related to “Sanctions” 25

5.B. Delegated Powers related to “Group Borrowers” 35

5.C. Delegated Powers related to “Margin” 38

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5.D. Delegated Powers under Thrust, General AND Restricted Industries/Sectors 41

5.E. Delegated Powers related to “Security” 43

5.F. Delegated Powers related to “Operational Aspects” 45

5.G. Delegated Powers related to “SMA and NPA” 48

CHAPTER 6

DELEGATED POWERS FOR VARIOUS TYPES OF CONSTITUENT BORROWERS

6.1 Exposure Limits to Various Types of Constituent Borrowers 49

6.2 Advances to Trust 49

CHAPTER 7

DELEGATED POWERS FOR SPECIFIC INDUSTRIES / SEGMENTS / CATEGORY

7.1 Infrastructure Finance 51

7.2 Financing of Software /IT Enterprises/Call Centres 51

7.3 Finance to Gems, Diamonds and Jewellery Sector 51

7.4 Delegated Powers under Commercial Real Estate 52

7.5 Finance to Ship Breaking Industry 52

7.6 Finance to Non-Banking Finance Companies & Residuary Non-Banking Companies (RNBC)

52

7.7 Finance to Capital Market 52

7.8 Financing Film Industry 53

7.9 Financing to Non-Conventional Energy Sector 53

7.10 Financing PSU Disinvestments 53

7.11 Financing Under Schematic Lending 53

7.12 Delegated Powers for Granting Finance for Acquisition of Equity in Overseas Companies

54

CHAPTER 8

GUIDELINES FOR EXERCISE OF DELEGATED POWERS FOR VARIOUS TYPES OF FACILITIES

8.1 Delegated Powers for Term Loans 55

8.2 Delegated Powers for Unsecured Short Term Loan 56

8.3 Delegated Powers for Corporate Loan Scheme 56

8.4 Delegated Powers for Open Term Loan 57

8.5 Delegated Powers For Composition Of CC(H) And WCDL 57

8.6 Delegated Powers for Pledge 57

8.7 Advance against Supply Bills 57

8.8 Delegated Powers for Booking of Foreign Exchange Forward Contracts 57

8.9 Delegated Powers for Clean Overdrafts Facility 58

8.10 Number of Permitted Clean Overdraft Accounts per Branch 58

8.11 Delegated Powers for Purchase of Third Party Cheques 59

8.12 Occasional Cheque Purchase and Withdrawal against Uncleared Instruments / Cheques in Case of Non Borrowal Accounts

60

8.13 Delegated Powers for Advances against Pay Orders, Bank Drafts, Govt Cheques (Except Pay Orders or Drafts of Cooperative Banks)

61

8.14 Delegated Powers for Opening Standby LC (SBLC) 62

8.15 Delegated Powers for Line of Credit 62

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8.16 Delegated Powers for Purchase/Discounting of Bills under Letter of Credit 62

8.17 Delegated Powers for Discounting Bills Drawn on Associate Concerns 64

8.18 Delegated Powers to Extend Due Date in Case of Export Bills/ Packing Credit 64

8.19 Exposure to Indian Joint Ventures / Wholly-Owned Subsidiaries Abroad and Overseas Step-Down Subsidiaries of Indian Corporates

64

8.20 Pooled Municipal Debt Obligation Facility (PMDO) 64

8.21 Structured Mezannine Credit Facility (SMCF) 65

8.22 Loans against NRE and FCNR (B) Deposits 65

8.23 Delegated Powers for Allowing Advances against Term Deposits by the Incumbents of “Extension Counters”

65

8.24 Loans against CA / SB Accounts 65

8.25 Loans against Non-Current Assets 65

8.26 Issue of Bank Guarantees in Foreign Currency / Import LC 65

8.27 Guidelines to be adhered to in case of Import LCs/Foreign Bank Guarantee with 100% cash margin

66

8.28 Delegated Power for Advances against Warehouse Receipts 66

8.20 Delegated Power for Letter of Credit (Purchase of Capital Goods / Machinery) 67

CHAPTER 9

GRANTING OF ADHOC, OVER LIMIT, OCCASIONAL CHEQUE PURCHASE & WITHDRAWAL AGAINST UNCLEARED INSTRUMENTS / CHEQUES IN BORROWAL ACCOUNTS

9.1 Delegated Powers for granting of Adhoc Limits, Over Limit, Occasional Cheque Purchase & Withdrawal Against Uncleared Instruments / Cheques

68

9.2 General Guidelines for granting of Adhoc Limits, Over Limit, Occasional Cheque Purchase & Withdrawal Against Uncleared Instruments / Cheques

69

9.3 Adhoc Limits to Exporters 71

CHAPTER 10

DELEGATED POWERS FOR CONCESSIONS IN RATE OF INTEREST

10.1 Delegated Powers for allowing Concession in Rate of Interest 72

10.2 Delegated Powers for Permitting Concession in Rate of Interest In Case Of Accounts Having Internal Credit Risk Rating OBC 7 & Below

73

10.3 Delegated Powers for Permitting Concession in Rate of Interest in Accounts Sanctioned Under The Delegated Powers of MCB

73

10.4 Revision in Delegated Powers for Permitting Concession in Rate of Interest On FITL/WCTL In Restructured Cases

73

10.5 Concession in the Rate of Interest in Case of Sick Viable Units 74

10.6 Delegated Powers for Permitting Concession in Rate of Interest on Rupee Loan/ Advances against Term Deposit (Domestic/NRE/FCNR)

74

CHAPTER 11

DELEGATED POWERS FOR OTHER CONCESSIONS

11.1 Details of Service Charges Wherein Concession Can Be Permitted 75

11.2 Delegated Powers of Functionaries at Head office to allow Concession in Service Charges

75

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11.3 Delegated Powers of Functionaries at Regional office to allow Concession in Service Charges

76

11.4 General Guidelines for Permitting Concessions 76

11.5 Monitoring 77

11.6 Reporting System 78

11.7 Prepayment Penalty in Case of Term Loans / Demand Loans 78

11.8 Waiver of Insurance 78

11.9 Refund (In Part/Full) of Excess Interest/Penal Interest/Service Charges 79

11.10 Delegated Powers for Permitting Recovery of Commission on Guarantees on Annual Basis

79

11.11 Delegated Powers for Relaxation / Waiver of ECGC Premium To Be Borne By The Borrower For The Whole Turnover Packing Credit Guarantee (WTPCG)

80

11.12 Waiver of Registration Clause In Case Of Advance against Supply Bills 80

CHAPTER 12

DELEGATED POWERS FOR SHORT/LIMITED REVIEW 81

CHAPTER 13

DELEGATED POWERS IN CASE OF MULTIPLE / CONSORTIUM ARRANGEMENT

13.1 Consortium Financing/ Syndication 82

13.2 Multiple Banking Arrangement 84

13.3 Delegated Powers to Allow amendment in HO sanctions for limits under Consortium/Multiple Banking Arrangement 85

CHAPTER 14

DELEGATED POWERS FOR ISSUANCE OF NO OBJECTION CERTIFICATES 87

CHAPTER 15

DELEGATED POWERS IN CASE OF TAKEOVER OF ACCOUNTS

15.1 Nature of Borrowal Account to Be Transferred From Other Bank to Our Bank 88

15.2 General Guidelines 88

15.3 Credit Report of Borrowal Accounts to be transferred from Other Banks 89

15.4 Minimum Entry Level Internal Credit Rating of the Borrowal Accounts to Be Transferred From Other Banks to Our Bank 89

15.5 Delegated Authority for Takeover of Borrowal Accounts 89

15.6 Authority to Permit Deviation for Takeover Of Borrowal Accounts 90

15.7 Authority for Enhancement in Credit Limits For Takeover of Borrowal Accounts 90

15.8 Delegated Authority for Relaxation in Benchmark Financial Ratio For Takeover Accounts 90

15.9 Reporting of Takeover Borrowal Accounts 91

15.10 Periodic Review/ Monitoring Of Takeover Borrowal Accounts 91

15.11 Loan Review of Takeover Borrowal Accounts under Loan Review Mechanism 92

15.12 Other Due Diligence To Be Undertaken For Takeover Accounts 92

15.13 Other Operative Guidelines 93

15.14 Transfer of Borrowal Accounts from our Bank to other Bank/FIs 94

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CHAPTER 16

REHABILITATION / RESTRUCTURING OF ACCOUNT

16.1 Delegated Powers for Restructuring (At Existing Level of Sanctioned Exposure or Restructuring with Additional Exposure) of the Borrowal Accounts

95

16.2 Monitoring Period 95

16.3 Delegated Powers for granting of Enhancement/ Additional /Adhoc facilities in Restructured Accounts-within the ‘Monitoring Period’

95

16.4 \Delegated Powers for Granting of Enhancement/ Additional /Adhoc facilities in Restructured Accounts-after the ‘Monitoring Period’

96

16.5 Sanction of Credit Facilities to the Borrowers whose Group Accounts have been Restructured by Our Bank

97

16.6 Delegated Powers for Permitting Revision in DCCO (Not Amounting to Restructuring) 97

16.7 Extending Bank’s Commitment to Rehabilitation Package by the Lead Bank or by the Financial Institutions

97

16.8 Corporate Debt Restructuring (CDR) 97

16.9 Sanction / Takeover of Rescheduled / Restructured Accounts Involving Restructuring of Dues by State Electricity Boards/Banks/FIs

98

CHAPTER 17

DELEGATED POWERS FOR PERMITTING HOLDING ON OPERATIONS 99

CHAPTER 18

LOANS & ADVANCES TO STAFF/ RELATIVES (INCLUDING CLOSE RELATIVES) OF STAFF MEMBERS

18.1 Delegated Powers For Considering Credit Facilities To Relatives Of Staff Members 100

18.2 Granting Loans And Advances To Directors Or Relatives Of Directors 100

18.3 Loans To Relatives Of Staff Members 102

18.6 Loans to Staff Members 103

CHAPTER 19

LARGE CORPORATE BRANCHES (LCBS): DELEGATION OF POWERS 105

CHAPTER 20

CONVERSION FROM PRE-SHIPMENT FACILITY TO POST-SHIPMENT FACILITY 105

CHAPTER 21

APPROVAL OF NEW SCHEMES / FORMATS / DELEGATION RELATED ISSUES 105

CHAPTER 22

DELEGATED POWER FOR PERMITTING SWITCHOVER FROM PLR TO BASE RATE 105

CHAPTER 23

COMPLIANCE / FLEXIBILITY / DEVIATIONS / EXEMPTIONS FROM THE LAID DOWN POLICY GUIDELINES

23.1 Monitoring of Deviations 106

23.2 Relaxation In Benchmark Ratios (Other Than Takeover Accounts) 107

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CHAPTER – 1

GENERAL GUIDELINES FOR EXERCISE OF DELEGATED POWERS

The Delegated Powers of the various functionaries are to be exercised judiciously so as to

ensure:

Quality of Loan Assets and Conservation of Capital

To have a well-balanced and diversified loan portfolio covering various sectors of the

economy and different industries / sectors.

Achievement of targets given by the Government of India / Reserve Bank of India / Head

Office for Priority Sector and Sub Sectors with special emphasis on flow of credit towards

various segments i.e. Agriculture, Small and Micro Enterprises, Weaker section, Retail

Credit Schemes and Housing Finance to Individuals.

To increase non-interest / non-fund based income.

To enlarge client base of Corporate, Mid-Corporate and SME Segments through marketing

of quality loan assets.

To meet varied needs of customers through cross-selling of products.

To ensure timely and adequate flow of credit to meet the genuine needs of existing and

prospective borrowers, by ensuring quick and prompt credit decision making by reducing

response time.

Sanction of credit limits shall be strictly governed by the Bank’s existing Loan Policy,

standardized terms & conditions, guidelines laid down in the Advances Manual, circulars

issued by the Head Office and any other conditions as are necessary for sanction of a

particular limit. Proper documentation is to be completed and all Terms & Conditions of

sanction should be complied with before disbursement of any advance.

Delegated powers will be exercised by the delegatees judiciously, with due care and in

good faith, having regard to the duties entrusted to him/ her or to the responsibilities

devolving on him/her. The guiding rule should be that Delegated Powers would be

exercised not merely in letter but also in spirit. In exercising the authority, the delegatee will

comply with the general/ specific instructions and guidelines prescribed by the Head Office

/ RBI / other controlling authority from time to time.

In the exercise of Delegated powers it should be ensured that the credit requirements of the

borrower are assessed in relation to the borrower’s business-needs and no attempt should

be made to reduce or underplay the credit requirement or increase the Rate of Interest or

margin solely to bring the proposed limits within one’s Delegated Powers. Similarly,

attempts to deliberately add some clause or conditions or waivers or increase the amount

of proposed credit limit solely with the purpose of referring the proposal to higher authorities

should be avoided.

1.1. JUDICIOUS EXERCISE OF DELEGATED POWERS

1.2. COMPLIANCE OF LOAN POLICY GUIDELINES, INSTRUCTIONS IN THE

ADVANCES MANUAL & LOAN CIRCULARS ISSUED BY HO FROM TIME TO TIME

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Accordingly, the Field Functionaries and/or Credit Committees would take the credit

decision at their level and only the deviation be referred to the competent authority for

necessary approval with proper justification.

Wherever Specific Guidelines have been provided, the same shall supersede the General

Guidelines. In case of any doubt, clarifications from the next higher authority (ies) should be

sought rather than making own interpretations.

Sanctioning authority will exercise his / her Delegated powers only after regular loan

proposals are compiled, limits properly assessed and duly recommended atleast by one

officer of the bank other than the sanctioning authority. However, in case of one - man

(Officer) branch, this stipulation would not be applicable.

Proposals which prima facie do not fall within one’s Delegated powers should not be

entertained in part. While considering sanction of term loan, the proposed term loan limit

along with the future working capital requirements should be considered in totality by Field

Functionaries while determining the exposure for the purpose of Delegated Powers. This

shall be the case even if working capital limits are not envisaged to be released

immediately but on completion of project.(Detailed guidelines in Chapter-8)

Submitting proposals to higher authorities and simultaneously releasing part limits within

one’s own Delegated powers should not be done. The loan proposals should be considered

in totality.

As a matter of policy, the sanction of adhoc limit / temporary enhancement shall be kept to

the bare minimum, to be allowed only where circumstances / business considerations

warrant. Adhoc facility / temporary enhancement must be allowed strictly within the

Delegated powers vested with the concerned functionary. The Adhoc facility should be

allowed selectively and not as a matter of routine / throughout the year. The policy

guidelines with respect to exercise of Delegated powers for sanction of adhoc limits are

detailed in Chapter 9 of this booklet and shall be strictly adhered to while considering/

sanctioning any adhoc facility.

Management appraisal of the borrower should be done and updated every year.

While renewing the credit facilities, although the past track record of the borrower or the

length of his association should be one of the considerations, the status of the customer

should be more critically analyzed.

Due to old relationships with the borrower, alert supervision of the accounts should not be

given a go-by. In other words, long relationship with a borrower should not be given undue

weightage. No laxity be observed in obtaining monitoring statements like stock statements,

stock verification, stock audit, QIS, Monitoring Officer’s report even in case of borrower

having satisfactory dealings with the bank for a long time. Supervision and follow-up in

such accounts should be rather more than required to avoid sudden slippages.

A clause should be incorporated in the sanction to the effect that the borrower would

require NOC from the Bank for opening of current account or availing credit facilities from

other banks/Financial institutions for further expansion, taking up new activities, setting up

or investing in a subsidiary (whether in the same business line or unrelated business) .

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Assessment of credit requirements be worked out as detailed in Loan Policy and suitable

sub limits e.g. against UBD, FUDBP, LC on DA basis, LC for capital goods etc. be fixed,

wherever required, keeping in view the genuineness of credit requirements of the

constituents.

While exercising powers, it may be ensured that proper mix of pre and post sales limits are

considered.

If a higher authority has declined a proposal, the lower delegatee cannot exercise his

Delegated powers in that particular case without the permission of the higher authority in

writing. Proposals rejected/declined by higher authorities should not be entertained at lower

levels even if such sanctions fall within lower level functionary’s Delegated powers.

It shall be ensured by the Regional Heads that adequate infrastructure exists for proper

appraisal of loan proposals, disbursement, post-disbursement supervision and control over

advances both at Branches and Regional Offices.

Branch Incumbents and Regional Heads shall make available copies of the Loan Policy as

well as Delegation of Powers Chart along-with detailed guidelines to all concerned persons

handling credit proposals in branches and Regional Offices for prudent exercise of

Delegated powers. The Advances Manuals, Policies and Circulars issued by various

departments are uploaded on OBCWEB and references be made to these for an informed

processing and decision making.

It is incumbent on the Branch Incumbents as well as Regional Heads to ensure effective

supervision and follow up of advances. Regional Heads are advised to strengthen their

Credit Department and Loan Audit Cell. Besides, training of Credit Officers at all levels be

undertaken as an ongoing exercise. Similarly, Branch Incumbents shall strengthen their

credit cells for proper appraisal, monitoring and follow-up of advances besides having

proper control over revenue leakage.

1.3. INFRASTRUCTURE FOR PROPER APPRAISAL OF LOAN PROPOSALS,

DISBURSEMENT, POST-DISBURSEMENT SUPERVISION & CONTROL OVER

ADVANCES

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CHAPTER – 2

DEFINITIONS

Unless there is anything repugnant in context or otherwise, the terms referred in this circular

for the purpose of exercising Delegated Powers, would mean as under:

Exposure shall include Credit exposure (Funded and Non-Funded Credit Limits), credit

equivalent of Forward Contract Limit to the extent of 5% of the Forward Contract Limit and

investment exposure (including underwriting and similar commitments). The sanctioned limits

or outstanding, whichever are higher, shall be reckoned for arriving at the exposure

limits in case of Working Capital Limits. However, in case of fully drawn term loans, where

there is no scope for re-drawal of any portion of the sanctioned limit, outstanding shall

be reckoned as the Credit Exposure. In case of partly drawn term loans, the exposure shall be

taken as outstanding + undrawn portion.

(This definition of Exposure is applicable only for the purpose of exercise of Delegated

Powers. For the purpose of classification of assets in the Bank’s Balance sheet /

Exposure Norms, the definition of Exposure shall be as per RBI Guidelines.)

The following facilities shall be considered as Fund Based Secured Limits for the purpose of

exercise of Delegated Powers (for all Delegatees):

Hypothecation of Stock and/ or Book Debts, Plant & Machinery, Movable Assets

Loans secured by Mortgage of Land & Building, Immovable Assets

Pledge of stocks

Pledge/Assignment of Bank’s own Deposit, NSC, LIP, Warehousing Receipts, Relief

Bonds, Shares, Units of Mutual Funds

Demand documentary bills accompanied with RRs / TRs of the approved transport

operators

Packing credit for Export secured by stock

FDBP/FUDBP against orders/Letter of Credit

UBD/UDBP /Documentary Usance Bills backed by Inland Letter of Credit/Accepted

Hundies arising out of genuine trade transactions

Pledge of Hire purchase/ leasing documents

Advance against bills for collection / supply bills

Advance against duty drawback/ Undrawn Balances /Cash incentives (to be allowed at

branches authorized for foreign exchange business)

Purchase of cheques drawn by Govt. Departments.

Hypothecation of Trust Receipts

2.1. EXPOSURE

2.2. FUND BASED SECURED LIMITS

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Advance against bills in the course of collection ( Post shipment Loan)- To be allowed at

branches authorized for Foreign Exchange Business)

(This definition of Unsecured Limits is applicable only for the purpose of exercise of

Delegated Powers. For the purpose of classification of assets in the Bank’s Balance

sheet / Exposure Norms, the definition of Unsecured Exposure shall be as per RBI

Guidelines.)

The following facilities shall be considered as Fund Based Unsecured Limits for the purpose of

exercise of Delegated Powers:

Third Party Cheque Purchase except purchase of cheques drawn by Govt. Departments

which shall be considered as secured.

Withdrawal against Uncleared Effects

Clean Overdraft

In case of credit facilities (Fund Based and/or Non Fund Based), where no charge is

available on tangible security (movable or immovable), the facility shall be treated as

unsecured and shall be sanctioned at Head Office by HLCC-ED/CAC /MCB within their

respective Delegated Powers.

Notwithstanding any facility being defined as Secured / Unsecured, Restricted Powers

shall be exercised in respect of:

Clean Overdraft Facility

Bank Guarantee to Stock Brokers

Advance against Shares

Commercial Real Estate

Retail Credit(As per Scheme)

Agriculture & Priority Sector Advances

The powers in respect of the following credit facilities can be exercised over and above the

Delegated Powers as per the Appendix-A.

Advance to self / third parties against Bank’s own Deposits, NRE/ FCNR(B)/ NRNR

deposits , RFC deposits

Purchase of Govt. cheques, Pay Orders, bank draft issued by Scheduled Commercial

Banks (except pay orders or drafts of Cooperative banks)

Advances against Government Securities like NSC, LIP (Except those covered under

retail schemes)

Bills co-accepted by other banks under IDBI/ICICI schemes for sale of self-manufactured

goods

Advance against Relief Bonds (all series) issued by GOI

2.3. FUND BASED UNSECURED LIMITS

2.4. POWERS THAT CAN BE EXERCISED OVER AND ABOVE THE DELEGATED

POWERS FOR SINGLE BORROWER

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Opening of LCs and issue of Bank Guarantee covered by 100% up-front cash margin

Ad-hoc Limits in case of own sanction and limits sanctioned by lower/higher authority for

all categories of borrowers.

Over Limits in case of own sanction and limits sanctioned by lower/higher authority for all

categories of borrowers.

Occasional Cheque Purchase and Withdrawal against Uncleared Instruments / Cheques

Retail personal loans viz Housing loans, Vehicle loan, Education loan and Personal loan

(Non Commercial purpose)

2.5.1. The following shall be the criteria for determining the existence of a group:

a) The group to which a particular borrowing unit belongs, shall, be decided by the

Sanctioning Authority on the basis of the relevant information available, the guiding

principle being commonality of management and effective control.

b) In the case of a split in the group, if the split is formalized, the splinter groups will be

regarded as separate groups.

c) If bank has doubt about the bona fides of the split, a reference may be made to RBI for its

final view in the matter to preclude the possibility of a split being engineered in order to

prevent coverage under the Group Approach.

d) If Field Functionary finds that two firms/ companies/ entities are suspected to be

connected but are not covered under the definition, specific instructions be invariably

obtained from General Manager (Risk Management), before making any interpretation.

2.5.2. The Group/Allied/Sister Concern shall include the following:

a) Two concerns having one or more common proprietors/partner(s); or

b) The proprietor/partner of a firm being director in a Private / Public Ltd. Company and vice-

versa; or

c) Any of the directors of the Private Limited Company is the director of another private

limited company; or

d) A Limited Company is subsidiary of another Limited Company within the meaning of The

Companies Act , 1956; or

e) A Limited Company is closely held Company with substantial interest i.e. more than 20%

of the equity share capital of the company is owned by the other concern(s); or

f) The member of an HUF is a proprietor/partner of a concern or director of a private limited

company.

Note1: Professional directors on the Board shall be excluded for the purpose of the

concept of the Group.

Note2: In so far as public sector undertakings are concerned, only single borrower

exposure limit would be applicable.

a) The facilities sanctioned to the guarantor(s) shall be taken into account for the purpose of

exposure per group. However, the two concerns shall not be termed as

2.5. GROUP CONCERN

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allied/associate/sister concerns merely because of having a common guarantor if the

guarantor is not enjoying any credit facilities as individual or as a

proprietor/partners/directors of a firm/company. It shall, however, be ensured by the field

functionaries that this clause is not misused by such guarantors.

b) In case the Managing Member of a Samiti / Society or Trustee of a Trust or Managing

person of a Club is a proprietor/ partner/ director / Karta of HUF/ Managing Member or

Managing Person in any other constituent body of similar nature or in the firm/ company /

Society/ Trust .

However, the above list is not exhaustive and enumerative only. In case of any doubt, criteria

defined in para 2.5.1(a) above shall be applied.

Real Estate is defined as an immovable asset - land (earth space) and the permanently

attached improvements to it.

Commercial Real Estate (CRE)/ Income-Producing Real Estate (IPRE)

Commercial Real Estate refers to a method of providing funding to Real Estate (such as, office

buildings to let, retail space, multifamily residential buildings, industrial or warehouse space,

and hotels) where the prospects for repayment and recovery on the exposure depend primarily

on the cash flows generated by the asset. The primary source of these cash flows would

generally be the lease or rental payments or the sale of the asset. The borrower may be, but

is not required to be, an SPE (Special Purpose Entity), an operating company focused on real

estate construction or holdings, or an operating company with sources of revenue other than

real estate.

The distinguishing characteristic of CRE versus other corporate exposures that are

collateralized by real estate is the strong positive correlation between the prospects for

repayment of the exposure and the prospects for recovery in the event of default, with both

depending primarily on the cash flows generated by a property.

From the definition of CRE given above, it may be seen that for an exposure to be classified as

IPRE/CRE, the essential feature would be that:

the funding will result in the creation / acquisition of real estate (such as, office buildings to

let, retail space, multifamily residential buildings, industrial or warehouse space, and hotels)

where the prospects for repayment would depend primarily on the cash flows generated by

the asset. The primary source of cash flow (i.e. more than 50% of cash flows) for

repayment would generally be lease or rental payments or the sale of the assets as also for

recovery in the event of default where such asset is taken as security.

The prospect of recovery in the event of default would also depend primarily on the cash

flows generated from such funded asset which is taken as security, as would generally be

the case.

These guidelines will also be applicable to certain cases where the exposure may not be

directly linked to the creation or acquisition of CRE but the repayment would come from the

cash flows generated by CRE. For example,

2.6. REAL ESTATE

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exposures taken against existing commercial real estate whose prospects of repayments

primarily depend on rental/ sale proceeds of the real estate should be classified as CRE.

other such cases may include: extension of guarantees on behalf of companies engaged

in commercial real estate activities,

exposures on account of derivative transactions undertaken with real estate companies,

corporate loans extended to real estate companies and investment made in the equity

and debt instruments of real estate companies,

if the repayment primarily depends on other factors such as operating profit from

business operations, quality of goods and services, tourist arrivals, the exposure would

not be counted as Commercial Real Estate.

For further clarification on classification of account as CRE, reference may be made to RBI

circular RBI Circular DBOD.BP.BC.No. 42 / 08.12.015/ 2009-10 dated September 9, 2009 and

guidelines issued by HO/ RBI from time to time.

2.7. THIRD PARTY COLLATERAL

The obtention of Immovable Collateral security belonging to the following shall not be treated

as Third party collateral:

Credit facilities sanctioned to Property belonging to the following can be taken as Collateral Security

Proprietorship concern Proprietor / Close relative of Proprietor of the Firm

Partnership Concern Partners / Close relative of the Partners of the firm

Private Limited Company Directors / Close relative of the directors of the Company

Limited Company

2.8. DEFINITION OF CLOSE RELATIVE

CLOSE RELATIVE means

a) Spouse

b) Father

c) Mother (including Step Mother)

d) Son (including Step Son)

e) Son’s wife

f) Daughter (including Step Daughter)

g) Daughter’s husband

h) Brother (including Step Brother)

i) Brother’s wife

j) Sister (including Step Sister)

k) Sister’s husband

l) Brother (including step-brother) of the Spouse

m) Sister (including step sister) of the Spouse

n) Father/Mother of the Spouse

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CHAPTER – 3

CREDIT COMMITTEES AT VARIOUS LEVELS & RESPECTIVE DELEGATED POWERS

In terms of guidelines issued by RBI on the Risk Management Systems in October 1999 as

also in its guidance note on Credit Risk Management, issued in March, 2002 enumerating

essential dimensions for effective Credit Risk Management, the Board of Directors vide

item C-1 dated 21.10.2005, had approved the constitution of “Credit Grids” at Regional

Offices and Head Office.

Credit Grids are in the nature of a Committee constituted for screening all proposals falling

within the Delegated powers of Credit Committees, which are to be mandatorily routed

through the Credit Grids. Responsibilities and Tasks of Credit Grids include:

Evaluation of credit proposals from all perspectives.

Evaluation of revenue potential of the account vis-à-vis risks involved.

Giving suggestions as to Risk mitigating measures, if any.

Recommending the proposal to the sanctioning authority.

The Credit Grid should evaluate all the proposals in line with the Bank’s Loan and Risk

Management Policy guidelines issued from time to time and should submit their

observations/ recommendations to the sanctioning authority.

Government of India, Ministry of Finance, Dept. of Financial Services vide letter dated

3rd April 2012 has advised all Nationalised Banks for setting up of Credit Committees at the

Corporate, Regional and Zonal level in Nationalised Banks.

In view of the foregoing, the constitution of Credit Committees at Head Office Level and

Regional Office Level was approved by Board of Directors in the meeting held on

30.04.2012 vide agenda item No. 71.

As the Credit Committee at Regional Office Level (RLCC) has been constituted, and the

same factors in the spirit behind RBI guidelines for establishing a Credit Grid, such Grid is

not to be formed at Regional Office level.

3.2. CREDIT COMMITTEES AT VARIOUS LEVELS

The various Credit Committees at Head Office and Regional Office Level are as under:

i. Head Office Level Credit Committees

Management Committee of Board (MCB) headed by Chairman & Managing Director.

Credit Approval Committee (CAC) headed by Chairman & Managing Director.

Head Office Level Credit Committee (HLCC) headed by Executive Director.

ii. Regional Office Level Credit Committees

Regional Office Level Credit Committee (RLCC) headed by Regional Head

3.1. CONSTITUTION OF CREDIT COMMITTEES

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3.3. SANCTIONING AUTHORITIES AND THEIR DELEGATED POWERS FOR LOANS &

ADVANCES

The Sanctioning Authority and their respective delegated powers for sanctioning of credit

proposals are as follows:

(Amount in ` Crore)

SN Sanctioning

Authority

Delegated powers

Single Borrower Group

1. MCB Full Power# Full Power#

2. CAC 250* Full Power#

3. HLCC-ED 75 150

4. RLCC-RH

4.1 RLCC-RH-GM 35 50

4.2 RLCC-RH-DGM 20 30

4.3 RLCC-RH-AGM 10 15

5. Branch

Incumbent (BI)

5.1 BI-GM 25 40

5.2 BI-DGM 15 25

5.3 BI-AGM 7.5 10

5.4 BI-CM 2.5 2.5

5.5 BI-Scale-III 1 1

5.6 BI-Scale-II 0.25 0.25

5.7 BI-Scale-I 0.15 0.15

# Within the RBI prescribed Regulatory Limit

* ` 250 Crore per Borrower

The Delegated Powers of the functionaries have been defined based on the following:

Fund Based Secured and Unsecured Nature of advances

Non Fund Based facilities

Sector/industries specific restrictions

Branch Incumbents and RLCC-RH can consider sanction of the credit proposals (New,

enhancement, additional, adhoc facilities) of the borrowers having Internal Credit Risk

Rating upto OBC 6 (i.e., OBC 1 to OBC 6). The credit proposals of the borrowers having

Internal Credit Risk Rating below OBC 6(i.e., OBC 7, 8, 9 and 10) shall be considered by

next sanctioning authority. In cases where External Credit Rating of the borrower is C and

D, the powers for sanction of fresh and additional facility shall be vested with next

sanctioning authority.

However, HLCC-ED/CAC/MCB can consider the credit proposals irrespective of the

Internal/External Credit Risk Rating of the Borrower.

As it is Renewal (without enhancement and additional facilities) of the credit facilities shall

be undertaken by the respective sanctioning authority within their delegated powers

irrespective of Internal and External Credit Risk Rating of the borrower.

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The Delegated Powers of the sanctioning authorities for Schematic / Retail loan shall be as

per the respective scheme.

3.4. CREDIT APPROVAL COMMITTEE (CAC) & FUNCTIONING

Credit Approval Committee (CAC) headed by CMD has been constituted along with its

functioning & reporting etc. as follows:

SN Particulars Committee Details

1 Name of the

Committee

Credit Approval Committee (CAC) headed by Chairman and Managing

Director.

2 Composition of

the Committee

Chairman and Managing Director

Executive Director-1

Executive Director-2

General Manager in-charge of the Large Corporate Credit

General Manager in-charge of the Mid Corporate Credit

General Manager in-charge of the Priority Sector Credit

General Manager in-charge of Accounts/CFO

General Manager in-charge of Risk Management

General Manager in-charge of Credit Monitoring

General Manager in-charge of Recovery & Law

General Manager in-charge of Inspection & Control

3 Mandatory

Members

Chairman and Managing Director

One Executive Director

General Manager (Respective Credit Verticals) for Credit Proposal

Note: In case, any GM mentioned as mandatory member is not

present in the office, then the Alternate GM acts as mandatory

member.

4 Quorum The quorum of the Committee is six members including mandatory

members.

5 Delegation of

Power

The Committee has been delegated the powers in respect of the

following items:

a) Sanctioning of credit proposals (funded and non-funded);

b) Loan compromise / write off proposals.

The powers delegated to CAC for sanctioning of credit proposals are

subject to the following:

Particulars Delegated Powers

Maximum exposure to one group Full Powers#

Maximum exposure to single borrower `250 Crore*

# Within the RBI prescribed Regulatory Limit

* ` 250 Crore per Borrower

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The powers delegated to CAC for Loan Compromise / Write-

off proposals are subject to the following:

Particulars Delegated Powers

Loan Compromise / Write-off Proposal –

Sacrifice Amount* `4 Crores

*Sacrifice Amount shall be calculated as per modular approach of

the Recovery Policy of the Bank. Sacrifice Amount includes both

Principal as well as recorded Interest.

5 Arranging

Meetings,

Recording of

Minutes

The Board Secretariat has to organize all necessary functions such as

arranging meeting of CAC, recording minutes of the meeting, placing

the minutes before the Board etc. as applicable to MCB.

6 Prior screening

by independent

Credit Grid

An independent Credit Grid for CAC has to first screen and

recommend all credit proposals to be considered by the Credit

Approval Committee.

The Credit Grid shall consist of following members:

Deputy General Manager (Large Corporate Credit) – Convenor &

Member Secretary for Large Corporate Credit proposals.

Deputy General Manager (Mid Corporate Credit) – Convenor &

Member Secretary for Mid Corporate Credit proposals.

Deputy General Manager / Asstt. General Manager (Priority

Sector) – Convenor & Member Secretary for Priority Sector Credit

proposals.

Deputy General Manager / Asstt. General Manager (Risk

Management)

Deputy General Manager / Asstt. General Manager (Credit

Monitoring)

Deputy General Manager / Asstt. General Manager (Recovery)

Deputy General Manager / Asstt. General Manager (Inspection &

Control)

Deputy General Manager / Asstt. General Manager (Retail Credit)

Mandatory Members: The mandatory members of the Grid shall be

Convenor & Member Secretary for respective Credit Proposals


Management)


Monitoring) or in their absence DGM / AGM (Recovery)

Note: In the absence of any of the DGMs of any of the function, the

AGM shall be the member of the Grid.

Quorum of the Grid: The quorum of the Grid shall be four members

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including mandatory members.

7 Placing,

Appraising &

Recommending

of the

Proposals to

the Committee

The presentation of credit proposals to CAC for consideration and

approval shall be undertaken by the respective Convenor and Member

Secretary of the Credit Grid.

8 Reporting of

Minutes

The minutes of the CAC are to be placed before the Board in the next

meeting.

9 Reconstitution

of Credit Grid

The CMD has been empowered to constitute and reconstitute the

Credit Grid from time to time.

10 Other

Conditions

The Credit proposal declined by Management Committee of Board

cannot be considered by Credit Approval Committee unless

specifically directed to do so by MCB.

The Credit Approval Committee may consider the amendments /

modifications/ renewal /review/ enhancements of sanctions in respect

of all the existing cases with credit facilities upto the limit of `250.00

Crore. However, all such amendments etc. approved by the CAC shall

be reported in the subsequent meeting of the Board of Directors along

with the minutes of the respective CAC meeting.

For approval of any credit proposal with deviations in policy, the matter

shall be referred for approval to MCB.

3.5. HEAD OFFICE LEVEL CREDIT COMMITTEE (HLCC) & FUNCTIONING

In addition to the MCB and CAC, Head Office Level Credit Committee (HLCC) headed by

Executive Director as per MOF guidelines has been constituted with Composition,

Delegated Powers, functioning & reporting etc. as follows:


1 Name of the

Committee

Head Office Level Credit Committee headed by Executive Director

(HLCC – ED)

2 Composition of

the Committee

Executive Directors

General Manager (Respective Credit Verticals)

General Manager (Recovery)

General Manager (Accounts)

General Manager (Credit Monitoring)

General Manager (Risk Management)

General Manager (Inspection & Control)

3 Mandatory

Members

One Executive Director

General Manager (Respective Credit Verticals) for Credit Proposal

General Manager (Recovery) for Loan Compromise / Write-Off

Proposal

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Note: In case any General Manager mentioned as mandatory

members is not present in the office then the Alternate General

Manager acts as mandatory member.

4 Quorum The quorum of the Committee is five members including mandatory

members.

5 Delegation of

Powers for

sanctioning

Credit

Proposals

The committee has been delegated the powers in respect of the

following items:



The powers delegated to HLCC – ED for sanctioning of credit

proposals are subject to the following:

Particulars Delegated Power

Maximum exposure to one group `150 Crore

Maximum exposure to single borrower `75 Crore

The powers delegated to HLCC – ED for Loan Compromise / Write-

off proposals are subject to the following:

Particulars Delegated Power

Loan Compromise / Write-off Proposal –

Sacrifice Amt*

`1.00 Crores

*Sacrifice Amount shall be calculated as per module approach of the

Recovery Policy of the Bank. Sacrifice Amount includes both

Principal as well as recorded Interest.

6 Periodicity of

the Meeting Weekly or More Often

7 Arranging

Meetings,

Recording of

Minutes

The respective departments have to organise all necessary functions

such as arranging meeting of HLCC – ED and recording minutes of

the meeting.

8 Prior screening

by independent

Credit Grid

An independent Credit Grid consisting of following members has to

first screen and recommend all credit proposals to be considered by

the HLCC – ED.

Deputy General Manager (Large Corporate Credit) – Convenor &

Member Secretary for Large Corporate Credit Proposals

Deputy General Manager (Mid-Corporate Credit) – Convenor &

Member Secretary for Mid Corporate Credit Proposals

Deputy General Manager /Asstt. General Manager (Priority

Sector) – Convenor & Member Secretary for Priority Sector Credit

Proposals

Deputy General Manager / Asstt. General Manager (Recovery) –

Convenor & Member Secretary for Loan Compromise & Write-Off

Proposals


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Management)


Monitoring)

Deputy General Manager / Asstt. General Manager (Inspection &

Control)

Asstt. General Manager/ Chief Manager (Retail Credit)

Mandatory Members: The mandatory members of the Grid are:

Convenor & Member Secretary for respective Credit Proposals /

Loan Compromise & Write-Off Proposals


Management)

Quorum of the Grid: The quorum of the Grid is five members

including mandatory members.

9 Placing,

Appraising &

Recommending

of the Proposals

to the

Committee

The presentation of credit proposals / Loan Compromise & Write-Off

Proposals to HLCC – ED for approval shall be undertaken by

respective Convenor & Member Secretary of Credit Grid.

10 Reporting of

Minutes

Board of Directors

11 Reporting of

Sanctions

Board of Directors

12 Reconstitution

of HLCC – ED

The CMD shall be empowered to constitute and reconstitute the

HLCC – ED/Credit Grid.

At present, Regional Offices are headed by General Managers, Dy. General Managers and

Asst. General Managers.

In view of the same, Regional Office Level Credit Committee (RLCC) headed by Regional

Head be constituted as per MOF guidelines with Composition, Delegated Powers,

functioning & reporting etc. as follows:


1 Name of the

Committee

Regional Office Level Credit Committee headed by Regional Head

(RLCC – RH)

2 Composition of

the Committee

Regional Head - Head of Committee

Second Man at RO

In-Charge of Credit Deptt. at RO

In-Charge of Risk Deptt. at RO*

In-Charge of Credit Monitoring Dept. / Planning Deptt. at RO

In-Charge of Recovery Deptt. at RO

* The alternate member for Officer in-charge of Risk Deptt. shall be

3.6. REGIONAL OFFICE LEVEL CREDIT COMMITTEE (RLCC) & FUNCTIONING

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Officer in-charge of Credit Monitoring at RO.

3 Mandatory

Members

Regional Head - Head of Committee

For Credit Proposals:

In-Charge of Credit Dept. at RO

In-Charge of Risk Dept. at RO*

For Loan compromise / Write Off proposals:

In-Charge of Recovery Deptt. at RO

* The alternate member for Officer in-charge of Risk Deptt. shall be

Officer in-charge of Credit Monitoring at RO.

4 Quorum The quorum of the Committee is three members including mandatory

members.

5 Delegation of

Powers for

sanctioning

Credit

Proposals

The Committee has been delegated the powers in respect of the

following items:



The powers delegated to RLCC – RH for sanctioning of credit

proposals shall be subject to the following:

(Fig. in `Crore)

Particulars

Delegated Power to RLCC – RH headed by

GM DGM AGM

Maximum exposure to one group 50 30 15

Maximum exposure to single borrower

35 20 10

The powers delegated to RLCC – RH for Loan Compromise / Write-

off proposals is subject to the following:

(Fig. in `Crore)

Particulars

Delegated Power to RLCC – RH headed by

GM DGM AGM

Loan Compromise / Write-off

Proposal - Sacrifice Amt* 0.75 0.35 0.25

*Sacrifice Amount shall be calculated as per module approach of the Recovery Policy of the Bank. Sacrifice Amount includes both Principal as well as recorded interest.

6 Periodicity of

the Meeting Weekly or More Often

7 Arranging

Meetings,

Recording of

Minutes

The respective departments i.e. Credit & Recovery Department at RO

have to organise all necessary functions such as arranging meeting

of RLCC – RH, recording minutes of the meeting, placing the minutes

before HLCC – ED by sending the minutes to H.O.

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8 Prior screening

by independent

Credit Grid

As the Credit Committee at Regional Office Level (RLCC) has been

constituted, and the same factors in the spirit behind RBI guidelines

for establishing a Credit Grid, such Grid is not to be formed at RO

level.

9 Placing, Appraising & Recommending of the Proposals to the Committee

The presentation of credit proposals / Loan Compromise & Write-Off

Proposals to RLCC – RH for approval shall be undertaken by

respective Officer of Credit Deptt. / Officer of Recovery Deptt.

10 Reporting of

Minutes to

The minutes of the meetings of the RLCC – RH shall be sent by

Regional Office to respective departments at HO i.e. Credit or

Recovery Department and these respective departments shall place

these minutes before HLCC – ED of respective Credit verticals for

reporting in the next meeting.

11 Reporting of

Sanctions to

The proposals sanctioned by RLCC – RH shall be placed to the

authority as per the chart below:

Particulars Proposals sanctioned by RLCC – RH headed

GM DGM AGM

Reporting of

Sanctions to

HLCC – ED

of respective

Credit

verticals*

GM (Credit Monitoring) at

HO

GM (Credit Monitoring)

at HO

* Reporting by Credit Monitoring Deptt.

12 Reconstitution

of RLCC – RH

The CMD is empowered to constitute and reconstitute from time to

time the RLCC – RH including induction of Branch Head of

Specialized branches.

a) All the Delegated Powers for various purposes related to Loans and Advances which were

hitherto delegated by the Board of Directors to the respective functionaries viz. CMD, ED /

CGM/GM (Large Corporate Credit), other General Managers at HO and Regional Head

shall now vest with CAC, HLCC – ED and RLCC – RH respectively.

b) The existing powers vested in Branch Incumbents shall continue as before.

c) The proposals beyond the powers delegated to HLCC – ED shall be placed before the

Credit Approval Committee or MCB as per Delegated Power guidelines.

d) Credit proposals which are not disposed off within the prescribed time limit by Branch

Incumbents shall be reported to Regional Level Credit Committee (RLCC-RH).

e) These Committees shall also review the pending proposals and expedite actions.

f) The decision of these Committees shall be unanimous. In case unanimous decision cannot

be arrived at, reasons of disagreement and the basis of the decision shall be specifically

mentioned in the minutes.

3.7. TERMS & CONDITIONS FOR EXERCISING DELEGATED POWERS BY CAC,

HLCC–ED and RLCC–RH

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g) In respect of Loan compromise/ Write off proposals, the terms and conditions mentioned in

Recovery policy shall be applicable while exercising powers delegated to these

Committees.

h) The RLCC-RH is delegated authority only for sanction of Credit proposals/ Loan

Compromise & Write off Proposals falling under the powers of RLCC-RH. The following

matters need not be routed through RLCC-RH:

Recommendations of Regional Office in respect of Credit proposals/ Loan

compromise & Write-Off proposals under the powers of Head Office.

New Business Group (NBG) proposals for ‘Expression of Interest’ approval.

Other proposals such as concession in Rate of Interest / Margin/ Service Charges

and other amendments / routine matters falling under the powers of Head Office.

and the above are to be recommended by the Regional Heads.

i) It should be ensured that the Turn Around Time (TAT) for sanction and disbursement of

credit proposals is brought down to the minimum while ensuring compliances of Systems/

Procedures as per laid down policy guidelines of the Bank.

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CHAPTER – 4

CLEARANCE BY NEW BUSINESS GROUP

The basic objective of NBG is to expeditiously convey Expression of Interest (EOI) in case of

New Corporate Connections.

4.2. CONSTITUTION OF NEW BUSINESS GROUP

The constitution of New Business Group at Head Office Level and Regional Office Level shall

be as follows:

NBG AT HEAD OFFICE HEADED BY CMD

The constitution of the New Business Group (NBG) at Head Office headed by CMD shall be as under:

i. Chairman and Managing Director

ii. Executive Director-I

iii. Executive Director-II

iv. General Manager/Functional Head in charge of:

Accounts and CFO

Large Corporate Credit - LCBs

Mid Corporate & SME

Treasury and MBD

International Banking Division

Risk Management

Credit Monitoring

Inspection & Control

Recovery & Law

Mandatory Members of NBG

The mandatory members of the NBG at Head Office shall be as under:

Any two amongst Chairman and Managing Director, Executive Director I and Executive

Director II.

General Manager (Large Corporate Credit-LCBs)

General Manager (Mid Corporate & SME)

General Manager (Credit Monitoring )


Quorum for the NBG

The Quorum of NBG shall be seven members including the mandatory members.

Chairman & Managing Director shall have the powers to re-constitute the committee from

time to time.

4.1. BACKGROUND

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Chief General Manager/ General Manager (Large Corporate Credit) will be the convener of

the NBG.

Dy. General Manager (Large Corporate Credit) or in his absence Asst. General Manager

(Large Corporate Credit) shall pilot the eligible Large Corporate proposals in NBG.

Dy. General Manager (Mid Corporate & SME) or in his absence Asst. General Manager (Mid

Corporate & SME) shall pilot the eligible Mid Corporate proposals in NBG.

In respect of Retail Credit proposals, it will be mandatory for General Manager (Retail Credit)

to participate in the NBG. In his absence, Dy. General Manager/Asst. General Manager

(Retail Credit) shall be mandatory member for Retail Credit proposals.

Dy. General Manager (Retail Credit) or in his absence Asst. General Manager (Retail Credit)

shall pilot the eligible Retail Credit proposals in NBG.

In respect of Priority Sector credit proposals, it will be mandatory for General Manager (Rural

Dev. & Priority Sector) to participate in the NBG. In his absence, Dy. General Manager/Asst.

General Manager (Rural Dev. & Priority Sector) shall be the mandatory member for the

Priority Sector credit proposals.

Dy. General Manager (Rural Dev. & Priority Sector) or in his absence Asst. General Manager

(Rural Dev. & Priority Sector) shall pilot the eligible Priority Sector proposals in NBG.

In the absence of any General Manager, the alternate General Manager at the Head Office

along with the next officer in-charge of the respective Portfolio shall be co-opted as NBG

member of the meeting of the NBG.

NBG AT REGIONAL OFFICE HEADED BY REGIONAL HEAD

The constitution of the NBG headed by Regional Head at RO level:

i. Regional Head

ii. 2nd Man at Regional Office

iii. In-charge of Loans Department of the concerned Regional Office

iv. In-charge of Planning Department of the concerned Regional Office

v. In-charge of Recovery Department of the concerned Regional Office

vi. Risk Manager of the respective Regional Office

Quorum of NBG at RO level: Any three with mandatory presence of Regional Head & In-

charge of Loans Department of the concerned Regional Office.

4.3. CATEGORIES OF ADVANCES EXEMPTED FROM NBG

The following categories of advances are exempted from New Business Group (NBG) approval:

Exposures secured by 100% cash margin.

All existing Borrowers seeking additional facilities.

In case of the existing borrower falling under restricted industries/activities for NBG

approval mentioned at Point No.4.5 (B) only Administrative Clearance from NBG at Head

Office headed by CMD/ED shall be obtained prior to sanction additional facility. The Field

Functionaries shall send process note complete in all respects to Head Office for obtaining

Administrative Clearance.

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Exposures to Public Sector Undertakings both Central and State Government.

New borrower whose group concern(s) is dealing with the Bank for last three years with

satisfactory performance of all the group concerns and atleast one such group concern

(existing) enjoying minimum exposure of `10.00 Crore & above.

In case of existing borrower falling under restricted industries/activity for NBG approval

mentioned at Point No.4.5 (B) where additional exposure proposed to be taken by the Bank

as a part of JLF Corrective Action Plan package, Administrative approval shall not be

required to be obtained from NBG at Head Office.

4.4. FUNCTIONING OF NEW BUSINESS GROUP (NBG)

The ‘Expression of Interest’ approval by New Business Group (NBG) is required for all

fresh credit proposals of more than `5 Crore. In case of the existing borrower falling under

restricted industries/activities, only Administrative Clearance from NBG at Head Office

headed by CMD/ED shall be obtained prior to sanction additional facility.

All fresh credit proposals envisaging exposure (Both Fund–Based and Non-Fund Based)

exceeding the cut-off limit shall be referred to the Head Office/ Regional Office for placing

the same before the respective New Business Group (NBG) authority.

NBG will discuss and reach a consensus about the proposal being support worthy or not,

based on the Preliminary Information Memorandum (PIM) put up by the respective Credit

verticals.

Consensus will only be in the nature of ‘Expression of Interest’ and not a commitment of

the Bank. The final sanction shall be accorded by the respective sanctioning authority after

a detailed scrutiny of all aspects of the proposal and after obtaining the recommendations

of the appropriate functionary as per prescribed system and procedure.

Validity of ‘Expression of Interest’ approval granted by NBG

The validity of the ‘Expression of Interest’ approval granted by NBG shall be three months

from the date of approval.

The validity of ‘Expression of Interest’ approval implies that the full-fledged credit proposal

(including all the relevant papers for regular sanction) for sanction of credit facilities shall

be received at the branch within three months.

In case the full-fledged credit proposal is not received at the branch within a period of three

months, the ‘Expression of Interest’ approval granted by NBG shall lapse and would

require revalidation by the NBG. The same is illustrated below with an example:

Date of ‘Expression of Interest’ approval by

NBG 01.01.2014

Validity of ‘Expression of Interest’ approval by

NBG 31.03.2014

In case full-fledged proposal is not received at

the branch by 31.03.2014(including this date)

The ‘Expression of Interest’

approval granted NBG shall lapse

and require revalidation

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As soon as NBG approval is received, all the relevant papers required for regular sanction

of credit facilities must be compiled after due discussion with the borrower on Terms &

Conditions of NBG approval.

Branches and Regional Offices should endeavour to submit the credit proposal to the

respective sanctioning authority within one month of the NBG approval, thereby providing

sufficient time for sanctioning authority to process and sanction the regular limits and/or

convey the credit decision of the Bank expeditiously.

The references received directly from the Corporates will also be placed before the NBG by

the respective Credit Verticals before referring the same to Regional Office.

Regional Heads shall make reference to Head Office about the fresh business proposals

(beyond their powers) received both at the branches as well as at RO before undertaking

full-scale appraisal to cut short the delay in decision making.

Any proposal which is rejected under NBG shall be displayed in the OBC-e-circular portal.

All the field functionaries shall refer to the portal before recommending/conveying approval

of NBG proposals to ensure that such proposals were not rejected earlier by the Bank.

Decision on the proposal submitted for NBG approval at HO will be taken after receipt of

recommendation of concerned Regional Office except in the cases received directly from

syndicating banks/institutions and Large Corporate Branches.

Holding of the NBG meeting regularly and recording deliberations & minutes

Normally NBG would meet every week or as and when there is urgency, even at shorter

intervals.

The deliberations shall be duly recorded in the minutes, record of which should be properly

maintained.

Chairman & Managing Director may induct any other General Manager at his discretion to

be involved in the group discussion on exigencies.

The cut-off limit and coverage of proposals for fresh /additional credit facilities for

Expression of Interest by New Business Group (NBG) at various levels are as under:

SN Type of Borrower Cut-off Limit NBG Authority

A. New Borrowers

Above `5 Crore to `10.00 Crore

NBG at RO headed by DGM

Above `5 Crore to `20.00 Crore

NBG at RO headed by GM

Above `10.00 Crore

for Regional Offices headed by DGM NBG at HO

headed by CMD/ ED Above `20 Crore for Regional Offices headed by GM

4.5. CUT-OFF LIMIT FOR FRESH / ADDITIONAL CREDIT FACILITIES FOR

EXPRESSION OF INTEREST BY NEW BUSINESS GROUP (NBG)

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SN Type of Borrower Cut-off Limit NBG Authority

B. Loan Proposals falling under the following industries (New /Existing borrower)

Loan proposals falling under:

Comm. Real Estate

IT / Software

Microfinance

Ship-breaking industry

Capital Market

NBFC(Other than SI-NBFC)

Entertainment / Film Industry

including dubbing

Tea/Coffee

Jute

Asbestos sheet

manufacturing

Rubber Plantations

Gems and Jewellery

Educational Institutions

Chemical

BPO/ Call Centre

Above `5 Crore NBG at HO

headed by CMD/ED

In case of the existing

borrower falling under

restricted

industries/activities, only

Administrative Clearance

from NBG at Head Office

headed by CMD/ED shall

be obtained prior to

sanction additional facility.

NBG approval in case of sanction of Fresh credit facilities to the Borrowers whose

sister/allied concerns are Ex-Clients of our Bank/Clients of other banks who had adjusted

their accounts under Compromise/Settlement

The sanctioning authorities can consider sanction of Fresh credit facilities to the

Borrowers whose sister/allied concerns are Ex-Clients of our Bank/Clients of other banks

who had adjusted their accounts under Compromise/Settlement within their respective

Delegated Powers. For Field Functionaries, prior approval of NBG at Head Office is

required irrespective of the amount of exposure.

The NBG at Regional Office shall have “NO” powers to approve ‘Expression of Interest’ in

respect of all the cases where the regular sanction falls under the powers of Head Office

(HLCC-ED/CAC/MCB) irrespective of the amount of exposure of the borrower.

The Branches / Regional Offices should submit all credit proposals involving fresh

exposure (FB + NFB) as per the cut-off limit to the designated authority in the Preliminary

Information Memorandum (PIM) as per the format circulated vide Circular No. HO/

RMD/55/2014-15/645dated 10.11.2014 for approval of Expression of Interest by New

Business Group (NBG).

In case of the existing borrower falling under restricted industries/activities, only

Administrative Clearance from NBG at Head Office headed by CMD/ED shall be obtained

prior to sanction additional facility.

The information provided in the Preliminary Information Memorandum (PIM) should be

concise and relevant for decision making by NBG and no column of Preliminary

Information Memorandum (PIM) should be left blank. If information sought in any column

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is not applicable in a particular case then it should be specifically mentioned as “Not

applicable”.

The Branches are also required to submit a Due Diligence Report as per the format

circulated vide Circular No. HO/ RMD/55/2014-15/645dated 10.11.2014. The same should

be incorporated in and shall form a part of NBG proposal submitted by Branches / Regional

Offices.

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CHAPTER – 5

EXERCISE OF DELEGATED POWERS

5A. DELEGATED POWERS RELATED TO “SANCTIONS”

The Delegated powers for loans and advances would be exercised based on the scale of the

delegates follows:

Delegated power of Basis of determination

Branch Incumbent Based on the scale of the Branch Incumbent i.e. whether

the incumbent is in Scale I, II, III, IV, V, VI and VII

Regional Head Based on the scale of the Delegatee i.e. whether the

Delegatee is in Scale V, VI and VII

5.A.2 SANCTION OF IMPORT/EXPORT/FOREIGN EXCHANGE BASED LIMITS

The Delegated powers in respect of import/export based credit limits(both Fund and Non-

Fund based) shall be exercised by Branch Incumbents and other delegates only at branches

authorized to deal in foreign exchange. However, the branches which are not authorized to

deal in foreign exchange can sanction the import /export based credit limits (both fund and

non-fund based) within their respective discretionary powers.

However, for operational aspects like opening of import LC, discounting of foreign bill etc. the

same shall be done at authorized branches with prior intimation to Regional Office. The

Regional Head shall instruct the authorized branch to undertake such transactions provided by

non-authorized branches.

In view of the exchange rate fluctuations, the export limits shall be expressed in Dollar terms in

both the proposal and sanction letter.

However, for the purpose of determining the amount of delegation of powers, the Rupee equivalent shall be taken into account.

Foreign Bills shall be negotiated/ purchased under Letter of Credit issued by top 1000

Commercial Banks as per ALMANAC and top 10 banks each of Bangladesh, Pakistan, Nepal

and Sri Lanka and other Banks as approved by GM(IBD) and GM(RMD) jointly from time to

time.

5.A.3 TELEPHONIC/VERBAL SANCTION ALLOWED IN EMERGENT CASES:

PROCEDURE

No telephonic/verbal sanction will be given by any delegatee except in very exceptional cases

for which the following procedure will be strictly adhered to:

a) Confirmation is to be sought by the branch or Regional Office as the case may be,

immediately by return post/fax/e-mail, from concerned delegatee who has conveyed the

telephonic sanction.

b) Sanctioning authority will also simultaneously issue a confirmatory letter on the same

date.

5.A.1 BASIS OF DETERMINATION OF DELEGATED POWERS OF VARIOUS

FUNCTIONARIES

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c) In case of violation of these provisions, the limits so sanctioned will be considered

unauthorized.

d) All telephonic / verbal sanctions shall be entered in the adhoc sanction register in the

Regional Office/Head Office.

5.A.4 SANCTION OF CREDIT FACILITIES IN ANTICIPATION OF SANCTION BY

MANAGEMENT COMMITTEE OF THE BOARD (MCB)

The Credit Approval Committee (CAC) headed by Chairman & Managing Director shall have

authority to sanction credit facilities/approve in-principle limits falling under the powers of

Management Committee of the Board in anticipation of Confirmation by MCB. Such cases

shall be placed before MCB in its next meeting for ratification of action.

5.A.5 VALIDITY OF CREDIT LIMITS SANCTIONED BUT NOT DISBURSED (FRESH

CASES AS WELL AS ENHANCEMENT PROPOSALS)

The facilities sanctioned to a borrower should be availed within a period mentioned in the table

below from the date of sanction failing which the sanction shall lapse and will need re-

validation.

Credit Facility Validity of sanction

Standalone Term Loan 6 months from date of sanction

Term Loan + working capital 6 months from date of sanction

Only working capital 3 months from date of sanction

This condition should also be incorporated as one of the conditions of sanction. If the

sanctioned limits are not availed of within these aforesaid periods from the date of sanction,

detailed reasons should be sought from the borrower and sanction should be got re-

validated from the sanctioning authority provided no unfavourable change has come to the

notice of the Bank in any form (including those pertaining to the means and net worth of the

borrower/guarantor/collateral security) during the intervening period.

Rate of interest to be charged shall be renegotiated with the borrower at the time of

revalidation of the sanction.

However, in case of MCB sanctions, CAC shall have powers to revalidate the lapsed

sanction provided there is no change in the Basic project parameters.

In case the borrower is not interested in availing the facility, the matter shall be referred to

the sanctioning authority and limit shall be got cancelled. Similarly, where the validity of

unavailed limits has expired, the same shall be cancelled.

In case of term loans, fresh schedule of drawal should be obtained and necessary

recommendations for extension in gestation period shall be sent to the sanctioning

authority with justifications.

5.A.6 AUTHORITY TO DECLINE/REJECT LOAN PROPOSALS

The loan applications pertaining to SC/ST, MSME borrowers and Exports cannot be

rejected by the sanctioning authority under whose powers the same falls. Only the next

higher sanctioning authority can reject the same.

Branch Managers may reject applications (except in case of SC/ST) provided the cases of

rejection are verified subsequently by the RLCC-RH.

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5.A.7 SANCTION OF LOAN PROPOSALS DECLINED BY HIGHER AUTHORITIES

If some higher authority has declined a proposal, the lower sanctioning authority cannot

exercise his Delegated powers in that particular case without the permission of higher

authority in writing. Rejected/declined proposals by higher authorities should not be

entertained at lower levels even if such sanctions fall within lower level functionary’s

Delegated powers

5.A.8 WITHDRAWAL OF LENDING POWERS OF ERRING OFFICIALS – AUTHORITY &

REPORTING

Officers of the rank of Regional Head and above are authorized to withdraw the lending

powers of erring officials. However, the matter shall be reported to the General Manager

(Large Corporate/Mid Corporate Credit)and General Manager (I&C) at the Head Office

citing reasons for the same.

5.A.9 EXERCISE OF DELEGATED POWERS OF THE LOWER FUNCTIONARIES BY

THE HIGHER FUNCTIONARIES

Higher functionaries can exercise the Delegated powers of the lower functionaries.

5.A.10 DELEGATED POWERS OF FUNCTIONARIES THREE MONTHS PRIOR TO

RETIREMENT

Regional Heads should not post/continue any officer as Branch Manager of the Branch

three months prior to his/her retirement.

In case such officer is continuing as Branch Manager during three months period prior to

his/her retirement, the officer shall not exercise the lending powers. The credit proposals of

such Branch shall be sanctioned by the next higher sanctioning authority.

However, RLCC-RH/HLCC-ED/CAC/MCB shall continue to consider credit proposals within

their respective Delegated Powers.

5.A.11 REPORTING CASES OF OVER ACCOMMODATION ALLOWED BEYOND THE

SANCTIONED LIMITS

All cases of over accommodation allowed beyond the sanctioned limits shall be reported in

the STM-41 statement. Where excess accommodation allowed falls under the powers of

the Head Office, the same shall be reported to RLCC-RH which shall consider confirmation

of action of the branch Manager on merits and recommend to the Head Office for

confirmation of action accordingly. Besides reporting such over-accommodation in the

STM-41 statement, a separate letter shall also be written to the Regional Head/Head Office

in this regard.

The Regional Office/Head Office must confirm action of the Branch within two weeks from

the date of reporting failing which the action shall be deemed confirmed.

5.A.12 SANCTION OF CREDIT FACILITIES TO INDIVIDUAL/FIRM/COMPANY

RENDERING SERVICES TO THE BANK

Any individual/firm/company rendering services to the Bank as Consultant, Valuer, Lawyer,

Appraiser, Concurrent Auditor, Revenue Auditor or Statutory Auditor should not be

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sanctioned any credit facility without prior permission /approval from the next higher

authority.

5.A.13 ENHANCEMENT IN CREDIT LIMITS WITHIN 6 MONTHS OF FRESH SANCTION

TO BE PERMITTED ONLY BY THE NEXT HIGHER AUTHORITY

The Branches/Regional Offices shall obtain prior permission from next higher authority

before considering enhancement of credit limits in case of request for enhancement within

six months of fresh sanction.

However, for cases falling under the Delegated powers of HLCC-ED, CAC and MCB, the

respective sanctioning authority can consider such requests within their respective

delegated powers.

5.A.14 OTHER CATEGORIES OF BORROWERS NOT PERMITTED FOR FINANCE BY

THE BANK UNLESS OTHERWISE SPECIFIED

a) Loan Proposals belonging, in any way, to the willful defaulters (as defined by RBI vide

its Circular No. DBOD.NO.DL (W).BC.110/20.16.003 (1)/2001-02 dated 30.05.2002 &

DBOD.NO.DL (W).BC.87/20.16.003/2007-08 dated 28.05.2008) of banks/ financial

institutions shall not be considered.

b) In addition, the entrepreneurs/promoters of companies where Bank has identified siphoning

off /diversion of funds, misrepresentation, falsification of accounts and fraudulent

transactions shall be debarred from institutional finance from the Bank for floating new

ventures for a period of 5 years from the date the name of the willful defaulter is published

in the list of willful defaulters by RBI.

c) An undertaking shall be obtained from all fresh borrowers to the effect that none of their

associate/ group concerns are classified as willful defaulters by other banks/ financial

Institutions. Suitable affidavit should be obtained at the time of accepting loan application

wherever the namesake of the promoters/partners/directors is included in any of the

defaulter lists. The deponent should categorically affirm that he/she is not the same person

which is appearing in the defaulter lists.

d) Branches/Regional Offices shall invariably obtain list of group concerns from all fresh

borrowers along with the names of their banks / financial institutions besides classification

of accounts.

e) The Bank should not deny credit facilities to constituents merely on the ground that any of

their directors happens to be the professional director on the board of a defaulting

company.

f) Credit facilities for units/product group under the banned list / negative list of All India

Financial Institutions, Government of India, RBI, IBA, other authorities.

g) Fresh borrowers who are incurring losses (operating loss or cash loss) for the past two

years unless otherwise justified with valid reasons for such loss. (Cases of such borrowal

accounts shall be disposed of by the respective sanctioning authority). However, the

branches shall obtain in-principle approval from Regional Office for financing fresh cases

where the unit has incurred cash losses.

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h) Borrowers/Guarantors who have defrauded our bank / other banks / Institutions.

i) Borrowers against whom suit(s) have been filed by the Bank.

j) Guarantors who have not fulfilled their commitments to the Bank.

k) Any type of facility prohibited by RBI guidelines issued from time to time.

5.A.15 SANCTION OF CREDIT FACILITIES WHERE BORROWER’S ACCOUNT IS

CLASSIFIED AS STANDARD AND RESTRUCTURED WITH OTHER BANK

The Delegated Powers for sanction of credit facilities to a borrower whose account is

Restructured and Standard with other bank are as under:

SN Types of Exposure Delegated Authority

NEW BORROWERS

1. Fresh Exposure Next higher authority in respect of proposals

falling upto the powers of RLCC-RH.

HLCC-ED/CAC/MCB may consider within

their Delegated Powers.

EXISTING BORROWERS

2. Renewal / Review of accounts which are

standard and restructured with other

Bank

Respective sanctioning authorities within

their normal delegated powers

3. Granting of fresh/ enhancement /

additional / adhoc facilities in accounts

which are standard and restructured with

other Bank

Next higher authority in respect of proposals

falling upto the powers of RLCC-RH.

HLCC-ED/CAC/MCB may consider within


5.A.16 SANCTION OF CREDIT FACILITIES WHERE BORROWER’S GROUP ACCOUNT IS

CLASSIFIED AS STANDARD AND RESTRUCTURED WITH OTHER BANK

The Delegated Powers for sanction of credit facilities to a borrower whose group account is

Restructured and Standard with other bank are as follows:


1. Sanction related to accounts which have

not been restructured but whose Group

Account is Restructured and Standard

with other bank/Financial Institution.

Within the normal Delegated Powers


CLASSIFIED AS NPA WITH OTHER BANKS/FINANCIAL INSTITUTIONS

The Delegated Powers for sanction of credit facilities, where the Borrower’s account is

classified as NPA with other banks/Financial Institutions are as follows:

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NEW BORROWERS

1. Fresh Exposure HLCC-ED/CAC/MCB

EXISTING BORROWERS

2. Renewal / Review of limits Respective sanctioning authorities within

their normal Delegated Powers.

3. Granting of additional/ enhancement /

adhoc facilities HLCC-ED/CAC/MCB

4. Restructuring of limits (Restructuring at

existing level of sanctioned exposure or

restructuring with additional fresh exposure)

Next higher authority in case of BI/RLCC-

RH irrespective of the Internal Credit Risk

Rating grade of the borrower.

Respective sanctioning authority in case of

HLCC-ED/ CAC/ MCB.

5.A.18 CREDIT FACILITIES TO THE BORROWERS WHOSE GROUP ACCOUNTS HAVE

BEEN CLASSIFIED AS NPA WITH OTHER BANKS/FIs

The Delegated Powers for the credit facilities to the Borrower whose group concerns are

classified as NPA with other Banks/Financial Institutions are as follows:


NEW BORROWERS


EXISTING BORROWERS

2. Renewal / Review of limits Respective sanctioning authorities within their

normal delegated powers.

3. Granting of additional/

enhancement / adhoc facilities

HLCC-ED/CAC/MCB

4. Restructuring of limits (Restructuring

at existing level of sanctioned

exposure or restructuring with

additional fresh exposure)

Next higher authority in case of BI/RLCC-RH

irrespective of the Internal Credit Risk Rating

grade of the borrower.


HLCC-ED/CAC/ MCB.


CLASSIFIED AS NPA WITH OUR BANK

The Delegated Powers for the credit facilities, where the existing Borrower’s account is

classified as NPA with our Bank are as follows:

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adhoc facilities


RH. Respective sanctioning authority in

case of HLCC-ED/CAC/MCB.

Sanctioning Authority shall examine the

viability aspect.



restructuring with additional fresh exposure)





HLCC-ED/CAC/MCB.

5.A.20 CREDIT FACILITIES TO THE BORROWERS WHOSE GROUP ACCOUNTS HAVE

BEEN CLASSIFIED AS NPA WITH OUR BANK

The Delegated Powers for the credit facilities to the Borrower whose group concerns are

classified as NPA with our Bank are as follows:


NEW BORROWERS

1. Fresh Exposure Next higher authority in case of BI/RLCC-

RH.


HLCC-ED/CAC/MCB.

EXISTING BORROWERS

2. Renewal / Review of limits Respective sanctioning authorities within

their normal Delegated Powers.


adhoc facilities


RH.


HLCC-ED/CMD/CAC/MCB.



restructuring with additional fresh

exposure)





HLCC-ED/CAC/MCB.

5.A.21 SANCTION OF CREDIT FACILITIES WHERE BORROWERS OR THEIR

ASSOCIATES APPEAR IN DEFAULTER LIST/CAUTION LIST

The Delegated Powers for sanction of credit facilities to the borrowers or their associates

appearing in the defaulters list / caution list circulated from time to time by RBI, IBA, CIBIL,

ECGC, other banks /Financial Institutions, Government of India etc. are as follows:

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SN TYPES OF EXPOSURE DELEGATED AUTHORITY

NEW BORROWERS


EXISTING BORROWER

2. Renewal / Review of limits Next higher authority in respect of proposals falling

upto the powers of RLCC-RH.

HLCC-ED/CAC/MCB may consider within their

delegated powers.

3. Granting of additional/ enhancement / adhoc facilities

HLCC-ED/CAC/MCB

4. Restructuring of limits (Restructuring at existing level of sanctioned exposure or restructuring with additional fresh exposure)

Next higher authority in case of BI/RLCC-RH

irrespective of the Internal Credit Risk Rating

grade of the borrower.

Respective sanctioning authority in case of HLCC-

ED/CAC/MCB

5.A.22 SANCTION OF CREDIT FACILITIES WHERE CIBIL REPORTS REFLECT

DEFAULTS ON ACCOUNT OF CREDIT CARD TRANSACTIONS ONLY

The Delegated Powers for sanction of credit facilities where CIBIL reports reflect defaults on

account of credit card transactions* only are as follows:


NEW BORROWERS

1. Fresh Exposure By the respective sanctioning authorities

within their Delegated Powers.

EXISTING BORROWER

2. Renewal By the respective sanctioning authorities



adhoc facilities

By the respective sanctioning authorities





exposure)





HLCC-ED/CAC/MCB.

*In case CIBIL reports reflect defaults on account of credit card transactions only, the

sanctioning authority shall take their credit decisions within their Delegated powers after due

diligence and on merits of the case after verifying the reasons for default and subject to

compliance of the other policy guidelines of the Bank. Process notes should also mention the

justifications for approval of such proposals.

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5.A.23 DELEGATED POWERS FOR SANCTION OF CREDIT FACILITIES IN TERMS OF

CONSUMER CIBIL SCORE

The Delegated Powers for sanction of credit facilities in terms of Consumer CIBIL Score are

as under:

SN PARTICULARS DELEGATED POWERS

1. Delegated Powers for sanction of

credit facilities to Borrowers

whose Consumer Score (both TU

and PL) is equal to or above the

acceptable Consumer Score

The respective sanctioning authority can consider

the credit proposals within their Delegated Powers

to the borrowers having acceptable CIBIL Score.



whose Consumer Score is

below the acceptable

Consumer Score on account of

other than the credit card

defaults

The respective sanctioning authority can consider

the credit proposals within their Delegated Powers

in case of borrower/ Sole Proprietor/

Partner/Promoter Director /Directors/

Guarantors having acceptable TransUnion

Score (TU) even if Personal Loan (PL) Score is

below the acceptable Score.

The Branch Incumbent and RLCC-RH shall

consider the proposal after obtaining prior

permission (by sending Process Note) from the

next higher sanctioning authority in case the

TransUnion (TU) Score of a borrower/ Sole

Proprietor/ Partner/Promoter Director

/Directors/ Guarantors is below the acceptable

Consumer Score. RLCC-RH and HLCC-ED shall

examine such cases on merits before giving their

permission to the branches and RLCC-RH

respectively for taking credit exposure.

However, HLCC-ED /CAC / MCB, can consider

the proposal within their respective Delegated

Powers irrespective of the Consumer Score.

Renewal/Review(without enhancement)

At the time of renewal / review of the

account(without enhancement), if CIBIL Score of

the consumer / borrower is close to / less than the

score being treated as safe / less risk prone,

respective sanctioning authority can renew /

review (without enhancement) the account.



whose Consumer Score (either

TU or PL) is -1(minus 1)

The respective sanctioning authority can consider the

credit proposals within their Delegated Powers based

on the merits of the proposal and after undertaking

proper due diligence.

The Delegated Powers for sanction of credit facilities to borrowers where borrower’s account is

Standard Restructured/ Non Performing Asset (NPA) /adjusted under Compromise/ Settlement

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with our Bank/other banks/Financial Institutions shall be as per the guidelines for Standard

Restructured/ Non Performing Asset (NPA) /adjusted under Compromise/ Settlement with our

Bank/other banks/Financial Institutions.

5.A.24 SANCTION OF FRESH CREDIT FACILITIES TO EX-CLIENTS OF OUR

BANK/CLIENTS OF OTHER BANKS WHO HAD ADJUSTED THEIR ACCOUNTS

UNDER COMPROMISE/ SETTLEMENT NEGOTIATED

The Board of Directors vide BR No. F-7 dated 18.8.2001 approved that the request for fresh

credit facilities by previous borrower(s) of our Bank and borrowers of other banks who have

adjusted their accounts through settlement/compromise can be considered by the Bank on the

following terms and conditions:

The Board has directed that whenever a proposal for fresh approval in a compromise

account is put up, the same be clearly indicated on the first page of the note.

Besides, copy of the last settlement proposition must be enclosed.

The aforesaid directions of the Board shall be meticulously followed while considering

fresh proposal for approval in a compromise account.

The Delegated powers for sanction of credit facilities to the borrowers who are

Ex-Clients of our Bank/Clients of other Banks who had adjusted their accounts under

compromise/settlement are as follows:


NEW BORROWERS

1. Fresh Exposure CAC/MCB

EXISTING BORROWERS

2. Renewal / Review of limits By the respective sanctioning authorities



adhoc facilities



EX-CLIENTS OF OUR BANK

The request of former clients of the Bank for sanction of fresh credit facilities, who are willing

to make good the relief suffered/ granted by the Bank while settling their previous account(s),

may be considered on merits on the following terms and conditions :

The applicant(s) had not been a willful defaulter.

The account became bad in normal course for the reasons which were beyond their

control.

Intention of the borrower is good.

Rebate was in respect of interest portion only.

The applicants agree to make good the sacrifice (on account of settlement/

compromise ) made by the Bank along with interest at agreed rate of interest (on

simple basis) as a pre-condition.

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CLIENTS OF OTHER BANKS

Clients of other Banks who had adjusted their accounts with their previous bankers

under a Compromise/Settlement may also apply for sanction of credit facilities.

Their request may also be considered on merits provided that they had liquidated their

dues in those banks.

The applicant(s) had not been a willful defaulter.

The account became bad in normal course for the reasons which were beyond their

control.

The above provision now enables the Bank to sanction credit facilities in genuine

cases, to all types of borrowers, including Non Industrial Units, on merits, after

critical examination of their financial papers, who have adjusted their previous

account(s) through settlement by availing certain concessions.

5.A.25 SANCTION OF FRESH CREDIT FACILITIES TO THE BORROWERS WHOSE

SISTER/ALLIED CONCERNS ARE EX-CLIENTS OF OUR BANK/CLIENTS OF

OTHER BANKS WHO HAD ADJUSTED THEIR ACCOUNTS UNDER

COMPROMISE/ SETTLEMENT

The Delegated powers for sanction of credit facilities to the borrowers whose sister/allied

concerns are Ex-Clients of our Bank/Clients of other Banks who had adjusted their accounts

under compromise/settlement are as follows:


NEW BORROWERS

1. Fresh Exposure Respective sanctioning authorities within their

delegated powers. For Field Functionaries, prior

approval of NBG at Head Office is required

irrespective of the amount of exposure.

EXISTING BORROWERS

2. Renewal / Review of limits By the respective sanctioning authorities within


3. Granting of additional/

enhancement / adhoc facilities

By the respective sanctioning authorities within


5B. DELEGATED POWERS RELATED TO “GROUP BORROWERS”

5.B.1 DELEGATED POWERS OF CAC FOR GROUP ACCOUNTS HAVING LIMITS

UNDER MCB POWERS

In case of fresh/review/renewal/enhancement of limits in group/allied/sister concerns of

borrowers enjoying credit limits sanctioned by the Management Committee of the Board,

the Delegated powers of CAC in such cases to expedite the sanctioning of relatively lower

credit facilities to group / allied / sister concern borrowers is as under:

(Amount in ` Crore)

PARTICULARS CAC

Limit to group concern of borrower enjoying facility

under MCB powers

250

(`250 Crore per Borrower subject to

group exposure within RBI prescribed

Ceiling limit for a Single Group)

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Such fresh/review/renewal/enhancement of limits sanctioned by CAC shall be reported to

the Management Committee of the Board in the next meeting.

5.B.2 DELEGATED POWERS OF HLCC-ED FOR GROUP ACCOUNTS HAVING LIMITS

UNDER CAC POWERS

In case of fresh/review/renewal/enhancement of limits in group/allied/sister concerns of

borrowers enjoying credit limits sanctioned by the Credit Approval Committee (CAC), the

Delegated powers of HLCC-ED in such cases to expedite the sanctioning of relatively lower

credit facilities to group / allied / sister concern borrowers is as under:

(Amount in ` Crore)

Particulars HLCC-ED

Limit to group concern of borrower enjoying facility

under CAC powers

75

(Subject to group exposure not

exceeding `150 Crore)

Such fresh/review/renewal/enhancement of limits sanctioned by HLCC-ED shall be reported to

CAC in the next meeting.

5.B.3 DELEGATED POWERS OF RLCC-RH FOR SANCTION OF CREDIT

FACILITIES TO GROUP ACCOUNTS HAVING LIMITS UNDER HO POWERS

The Delegated powers for sanction of credit facilities to different borrowal accounts belonging

to one group are to be exercised by one single authority under whose Delegated powers the

same falls. Hence, the Delegated powers of RLCC-RH for sanction of credit facilities to group

concerns having sanctioned facilities under HO powers have been withdrawn.

However, limitation on sanction of credit facilities to group concerns shall not be applicable for

those facilities (such as loan against Bank’s own Deposit, Retail Loans viz. Housing Loan,

Vehicle Loan, and Education Loan, Personal Loan) for which Delegated powers have been

stipulated over and above the maximum exposure ceiling fixed.

5.B.4 DELEGATED POWERS OF BRANCH INCUMBENTS FOR LENDING TO

MORE THAN ONE ACCOUNT OF THE SAME GROUP

The Delegated Powers of Branch Incumbents for lending to more than one account of the

same group are as under.

The Branch Incumbents can consider maximum of three (3) loan proposals of the same

group for fresh / enhancement / adhoc sanction / review within their Delegated powers. The

above said ceiling shall not be applicable to credit proposals sanctioned under Retail Credit

Schemes that are over & above the normal Delegated Powers.

The aggregate of these three accounts shall not exceed the overall Delegated Powers for

Branch Incumbents.

The loan proposals having more than three loan accounts of the same group shall be sent

to next higher authority for fresh / enhancement / adhoc sanction / review proposal.

However, limitation on sanction of credit facilities to group concerns shall not be applicable

for those facilities for which Delegated powers have been stipulated over and above the

maximum exposure ceiling fixed. However, updated circulars issued by HO for granting

such facilities shall be referred to before exercising Delegated power.

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5.B.5 TWO OR MORE GROUP FIRMS AVAILING CREDIT FACILITIES FROM TWO

OR MORE DIFFERENT REGIONS

If two group concerns seek credit facilities from branches falling under different Regions,

the sanctioning authority at respective Regions may sanction credit limits in the individual

accounts of the group within the Delegated powers vested with the respective sanctioning

authority after confirming that aggregate group exposure of all the individual accounts in all

the Regions taken together shall not exceed the Delegated powers for group exposure as

applicable to the RLCC-RH in the highest scale from amongst the Regional Heads.

In such cases, Branch Incumbents shall not exercise their Delegated powers except for

permissible Adhoc facilities.

The Regions concerned shall exchange all information on the status of the Group accounts

at quarterly intervals and early if any account turns irregular.

5.B.6 TWO OR MORE GROUP FIRMS AVAILING CREDIT FACILITIES AT TWO OR

MORE BRANCHES IN THE SAME REGION

Under normal circumstances, all accounts of Group shall be sanctioned credit facilities from

one Branch only for effective control and monitoring. However, Regional Head may permit

operations at a branch other than the parent branch, if there are justified reasons for the

same.

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5C. DELEGATED POWERS RELATED TO “MARGIN”

5.C.1. PRESCRIBED MINIMUM MARGINS TO BE MAINTAINED ON DIFFERENT

TYPES OF SECURITIES AND DELEGATED POWERS FOR REDUCTION IN

MARGIN

TYPE OF SECURITY PRESCRIBED

MARGIN

Plant & Machinery (New) 25%

Hypothecation / pledge of stocks (Marketable) / Packing Credit / New

Furniture & Fixtures 25%

Land and for the construction of building :

a) Purchase of land for industrial use (Industrial Borrower) b) Purchase of land for Non-industrial use (Non-Industrial Borrower) c) For construction of building (Industrial Borrower/ Non-Industrial

Borrower)

25%

50%

25%

Equity shares, Preference shares/bonds/debentures, Units of UTI, Units of

Mutual Fund

(Margin to be maintained on the latest prevailing market value in case of

shares and on NAV or MV whichever is lower in case of mutual fund units

as per latest RBI guidelines issued from time to time)

50%

NSCs, KVPs, Government Securities, Bonds issued by Public Sector

Undertakings, (on the face value) 30%

Relief Bonds issued by the Government of India 15%

Life Insurance Policies issued by LIC (Surrender Value) 10%

Bima Nivesh Policy issued by LIC(On face value of the Policy) 25%

Advance against Bank’s own deposit:

Advance to self

Advance to third party

5-10%

15%

Resident Foreign Currency Deposit (RFC) accounts 10%

In case of Vehicles (tractors & trucks) advances covered under Priority

Sector(Chassis in case of trucks, bus)

15%

Advances for vehicles including car(other than Priority Sector)

Chassis Body(Commercial Vehicles if applicable)

25%

40%

Book debts 25%

Hire purchase documents (on the amount advanced or the cost of asset,

whichever is lower)

25%

Second – hand vehicles, car, plant & machinery(On the market value as

estimated and certified by Government approved Valuer / Architect)* 40%

Advance to builders(Real Estate Development Projects) 40%

Note: Margins for other facilities not covered here in above shall be governed by respective

policies / guidelines / schemes.

* Residual life of such item shall also be certified by the government approved valuer / architect.

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5.C.2. DELEGATED POWERS FOR REDUCTION IN MARGIN

A. Cases falling under the Delegated powers of the MCB (Management Committee of

the Board)

Amendments in terms and conditions including reduction in margin in the credit facilities

approved by the MCB shall be permitted by the MCB only except:

In case of accounts under Consortium Banking arrangement(where our Bank is not a

Lead Bank) where specific powers have been given to RLCC-RH for amendments in

Head Office sanctioned terms

Specific powers given to CAC to allow concession in Rate of Interest

Specific powers given to CAC to allow concession in Service Charges

Specific powers given to RLCC-RH to refund excess Interest /Commission /Discount

/Penal Interest in case of mistake/computer error pertaining to current Financial Year

B. Non MCB Cases falling under the Delegated powers of CAC/HLCC-ED

The respective sanctioning authority at Head Office (other than those under the powers of

MCB) shall be the competent authority for permitting reduction in margin for all other

cases falling under the powers of CAC/HLCC-ED.

C. Cases falling under the Delegated powers of RLCC-RH /Branches

The RLCC-RH shall be authorized to reduce margins in cases falling under their powers

as well as under powers of Branch Incumbents on a case-to-case basis based on the

value of the account as per the discretion below. The reasons for permitting reduction in

margin, if any, shall be duly documented in the process note. However, in cases where

RBI issues guidelines for maintaining minimum margin on specified securities /

commodities, the minimum margin as stipulated by RBI should always be maintained

TYPE OF SECURITY FOR THE CREDIT FACILITIES

Normal

margin

prescribed

Lower Margin

upto which

reduction may

be permitted by

RLCC-RH

Plant & Machinery (New)/Stock/Book Debts

(in case of existing borrowers with rating OBC 1,2,3 only)

25% 20%

NSCs/KVPs/ Government Securities/ BONDs issued by

Public Sector Undertakings, (on the face value)

30% 10%

Relief Bonds issued by the Government of India 15% 10%

For any further reduction not covered above, the case shall be referred to the HLCC-ED for

approval.

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D. Term Loans against Second Hand Vehicles, Second Hand Car, Second Hand Plant

& Machinery.

The Branches shall have no power to reduce margin in such cases.

The RLCC-RH shall have authority to reduce the margin upto 25% on case to case

basis for cases falling under delegated powers of ROs / Branches.

For any further reduction, the case shall be referred to the HLCC-EDfor approval.

For proposals under Head Office powers, respective sanctioning authority at HO

shall have delegated powers for reduction in margin on case to case basis upto 25%.

E. Margin In Case of Specific Borrowal / Retail Schemes

In case of specific borrowal / retail schemes approved by Head Office, margin

stipulated as per the scheme shall be obtained. The Delegated Powers to reduce

margin in case of schematic lending shall be as per the respective scheme.

F. Margin on Advance Against Bank’s Own Deposit

The Delegated Powers to reduce margin in case of advances against Bank’s own

Deposit are as under:

SN LOAN AGAINST PRESCRIBED

MARGIN

DELEGATED AUTHORITY FOR

PERMITTING RELAXATION IN

MARGIN

RLCC-RH HLCC-ED

1. Self-Deposit with residual

maturity of less than 6 months

5% No Powers to

reduce margin

From

Prescribed

Margin to NIL

Margin

2. Self-Deposits with residual

maturity of 6 months & Above

10% From Prescribed

Margin of 10% to

5%

3.

Third Party Deposit

15% From Prescribed

Margin of 15% to

5%

G. Margin on Advance Against Mutual Funds

The margins in case of advance against Mutual Funds are as under:

Equity oriented mutual funds -50%

Debt oriented mutual funds - 30%*

* HLCC-ED has been empowered to relax the margin upto 25% based on merits of the case.

(As per RBI guidelines, Advances against units of mutual funds (except units of exclusively

debt oriented mutual funds) would attract the quantum and margin requirements as are

applicable to advances against shares and debentures. However, the quantum and margin

requirement for loans/ advances to individuals against units of exclusively debt-oriented mutual

funds may be decided by individual banks themselves in accordance with their loan policy.)

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5.D. DELEGATED POWERS UNDER THRUST GENERAL AND RESTRICTED INDUSTRIES/SECTORS

5.D.1. THRESHOLD INTERNAL CREDIT RISK RATING FOR NEW BORROWERS

AND ADDITIONAL EXPOSURE TO EXISTING BORROWERS

The threshold internal Credit Risk Rating for New Borrowers and additional Exposure to

Existing Borrowers is as under:

Particular Threshold Rating

Thrust/General/Restricted areas of Lending OBC 1 to 6

Education Loan (upto `7.50 Lacs) OBC 1 to OBC 10

Take over accounts (General & Thrust) OBC 1 to OBC 5

Take over accounts (Restricted) OBC 1 to OBC 3

Bridge Loan to companies (other than NBFC)

Against Public Issue of Equity as also against the expected

proceeds of Non-Convertible Debentures, External Commercial

Borrowings, Global Depository Receipts and/or funds in the nature

of Foreign Direct Investments.

OBC 1 to OBC 3

Line of Credit

The facility shall be permitted only to PSUs and blue chip

companies falling under the powers of HLCC-ED / CAC / MCB.

However, CAC / MCB shall be authorized to permit relaxation in

credit rating on case to case basis.

External Credit Rating

AAA/AA/A or equivalent

short term rating or

internal rating OBC 1

and OBC 2

Branch Incumbents and RLCC-RH can consider the credit proposals of the borrowers

having Internal Credit Risk Rating upto OBC 6 (i.e., OBC 1 to OBC 6).

The credit proposals of the borrowers having Internal Credit Risk Rating below OBC

6(i.e., OBC 7, 8, 9 and 10) shall be considered by next sanctioning authority. In cases

where external rating of the borrower is C & D, the powers for sanction of fresh and

additional facility will vest with next higher authority.

However, HLCC-ED/CAC/MCB can consider the credit proposals irrespective of the

Internal/External Credit Risk Rating of the Borrower.

In case of takeover of accounts, guidelines stipulated as per takeover policy shall be

complied with.

5.D.2. AUTHORITY TO PERMIT DEVIATIONS IN EXPOSURE CAP FOR

DIFFERENT INDUSTRIES

Any deviation to the stipulated cap for industries/sectors as per Loan policy may be permitted

by Board of Directors.

5.D.3. CREDIT FACILITIES APPROVED BY MANAGEMENT COMMITTEE –

AUTHORITY TO PERMIT AMENDMENTS

Amendments in terms and conditions including reduction in margin in the credit facilities

approved by the MCB shall be permitted by the MCB only except:

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Specific powers given to RLCC-RH to refund excess Interest /Commission /Discount

/Penal Interest in case of mistake/computer error pertaining to current Financial Year

5.D.4. CHANGE IN COLLATERAL SECURITY

Change in collateral security in cases approved by MCB shall be done by the Management

Committee of Board and for other cases; the matter shall be referred to the respective

sanctioning authorities.

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5.E. DELEGATED POWERS RELATED TO “SECURITY”

5.E.1. CREDIT FACILITIES TO BORROWERS SECURED BY IMMOVABLE

PROPERTY AS COLLATERAL SECURITY OWNED BY THIRD PARTY

No such credit facility shall be sanctioned by Branch Incumbent under his or her

Delegated powers without obtaining such prior approval from the RLCC-RH. In such

cases, Branch Incumbent shall obtain prior approval of the RLCC-RH before accepting

Immovable collateral securities belonging to third parties (other than close relatives

of borrower) for fresh sanction / enhancement of credit facilities.

The obtention of Immovable Collateral belonging to the following shall not be treated as

Third party collateral:

Credit facilities sanctioned to Close Relative* belonging to the following can be

taken as Collateral Security

Proprietorship Concern Proprietor / Close relative* of Proprietor of the Firm

Partnership Concern Partners / Close relative* of the Partners of the Firm

Private Limited Company Directors / Close relative* of the directors of the company

Limited Company

* Close Relative means

1. Spouse

2. Father

3. Mother (including Step Mother)

4. Son (including Step Son)

5. Son’s wife

6. Daughter (including Step Daughter)

7. Daughter’s husband

8. Brother (including Step Brother)

9. Brother’s wife

10. Sister (including Step Sister)

11. Sister’s husband

12. Brother (including Step-Brother) of the spouse

13. Sister (including Step Sister) of the spouse

14. Father/Mother of the Spouse

In existing cases sanctioned by Branch Incumbents where third party collaterals have

been obtained, the properties should be visited and it shall be ensured that the mortgage

of property and intent given by the owner to mortgage his/her property is genuine. Visit

Report to be kept on record at the time of renewal / review of such cases, Branch

Incumbents shall obtain prior approval of RH.

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5.E.2. LOAN AGAINST NEGATIVE LIEN OVER PROPERTY

In case of immovable property obtained as collateral security by the Bank for securing credit

facilities, where the mortgage cannot be created, the Bank may consider charge on such

security by way of negative lien. However, the value of such securities shall not be reckoned

for arriving at credit decisions or for taking into account secured / unsecured categorization for

the purpose of Delegated Powers.

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5.F. DELEGATED POWERS RELATED TO “OPERATIONAL ASPECTS”

5.F.1. MAINTENANCE OF BORROWAL ACCOUNT IN MORE THAN ONE BRANCH

AND ALLOCATION /FIXING OF SUB-LIMITS OF BORROWERS

MAINTAINING ACCOUNTS AT MORE THAN ONE BRANCH

In order to ensure proper follow up and monitoring, the credit facility accounts of a

particular borrower should be maintained in a single branch at a particular station/city and

they should not be allowed to be operated from different branches simultaneously.

The only exception to be allowed is in cases where the borrower is having its units/offices

in more than one city/center and has made a justifiable request for sub-limit at a center

other than the main center. This aspect should be examined by the Regional Office from

case to case basis and the sub-limit should be approved in the following manner.

a) In case of credit limits sanctioned by RLCC-RH/Branch, allocation of the sub-limit may be

done by the respective RLCC-RH sanctioning the limit/under whose Region the Branch

(where the principal limit is sanctioned) falls.

b) In case of credit limits sanctioned by Head Office, allocation of the sub-limit shall be done

by the Regional Head of the Branch where the principal facilities are being availed. This

will also apply in cases where the sub-limits have to be allocated at a branch of a different

Region.

c) In no circumstances, the branch level functionaries will allow availment of sub-limit at any

different branch.

In addition to the above guidelines, the Branches/Regional Offices should ensure that:

a) The statement of accounts of the borrower for the allotted sub-limit is sent periodically to

the main Branch Office where the principal account is maintained on monthly basis.

b) DP is regularly intimated by the parent branch to the branch where sub-limit is to be

availed.

c) All terms and conditions pertaining to the operation of the account as stipulated by the

sanctioning authority/applicable as per general guidelines of the bank should be complied

with by the branch where the sub-limit is allocated.

d) Any adverse or special feature of the borrower’s account at the branch where the sublimit

is allocated is intimated promptly to the parent branch from where the main facility has

been obtained.

e) In case principal limits are availed at a Large Corporate Branch (LCB), the allocation of

sub-limit shall be done by General Manager (Large Corporate) at HO.

5.F.2. TRANSFER OF CREDIT FACILITIES (OTHER THAN LOANS TO STAFF

MEMBERS) FROM ONE BRANCH TO OTHER BRANCH

1. Within Region- Regional Head

2. Outside the Region: General Manager of respective credit verticals.

In cases of group/allied accounts, it is required that all the firms/concerns/units of a

particular group/allied concern should maintain their borrowal accounts in one branch

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only to ensure proper follow up/scrutiny of the various accounts of the group as a whole.

The Regional Heads should periodically review the position of all borrowal accounts at

their end falling under their respective jurisdiction and ensure compliance.

5.F.3. APPROVAL FOR ALLOWING THE BORROWER TO OPEN / CONTINUE A

CURRENT ACCOUNT WITH OTHER BRANCHES OF THE BANK OR OTHER

BANKS

This facility, for the purpose of collection of cheques, taxes / customs duty / excise duty

payments, remittances (other than consortium / multiple financing), can be accorded by the

Regional Heads and wherever the limits are sanctioned by Head Office, such approval can

also be given by Regional Heads subject to the said account being a Standard Asset and

submission / scrutiny of the statement of account on quarterly basis.

5.F.4. PERMITTING THE BORROWER TO INVEST SHORT-TERM SURPLUS

FUNDS OF BORROWER

The Delegated Power has been vested with RLCC-RH (in cases falling under RO/ Branch

powers) and the respective sanctioning authority at HO (in cases falling under HO powers) to

permit the borrower to invest their short-term/temporary surplus in short-term money market

instruments like Commercial Paper (CP), Certificates of Deposit (CD) and in Term Deposit with

other banks.

5.F.5. FIXATION OF SINGLE PARTY LIABILITY FOR BILLS DISCOUNTING

FACILITY SANCTIONED

While fixing the single party liability, care shall be taken to ensure that the bills are drawn as far

as possible on more drawees and concentration on a few drawees is minimised. The single

party liability shall be fixed taking into account the distribution pattern of the borrower between

its customers.

A. CASES SANCTIONED BY HEAD OFFICE

The Regional Heads shall be authorized to fix the single party liability for the Bills Discounting

facility sanctioned by Head Office. The single party liability shall be fixed by the Regional Head

in consultation with the branches.

B. CASES SANCTIONED BY REGIONAL OFFICE AND BRANCHES

The Regional Heads shall be authorized to fix the single party liability for the Bills Discounting

facility sanctioned by Regional Office/Branches.

5.F.6. DELEGATED POWERS FOR PERMITTING SUB-LIMITS/

INTERCHANGEABILITY

The respective sanctioning authority can permit the following interchangeability/sub-limits:

Approving sublimit of LC facility by earmarking sanctioned Term Loan for purchase / import

of capital equipment.

Conversion of CC Limits to LC, if LC is sanctioned for purchase of raw material/

consumables/ spares but not vice versa.

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Permitting conversion of CC Limits to BG limits to the extent of 15% of the sanctioned CC

limits but not vice versa, if BG facility is for procurement of raw material consumables/

spares.

Permitting interchangeability between CC / PC limits and CC / WCDL limits.

In case credit proposals sanctioned by Head Office, RLCC-RH can allow the above said interchangeability/sub-limits.

5.F.7. RLCC-RH EMPOWERED TO OPEN FRESH LC FOR THE EQUIVALENT AMOUNT

DEPOSITED BY THE BORROWER FOR DEVOLVED LC AMOUNT IN CASES

FALLING UNDER DELEGATED POWERS OF HEAD OFFICE POWER

With a view to have operational convenience and to enable holding on operations, the

following authorities are empowered to allow fresh opening of LCs for cases sanctioned by

the Head Office:

RLCC-RH is empowered to permit opening of Fresh LC (for working capital purpose)

equivalent to the amount deposited by the Borrower.

HLCC-ED is empowered to permit such facility in case of Large Corporate Branches

(LCBs).

The Delegated authority exercising the above powers shall report the same to the Head

Office for information.

Issuance of further Bank Guarantees, for the equivalent amount deposited by the Borrower

for invoked Bank Guarantee shall be permitted only as per the following delegated powers:

RLCC-RH for all cases falling under branch/Regional Office powers

HLCC-ED for cases under HO powers

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5. G. DELEGATED POWERS RELATED TO “SMA and NPA”

5.G.1. ENHANCEMENT IN EAS / SMA ACCOUNTS

No additional facility shall be allowed by Branch Incumbent /RLCC-RH for accounts falling

under their respective powers so long as any account continues to be irregular i.e. under

EAS/SMA and such powers shall be vested with the next higher sanctioning authority. The

Delegated Powers of the Functionaries at Head Office shall continue as hitherto.

5.G.2. GUIDELINES REGARDING SANCTION TO SMA – 2 BORROWER UNDER

MULTIPLE BANKING ARRANGEMENT / CONSORTIUM ARRANGEMENT / JLA

No Field Functionaries shall have the power to sanction exposure to a new borrower who is

classified as SMA-2 by any Banks / NBFCs / other Institutions. However, HLCC-

ED/CAC/MCB can sanction to such borrower within their respective delegated power.

In case of existing borrower who is classified as SMA – 2 by our Bank / any other Banks /

NBFCs / other Institutions, additional exposure can be sanctioned by respective

sanctioning authority as per Corrective Action Plan.

In case of existing borrower who is classified as SMA – 2 by our Bank / any other Banks /

NBFCs / other Institutions and does not fall under Corrective Action Plan, additional

exposure can be sanctioned by next higher sanctioning authority for Branch Incumbent &

RLCC-RH. However, HLCC-ED/CAC/MCB can sanction to such borrower within their

respective delegated power.

5.H.OTHER GENERAL GUIDELINES

1. Co-acceptance of Bills limit / clean LC limit can be permitted only by RLCC-RH and Head

Office functionaries.

2. Book debt facilities are to be allowed only against those book debts for which borrowers

have not availed bills purchased / discounted limits and as far as possible, book debts

should be spread over a reasonably good number of parties.

3. The Delegated authority for considering advance by way of purchase of Banker’s cheque /

pay order / draft issued by Co-operative banks including State Co-Operative Bank shall be

minimum HLCC-ED. The Delegated Powers of the various authorities are as under:

Delegated Powers Amount(` in Crore)

HLCC-ED 75

CAC 250

MCB Full Powers

4. Branch Incumbents in Scale I and Scale II shall not exercise powers for allowing Overdraft

against duty drawback and cash incentives.

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CHAPTER – 6

DELEGATED POWERS FOR VARIOUS TYPES OF CONSTITUENT BORROWERS

(Amount in `Crore)

Type of Constitution of the Borrower

Maximum credit exposure limit to borrowers

other than Real Estate

Maximum credit exposure limit to Real Estate

Borrowers

Individual borrowers for personal loans for Non-business

purpose (Other than schematic loans) on secured basis

only

5 5

Sole proprietary concerns, HUF* 50 30

Partnership firms/ Trusts/ Regd. Societies / Associations/

Limited Liability Partnership (LLP)

100 50

Private Ltd. Co. (which is not a subsidiary or holding

company of a Public Ltd. Co.)/ Closely held Public

Ltd. Co.

400 200

Closely Held Public Limited Company owned by

Central / State Govt. 1000 250

Widely held Public Ltd Company / Statutory Bodies

/Private Ltd. Company (which is a subsidiary or holding

company of a widely held Public Ltd. Company)

15% of Capital

Funds of the

Bank as on the

date of last

Audited Balance

sheet

400

*No fresh exposure shall be extended by the Bank to HUF entities or Partnership entities

where HUF is a partner. As regards Bank’s existing exposure, the Bank shall endeavour to

progressively exit from such exposures or alternatively get the partnership reconstituted for

ensuring that HUF is not a partner.

CAC/ MCB shall be competent authority to relax the above norms on case to case basis

No loans to be granted to partnership / proprietorship concerns against the primary

security of shares and debentures

6.2. ADVANCES TO TRUST

Branch Incumbents shall have no Delegated powers for advances to Trust.

RLCC-RH shall have authority to permit advances to Trusts for cases falling under

Regional Office/ Branch powers.

For proposals under Head Office powers, the respective sanctioning authority shall

exercise their Delegated powers for advances to trusts.

However, permission shall be obtained from “Commissioner of Charity” (in states where

this office exists) for sanction of facilities / charging or alienation of property of the Trust.

6.1. EXPOSURE LIMITS TO VARIOUS TYPES OF CONSTITUENT BORROWERS

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Keeping in view, the risks associated with lending to trusts on account of legal implications

involved in mortgaging the property of the Trust and limitation in realisability of the property,

comfort should not be derived from the securities offered while sanctioning credit facilities

to Trusts. The viability of the project and cash flows of the Trust are to be relied upon while

considering any advance to a Trust.

Trust Constitution and restrictions placed in the Trust Deed should be perused carefully

before taking a credit decision.

Credit facilities to a partnership firm, where a Trust is a partner, should normally not be

considered to avoid inherent risk of being a party, knowingly or unknowingly, to a breach of

Trust by the Trustees. The authorised persons of the Trust need to sign the documents on

behalf of the Trust as a partner. The constitutional documents of a Trust should be checked

to verify if the Trust can become a partner of a partnership firm and certified true copy of

requisite resolutions should be procured in relation to execution of documents, charging of

properties, etc. by the Trust as a partner.

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CHAPTER – 7

DELEGATED POWERS FOR SPECIFIC INDUSTRIES / SEGMENTS / CATEGORY

All proposals of infrastructure finance (including renewal/additional/enhancement proposals

in existing cases) shall be sanctioned at Head Office only.

However Branch Incumbents/RLCC-RH may consider sanction (including

renewal/additional/enhancement proposals in existing cases) of proposals falling under the

following category of infrastructure finance on merits, within their Delegated powers:

Construction relating to projects involving agro processing & supply of inputs to

agriculture, and

Construction for preservation and storage of processed agro products, perishable goods

such as fruits, flowers, vegetables including testing facility for quality.

RLCC-RH may consider sanction of proposal for Construction of educational institutions

and hospitals on merits within their Delegated powers. Branches will have no powers to

sanction such cases.

The respective sanctioning authorities can consider credit proposals under PMDO facility

(including infrastructure projects) within their respective Delegated Powers.

7.2. FINANCING OF SOFTWARE /IT ENTERPRISES/CALL CENTRES

All fresh/additional/ enhancement proposals for finance to Software /IT companies and call

centers shall be considered at Head Office. Such proposals shall normally be backed

by minimum of 100% collateral security; however MCB/CAC/HLCC-ED can permit

relaxation in collateral security for cases falling under their respective powers.

Renewal/review of existing credit limits can be done by the respective sanctioning

authority at Regional Office/Head Office under existing terms and conditions without

increasing the exposure.

The respective sanctioning authorities can consider Finance to Software / IT

Enterprises / Call Centres under OBLS Scheme.

7.3. FINANCE TO GEMS, DIAMONDS AND JEWELLERY SECTOR

In view of the current slowdown in the gems and Jewellery sector, all fresh/additional/

enhancement proposals for finance to gems and Jewellery sector shall be considered at

Head Office.

However, renewal of credit limits at existing level may be considered by the respective


The authority to permit facility of direct dispatch of shipping documents to importers shall be

with RLCC-RH in case of proposals falling within the powers of Regional Office and

Branches and with respective sanctioning authorities in case of proposals falling under

Head Office Powers. Branch Incumbents shall have no powers except as stated when

7.1. INFRASTRUCTURE FINANCE

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Bank does not have any credit exposure as detailed in Circular No. IBD/63/2013-14/420

dated 27.07.2013 and IBD/32/14-15/211 dated 17.06.2014.

The respective sanctioning authorities can consider Finance to Gems, Diamond and

Jewellery Sector under OBLS Scheme.

7.4. DELEGATED POWERS UNDER COMMERCIAL REAL ESTATE

Lending to Commercial Real Estate shall be on very selective basis.

Branches shall have no powers to consider proposals under Commercial Real Estate.

Delegated powers for considering Commercial Real Estate proposal shall be vested with

RLCC-RH/ HLCC-ED/CAC/ MCB as per Appendix-A.

In case of Commercial Real Estate, for credit proposals above `5 Crore, prior NBG

approval from HO shall be obtained.

7.5. Finance TO SHIP BREAKING INDUSTRY

The Delegated Powers with respect to Ship Breaking industry are as follows:

PARTICULARS DELEGATED AUTHORITY

Delegated Authority for Approval of limits

on yearly basis to Ship breakers

RLCC-RH at Ahmedabad and Mumbai and HLCC- ED/CAC/MCB within their respective Delegated Powers.

Delegated Authority for Approval of limits

on ship to ship basis within the yearly

limits set by Head Office / RLCC-RH at

Mumbai & Ahmedabad

RLCC-RH

7.6. FINANCE TO NON BANKING FINANCE COMPANIES & RESIDUARY NON

BANKING COMPANIES (RNBC)

Branches and Regional Offices shall have no powers to consider proposals related to all

categories of NBFCs.

The Delegated powers for sanctioning of credit proposals related to all categories of

NBFCs shall be at Head Office only.

The credit proposals from NBFCs falling under the Delegated powers of HLCC-ED/CAC

/MCB can be considered by the respective authority under its delegated powers.

NBFCs having assets size of less than `50Crore can be sanctioned only by HLCC-ED/

CAC/MCB under their delegated authority.

7.7. FINANCE TO CAPITAL MARKET

A. Advances against shares, bonds, mutual fund units to individuals, broking

entities promoted by Banks/ FIs as well as other broking entities

The delegated powers for advance against shares, bonds, mutual fund units to individuals,

broking entities promoted by Banks/ FIs as well as other broking entities shall be as per

Appendix-A.

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Branch Incumbents in Scale – I, Scale – II and Scale – III shall have no Delegated Powers

under such category of financing.

Stock Broker includes any single stock Broking entity including its associates / inter

connected companies

No loans to be granted to partnership / proprietorship concerns against the primary security

of shares and debentures.

B. Delegated Powers For Bank Guarantees On Behalf Of Share Brokers / Commodity

Brokers.

The delegated powers for issuing of Bank Guarantees on behalf of share

brokers/commodity brokers shall be as per Appendix-A.

7.8. FINANCING FILM INDUSTRY

Sanctioning authority for financing Film Industry rests with MCB/CAC/HLCC-ED within their

Delegated powers.

7.9. FINANCING TO NON-CONVENTIONAL ENERGY SECTOR

All the proposals shall be sanctioned at Head Office within the Delegated powers of HLCC-

ED/CAC/ MCB as applicable.

7.10. FINANCING PSU DISINVESTMENTS

Maximum Exposure for the Bank for any single disinvestment is `200 Crore subject to a

consolidated ceiling of `1000 Crore;

The tenor, margin, interest, security, repayment-schedule, shall be decided based on case-

specific merits by MCB/ CAC/HLCC-ED for accounts falling upto their respective Delegated

powers.

No other official in the Bank would have such powers.

7.11. FINANCING UNDER SCHEMATIC LENDING

Branch Incumbents shall exercise Delegated powers within the Structured Schemes only

for the Category/Segment/Purpose of Credit for which specific Bank Schemes already

exist.

For meeting requirements of borrowers under such Category/Segment/Purpose beyond the

terms of the structured scheme (including renewal of existing accounts), the Delegated

powers shall be with RLCC-RH/ HLCC-ED/ CAC/ MCB only.

However, this restriction shall not apply to Loan to Traders (Retail Credit) and OBLS. The

Branch incumbents can consider Loans to Traders beyond these two schemes, as per

Loan policy guidelines.

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7.12. DELEGATED POWERS FOR GRANTING FINANCE FOR ACQUISITION OF

EQUITY IN OVERSEAS COMPANIES

The Delegated powers for sanction of this type of advance shall be at Head Office only as follows:

(Amount in ` Crore)

DELEGATED AUTHORITY SIZE OF LIMIT (in ` Crore)

HLCC-ED Up to `75.00 Crore

CAC Up to `250.00 Crore

Management Committee of the Board Above `250.00 Crore

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CHAPTER – 8

GUIDELINES FOR EXERCISE OF DELEGATED POWERS FOR VARIOUS TYPES OF

FACILITIES

8.1.1. Composite / Integrated Assessment and Sanction of Credit Facilities to

Borrowers

In some of the cases, it has been observed that stand alone term loans are considered at

the field level without assessing the overall credit requirements of the borrowers covering

working capital requirements and Non Fund based credit requirements.

Composite / Integrated Assessment of credit facilities is essential to ensure continuity of

production and also assess availability of margin requirement to be brought in by the

Borrower both for Term Loan and Working Capital besides the financing arrangement

made for working capital/ Financial Closure for running the unit on viable lines.

Accordingly,

The field functionaries shall not consider Standalone Term Loans in case of finance to

manufacturing units.

The proposed term loan along with the future working capital requirements should be

considered only in totality by Field functionaries while determining the exposure for the

purpose of Delegated Powers. This shall be the case even if working capital limits are

not envisaged to be released immediately but on completion of project.

However, a stipulation shall invariably be made that working capital limits shall be

released only after / near completion of the project for procurement of raw material /

consumables on account of commencement of trial / commercial production.

8.1.2. In cases sanctioned by higher authority, proportionate change in installment

amount on account of lower availment / allocation of term loan/ demand loan with

no change in scope of project, Branch Incumbent may consider the same under

intimation to the sanctioning authority.

The term loan maturity profile (excluding Retail Schemes / Housing Loans) should not

generally exceed 7 years. However, RLCC-RH/HLCC-ED/CAC/MCB may permit term

loans having repayment period up to 10 years (including gestation period) on case to

case basis, where cash flow justifies such longer repayment period.

In the cases of financing for infrastructure, the term loan maturity period may go up to 15

years or more. But in case the repayment period is over 15 years, it may be considered

by the sanctioning authority on case to case basis.

However, the cases where repayment of Term Loan is beyond 7 years, the information of

such cases shall be submitted by respective Regional Offices to respective Credit

Verticals at HO which shall place the consolidated information (RO+HO cases) of all such

cases to ALCO for information.

In case of Housing Loans, maturity period may go up to 30 years.

8.1. DELEGATED POWERS FOR TERM LOANS

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8.1.3. Reimbursement of Loan proceeds

As per system in vogue, payments under Term Loan are released directly to the suppliers

to ensure end use of funds. On a few occasions, the borrowers claim reimbursement of

funds after spending the amount on the project mobilized by them from allied/associate

concerns/other sources. In such cases the RLCC-RH shall have authority to permit such

reimbursement (on case to case basis) in cases sanctioned within the powers of the

MCB/CAC/HLCC-ED/RLCC-RH/Branches subject to obtention of certificate from a firm of

Chartered Accountants about the amount spent and source of finance. RLCC-RH should

also arrange for inspection of the unit to satisfy himself in this regard before permitting

reimbursement.

8.1.4. Review of Standalone Term Loans

In case there is no change in the terms and conditions of the sanction, the annual review

of Standalone Term Loan cases falling under the powers of HO/RO/Branch shall be

undertaken by the respective sanctioning authority based on the outstanding prevailing at

the time of review (for determining the Delegated Power).

In case there is any change in the terms and conditions of the sanction (including release

of Personal Guarantee, security, ceding of charge etc.) in the standalone Term Loan at

the time of review, the annual review shall be undertaken only by the original sanctioning

authority.

8.2. DELEGATED POWERS FOR UNSECURED SHORT TERM LOAN

The Bank policy guidelines for granting Unsecured Short Term Loan to Corporates to

meet their short term requirements was approved vide agenda item no. A-15 by the

Board of Directors in its meeting held on 24.08.2012. The same have been circulated to

the field functionaries vide Circular No. HO/ RMD/43/2012-13/404 dated 10.09.2012.

The proposals for sanction of Unsecured Short Term Loan to Corporates can be

considered by CAC/MCB only within their respective delegated powers for Loans &

Advances.

The proposals for sanction of Unsecured Short Term Loans to Corporates shall be placed

before the CAC/MCB only as a regular agenda item and not through Circular Resolution.

Further, all such sanctions (along with copy of the Resolution & Process note) shall be

placed before the Board in the next meeting for information.

Any relaxation in the said policy norms can be permitted by the CAC/MCB within their

Delegated Powers.

8.3. DELEGATED POWERS FOR CORPORATE LOAN SCHEME

The revised guidelines of the Bank’s Corporate loan Scheme have been approved by the

Board of Directors vide Board Resolution No A-13 dated 22.06.2013. The same have

been circulated to the field functionaries vide Circular No. HO/ RMD/16/2013-14/194

dated 25.06.2013.

The Sanctioning Authority for Corporate Loan shall be restricted to Head Office only.

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The HLCC-ED, CAC, MCB can sanction Corporate Loan within their Delegated Lending

Powers.

8.4. DELEGATED POWERS FOR OPEN TERM LOAN

The Delegated Powers of RLCC-RH/HLCC-ED/CAC/MCB for sanction of Open Term

Loan shall be as per Appendix-A.

The Branch Incumbents shall not exercise any Delegated powers for open term loan.

8.5. DELEGATED POWERS FOR COMPOSITION OF CC(H) AND WCDL

The guidelines of pricing the WCDL component of Working Capital Finance at 0.50% p.a.

below the Rate (subject to a minimum of Base Rate) are applicable in those cases where

sanctioned Rate and normal applicable Rate are same.

In other cases, delegated authorities can consider concession in Rate of Interest within

their respective Delegated Powers for allowing concession in Rate of Interest.

8.6. DELEGATED POWERS FOR PLEDGE

Delegated Powers regarding ‘pledge’ can be exercised in respect of un-perishable stocks:

Government Securities, Government Warehouse Receipts: LIPs (SV) and securities of

similar nature which can be validly charged and pledged to the Bank.

8.7. ADVANCE AGAINST SUPPLY BILLS

While sanctioning advance against supply bills, the same shall be accompanied with

invoices / receipted challans / inspection notes evidencing supply of goods. Power of

Attorney to be got registered in favour of Bank with the concerned department.

RLCC-RH may consider waiver of registration clause after satisfying itself about the

reasons thereof.

8.8. DELEGATED POWERS FOR BOOKING OF FOREIGN EXCHANGE FORWARD

CONTRACTS

As per RBI Guidelines, the risk arising out of booking of Forward Contracts is to be

properly mapped and as per the approved Policy, 5% of the limit fixed for the Forward

Contracts shall be taken as credit exposure. In other words, 5% of the limit sanctioned for

booking of Forward Contracts will be added to the other credit limits sanctioned in favour

of the borrower and overall credit exposure will be counted after adding the credit

exposure on account of Forward Contract limits

Hence, at the time of sanction of fresh limits / renewal of limits, the credit exposure on

account of Forward Contract Limit shall be calculated and shall be part of the exposure

limits.

In view of the above Policy, the Branches / Regional Offices should propose for sanction

of limits for booking of Forward Contracts along with other credit limits simultaneously

wherever necessary, in consultation with the borrower. These limits will be sanctioned by

the competent authority as per the Policy and will form a part of the overall credit

exposure to the borrower.

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We reiterate that no Forward Contracts can be booked without a proper sanction from the

competent authority and a copy of the sanction shall also be sent to IBD for their

information.

Branches shall be guided by Circular No. IBD/58/13-14/393 dated 18.07.2013 issued by

IBD on booking of Forward Contracts. The Policy regarding booking of these Contracts is

also circulated along with the above referred Circular. Branches are required to ensure

strict compliance to the Policy.

8.9. DELEGATED POWERS FOR CLEAN OVERDRAFTS FACILITY

The Delegated powers for Clean Overdraft shall be as per Appendix-A.

8.10. NUMBER OF PERMITTED CLEAN OVERDRAFT ACCOUNTS PER BRANCH

The number of clean OD accounts that can be considered by Branch Incumbents in Scale

I and Scale – II shall be restricted to 5 accounts at a time within their Delegated Powers.

Branch Incumbents in Scale – III and above can sanction 10 Clean OD accounts at a time


Clean OD can be permitted only in three accounts of a group at a point of time.

In case of exceptional circumstances and for bonafide exigencies wherever such number

of borrowers is exceeded, prior permission from the Regional Head is to be obtained

stating the reason and circumstances for exceeding the number of borrowers for clean

overdraft and the same shall be duly reported in STM 41.

The number of accounts shall not include those overdraft accounts which have been

classified as NPA or automatically generated by system.

8.10.1. Guidelines For Exercise Of Delegated Powers For Clean Overdraft Facility

The Clean Overdraft is to be permitted selectively only to current account holders

maintaining a satisfactory account for a minimum period of six months.

It is to be ensured that the facility is not permitted for funding speculative activities.

In case of Clean Overdraft, it cannot be allowed for more than 15 days at a stretch and

overall aggregate number of days when such clean overdraft facility is extended shall not

exceed 90 days during the Financial Year.

No temporary enhancement shall be allowed in respect of Clean Overdraft limits

sanctioned under RO/HO powers.

In case of overdraft limits sanctioned under Branch powers, the Branch Incumbents shall

not have any delegated authority for permitting temporary enhancement as permitted in

the loan policy of the bank for granting of adhoc limits/temporary enhancement for other

borrowal accounts.

The total amount of cash withdrawals in a single clean overdraft account shall not exceed

50% of the facilities sanctioned with maximum of `50000 during the entire tenure of the

facility.

Prior permission from Regional Office/Head Office shall be obtained before permitting any

facility beyond Delegated Powers of the field functionaries as mentioned above.

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Necessary documents/ Demand Promissory Note shall be obtained before allowing the

Clean Overdraft facility.

The facility be allowed occasionally and wherever the requirements are frequent in

nature, need based requirements of the borrower be assessed and regular working

capital limits be established.

Interest shall be recovered as applicable to Clean Overdraft facility.

8.10.2. Reporting and Monitoring System For Clean Overdraft Facility

Delegated Clean Overdraft Register shall be maintained date-wise at Branch level to

record the transactions permitted by the Branch. In addition to the same, exceptional

reports that are generated in the branch daily shall be verified by the Branch Incumbent

who shall also ensure that all the permitted clean overdraft transactions under

Branch/Regional Office/Head Office powers are entered in the clean overdraft register for

monitoring purposes.

The transactions permitted under the above policy shall be reported in STM-41/STRO-16

statements as per the system in vogue. The statement submitted by the branches shall

be scrutinized at Regional Office level and the outstanding is to be monitored to ensure

that no clean overdraft remains outstanding for a period of more than 15 days. The

statement of clean overdraft permitted by the Branches shall be put up to RLCC-RH for

information and confirmation of action, wherever necessary.

Wherever clean overdraft entries are not adjusted within the stipulated period (i.e.,

maximum 15 days), the same shall be classified and reported as EAS. In case the facility

remains unadjusted beyond one month of due date of adjustment, the account be

classified as SMA and the same shall be reported to Regional Office and Head Office

simultaneously along-with the steps taken for adjustment of the account.

8.11. DELEGATED POWERS FOR PURCHASE OF THIRD PARTY CHEQUES

WHERE REGULAR LIMIT IS TO BE FIXED

Third party cheques purchase facilities shall be considered as Unsecured Limit and all

functionaries are empowered to use the Delegated Powers of unsecured limit for such

cases. Further, delegated powers of the functionaries for purchase of Third Party Cheque

(Regular Limit) shall be as per Appendix-A.

8.11.1. Guidelines for Exercise of Delegated Powers In Respect of Purchase of Third

Party Cheques-Regular Limit

i. The regular Limit of purchase of third party cheques is to be permitted selectively to those

account holders maintaining a satisfactory conducted current account for a minimum

period of six months or where the borrower has been sanctioned regular credit facilities

from the bank.

ii. Need based requirements of the borrower be assessed and regular limits be set up after

proper risk assessment and also taking into consideration actual requirements based on

turnover of the business of the borrower and all other relevant factors.

iii. Prescribed documentation of bank as advised from time to time to be obtained.

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8.12. OCCASIONAL CHEQUE PURCHASE AND WITHDRAWAL AGAINST UNCLEARED

INSTRUMENTS / CHEQUES IN CASE OF NON BORROWAL ACCOUNTS

i. The Delegated Powers for Occasional Cheque Purchase and Withdrawal against

Uncleared Instruments / Cheques in case of non borrowal accounts shall be as per

Delegated Powers of the functionaries for Clean Overdraft as per Appendix-A.

ii. The third party Occasional Cheque Purchase/ Withdrawal against uncleared effects shall

be permitted in select cases, where the current account has run satisfactorily for a

minimum period of six months. In case of non borrowal accounts, deviation can be

permitted by RLCC-RH, HLCC-ED, CAC and MCB within their respective Delegated

Powers.

iii. In case cheques are dishonoured resulting in an overdraft in the account, the Delegated

powers for clean overdraft shall not be exercised in such an account till the devolved

amount is cleared by the client.

iv. In case of Occasional Cheque Purchase and Withdrawal against Uncleared Instruments /

Cheques, documentation may not be done.

8.12.1. Guidelines for Purchase of Third Party Cheques

i. While purchasing third party cheques, Branches shall ensure the genuineness of

underlying transactions and shall not purchase accommodation cheques and a proper

record thereof shall be maintained at the branches.

ii. The total amount of cheque purchase drawn by a single party (drawer of cheque) shall not

exceed the maximum amount stipulated as above within the overall Delegated powers.

Individual liability register of the drawer of the cheque(s) should be maintained and posted

upto date and duly checked.

iii. Branches should guard against kite flying operations of any kind. Cheques drawn by

allied/sister concerns and/or self-drawn cheques shall not be purchased.

iv. Credit Reports of the drawers of cheques may be obtained from their respective bankers,

particularly for those who draw cheques for large amounts frequently.

v. Purchase of postdated cheques is prohibited.

vi. Cheques purchased and lodged for clearing/collection should be promptly sent for

clearing/collection. The branches shall not retain/detain the same under any understanding

with the customer for presenting the same to the drawee bank later. Violation in this regard

should be viewed strictly.

vii. Branches should follow the accounting and other laid down procedures and closely watch

the conduct of the accounts of the borrower which leave no scope for any customer to

misuse the system in raising finance against accommodation cheques.

viii. Amount of cheques purchased presented in clearing and received back unpaid should be

got reimbursed from the borrower without any delay.

ix. Under no circumstances should a dishonored instrument (dishonoured for want of funds)

be again purchased.

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x. The Delegated powers for allowing the facility shall be exercised judiciously taking into

account all the factors including the risk perception on the drawer of the instrument, value

of connection, financial position of the customer, volume and value of transactions. The

branch should ensure that purchase of cheques in the account of the customer is in

proportion to the business of the customer and the same is relevant to the borrower’s

business.

xi. In case cheques purchased in an account generally or those drawn by a particular drawer

are dishonoured frequently (for want of funds or other similar reason), continuance of the

facility shall be reviewed by the branch in consultation with the sanctioning authority.

xii. Commission and other service charges as applicable for purchase of third party cheque

purchase shall be recovered separately in addition to the interest leviable.

8.12.2. Reporting and Monitoring System for Third Party Cheque Purchase Facility

i. Proper Register is to be maintained at Branch level to record the transactions permitted

by the Branch under the facility of third party cheque purchase. The transactions

permitted under the above policy shall be reported in STM-41/STRO-16 statements as

per the system in vogue.

ii. In case the purchased cheque has been dishonoured and the amount has devolved on

the bank, the Branch shall report the matter to the respective Regional Office for the

amounts devolved on the Bank and outstanding as at the end of the month. The steps

taken for recovery should be outlined by the branch. This reporting shall be on monthly

basis and the Loan Audit Cell at Regional Office shall scrutinize this aspect and put up to

the Regional Head for necessary action.

iii. Wherever the purchased cheque devolves on the bank and is not adjusted on the same

date, the same shall be immediately classified and reported as EAS. In case the devolved

amount remains unadjusted beyond one month of date of purchase, the account be

classified as SMA and the same shall be reported to Regional Office and Head Office

simultaneously along-with the steps taken for adjustment of the account.

8.13. DELEGATED POWERS FOR ADVANCES AGAINST PAY ORDERS, BANK

DRAFTS, GOVT CHEQUES (EXCEPT PAY ORDERS OR DRAFTS OF

COOPERATIVE BANKS)

The Delegated Powers for advance against Pay orders, Bank Drafts and Government

Cheques (except Pay Orders or Drafts of Cooperative Banks) shall be as per Appendix-A.

The following shall be complied with by the branches:

Register be maintained on daily basis by Branch Heads duly authenticated.

System be put in place for generating control statement on weekly basis by RO.

Any deviation should appear in exceptional report also.

All the above aspects should be examined by Concurrent Auditors.

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8.14. DELEGATED POWERS FOR OPENING STANDBY LC (SBLC)

Branches shall have no powers.

RLCC-RH shall consider Branch/RO cases (including renewal) within normal Delegated

powers.

For proposals under HO powers- respective sanctioning authority shall examine such

cases.

8.15. DELEGATED POWERS FOR LINE OF CREDIT

The facility shall be permitted only to PSUs and blue chip companies which are enjoying

Credit Rating of AAA/AA/A or equivalent short term rating A1+, A1 by External Credit

Rating Agencies or internal rating OBC -1,2 falling under the powers of HLCC-

ED/CAC/MCB. However, CAC/MCB shall be authorized to permit relaxation in credit rating

on case to case basis.

8.16. DELEGATED POWERS FOR PURCHASE/DISCOUNTING OF BILLS UNDER LETTER OF CREDIT

The Delegated Powers of the functionaries for Purchase/ discounting of Inland/ Export bills

under Letter of Credit (DA/DP) shall be as per Appendix-A.

The exposure on account of Purchased/ discounting of Inland/ Export bills under

LC(DA/DP) shall not be over & above the normal Delegated Powers.

8.16.1. Negotiation of bills under LC (DA more than 120 days)

RLCC-RH shall have Delegated Power for permitting discounting of bills under Inland Letter

of Credit having DA period beyond 120 days subject to a maximum DA period of 180 days.

For Cases where DA period is beyond 180 days, the Sanctioning Authority shall be HLCC-

ED.

8.16.2. Important Conditions to be complied With for Inland/ Export Bills Purchase /

Discounting under Letter of Credit

The Delegated powers for purchase / discounting of Inland / Export bills under LC issued

by other Banks is subject to the following:

The Delegated powers for purchase / discounting of Inland / Export bills under LC

issued by other banks are not over & above normal Delegated powers for loan and

advances.

Accommodation bills should not be purchased / discounted / negotiated.

The borrower must be a constituent of the Bank and all the RBI guidelines for Bills

Purchase/ Discounting under LC shall be adhered to.

The Letter of Credit issued only by reputed banks (Public Sector banks/ New & Old

Private Sector banks/ Foreign banks as approved by the Bank from time to time)

shall be considered for Bills Purchased / Discounting facilities.

Branch shall obtain confirmation for authenticity of LC from the issuing bank.

In case of bills drawn under “Inland Letter of Credit (LC)”, confirmation shall be

obtained prior to disbursement of funds from LC opening bank that documents

drawn conform to the terms of LC and the payment will be made on due date.

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In case of Export bills drawn under Letter of Credit, disbursement of funds shall be

made only after acceptance of the bills as per terms of LC and the due date from LC

opening bank is obtained.

Branch shall also obtain confirmation that the bills/ documents drawn under LC are

in order and payment will be made on due date, both in hard copy and also

preferably through independent email confirmation.

Only after complying with all the terms and conditions, the branch shall disburse

funds under Bills Purchase/ Discounting under LC.

A regular limit shall be got approved from the respective sanctioning authority, in

case of frequent availment of this facility by the borrower.

In case of JLA /Multiple Banking Arrangement/ Consortium, the other banks shall

suitably be informed about the exposure.

For other bills under LC not covered by above, normal Delegated powers for the

respective functionaries shall be exercised but the facility shall be availed at the

designated branches only.

The Bill discounting under LC shall be subject to Inter Bank Exposure Limit fixed by

the Bank (Since such exposure would be exposure on the LC Issuing bank).

All other existing terms and conditions for purchase/ discounting of Inland/ Export

bills under Letter of Credit will continue.

Branches should be circumspect while discounting bills drawn by front finance

companies set up by large industrial groups on other group companies.

Branches should not rediscount bills earlier discounted by non-bank financial

companies (NBFCs) except in respect of bills arising from sale of light commercial

vehicles and two / three wheelers.

8.16.3. Branches Authorized For Inland/ Export Bills Purchase / Discounting Under LC

Inland Bills Purchase/ Discounting under Letter of Credit

The Delegated powers for Inland Bills purchase/ discounting under Letter of Credit shall be

exercised at the following branches only:

All Large Corporate branches

All Mid Corporate branches

All Overseas branches

All Category B branches

Export Bills Purchase/ Discounting under Letter of Credit

The Delegated powers for Export Bills purchase/ discounting under Letter of Credit of

reputed foreign banks shall be exercised at the following branches only:

All Overseas branches

All Category B branches

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Authorization of any other Branch for Bills Purchase/ Discounting under Letter of Credit

For all other branches other than above, the Regional Head may designate branches to

undertake Inland Bills purchase/ discounting under Letter of Credit on special request

received from such branches.

While designating any other branch to undertake the said business, the following points are

required to be ensured along with other points deemed relevant by RO.

Potential for the Inland Bills Purchase/ Discounting under LC in the area where the

branch is located.

Availability of adequate skilled manpower at the branch to handle such business.

Availability of adequate infrastructure (IT/SFMS) at the branch to handle such

business.

All the Regional Offices shall send the list of branches authorized by the respective

Regional Head for Bills Purchase/ Discounting under LC to the following:

For Inland Bills: Credit Administration Department & Risk Management Department,

Corporate Office, Gurgaon

For Export Bills: International Banking Division, Corporate Office, Gurgaon.

8.17. DELEGATED POWERS FOR DISCOUNTING BILLS DRAWN ON ASSOCIATE

CONCERNS

Prior specific approval of the next higher sanctioning authority shall be obtained by a

functionary before approving any bills discounting limit in respect of bills drawn by

borrowers on Associate concerns of the borrower as defined earlier. This would be

irrespective of whether the entire bills limit or only a part of the bill limit is to be utilized for

drawing bills on Associate Concerns of the Borrower.

8.18. DELEGATED POWERS TO EXTEND DUE DATE IN CASE OF EXPORT BILLS/

PACKING CREDIT

Branch Incumbents can extend the due date of Export Bills/Packing Credit within the

sanctioned tenor.

The respective sanctioning authorities can extend the due date beyond the sanctioned

tenor of Export Bills/Packing Credit with maximum permissible period as per RBI/FEMA

guidelines in cases falling under Branch/Regional Office/Head Office powers, on specific

request from the borrower/overseas buyer justifying the reasons for such extension. The

extension shall be subject to adherence to ECGC guidelines.

8.19. EXPOSURE TO INDIAN JOINT VENTURES / WHOLLY-OWNED

SUBSIDIARIES ABROAD AND OVERSEAS STEP-DOWN SUBSIDIARIES OF

INDIAN CORPORATES

All such proposals shall be dealt at Head Office only.

8.20. POOLED MUNICIPAL DEBT OBLIGATION FACILITY (PMDO)

The Pooled Municipal Debt Obligation Facility (PMDO) has been allocated funds of

`272.50 Crore (5.45% of total corpus of `5000.00 Crore)vide MCR No. 11 dated

27.09.2010.

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This facility intends to create an environment where Urban Local Bodies, State

Governments and other stakeholders would embark on a series of reforms to improve

credit worthiness and bank-ability of urban infrastructure projects.

PMDO would provide funds by way of term lending to Municipal Corporations, Urban Local

Bodies, Local Authorities, etc. for developing Urban Infrastructure projects across cities in

India on an integrated basis.

PMDO Facility is administered by Credit Committee of PMDO, which comprises of 11

members.

The respective sanctioning authorities can consider credit proposals under PMDO facility

(including infrastructure projects) within their respective Delegated Powers.

8.21. STRUCTURED MEZANNINE CREDIT FACILITY (SMCF)

CAC/MCB shall have power to sanction credit proposals under Structured Mezannine

Credit Facility (SMCF).

8.22. LOANS AGAINST NRE AND FCNR (B) DEPOSITS

In terms of RBI guidelines, the ceiling on loans against NRE and FCNR(B) deposits either

to depositors or to third parties have been withdrawn vide Circular No. IBD/155/12-13/826

dated 06.03.2013.

The facility shall, however, be permitted at designated branches only.

8.23. DELEGATED POWERS FOR ALLOWING ADVANCES AGAINST TERM

DEPOSITS BY THE INCUMBENTS OF “EXTENSION COUNTERS”

Maximum Delegated powers of `50 Lacs is vested with the incumbents of Extension

Counters for advances against Bank’s own domestic deposits/NRE deposits to self/third

party. However, no advance against FCNR (B) deposits shall be sanctioned by the

incumbents of Extension counters.

8.24. LOANS AGAINST CA / SB ACCOUNTS

No advance is permitted against deposits in SB/CA balances.

8.25. LOANS AGAINST NON-CURRENT ASSETS

Competent authority to grant Finance against Non-Current Assets shall be functionaries at

Head Office as per Delegated powers vested with them as per guidelines detailed in the

Loan Policy.

8.26. ISSUE OF BANK GUARANTEES IN FOREIGN CURRENCY / IMPORT LC

(Such guarantees shall be issued at category ‘B’ branches / overseas branches only)

The size of the Delegated powers limit will be equivalent Indian Rupees (at the exchange

rate prevailing at the time of issue of the Guarantee). On the issue of the Foreign Bank

Guarantee, the branch / RO shall report the same to the respective Credit Vertical as well

as IBD at Head Office along with a copy of the Guarantee.

The exercise of Delegated powers for issue of Foreign Bank Guarantees shall be subject to

the compliance of the undernoted points and other Policy Guidelines: -

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All rules and regulations laid down by Reserve Bank of India/Government of India for

issue of Foreign Bank Guarantee shall be complied with.

For any fluctuations in the value of the Foreign Currency vis-à-vis the Indian Rupee

beyond 5% in comparison to the rate prevailing at the time of issue of the guarantee,

the shortfall in the prescribed margin shall be recovered by the branch from the

borrower. The same shall be reviewed on quarterly basis for recovery of the shortfall, if

any, in the margin obtained from the borrower.

The Incumbent Incharge should monitor exchange fluctuations on regular basis and in

case there is adverse variation of more than 10% on account of exchange fluctuation,

the borrower be asked to top up the margin or get the forward cover booked. A suitable

undertaking from the borrower in this regard should be obtained at the time of issuance

of Bank Guarantee.

Besides monitoring by the Incumbents, concurrent /regular auditors, should also monitor

the availability of margin vis-à-vis the foreign currency exposure and mention the same

in the inspection report to facilitate initiation of remedial measures.

In order to have operational flexibility, powers to waive additional margin (over 100% of

Rupee value) for issuance of FLC/FLG have been vested with HLCC-ED & above on

merits of each case. ECGC Counter-Guarantee/Cover wherever available shall be

obtained.

8.27. GUIDELINES TO BE ADHERED TO IN CASE OF IMPORT LCs/FOREIGN BANK

GUARANTEES OPENED/ISSUED WITH 100% CASH MARGIN

In case of opening of Import Letter of Credit/ issuance of Foreign Bank Guarantee with

100% cash margin, it shall be ensured that the forward cover for the full foreign currency

exposure amount for which Import Letter of Credit/Foreign Bank Guarantee is to be

opened/ issued is invariably obtained at the time of opening/issuance itself.

The delegated powers to Branch Incumbents/RLCC-RH for opening of Import Letter of

Credit/issuance of Foreign Bank Guarantee are subject to the obtention of the forward

cover by the borrower.

In cases where Import Letter of Credit/Foreign Bank Guarantee has been issued with 100%

cash margin, the shortfall in the margin due to Rupee depreciation should be recovered by

the Branch from the borrower on an ongoing basis whenever the Indian Rupee depreciates

beyond 5% in comparison to the rate prevailing at the time of issue of Import Letter of

Credit/Foreign Bank Guarantee. In case forward cover is not booked by borrower,

110% upfront cash margin shall be obtained.

The Branch should monitor the exchange fluctuations on regular basis to ensure top-up of

margin in case of adverse fluctuations or alternatively obtain forward cover. A suitable

undertaking from the borrower should be obtained at the time of opening of Import Letter of

Credit/issuance of Foreign Bank Guarantee.

8.28. DELEGATED POWER FOR ADVANCES AGAINST WAREHOUSE RECEIPTS

Govt. has enacted warehouse receipts as negotiable instruments in the Warehousing

(Development & Regulation) Bill in April 2011. These receipts issued by the warehouses

registered with the Warehousing Development and Regulatory Authority (WDRA) would

become a fully negotiable instrument backed by a Central legislation. The WDRA was

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setup by the Government in October 2010 to regulate and development of warehouses in

the country.

Keeping in view feedback from field functionaries and difficulties faced in complying the

Government guidelines, Credit Risk Management Committee in its 67th meeting held on

16.03.2012 reconsidered the policy and has approved that Bank may continue to finance

against the warehouse receipts issued by the warehouses of Central / State warehouse /

Warehouses of collateral Managers and Private warehouses approved by the Bank, without

on insisting WDRA registration and obtaining negotiable warehouse receipt.

The revised scheme for financing against warehouse receipts was approved vide agenda

item no A-55 by the Board of Directors dated 23.05.2012 and the same was circulated vide

HO/RD&PS/ 9 /2011-12/155 dated 07.06.2012.

All functionaries shall exercise their normal Delegated Powers.

8.29. DELEGATED POWER FOR LETTER OF CREDIT (PURCHASE OF CAPITAL

GOODS / MACHINERY)

Letters of Credit for import/purchase of machinery or capital equipment is to be considered

only when the post import obligation to meet the liability is firmly tied up depending upon

the financials of the borrower. Letter of Credit facility (Inland/ Import), for capital goods can

be considered in either of these cases:

Earmarking Term loans sanctioned by our own Bank.

Against Term loans sanctioned by other Financial Institutions provided the

concerned FI issues Letter of Comfort in favour of our bank i.e. they undertake to

remit the amount directly to the Bank to honour the obligation on or before due date

of LC.

The RLCC-RH shall be empowered for approving sublimit for LC facility / Letter of Comfort

against Buyer’s Credit facility by earmarking sanctioned Term Loan for purchase / import of

capital equipment.

Letter of Credit for capital goods can be considered by the RLCC-RH/ HLCC-ED/CAC

/MCB in the absence of Term loan facilities in case the respective sanctioning authority is

satisfied with the availability of funds/accrual of funds from the borrower on due date.(No

powers at the Branch Level).

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CHAPTER – 9

GRANTING OF ADHOC, OVER LIMIT, OCCASIONAL CHEQUE PURCHASE &

WITHDRAWAL AGAINST UNCLEARED INSTRUMENTS / CHEQUES IN BORROWAL

ACCOUNTS

Presently, temporary requirements of the borrowers are being addressed by way of Adhoc,

Occasional Cheque Purchase and Withdrawal against Uncleared Instruments / Cheques.

To cater to requirements of short duration, a new concept of Over limit has been

introduced, where temporary overdrawings over and above the sanctioned limits can be

extended for a period not exceeding 30 days.

The Delegated Powers for granting of Adhoc, Over Limit, Occasional Cheque

Purchase & Withdrawal against Uncleared Instruments / Cheques shall be over &

above the normal Delegated Powers subject to ceiling for Adhoc/Over Limit

mentioned in the table.

9.1. DELEGATED POWERS FOR GRANTING OF ADHOC LIMITS, OVER LIMIT,

OCCASIONAL CHEQUE PURCHASE & WITHDRAWAL AGAINST UNCLEARED

INSTRUMENTS / CHEQUES

The Delegated Powers for Adhoc, Over limit, Occasional Cheque Purchase & Withdrawal

against Uncleared Instruments / Cheques for borrowal accounts all put together are as

under:

(Amount in ` Lacs)

DELEGATED

AUTHORITY

BORROWERS

DELEGATED POWERS IN CASE OF OWN SANCTION AND SANCTION BY HIGHER/LOWER AUTHORITY

MAXIMUM %AGE OF FB WC & NFB LIMITS

RESPECTIVELY

MAXIMUM AMT.

Over limit (1 - 30 days)

Adhoc limit (1 - 90 days)

Over limit (1 - 30 days)

Adhoc limit (1 - 90 days)

MCB - FP FP

CAC - 3000 3000

HLCC-ED - 1500 1500

RLCC-GM 25% 500 1000

RLCC– DGM 20% 250 500

RLCC – AGM 20% 100 200

Branch Incumbents

BI-GM 10% 250 500

BI – DGM 10% 100 200

BI – AGM 10% 50 100

BI – CM 10% 15 30

BI-Scale – III 10% 10 20

BI-Scale – II 10% 10 20

BI-Scale – I 10% 5 10

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In case where standalone Term Loan facility has been sanctioned, Adhoc Working Capital

Facilities can be permitted as per Loan Policy except in Real Estate accounts.

In emergent cases, the Branch Incumbents may allow temporary / adhoc limit beyond their

powers after seeking approval from the respective Regional office (but within Delegated

powers of Regional Office). In such cases, they shall seek confirmation of their action from

RLCC-RH through control returns i.e. STM-41B/ STM-41C as the case may be.

It is to be noted that the delegated powers for temporary enhancement in respect of limits

sanctioned by Head Office shall not be exercised concurrently both by the branch as well

as the RLCC-RH.

Adhoc facility / Over Limit must be allowed strictly within the Delegated powers vested with

the functionary for considering Adhoc facility / Over Limit. These should be allowed

selectively and not as a matter of routine / throughout the year.

9.2. GENERAL GUIDELINES FOR GRANTING OF ADHOC LIMITS, OVER LIMIT,

OCCASIONAL CHEQUE PURCHASE & WITHDRAWAL AGAINST UNCLEARED

INSTRUMENTS / CHEQUES

The following guidelines are to be complied with in case of adhoc / temporary enhancement

allowed in those accounts where regular credit limits have been sanctioned in favour of the

party:

SN. Particulars Bank’s Guidelines

1. Purpose To enable the borrower to execute orders received over and

above the normal business orders not envisaged originally.

Change in the terms of trade than what was envisaged originally

at the time of regular assessment of limits.

Essential payments such as statutory dues/ electricity payments/

payments of bills under LC / invocation of bank guarantee and

other essential payments during regular course of business.

As a matter of policy, the sanction of adhoc limit / Over Limit shall

be kept to the bare minimum and to be allowed only where

circumstances / business considerations warrant.

2. Eligibility

Criteria

Adhoc, Over limit, Occasional Cheque Purchase & Withdrawal

against Uncleared Instruments / Cheques shall be allowed

selectively to borrowers dealing with the Bank for atleast six months

and classified as Standard.

3. Time Period for

which the facility

can be

sanctioned

The Over limit Facility shall be granted for a period not exceeding

30 days and Adhoc facilities shall be considered for a maximum

period of 90 days at a stretch.

Extension of Adhoc beyond 90 days upto 180 days shall be

permitted by next higher authority in case of branch and

RLCC-RH sanction. HLCC-ED, CAC and MCB can exercise their


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In case of adhoc facility in Non-Fund based limit, it shall be

ensured that aggregate outstanding of Non-Fund based facilities

is brought within the regular sanctioned limit within 90 days.

4. Documentation In case of Over limit, Occasional Cheque Purchase & Withdrawal

against Uncleared Instruments / Cheques, documentation may not

be done. However, requisite documentation shall be done in case of

adhoc facilities.

5. Maximum

Permitted

Frequency

The adhoc facilities can be considered maximum 3 times a year in

a borrowal account and Over Limit facility can be considered

maximum 6 times in a year in a borrowal account. However, total

duration of adhoc allowed and Over Limit allowed put together

shall not exceed a period of more than 180 days in a year in a

borrowal account.

However, any deviation to above mentioned maximum permitted

frequency and duration shall be considered by HLCC-

ED/CAC/MCB within their respective Delegated Powers.

6. Restrictions Adhoc/Over Limit shall not be allowed in respect of Clean Overdraft /

Clean Demand Loan (except clean overdrafts to commission agents,

clean overdraft sanctioned as working capital limit or under any other

specific scheme approved by higher authority).

7. Additional

Interest rate &

Process fees

Additional interest of 1% shall be charged on adhoc limit granted

(except export accounts)

150% of normal charges on the amount of Adhoc / Over Limit are

to be charged on pro-rata basis for the period for which the Adhoc

Sanction/Over limit has been permitted to the borrowers other

than exporters.

In case of Adhoc facilities / Over Limit to exporters, normal

process fee on the amount of Adhoc / Over Limit is to be

charged on pro-rata basis.

8. Reporting The Branch Incumbent shall report the adhoc / Over Limit to

Regional Offices through control returns viz. STM-41 A.

The reporting system in vogue through STM-41A, 41B, 41C must

be followed.

9. Security Adequate prime security with stipulated margins must be available to

cover the adhoc facility/Over Limit i.e., over - accommodation as

above shall be allowed against available DP in Cash Credit account

or by way of purchase of cheque / discounting of bills arising out of

genuine business transactions.

10 Other

Conditions

Adhoc / Over limit shall be allowed within the delegated

power to the extent of percentages in respect of total Fund-

based working capital limits and Non- Fund-based limit

separately within the aggregate ceiling limits.

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As far as possible, unit must be visited before allowing the adhoc

facility but in any case, the last unit visit should not be more than

2 months old.

11 Review/

Renewal

/enhancement

and conversion

of adhoc limits

into regular

limits

Where requirements are more than 10% of the existing limit in

case of BM sanction, 20% in case of sanction by RLCC-

RH(AGM/DGM), 25% in case of RLCC-RH(GM)or the period for

which the adhoc is required is more than 90 days at a stretch,

sanction of additional limits or resetting of limits, within the

Delegated powers of the sanctioning authority, may be

considered under regular limit. However, the same shall be

permitted only after proper assessment of limit, justifying reasons

and amount of sanction.

In case of sanction of adhoc limits by Branch Incumbents/

RLCC-RH, the next higher authority is empowered to review

/renew/ enhance adhoc limits and permit conversion of adhoc

limits into regular limits.

12 Deviation

Authority for

eligibility criteria

RLCC-RH can permit deviation in eligibility criteria in cases

sanctioned by Branch Incumbents and RLCC-RH.

HLCC-ED, CAC and MCB can consider deviation in eligibility criteria

within their respective Delegated Powers.

9.3. ADHOC LIMITS TO EXPORTERS

At times, exporters require adhoc limits to take care of large export orders, which were not

foreseen earlier by them. Branches should respond to such situations promptly and allow

adhoc limit to exporters to the extent of maximum 20% of Fund based / Non-fund based

limit subject to maximum amount of adhoc permitted within his Delegated powers.

Under Gold Card scheme for exporters, a need based adhoc limit upto 20% of the

in-principle limits can be extended to meet urgent credit needs on selective occasions.

Apart from this, branches should adopt a flexible approach in respect of exporters who, for

genuine reasons, are unable to bring in corresponding additional contribution in respect of

higher credit limits sought for specific orders. In such cases reduction in margin upto 10%

may be allowed by the sanctioning authority for execution of specific orders to the exporters

with good track record and whose past payments are not held up or overdue.

No additional interest is to be charged in respect of adhoc limits granted by way of pre-shipment / post-shipment export credit.

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CHAPTER – 10

DELEGATED POWERS FOR CONCESSIONS IN RATE OF INTEREST

The following authorities have been delegated the powers for allowing concession in Rate

of Interest.

The Delegated Powers to allow concession in Rate of Interest in respect of cases

sanctioned under the Delegated Powers of Branch Incumbent / RLCC-RH / HLCC-ED/

CAC (other than advances against Deposits /Schematic lending) are as follows:

SN Competent Authority Maximum Concession in Rate of Interest that can be

permitted(other than advances against Deposits

/Schematic Lending)

1 CAC Concession not exceeding 4% less than applicable rate

subject to minimum of Base Rate.

In CDR / Restructured cases ROI lower than Base Rate may

be allowed as per approved package.

2 HLCC-ED Concession not exceeding 3% less than applicable rate


In CDR / Restructured cases ROI lower than Base Rate may

be allowed as per approved package.

3 RLCC-RH RLCC-RH (AGM/DGM/GM) shall have the Delegated Powers

for allowing concession in respect of the following:

For Micro & Small Enterprises having Internal Credit

Risk Rating of OBC 1, 2 and 3, concession not

exceeding 0.50% less than the applicable Rate of Interest


For Medium Enterprises (covered under Priority

Sector) having Internal Credit Risk Rating of OBC 1, 2

and 3, concession not exceeding 0.25% less than the

applicable Rate of Interest subject to minimum of Base

Rate.

RLCC-RH(GM) can allow concession in Rate of Interest not

exceeding 1% less than the applicable Rate of Interest subject

to minimum of Base Rate in case of all borrowers except Micro

& Small Enterprises and Medium Enterprises (covered under

Priority sector) subject to conditions mentioned at Point No.

10.2.

The competent authority for allowing any relaxation in the Rate of Interest in any specific

account beyond the above norms shall be Management Committee of the Board.

For Retail /Specific schemes approved by Head Office, the Delegated powers for permitting

concession in Rate of Interest shall be as per the scheme.

10.1. DELEGATED POWERS FOR ALLOWING CONCESSION IN RATE OF INTEREST

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Wherever specific deviation is not mentioned in the schemes, the above concessions of

Delegated Powers may be utilized by the respective authority.

10.2. DELEGATED POWERS FOR PERMITTING CONCESSION IN RATE OF INTEREST

IN CASE OF ACCOUNTS HAVING INTERNAL CREDIT RISK RATING OBC 7 &

BELOW

The Delegated Powers for permitting concession in Rate of Interest in case of accounts having

Internal Credit Risk rating OBC 7 & below are as follows:

Concession in Rate of Interest in case of accounts having Internal Credit Risk Rating OBC

7 and below (i.e. OBC 7, 8, 9 & 10) shall not be considered by RLCC-RH (GM).

Concession in Rate of Interest in case of accounts having Internal Credit Risk Rating OBC

7 and below (i.e. OBC 7, 8, 9 & 10) shall be considered selectively by the competent

authorities at the Head Office within their Delegated Powers.


IN ACCOUNTS SANCTIONED UNDER THE DELEGATED POWERS OF MCB

The Delegated Powers for permitting concession in Rate of Interest in accounts sanctioned

under the Delegated Powers of MCB are as follows:

SN Competent Authority to

allow concession

Concession in ROI

1 CAC Not exceeding 1% less than the sanctioned rate subject

to minimum of Base Rate.

2 MCB More than 1% subjected to a minimum of Base Rate. In

CDR / Restructured cases ROI lower than Base Rate

may be allowed as per approved package.

10.4. REVISION IN DELEGATED POWERS FOR PERMITTING CONCESSION IN RATE OF

INTEREST ON FITL/WCTL IN RESTRUCTURED CASES

As per RBI Master Circular on Interest Rate on Advances dated 01.07.2014, Rate of

Interest below Base Rate may be permitted only in case of FITL/WCTL.

For restructured accounts falling under the powers of RLCC-RH, FITL/WCTL below Base

Rate may be approved by HLCC-ED.

For cases falling under the powers of HLCC-ED/CAC/MCB, the respective sanctioning

authority may approve FITL/WCTL below Base Rate as follows:

SN Authority which has Sanctioned FITL/WCTL

Competent Authority for allowing Concession in Rate of Interest on

FITL/WCTL

1 RLCC-RH HLCC-ED

2 HLCC-ED HLCC-ED

3 CAC / MCB CAC / MCB

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Concession in the rate of interest may be required to be allowed in certain sick viable units

under approved rehabilitation packages in fulfillment of terms of such packages provided

such package has been drawn up on the basis of RBI parameters or BIFR order or under

CDR mechanism or RBI guidelines on Base Rate. However, the possibility of

recompensating such sacrifices by the borrower once the unit turns around may be

explored in deserving cases.

The Delegated authorities for permitting concession in Rate of Interest on Rupee

Loans/Advances against Bank’s Own Deposit are as under:

Delegated Authority

Advances against Bank’s own deposit standing in the name of

SELF THIRD PARTY

Branch Incumbent

Nil Nil

RLCC-RH Upto 0.50% less than the normal

applicable rate (Deposit rate + 1.50%

at present)

Nil

HLCC-ED Upto 1.00% less than the normal

applicable rate (Deposit Rate + 1.50%

at present)

Upto 1.00% less than applicable

rate subject to minimum of Base

rate.

CAC At par with deposit rate Upto Base Rate or at par with

Deposit rate whichever is higher.

The concession in rate of interest on advances against Bank’s own deposit may be permitted

in exceptional circumstances for valuable clients recording the complete particulars of the

value of the account and how it would compensate the Bank for lower rate of interest.

10.5. CONCESSION IN THE RATE OF INTEREST IN CASE OF SICK VIABLE UNITS


ON RUPEE LOAN/ADVANCES AGAINST TERM DEPOSIT

(DOMESTIC/NRE/FCNR)

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CHAPTER – 11

DELEGATED POWERS FOR OTHER CONCESSIONS

The Delegated powers for waiver / relaxation of process fee/upfront fee/commitment

charges/ inspection charges/commission etc relating to loans and advances shall be as

under:

Up-front fee, Process fee, Lead bank Charges, Commitment* Charges for sanction of credit

facility.

Commission, other service charges on Bank Guarantee / Letter of Credit issued

Service charges on foreign exchange transactions.

Commission / Service charges for collection / purchase of cheques / drafts / bills.

Inspection Charges

11.2. DELEGATED POWERS OF FUNCTIONARIES AT HEAD OFFICE TO ALLOW

CONCESSION IN SERVICE CHARGES

The Delegated Powers of functionaries at Head Office to allow concession in Service Charges

are as under:

S.N. For cases of Loans and Advances falling under the Delegated Powers of

Functionary

Authorized to allow relaxation

Maximum extent of relaxation / waiver of the service charges

1. MCB

MCB 100%

CAC 50%

2. CAC CAC 100%

3. HLCC - ED HLCC - ED 100%

4. RLCC – RH (GM) HLCC - ED 100%

5. RLCC – RH (DGM / AGM) HLCC - ED 100%

6. Branch Incumbent

HLCC - ED 100%

* However, no refund of commitment charges already levied is to be permitted.

11.1. DETAILS OF SERVICE CHARGES WHEREIN CONCESSION CAN BE PERMITTED

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11.3. DELEGATED POWERS OF FUNCTIONARIES AT REGIONAL OFFICE TO ALLOW

CONCESSION IN SERVICE CHARGES

The Delegated Powers of functionaries at Regional Office to allow concession in Service

Charges are as under:

SN DELEGATED AUTHORITY DELEGATED POWERS

1. RLCC-RH (AGM/DGM/GM) The Delegated Powers for relaxation/waiver in service

charges applicable to Micro & Small Enterprises and

Medium Enterprises (covered under Priority sector) are

as follows:

Maximum extent of relaxation / waiver of 25% of

the service charge on the applicable Rate can be

permitted.

For Commission on Bank Guarantee / Letter of

Credit, relaxation / waiver of 0.25% on the

applicable Rate can be permitted.

2. RLCC-RH(GM) For all other borrowers not covered under Point No.1

above:

Maximum extent of relaxation / waiver of 25% of

the service charge on the applicable rate can be

permitted.

For Commission on Bank Guarantee / Letter of

Credit, relaxation / waiver of 0.25% on the

applicable Rate can be permitted.

However, RLCC-RH (AGM/DGM) shall have no

Delegated Powers for relaxation/waiver in service

charges for all other borrowers not covered under

Point No. 1 above.

The Delegated Powers of the Field Functionaries for allowing concession in Service Charges

in case of schematic lending shall be as per the scheme.

Branches should not extend concessions to clients in anticipation of sanction, as the

RLCC-RH has not been delegated with authority to post facto sanction the concessions.

Extending concession to any client without sanction/in anticipation of sanction/ under

lapsed sanction/beyond the maximum ceiling stipulated in the sanction/beyond the

concession permitted in the sanction will be considered as slippage of income.

The concession should be allowed selectively after examining the merits and carrying out

the Cost – Benefit Analysis of each case and not in a routine manner. The concession

allowed shall be reviewed at regular intervals on the merits of each case.

The concession should be permitted where the business value of the account is high and

/ or there is ancillary / fresh business accruing to the Bank. The conduct of the

constituent’s account must be satisfactory in all respects.

11.4. GENERAL GUIDELINES FOR PERMITTING CONCESSIONS

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The Regional Office shall record a note giving the reasons for allowing the concession

and the permission granted must be conveyed in writing to the branch.

A quantitative assessment of the benefit of deposit support for the past one-year period

should be made. Notional value of deposit should be calculated as given below:

For average current account

balance

9.00% (One year Fixed Deposit Rate)

(May change from time to time.)

For average Savings Bank balance 5.00% (Differential cost) (9.00% – 4.00% =5.00%)

For average Term Deposits 0.25%

In accounts where a long-standing relationship has been established, the benefit of

deposit support for the past six months may be made.

100% of notional value assessed above be fixed as the maximum ceiling per annum for

any concession and 100% of notional value be converted into nominal terms for

assessment of concessions.

The average balance in Current account/Savings Bank account should be calculated on

the basis of weekly balances and it should not be based on monthly/quarterly balances.

The data / information about average balances should be accurate and should be

supported by a system generated resume / statement of accounts in respect of TBA

branches and a certified resume / statement in respect of other branches.

All out-of-pocket expenses actually incurred should invariably be recovered.

Normally the sanctions should be valid for one year period. However, in case of clients

having past dealings with the branch for less than a year or for new prospective clients,

the validity period of the sanction should not be more than 3 months. In such cases, the

sanction should be reviewed by the appropriate Competent Authority to sanction

concessions in the light of past dealings and renewal should be done accordingly.

Branches should submit the proposal for seeking concession in Service Charges in

duplicate as per format to the Competent Authority. The Competent Authority shall

retransmit the duplicate along with the sanction details. The office note-cum-sanction

letter shall be preserved by the branch for verification by inspecting officials.

In case concessions are sanctioned by the RLCC-RH / Head Office on the basis of

assured business, the branches should ensure that the stipulated business is generated

from the client. The Regional Heads should call for the details of additional business

garnered by the branches in all such cases.

If the concessions are to be extended at multiple locations, the parent branch shall

allocate and monitor branch wise sub-limits of sanction and shall ensure that the total

concession extended at all branches is within the overall limit stipulated.

Concessions sanctioned to the clients are worked out on the basis of their average

demand deposits with the Bank. Branches should review the average demand deposits

of the beneficiary clients every quarter. In case the demand deposits of these clients fall

below the level mentioned in the proposal/sanction, the concerned branches should either

11.5. MONITORING

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ensure inflow of the required demand deposits from the client or else should seek fresh

modification in the sanction order from the Competent Authority / Regional Office.

The cost benefit analysis shall invariably be done separately for each case and shall form

part of sanction.

Details of sanctions accorded by the RLCC-RH should be recorded properly in the

register maintained for the purpose.

Branches should maintain a separate register to record the details of concessions

proposed and allowed to the customers by the Regional Office / Head Office.

Any relaxation/waiver allowed will be reported on monthly basis to the next higher

authority incorporating the following:

a) Name of the party

b) Date and Authority of sanction of Limits

c) Nature of Limits sanctioned

d) Nature of Service Charges and normal rates applicable thereof.

e) Extent of Concessions allowed

f) Sanctioning Authority for concession

In case a term loan is prepaid by the borrower for shifting to other Bank/FI, onetime pre-

payment charges of 1% of the total outstanding balance shall be levied.

For waiver of prepayment penalty in cases falling under Branch/RLCC-RH powers, the

approval shall be obtained from HLCC-ED at Head Office. In cases falling under Head

Office powers, respective sanctioning authority shall be delegated the powers for waiver

of prepayment penalty.

However, in case of accounts falling under the sanctioning powers of the MCB, the

request of the waiver for pre-payment penalty for pre-closure of term loan may be

permitted by CAC and shall be put up before MCB for information on quarterly basis.

All assets (stocks / fixed assets) in the name of borrower / guarantor charged to the Bank

as security for advances are to be comprehensively insured against the risk of theft /

burglary, fire & Strikes, Riots, Malicious Damages (SRMD), with an insurance company

with Bank Clause, at the borrower's expense, unless insurance is specifically waived by

the competent authority as under:

Particulars Competent Authority to waive Insurance

Proposal falling in the powers of Branch/

RLCC-RH RLCC-RH

Proposals falling in the powers of

a) MCB*

b) CAC

c) HLCC-ED

a) CAC

b) CAC

c) HLCC-ED

*Such cases shall be reported to MCB/CAC for reporting as per the system in vogue.

11.6. REPORTING SYSTEM

11.7. PREPAYMENT PENALTY IN CASE OF TERM LOANS / DEMAND LOANS

11.8. WAIVER OF INSURANCE

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The functionaries, while permitting waiver of insurance with justifiable reasons, shall see to it

that burglary insurance is not waived unless otherwise justified.

RLCC-RH can refund excess Interest /Commission /Discount /Penal Interest charged due

to “mistake” irrespective of the sanctioning authority as per the sanctioned Terms &

Conditions.

In case, the refund does not pertain to current Financial Year, RLCC-RH shall submit the

details of refund to HLCC-ED through respective vertical Head at Head Office.

Refund of interest charged/service charges recovered for reasons other than mentioned

above, shall be permitted by respective authorities as per their Delegated Powers for

allowing Concession in Rate of Interest/Service Charges.

Branch Incumbents shall have no powers for refund of interest charged/service charges

recovered.

Some of the customers, on whose behalf the Bank has to issue guarantees for large

amounts and/or for long periods, request for recovery of commission on annual basis as

against the stipulated policy for recovery of commission for the entire tenure of the bank

guarantee + the claim period if any. This is because the amount of the guarantee

commission for the entire period works out to a large sum. In order to cater to such cases,

the RH shall be the competent authority in cases falling under Branch/RO Powers/HO

powers to permit recovery of commission on an annual basis subject to compliance of the

following conditions:

a) The recovery of bank guarantee commission on annual basis shall be permitted in

exceptional cases only where the guarantee amounts are large and/or where the

guarantee period is long. The same should not be permitted as a matter of routine.

b) The Regional Head shall satisfy himself that the borrower shall be paying, on regular

basis, the guarantee commission every year without default.

c) The branch must have a proper mechanism to track such cases and ensure recovery of

the guarantee commission every year at the beginning of the financial year itself in the

month of April every year.

Request for recovery of Guarantee commission on less than annual basis shall be

considered not below the level of HLCC-ED in Branch / RO cases. HLCC-ED, CAC and

MCB may permit the same in respect of the cases falling under their delegated powers.

11.9. REFUND (IN PART/FULL) OF EXCESS INTEREST/COMMISSION/PENAL

INTEREST

11.10. DELEGATED POWERS FOR PERMITTING RECOVERY OF COMMISSION ON

GUARANTEES ON ANNUAL BASIS

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The Delegated Powers to permit Relaxation / waiver of ECGC premium to be borne by the

borrower for the Whole Turnover Packing Credit Guarantee (WTPCG) are as under:

FUNCTIONARY DELEGATED POWERS

Branch Manager of Authorized Branches only Nil

RLCC-RH-AGM Relaxation up 25% for cases within Branch

and Regional Office powers. RLCC-RH-DGM

RLCC-RH-GM 1. Relaxation up 75% for all cases under RO/ Branch powers

2. Relaxation up 50% in HO cases

HLCC-ED Relaxation up 75% for all cases under Head

Office/ Regional Office/ Branch Powers

CAC Relaxation up 100% for all cases under Head

Office/ Regional Office/ Branch Powers

RLCC-RH may consider waiver of Registration clause after satisfying himself the reasons

for the same.

11.11. DELEGATED POWERS FOR RELAXATION / WAIVER OF ECGC PREMIUM TO

BE BORNE BY THE BORROWER FOR THE WHOLE TURNOVER PACKING

CREDIT GUARANTEE (WTPCG)

11.12. WAIVER OF REGISTRATION CLAUSE IN CASE OF ADVANCE AGAINST

SUPPLY BILLS

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CHAPTER-12

DELEGATED POWERS FOR SHORT/LIMITED REVIEW

The exercise of the regular renewal/full-fledged review should normally start two months

prior to the expiry of the regular sanction. However, in case of exigencies such as non-

availability of Financial Statements of the borrower or any other tangible reason, validity

extension was being undertaken by the field functionaries. However, henceforth a

limited/short review shall be undertaken and approved by the respective sanctioning

authority instead of extension of validity period of the original sanction.

The limited/short review of the borrowal accounts shall be undertaken by the respective

sanctioning authority which has sanctioned the regular limit (Branch Incumbents, RLCC-

RH, HLCC-ED, CAC, MCB) prior to the expiry of the regular sanction. The limited/short

review of such accounts shall be approved by the respective sanctioning authority subject

to the following conditions:

There shall be no change in the terms and conditions of the sanction as was originally

stipulated in the regular sanction.

There shall be no security dilution.

There shall be no enhancement in the level of credit facilities that were approved under

the regular sanction.

The limited/short review shall cover all the important parameters such as:

Significant developments that have taken place in the last twelve months impacting the

borrowal account

Sales/Purchase figures

Position of the capital and unsecured loans

Conduct of the account

Unit visit (not older than two months prior to the review)

Status of the unrectified inspection/audit irregularities and action taken

thereon/proposed to be taken for the rectification of the inspection/audit irregularities

The validity of the limited/short review shall be a maximum period of six months from the

date of the regular sanction.

The process fee for the extended period shall be recovered on pro rata basis at the

prescribed rates w.e.f the date of expiry of the regular sanction.

The reporting of the limited/short review shall be done by the sanctioning authority as per

the reporting system similar to the regular sanction.

The regular/full-fledged review/renewal should be done prior to the expiry of the

limited/short review.

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CHAPTER-13

DELEGATED POWERS IN CASE OF MULTIPLE / CONSORTIUM ARRANGEMENT

RLCC-RH shall have authority to approve amendments in borrowal accounts sanctioned by

MCB and other delegates at Head Office placed on Consortium basis as per decision of the

Lead Bank as detailed as detailed in para 13.3 below.

However where OBC is the Lead Bank prior permission from the respective sanctioning

authority is to be obtained for such amendments where our Bank is the lead bank in the

consortium, assessment of credit needs as well as on other related matters / service

charges / inspection charges etc; decisions will be taken on the basis of consensus in the

meetings. However, approval for acting as lead bank shall be permitted by the competent

authority at Head Office i.e. MCB/CAC/HLCC-ED before placing the same in the

Consortium Meeting. Detailed appraisal note with assessment of MBPF shall be sent by

Regional Office/ while seeking approval for acting as lead bank.

13.1.1 Where Our Bank Is A Lead Bank

i. Approval for acting as Lead Bank

The approval for acting as Lead Bank shall be permitted by HLCC-ED for the cases

falling under the Delegated Powers of Branch and RLCC-RH before placing the same

in the Consortium Meeting. Detailed appraisal note with assessment of MBPF shall be

sent by Regional Office while seeking approval for acting as lead bank.

Further, HLCC-ED/CAC/MCB shall approve taking up the role of Lead Bank of the

Consortium in respect of cases falling under their respective Delegated Powers.

The respective department will propose in the appraisal note for accepting the role of

Lead Bank in the consortium.

ii. Approval of MPBF where Our Bank is the Lead Bank

Wherever our Bank is Lead Bank in any consortium, MPBF in the borrowal account

shall be approved by respective sanctioning authority before placing the same in the

consortium meeting for its sharing to all other member banks.

iii. Convening of Consortium Meeting as Lead Bank

Generally, meeting should be called on quarterly basis or more frequently if needed.

The Branch Incumbent, in consultation with Regional Office/Head Office and

participating member banks of the consortium, shall convey the date, time and venue

along with agenda of meeting through fax/telephone so as to make it convenient for all

member banks to attend the consortium meeting.

iv. Authority for attending the Consortium Meeting

Depending on the Bank’s exposure under the consortium and internal credit risk rating

of the borrower, the designated authorities to attend the consortium meeting are as

given in the table below:

13.1. CONSORTIUM FINANCING / SYNDICATION

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Exposure of the

Bank

Internal Credit risk

rating of borrower

Respective Authority to attend the Consortium

meeting

Upto

`50 Crore

OBC1 to OBC 3

2nd Man at Regional Office

Credit In-charge at R.O.

Branch Incumbent.

OBC 4 to OBC 10

Regional Head


Branch Incumbent.

Above

`50 Crore

to

`200 Crore

OBC 1 to OBC 3

Regional Head


Branch Incumbent

OBC 4 to OBC 10

AGM (Credit)/Chief Manager (Credit) from H.O.

Regional Head

Branch Incumbent

Above

`200 Crore

OBC 1 to OBC 5


Regional Head

Branch Incumbent

OBC 6 to OBC 10

DGM (Credit) from H.O.

Regional Head

Branch Incumbent

Above

`500 Crore

OBC 1 to OBC 5

DGM (Credit) from H.O.

Regional Head

Branch Incumbent

OBC 6 to OBC 10

GM (Credit) from H.O.

Regional Head

Branch Incumbent

It shall be, however, ensured that no firm commitment shall be conveyed to the

consortium without prior approval from the competent authority.

In case of Head Office sanctions, the Branch/RO should obtain mandate from Head

Office before making financial commitments in the consortium meeting on behalf of

the Bank. The mandate required should be sent to Head Office by FAX / MAIL

sufficiently in advance.

13.1.2 Where Our Bank Is Not A Lead Bank

I. Information of Meeting

In case our bank is participating member bank, the Branch Incumbent shall convey the

date, time, and venue along with the items of agenda / purpose of the meeting to the

respective Regional Office and the Head Office.

II. Authority for attending the consortium meeting

Depending on the Bank’s exposure under the consortium and internal credit risk rating

of the borrower, the designated authorities to attend the consortium meeting are as

given in the table below.

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III. Other Guidelines

Where our Bank is a participating member in the consortium, the joint decisions taken

by the consortium with regard to various aspects including calculation of drawing power

/ levying of service charges / other charges shall be followed. However, if no decision is

taken in the consortium with regard to service charges / other charges they shall be

charged as per the Bank’s guidelines.

In cases where DP has been advised by the Lead Bank the stock statement in the

performa of the Lead Bank may be accepted without insisting on the performa of our

Bank.

In case of consortium having joint documentation, we may not insist for the obtention of

separate documents / undertaking/ affidavit for legal heirs in case of personal

guarantee.

As a matter of policy, the Bank shall not encourage disbanding of an account under an

existing consortium arrangement and switching over to multiple banking arrangements.

However, where there are convincing reasons and business is considered remunerative

by the bank, then the bank may entertain such a request for switch over to multiple

Exposure of

the Bank

Internal Credit risk

rating of borrower

Respective Authority to attend the Consortium

meeting

Upto

`50 Crore

OBC1 to OBC 3

2nd Man at Regional Office


Branch Incumbent.

OBC 4 to OBC 10

Regional Head


Branch Incumbent.

Above

`50 Crore

to

`200 Crore

OBC 1 to OBC 3

Regional Head


Branch Incumbent.

OBC 4 to OBC 10


Regional Head

Branch Incumbent

Above

`200 Crore to

`500 Crore

OBC 1 to OBC 5

AGM(Credit)/Chief Manager(Credit) from H.O.

Regional Head

Branch Incumbent

OBC 6 to OBC 10

DGM(Credit) from H.O.,

Regional Head

Branch Incumbent

Above

`500 Crore

OBC 1 to OBC 5

DGM(Credit) from H.O.,

Regional Head

Branch Incumbent

OBC 6 to OBC 10

GM(Credit) from H.O.,

Regional Head

Branch Incumbent

13.2. MULTIPLE BANKING ARRANGEMENT

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banking arrangements from existing consortium arrangement provided other consortium

members similarly agree to the same. However, in such cases approval in principle shall

be obtained from RLCC-RH and HLCC-ED where cases have been sanctioned by H.O.

subject to JLA guidelines.

In case of Credit Proposals sanctioned by Head Office under Multiple Banking

Arrangement, HLCC-ED/CAC/MCB are the competent authority to amend in sanction

terms and conditions within their vested Delegated Powers.

13.3. DELEGATED POWERS TO ALLOW AMENDMENT IN HEAD OFFICE

SANCTIONS FOR LIMITS UNDER CONSORTIUM/MULTIPLE BANKING

ARRANGEMENT

Delegated Powers to allow amendment in Head Office sanctions for limits under

Consortium Banking Arrangement where our Bank is not Lead Bank

RLCC-RH has powers to allow following amendments in accounts under Consortium

BankingArrangement sanctioned by Head Office.

a) To cede 2nd pari-passu charge on current assets to term lenders against taking 2nd

charge on fixed asset.

b) To cede 2nd pari-passu charge on fixed assets to working capital lenders against taking

2nd charge on current assets.

c) Ceding of charge on current assets (where our bank has granted working capital

facilities against first charge on current assets) and/or fixed assets (where our bank has

granted term loan against first charge on fixed assets) to financial institutions/banks on

reciprocal basis subject to the condition that our bank’s security cover is not diluted.

d) Ceding of charge on current assets to new entrants into the consortium /Multiple

Banking/ Joint Lending arrangement & to cover the increase in existing limits by other

banks subject to all other members agreeing to the same.

e) To issue letters ceding charges on assets already agreed to by the bank under CDR

System.

f) To cede exclusive charge on specific assets financed by other banks.

g) To cede paripassu charge to new bank to secure the loan taken over from an existing

bank without any overall increase in the liability secured by the charge.

h) To allow substitution of machinery / equipment after satisfying on the reasons for the

change, no adverse impact on the project implementation, its revenue generation

stream, no change in repayment terms, margin, reduction in term loan component etc.

i) All such amendments to be reported to the respective sanctioning authority

immediately.

In case of Credit Proposals sanctioned by Head Office under Consortium Banking

Arrangement where our Bank is Lead Bank, HLCC-ED/CAC/MCB are the competent

authority to amend sanction terms and conditions within their vested Delegated

Powers.

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Further, In case of Credit Proposals sanctioned by Head Office under Multiple Banking

Arrangement, HLCC-ED/CAC/MCB are the competent authority to amend in sanction

terms and conditions within their vested Delegated Powers.

All other amendments shall be permitted by the respective sanctioning authority.

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CHAPTER-14

DELEGATED POWERS FOR ISSUANCE OF NO OBJECTION CERTIFICATES

RLCC-RH are authorized to permit the issuance of No Objection Certificate provided there is

no dilution in security and/or asset coverage and earning capacity in the following cases/

purposes even in cases sanctioned by HLCC-ED/CMD/CAC/MCB:

a) To raise short term/long term loan from various financial Institutions/Insurance companies/

Banks for working capital as well as for acquiring fixed assets.

b) To induct any bank under consortium and ceding pari-passu charge in favour of member

banks who are participating in the finance subject to they also agreeing to issue reciprocal

NOCs / ceding pari-passu, while issuing such NOCs, it is to be ensured that there is no

dilution of securities and / or asset coverage as stipulated in the sanction)

c) Merger/ amalgamation/ spin off/Hive off of Companies subject to no dilution of security,

earning capacity and /or change in terms of sanction covenants.

d) Additional requirement of credit facilities of the company/firm considered by other banks.

However, while issuing such NOCs Regional Head shall examine whether existing MPBF is

fully tied up and additional requirements have been approved by all the member banks.

e) To raise foreign currency loan for working capital purposes subject to observance of

guidelines on hedging Foreign Currency risks.

f) To issue Commercial Paper.

g) To open LC and execute Bank guarantee by other Bank/s by earmarking the unutilized limit

allocated to other Bank/s on risk and remuneration sharing basis

h) To open current account/s with other bank/s in case our bank is not having any branch in

that area/business center.

i) To open LC from other banks for capital project purpose provided bills are retired through

term loans/ internal accruals/ cash flows without diversifying working capital funds.

j) To issue Debentures (PCD/FCD/NCD).

(Exception: In all other cases not covered above, the sanctioning authority will take a view on

it. However, in case of MCB sanctions, the NOC will be permitted by CAC).

However, copies of NOC issued shall be reported to the sanctioning authority for information

as per system in vogue.

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CHAPTER – 15

DELEGATED POWERS IN CASE OF TAKEOVER OF ACCOUNTS

The Bank’s policy guidelines for transfer of borrowal accounts from one bank to another bank

was reviewed vide agenda item no. A-3 by the Board of Directors in its meeting held on

24.08.2012.

The revised guidelines in this regard have been circulated to field functionaries vide Circular

No. HO/RMD/41/2012-13/399 dated 08.09.2012.

15.1. NATURE OF BORROWAL ACCOUNT TO BE TRANSFERRED FROM OTHER BANK

TO OUR BANK

All types of borrowal accounts including Retail accounts can be considered for transfer from

other banks to our Bank.

15.2. GENERAL GUIDELINES

Proper processing of the loan proposal be done and all relevant facts shall be looked into

while taking decision by the sanctioning authority.

The specific reasons for shifting the account from financial institution or other bank to our

Bank should be ascertained and recorded in the process-note.

Accounts of the associate concerns of the proposed borrower should not have any overdue

with financial institutions or other banks/ our Bank.

Audited balance sheet of the borrowal account be taken over should be as of a latest date

(For a unit whose books close on 31st March; audited balance sheet is filed with Income tax

authorities latest by 30th September, i.e. within six months of closure of books). In addition,

provisional balance sheet of a later date should also be obtained in such cases. Audited

balance sheet of the last financial year at the time of take over should not carry any cash /

non-cash accumulated losses unless otherwise justified with valid reasons.

Borrower is not incurring losses (operating loss or cash loss) for the past two years.

There should not have been any re-schedulement / restructuring in the account in the last 3

years.

The names of the Borrower/directors/guarantors should not be appearing in the caution

list/defaulter’s list of Reserve Bank of India/ECGC/IBA/CIBIL etc.

Prior to release of advance / takeover of the account, it shall be ensured that account to be

taken over should have been running regular without any default during the year immediately

preceding the take-over and a certificate should be obtained by the Branch from the existing

Banks/FIs to the effect that the account is standard regular

All the formalities such as fresh documentation, charging / transfer of securities, compliance

of terms & conditions of sanction should be duly completed before the release of the

facilities. Since at the time of take-over of the account, the securities are with the existing

bankers who will not part with them till they receive the payments in full, alternate securities

for the intermediate period shall be taken from the borrower. However, where the borrower is

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unable to offer any alternate property, the procedure as already in vogue shall be strictly

followed.

15.3. CREDIT REPORT OF BORROWAL ACCOUNTS TO BE TRANSFERRED FROM

OTHER BANKS TO OUR BANK

The account to be taken over should be classified as Standard Regular by the previous bank

/ financial institution and a certificate to this effect should be taken from the existing Bank that

the account is standard regular.

In case of all takeover of borrowal accounts from other banks, statement of the borrower

account for the last six months should be scrutinized as a part of the credit proposal and

comments on the same should be suitably incorporated in the process note separately.

The branch shall obtain the credit information report from existing Banks/FIs as per the

format prescribed by RBI before taking over an account and the same shall be obtained

along with loan application form.

15.4. MINIMUM ENTRY LEVEL INTERNAL CREDIT RATING OF THE BORROWAL

ACCOUNTS TO BE TRANSFERRED FROM OTHER BANKS TO OUR BANK

The minimum entry level internal credit rating of the borrowal accounts to be taken over from

other Banks is as under:

Particular Minimum Entry Level Internal Credit Rating

of the borrowal account

Thrust & General Area of Lending OBC 1 to OBC 5

Restricted Area of Lending OBC 1 to OBC 3

Note: No relaxation is permitted in entry level rating for takeover of borrowal accounts

15.5. DELEGATED AUTHORITY FOR TAKEOVER OF BORROWAL ACCOUNTS

In case of takeover of borrowal accounts including Retail accounts, the Branch Incumbent

will have no powers.

The RLCC-RH/ HLCC-ED/ CAC/ MCB can sanction takeover of credit proposals within their

Delegated Power for Loans and Advances.

Any concessions in rate of interest, processing fee, other service charges etc in the borrowal

accounts to be taken over from other Banks shall be permitted only in extremely deserving

cases at Head Office level by the competent authority as per Board approved Delegated

power guidelines of the Bank and specific reasons for allowing such concessions shall be

recorded in writing in the process note. However, there shall be no powers for allowing

concessions in the borrowal accounts to be taken over from other Banks at RLCC or Branch

level.

However, the transfer of borrowal accounts from other banks to our bank where project is at

implementation stage is permissible at Head Office only.

If the borrowal account to be taken over by the Bank belongs to the banks where any of our

EDs or CMD have worked earlier then such cases, irrespective of amount, shall be

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sanctioned only by the Board of Directors with specific reasons justifying the need for taking

over such accounts.

15.6. AUTHORITY TO PERMIT DEVIATION FOR TAKEOVER OF BORROWAL

ACCOUNTS

In case of takeover of credit proposals where any deviation from the said policy guidelines

is required, prior approval of CAC/MCB shall be obtained by the delegated authority.

15.7. AUTHORITY FOR ENHANCEMENT IN CREDIT LIMITS FOR TAKEOVER OF

BORROWAL ACCOUNTS

The limits of the borrowal account (both Fund Based and Non-Fund Based) should be

taken over as far as possible only at the existing level as enjoyed by the borrower with the

previous Banks/Financial Institution.

However, in case of enhancement in credit limits, upto 25% from the existing level as

enjoyed by the borrower with the previous Banks/ Financial institution, wherever deemed

justified, can be considered by the sanctioning authority at the time of takeover of borrowal

accounts.

After six months from the date of takeover of borrowal accounts, the enhancement in credit

limits, wherever deemed justified, can be considered by the sanctioning authority under

their delegated powers.

However, after initial sanction and disbursement, HLCC-ED is empowered to consider

further enhancement not exceeding 25% of the taken over limits even before completion of

six months. The CAC/MCB can consider enhancement in credit limits upto 50% of the

sanctioned working capital limits within 6 months from the date of sanction of takeover

accounts.

Moreover, the enhancement in credit limits while taking over an account should be based

upon proper independent assessment of the enhanced credit requirements of the borrower

as per norms of the Bank after obtaining all the relevant operative and financial data of the

borrower and due diligence. However, the term loans should always be taken at existing

level (besides fresh term loans for expansion of projects).

15.8. BENCHMARK FINANCIAL RATIO FOR TAKEOVER ACCOUNTS

Relaxation in the benchmark financial ratios shall be permitted on case to case basis at

Head Office only.

For credit proposals falling under the powers of RLCC, the relaxation in benchmark

financial ratios shall be permitted by HLCC – ED.

However, for credit proposals falling under the powers of HLCC-ED/CAC/MCB, the respective

sanctioning authority can consider the relaxation in benchmark financial ratios.

The benchmark financial ratios for takeover accounts are as under:

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Financial Ratios Benchmark for capital intensive industries /SME/Infrastructure

Projects

Benchmark for all others

Current Ratio 1.17( Upto `5 Crore) 1.33( Above `5 Crore)

1.17( Upto `5 Crore) 1.33( Above `5 Crore)

Debt -Equity 3:1 2:1

TOL/TNW 6:1 4:1

Average DSCR 1.2:1

1.3:1 (Annuity /lease rentals assured) 1.5:1

15.9. REPORTING OF TAKEOVER BORROWAL ACCOUNTS

The reporting of take over borrowal accounts shall continue to be through the statement of

sanction of credit proposals approved by Branch Incumbents (STM-41)/RLCC (STRO – 16)

and process note.

The sanctioning authority shall report to next higher authority the status of health of taken

over accounts at half yearly intervals for a period of two years after takeover.

15.10. PERIODIC REVIEW/ MONITORING OF TAKEOVER BORROWAL ACCOUNTS

The status review of takeover accounts shall be done at half yearly interval for one year

after takeover irrespective of internal credit risk rating of the borrower by the respective


The review of borrowal accounts (including take over borrowal accounts) availing aggregate

exposures (FB+NFB) of `5.00 Crore and above with internal credit risk rating of OBC 6 to

OBC 10 shall be undertaken on half yearly basis.

The post sanction monitoring mechanism of credit facilities extended to take over of borrowal

accounts are as follows.

Loan audit of borrowal accounts by Loan Audit Cell at HO & RO,

Branch Certificate of Compliance of Terms & Conditions of sanctions,

Post sanction Unit visit at periodic interval,

Scrutiny of Stock statement submitted by borrower,

Verification of Stocks & Receivables by independent Chartered Accountant,

Monitoring through Quarterly Information System,

Monitoring through Early Alert System and Special Mention Account mechanism.

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15.11. LOAN REVIEW OF TAKEOVER BORROWAL ACCOUNTS UNDER LOAN REVIEW

MECHANISM

Loan review of takeover accounts with exposure more than `5 Crore shall be completed

within three months from the date of release of facility as per the Loan Review Mechanism of

the Bank.

In all existing accounts which have been taken over from other banks having exposure of

`5.00 Cr & above, the Loan Review for such cases shall be conducted every year till the

currency of the loan.

In case of borrowal accounts of `10.00 Crore & above where Internal Credit Risk Rating is

OBC-7 & below, the LRM shall be conducted once in 6 months till the currency of the loan.

In SMA A/Cs of `10.00 Cr & above, the LRM shall be conducted once in 6 months.

15.12. OTHER DUE DILIGENCE TO BE UNDERTAKEN FOR TAKEOVER ACCOUNTS

In accounts where JLA guidelines are applicable and the borrower seeks to have additional

exposure from the bank after taking over the account, the Bank’s guidelines of Joint Lending

Arrangement shall be strictly adhered to.

The due diligence of the borrower shall be undertaken prior to transfer of borrowal accounts

from other banks to our Bank in the prescribed format and the same shall be submitted along

with the process note.

Proper processing of the loan proposal should be done and all relevant facts shall be looked

into while taking decision by the sanctioning authority.

The specific reasons for shifting the account from financial Institution or other Bank to our

Bank should be ascertained and recorded in the process-note.

Any concessions in rate of interest, processing fees, other service charges etc in the

borrowal accounts to be taken over from other banks shall be permitted only in extremely

deserving case at Head Office level by the competent authority as per Board approved

discretionary power guidelines of the Bank and specific reason for allowing such concession

shall be recorded in writing in the process note.

The account to be taken over should be classified as Standard Regular by the previous

banks / FIs and a certificate to this effect should be taken from the existing Bank.

Accounts of the associate concerns of the proposed borrower should not have any overdue

with our Bank or other Banks/FIs for the preceding one year.

In case of takeover of borrowal accounts, latest audited balance sheet of the borrowal

account should be obtained. (For a unit whose books close on 31st March; audited balance

sheet is filled with Income tax authorities latest by 30th November, i.e. within eight months of

closure of books). In addition, Provisional Balance Sheet of a later date should also be

obtained in such cases. Audited Balance Sheet of the last financial year (April to March) at

the time of take over should not carry any cash / non-cash accumulated losses.

The borrower to be taken over should have net profit for last 3 years (if in operation for 3

years).

There should not have been any re-schedulement/restructuring in the account in the last 3

yrs.

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The names of the Borrower/directors/guarantors should not be appearing in the caution

list/defaulters list of Reserve Bank of India/ECGC/IBA/CIBIL etc.

All the formalities such as fresh documentation, charging / transfer of securities, compliance

of terms & conditions of sanction should be duly completed before the release of the

facilities. At the time of take-over of the account, the securities are with the existing bankers

who will not part with them till, they receive the payments in full. In such cases, alternate

securities for the intermediate period be taken from the borrower. However, where the

borrower is unable to offer any alternate property, the procedure as already in vogue be

strictly followed.

The collateral securities charged to the existing bankers should not be diluted. However,

wherever deemed necessary the functionaries at Head Office and Regional Offices may

permit substitution of collateral security in the shape of immovable or movable property

previously charged to other Banks by the borrowers provided the tangible collateral security

(immovable or movable other than agricultural) offered now by the borrower to the Bank is at

least of the same realizable value and free from all sort of encumbrances.

However, in case of direct agriculture advances (area specific agricultural loan schemes)

mortgage of land / property (other than agriculture), including residential / commercial

property equal to the loan amount may be accepted.

Process note should in applicable cases contain a clause that takeover guidelines have been

duly complied with and due diligence shall be exercised for all takeover cases.

The respective delegated authority for takeover of borrowal accounts should take caution on

following points while considering housing loan takeover proposals:

a) Ensure meticulous compliance of existing housing loan policy.

b) While taking over the account the past repayment record be examined to ensure that the

account has been running regular till date of takeover.

c) Legal opinion on creation of valid equitable mortgage be obtained invariably from Bank's

penal advocate.

d) The value of immovable property proposed to be taken over be ascertained from approved

valuer of the bank.

e) The original repayment period shall not be extended.

f) All other terms & conditions of the takeover and home loan policy shall be complied with.

15.13. OTHER OPERATIVE GUIDELINES FOR TAKEOVER OF BORROWAL ACCOUNTS

Legal opinion on the basis of photo copy of the documents relating to securities should be

obtained from the local counsel, which shall also be scrutinized by legal retainer at Regional

Office for his opinion, who shall confirm that securities are free from encumbrances and can

be properly mortgaged.

A letter of confirmation shall be obtained from the existing Bank that they are in possession

of documents relating to securities (details to be furnished) and they shall hand over the

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same along with letter of satisfaction of charge/ no due certificate after receiving the specified

amount outstanding in the account of the party whose account is being taken over.

An undertaking shall also be obtained from the borrower for handing over the securities after

collecting the same from the existing banker.

In case of Pvt. Ltd/Ltd. Company, search report from ROC shall also be obtained to verify

charges on the assets of the Company.

After receiving the relative documents of securities, charge shall be created and got

registered (if required) with the appropriate authorities.

Payment towards adjustment / liquidation of the dues of the existing Financial

Institution/Bank shall be made directly to them.

15.14. TRANSFER OF BORROWAL ACCOUNTS FROM OUR BANK TO OTHER BANK/FIs

Endeavor be made to satisfy customers so that existing accounts of customers are not

taken over by other banks. In case of takeover by other banks, it should be ensured before

release of securities/ issuing letter of discharge of securities/ giving no dues certificate that

full payment has been received. In case of takeover of Bank Guarantee/ LC Limit, a letter

of comfort from other bank shall be taken and same shall also be cleared / vetted by the

legal retainer at RO.

In all cases where letter of comfort is obtained from other banks for takeover of accounts,

permission from RLCC-RH be obtained before release of securities.

In such cases, Bank guarantee commission for outstanding BG liability, if any be fully

recovered upto expiry period of guarantee.

In case any guarantee is outstanding and the account is taken over by some other bank,

the securities shall be released only after obtaining 100% margin or Guarantee of that

bank containing a specific clause that their liability under the said guarantee shall exist till

the original Guarantee Bond is received or a release letter from the beneficiary is received

by OBC.

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CHAPTER-16

REHABILITATION / RESTRUCTURING OF ACCOUNT

16.1. DELEGATED POWERS FOR RESTRUCTURING (AT EXISTING LEVEL OF

SANCTIONED EXPOSURE OR RESTRUCTURING WITH ADDITIONAL EXPOSURE)

OF THE BORROWAL ACCOUNTS

The Delegated Powers for Restructuring (at existing level of sanctioned exposure or

restructuring with additional exposure)are as follows:

SN Sanctioning Authority Delegated Authority for Restructuring

1. Branch Incumbent RLCC-RH irrespective of the Internal

Credit Risk Rating of the borrower.

2. RLCC-RH HLCC-ED

3. HLCC-ED/CAC/ MCB Respective Delegated Authority within


4. Renewal /Review of restructured accounts


within their normal Delegated Powers

irrespective of the restructuring authority.

16.2. MONITORING PERIOD

Monitoring Period shall refer to a period of one year from the commencement of the first

payment of interest or principal, whichever is later, on the credit facility with longest period of

moratorium under the terms of restructuring package.

16.3. DELEGATED POWERS FOR GRANTING OF ENHANCEMENT/ ADDITIONAL

/ADHOC FACILITIES IN RESTRUCTURED ACCOUNTS-WITHIN the ‘MONITORING

PERIOD’

The Delegated Powers for granting of Enhancement/ Additional /Adhoc facilities in

Restructured accounts within one year of restructuring vis-à-vis within the ‘Monitoring

Period ‘are as under:

SN Sanctioning

Authority

Delegated Authority for

Restructuring

Granting of enhancement/ additional

/adhoc facilities in restructured

accounts-within the ‘MONITORING

PERIOD’

1. Branch

Incumbent RLCC-RH

RLCC-RH# irrespective of the Internal

Credit Risk Rating of the borrower.

2. RLCC-RH HLCC-ED HLCC-ED

3.

HLCC-

ED/CAC/

MCB

Respective Delegated

Authority within their

respective Delegated

Powers.

Respective Delegated Authority within their


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#However, the above mentioned Delegated Powers shall be exercised by RLCC-RH subject to

fulfillment of the following conditions:

Restructured account is performing

The restructured terms and conditions have been complied with.

In case the abovementioned conditions are not fulfilled, the proposal for enhancement/

additional /adhoc facilities in restructured accounts-within ‘MONITORING PERIOD’ shall

be considered by HLCC-ED/CAC/MCB within their respective Delegated Powers.

16.4. DELEGATED POWERS FOR GRANTING OF ENHANCEMENT/ ADDITIONAL

/ADHOC FACILITIES IN RESTRUCTURED ACCOUNTS-AFTER the ‘MONITORING

PERIOD’

The Delegated Powers for granting of Enhancement/ Additional /Adhoc facilities in

Restructured accounts after one year restructuring vis-à-vis after the ‘Monitoring Period’

are as under:

SN Sanctioning

Authority

Delegated Authority for

Restructuring

Granting of enhancement/

additional /adhoc facilities in

restructured accounts-AFTER the

‘MONITORING PERIOD’

1. Branch Incumbent RLCC-RH Branch Incumbent*

2. RLCC-RH HLCC-ED RLCC-RH*

3. HLCC-ED/CAC/

MCB

Respective Delegated

Authority within their

respective Delegated

Powers.

Respective Delegated Authority within


*The Branch Incumbent and RLCC-RH shall exercise the abovementioned Delegated

Powers provided the following conditions are fulfilled:

i. The Borrower has fulfilled the restructured terms and conditions during the ‘Monitoring Period’.

ii. The terms and conditions as mentioned below are complied with:

Restructured account is performing

The restructured terms and conditions have been complied with.

Sales are showing satisfactory growth vis-à-vis estimates.

The borrower is making operating profits (The calculation of the operating profit shall be guided by Advances Manual Volume-I)

Financials and Conduct of account are satisfactory.

In case conditions are not fulfilled – next higher authority shall be the competent authority in

respect of proposals falling upto the powers of RLCC-RH. HLCC-ED/ CAC/MCB may consider

within their respective Delegated Powers.

However, a copy of the appraisal note granting the facilities shall be forwarded to

Regional Office/Head Office along with the control returns (STM41/STRO-16) for review.

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16.5. SANCTION OF CREDIT FACILITIES TO THE BORROWERS WHOSE GROUP

ACCOUNTS HAVE BEEN RESTRUCTURED BY OUR BANK

The Delegated Powers for sanction of credit facilities to the Borrower whose Group account is

Restructured with our Bank are as follows:


NEW BORROWERS

1. Fresh Exposure Respective sanctioning authorities within


EXISTING BORROWERS

2. Renewal / Review of limits By the respective sanctioning authorities



adhoc facilities






exposure)



Rating of the borrower


HLCC-ED/CAC/MCB

16.6. DELEGATED POWERS FOR PERMITTING REVISION IN DCCO (NOT AMOUNTING

TO RESTRUCTURING)

As revision in the date of commencement of commercial operations (DCCO) upto two years

and one year from the original DCCO stipulated at the time of financial closure for

infrastructure projects and non-infrastructure projects respectively and consequential shift

in repayment schedule for equal or shorter duration (including the start date and end date

of revised repayment schedule) is not treated as restructuring, the respective sanctioning

authority can revise DCCO and consequential shift in repayment schedule for equal or

shorter duration (including the start date and end date of revised repayment schedule).

Similarly, respective sanctioning authorities can consider re-schedulement / re-phasement

of the credit facilities within the ambit of RBI Master Circular on - Guidelines for Relief

Measures by Banks in areas affected by Natural Calamities after Central/State Government

has declared as Natural Calamity.

16.7. EXTENDING BANK’S COMMITMENT TO REHABILITATION PACKAGE BY THE

LEAD BANK OR BY THE FINANCIAL INSTITUTIONS

MCB/CAC/HLCC-ED shall have the authority to decide participation and extending bank’s

commitment to rehabilitation package by the lead bank or by the FIs involved, subject to the

action so taken being intimated to the MCB for confirmation as soon as possible.

16.8. CORPORATE DEBT RESTRUCTURING (CDR)

All cases falling under CDR mechanism shall be dealt with at Head Office with restructuring

to be undertaken under powers of competent authority at Head Office.

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16.9. SANCTION / TAKEOVER OF RESCHEDULED / RESTRUCTURED ACCOUNTS

INVOLVING RESTRUCTURING OF DUES BY STATE ELECTRICITY

BOARDS/BANKS/FIs

In the meeting of the Management Committee of the Board held on 17th January 2004, the

Committee made the following General observations:

On the issue of sanction of financial assistance to restructured accounts, the Committee

observed that during the last two or three years borrowers with healthy track record have got

their term loans rescheduled in view of the severe recessionary trends then prevailing in the

country. In other words the restructuring had to be resorted to for genuine reasons beyond

their control. The Committee felt that this would be the appropriate time to tap such accounts

on a selective basis. Accordingly those accounts involving restructuring of dues by State

Electricity Boards/ Banks/FIs may be considered for sanction/takeover for which

RLCC-RH/HLCC-ED/CAC/ MCB be permitted to consider such proposals on merits on a case

to case basis under their Delegated powers.”

Accordingly, RLCC-RH/ HLCC-ED/ CAC/ MCB can consider sanction/ takeover of

rescheduled/ restructured accounts involving restructuring of dues by State Electricity

Boards/Banks/FIs on merits on a case-to-case basis under their respective Delegated powers.

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CHAPTER – 17

DELEGATED POWERS FOR PERMITTING HOLDING ON OPERATIONS

Holding on operations may be permitted by RLCC-RH for accounts that fall under the

Delegated powers of Branches and Regional Office subject to the conditions

stipulated in Loan policy.

In case of sanctions under Head Office powers, HLCC-ED shall have the delegated

authority to permit holding on operations.

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CHAPTER – 18

LOANS & ADVANCES TO STAFF/ RELATIVES (INCLUDING CLOSE RELATIVES) OF STAFF MEMBERS

18.1. DELEGATED POWERS FOR CONSIDERING CREDIT FACILITIES TO RELATIVES OF STAFF MEMBERS

Any officer or any Committee comprising, inter alia, an officer as member shall not sanction

credit facilities to a borrower to whom he / she is related.

There shall be no relaxation in any of the terms and conditions of credit facilities, where the

borrower is a relative of any staff member of the bank, Such borrowers would be treated as

any other borrower and bank’s norms applied accordingly,

All policy guidelines, relating to respective category of advances shall be strictly complied

with.

The provisions/ powers for loans to relatives (including close relatives) of staff members are as

follows:

Personal guarantee of the staff member will not be mandatory for considering credit

facilities to relatives including close relatives (as notified by Head Office from time to time)

of staff members.

Existing cases where personal guarantees have already been issued by staff members for

loans to their relatives including close relative may be reviewed by the sanctioning authority

at the time of next renewal / review and waived accordingly if the account is otherwise in

order.

18.2. GRANTING LOANS AND ADVANCES TO DIRECTORS OF OTHER BANKS AND

RELATIVES OF DIRECTORS OF OUR BANK/OTHER BANKS

In terms of RBI guidelines, Loans and Advances aggregating `25 Lacs and above is to be

sanctioned by the Board of Directors/ Management Committee of the Board in the following

cases:

Directors of Other Banks

a) directors (including the Chairman/Managing Director) of other banks *;

b) any firm in which any of the directors of other banks * is interested as a partner or

guarantor; and

c) any company in which any of the directors of other banks * holds substantial interest or is

interested as a director or as a guarantor.

Relatives of Directors of Our Bank/Other Banks

a) any relative other than spouse and minor/ dependent children of the Chairman/ Managing

Directors or other Directors of the Bank;

b) any relative other than spouse and minor / dependent children of the

Chairman/Managing Director or other directors of other banks *;

c) any firm in which any of the relatives other than spouse and minor / dependent children

as mentioned in (a) & (b) above is interested as a partner or guarantor; and

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d) any company in which any of the relatives other than spouse and minor / dependent

children as mentioned in (a) & (b) above hold substantial interest or is interested as a

director or as a guarantor.

a) directors (including the Chairman/Managing Director) of other banks *;

b) any firm in which any of the directors of other banks * is interested as a partner or

guarantor; and

c) any company in which any of the directors of other banks * holds substantial interest or is

interested as a director or as a guarantor.

* including directors of Scheduled Co-operative Banks, Directors of Subsidiaries/ Trustees of

Mutual Funds/Venture Capital Funds.

The proposals for credit facilities of an amount less than `25 Lacs to these borrowers may

be sanctioned by the appropriate authority under powers vested in such authority, but the

matter should be reported to the Board of Directors.

Credit Facility

The term ‘loans and advances’ will not include loans or advances against:

Government securities

Life insurance policies

Fixed or other deposits

Stocks and shares

Temporary overdrafts for small amount i.e. upto `25000.

Third party cheque purchase of up to `5000 at a time.

Housing loans, car advances, etc. granted to an employee of the bank under any

scheme applicable generally to employees.

Relative

The term ‘relative’ shall mean:

i. Spouse

ii. Father

iii. Mother (including step mother)

iv. Son (including step son)

v. Son’s wife

vi. Daughter (including step daughter)

vii. Daughter’s husband

viii. Brother (including step brother)

ix. Brother’s wife

x. Sister (including step sister)

xi. Sister’s husband

xii. Brother (including step-brother) of the spouse

xiii. Sister (including step sister) of the spouse

xiv. Father/Mother of the Spouse

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18.3. LOANS TO RELATIVES OF STAFF MEMBERS

The Branch Incumbents shall not have delegated power for sanctioning credit facilities to the following: (i) Close relatives of staff members

(ii) Any firm/company in which any of the close relatives of staff members of the

Bank holds substantial interest, or is interested as a proprietor/partner/director or

guarantor.

However to the above category of borrowers, RLCC-RH/HLCC-ED/CAC/MCB shall have

powers for sanction of credit facilities within their respective delegated powers.

Reporting to Board of Directors

The sanction of credit facilities to relatives of Senior Officers of the Bank (Scale IV & above)

shall be reported to the Board of Directors.

Credit Facility

The term ‘credit facility’ will not include the following:

Advance against term deposits, Govt. securities/Bonds/ NSC and Life Insurance

Policies

Temporary overdrafts for small amount i.e. upto `25000.

Third party cheque purchase of up to `5000 at a time.

Advance under Retail Loan Schemes which are not business related or of commercial

nature.

Close Relative

The term close relative shall mean:

i. Spouse

ii. Father

iii. Mother (including step mother)

iv. Son (including step son)

v. Son’s wife

vi. Daughter (including step daughter)

vii. Daughter’s husband

viii. Brother (including step brother)

ix. Brother’s wife

x. Sister (including step sister)

xi. Sister’s husband

xii. Brother (including step-brother) of the spouse

xiii. Sister (including step sister) of the spouse

xiv. Father/Mother of the Spouse

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18.4. LOANS TO STAFF MEMBERS

The delegated lending authority for sanction of loans & advances in respect of staff members

under staff schemes & under Retail loan schemes as applicable to Public as under:

SN Type of

Credit facility Staff Posted at Sanctioning Authority

1

Clean

Overdraft

Facility

All Branches / RO (other than

Regional Heads) / Service Branch /

STC (other than STC, Noida) /

Currency Chest / COPEC / Data

Centre / Stationary Godowns

(except Stationary Godown at

Faridabad) / Regional Inspectorates

(other than RI Heads)

In RO where AGM is posted as 2nd

Man, AGM and in his absence CM at

RO.

In case AGM is not posted at RO,

CM at RO shall exercise the powers.

All Staff posted at Head Office/

Stationary Godown at Faridabad/

STC, Noida / Regional Heads &

Regional Inspectorate Heads.

AGM (Retail) and in his absence /

CM(Retail) at HO.

2 Vehicle

Loan – CAR











RO.








CM(Retail) at HO.

3

Housing

Loan under

Staff

Scheme









Regional Head





Vertical Head of Retail Credit and in

his absence DGM (HR).

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SN Type of

Credit facility Staff Posted at Sanctioning Authority

4

Vehicle

Loan – Two

Wheeler

Branch Offices(except Branch

Incumbents)/Regional Offices

(except Regional Heads)/ Head

Office /Regional Inspectorates

(except RI Heads)/Service

Branches/ Currency Chests/

Extension Counters/ Stationary

Godowns/STCs(except Principals)

BRANCH INCUMBENT (where the

salary account of the employee is

being maintained.)

Branch Incumbents



RO.



Regional Head/ RI Heads/

Principals of STCs


CM(Retail) at HO.

5

Staff

members

availing

retail loans

under

general

public

(except

advance

against term

deposits/

Govt.

securities/

Bonds /

NSC/LIC

Policies

etc.)





Centre / Regional Inspectorates


RLCC-RH




HLCC-ED

6 Advance

against

term

deposits/

Govt.

securities/

Bonds/

NSC/ LIC

Policies etc.

Irrespective the place of posting

Branch Incumbent

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CHAPTER – 19

LARGE CORPORATE BRANCHES (LCBs): DELEGATION OF POWERS

With a view to have a customer centric approach and to build a healthy portfolio of

advances, the consolidation of Large Corporate advances of `50.00 Crore and above at

select branches was undertaken. With this in view, few branches have been identified as

Large Corporate Branches (LCBs) which are located at main cities viz, Mumbai, Delhi,

Ahmedabad, Bengaluru, Chennai, Kolkata, Hyderabad and Chandigarh.

The CGM/GM – Large Corporate Credit shall be the In-charge/Controller of all the

designated Large Corporate Branches (LCBs) of the Bank.

The functioning of Large Corporate Branches shall be as per Circular No. HO/RMD/28/

2013-14/433 dated 05.08.2013 and HO/RMD/41/2014-15/458 dated 04.09.2014.

CHAPTER – 20

CONVERSION FROM PRE-SHIPMENT FACILITY TO POST-SHIPMENT FACILITY

In case of export advances, automatic convertibility from PC / PCFC facility into post sale

(FDBP/FUDBP/FBRD) facility shall be allowed but not vice versa.

CHAPTER – 21

APPROVAL OF NEW SCHEMES / FORMATS / DELEGATION RELATED ISSUES

All new Schemes / Formats / Delegation related issues shall be put up to Credit Risk

Management Committee for approval as prelude to advising field functionaries.

CHAPTER – 22

DELEGATED POWER FOR PERMITTING SWITCHOVER FROM PLR TO BASE RATE

As there shall not be any change in the interest rate being charged to the customers during

switchover from PLR to Base Rate, the approval of switchover from PLR to Base Rate shall be

given by the respective sanctioning authorities at Branches / Regional Office.

For sanctions at Head Office level (including MCB), HLCC-ED shall be competent authority for

approval of switchover from PLR to Base Rate.

In case any concession is to be provided to any borrower on case to case basis, the same

shall be approved as per existing policy in vogue.

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CHAPTER – 23

COMPLIANCE / FLEXIBILITY / DEVIATIONS / EXEMPTIONS FROM THE LAID DOWN POLICY GUIDELINES

The policy recognises the need for allowing a degree of flexibility to the decision makers to

succeed in the competitive business environment and achieve the corporate goal.

The deviation / exemption from the norms / bench-marks levels laid down in the Policy but

within RBI/Statutory norms may be permitted only in rare, genuine and exceptional cases,

on account of emergent and unavoidable business exigencies. However, the exemptions &

concessions which are part of the Delegated powers vested with the respective

sanctioning authority shall not be considered as deviation of the Policy.

In all other matters not expressly provided for, the Board shall be the authority on pure

policy related deviations and the MCB/ CAC shall be the authority on deviations related to

matters of credit sanctions.

23.1. MONITORING OF DEVIATIONS

Unless specifically provided otherwise in the Policy itself, the authority to permit/ approve

such deviation / exemptions shall be as under:

Sl. No.

Sanctioning

Authority

Deviation

Authority

Reporting Authority for

Deviations permissible

are already stated in the

Loan Policy

Deviations permissible are

not expressly stated in the

Loan Policy

1 Branch

Incumbent RLCC-RH Executive Director Board of Directors

2 RLCC-RH HLCC-ED MCB Board of Directors

3 HLCC-ED CAC Not Applicable Board of Directors

5 CAC CAC Not Applicable Board of Directors

6 MCB MCB Not Applicable Board of Directors

The deviations / exemption from the norms / benchmark levels shall be clearly brought out

in the appraisal note, duly recording the exhaustive reasons/ justifications for permitting the

deviations.

However, any modification of / deviation from both pre and post disbursement terms and

conditions of sanctions shall be permitted only by the respective sanctioning authority.

Amendments in terms and conditions in the credit facilities approved by the MCB shall be

permitted by the MCB only except the following:

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Specific powers given to CAC to permit Relaxation/ waiver of ECGC premium to be borne by the borrower for the Whole Turnover Packing Credit Guarantee (WTPCG)

Specific powers given to RLCC-RH to refund excess Interest /Commission /Discount /Penal Interest

Copy of the note of deviations/exemptions as put up to the Board shall be submitted to

Risk Management Department on yearly basis in the month of January of each calendar

year so as to review the Loan policy keeping in mind the deviations permitted vis-à-vis risk

involved and practices being followed by peer groups.

23.2. RELAXATION IN BENCHMARK RATIOS (OTHER THAN TAKEOVER ACCOUNTS)

Financial Ratio Relaxed Benchmarks by respective Sanctioning Authority

Current Ratio

Upto 1.17:1

(Working Capital limits beyond `5.00 Crore)

Upto 1.10:1

(Working Capital limits upto `5.00 Crore)

The sanctioning authority may take a view and satisfy himself / herself

while accepting a lower current ratio and the reasons may be suitably

recorded. While taking a final view on the current ratio and/or projected

level of current ratio, the sanctioning authority may examine various

options to improve the ratio such as exploring possibility of injection of

additional funds and / or ploughing back of profits, stipulations for not

declaring dividend / non withdrawal of profits, reduction in the level of non-

current assets and liquidation of investments outside business, if any,

within a reasonable time.

Debt Equity Ratio 3:1(other than SME, capital intensive industries ,infrastructure projects)

4:1 (in respect of SME, capital intensive industries ,infrastructure projects)

Leverage Ratio 5:1(other than SME, capital intensive industries ,infrastructure projects

and trading concerns)

6:1 (in respect of SME, capital intensive industries ,infrastructure projects

and trading concerns)

DSCR Only RLCC-RH are permitted for relaxation in DSCR for Branch/RO

cases.

For Head Office -respective sanctioning authority.

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The relaxation in Benchmark Ratios as approved in the Loan Policy shall be subject to the

following conditions:

Relaxation as above shall be considered selectively and on case to case basis for

borrowal accounts with internal credit risk rating of OBC 1 to 6 by the sanctioning authority

and cogent reasons thereof shall be recorded in the process note.

Relaxation shall not be considered in benchmark ratios in OBC 7 and below rated

accounts without prior approval of the next higher sanctioning authority. However, HLCC-

ED/CAC/MCB shall be the competent authority to consider relaxation in Benchmark

Ratio for such cases falling within their respective Delegated Powers.

For relaxation beyond the above mentioned relaxation in the ratios, prior approval shall be

obtained from the next higher sanctioning authority before permitting the relaxation.

However, in case of Head Office accounts, further relaxation may be permitted by the

respective sanctioning authority on case to case basis.

For renewal of accounts, where the current ratio is below the benchmark levels, the

sanctioning authority shall explore all possibilities of improving the current ratio to the

benchmark levels by injection of additional funds and / or ploughing back of profits,

stipulations for not declaring dividend / non withdrawal of profits, reduction in the level of

non-current assets and liquidation of investments outside business, if any, within a

reasonable time.

Relaxation in financial benchmark ratios shall not be permitted in case of takeover of

accounts without permission of HLCC-ED for cases under RLCC-RH powers. For cases

falling under the powers of Head Office, deviation is to be permitted by next higher

authority.

Evaluation of risk mitigant available to the Bank in cases where relaxation is being

permitted shall be done and recorded in the process note.

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