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INTRODUCTION What is Credit Appraisal? Credit Appraisal is a process by which lender appraises the credit worthiness of the prospective borrower. This normally involves appraising the borrower’s payment history and establishing the quantity and sustainability of his income. The lender satisfies himself of the good intentions of the borrower, usually through an interview. OR Credit appraisal means an investigation/assessment done by the bank prior before providing any loans & advances/project finance & also checks the commercial, financial & technical viability of the project proposed its funding pattern & further checks the primary & collateral security cover available for recovery of such funds. Why Banks Offers Credit? There are two main functions of a commercial bank those are accepting deposits and to lend Or Credit money lending or Crediting has been one of the principal sources of the income for Commercial Bank. Traditional Financers in general met the financing needs of the manufactures of good and the Industry during the olden days. Today the magnitudes of both the demand and supply have grown enormously which need a very large financial banking. Traditional financers cannot meet this, so the

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Page 1: Sip Report1

INTRODUCTIONWhat is Credit Appraisal?Credit Appraisal is a process by which lender appraises the credit worthiness of the prospectiveborrower. This normally involves appraising the borrower’s payment history and establishingthe quantity and sustainability of his income. The lender satisfies himself of the good intentions of the borrower, usually through an interview.

ORCredit appraisal means an investigation/assessment done by the bank prior before providing any loans & advances/project finance & also checks the commercial, financial & technical viability of the project proposed its funding pattern & further checks the primary & collateral security cover available for recovery of such funds.

Why Banks Offers Credit?There are two main functions of a commercial bank those are accepting deposits and to lend Or Credit money lending or Crediting has been one of the principal sources of the income forCommercial Bank.

Traditional Financers in general met the financing needs of the manufactures of good and theIndustry during the olden days. Today the magnitudes of both the demand and supply have grown enormously which need a very large financial banking. Traditional financers cannot meet this, so the important of modern commercial bank of credit providers to the economy begins at this point.

Priority SectorThe Concept of ‘Priority Sector’ was evolved at the time of introduction of Social Control on banks in 1968 and subsequent nationalization of major banks in 1969 by RBI and Govt. of India. Till recently different segments of priority sector were as follows: 1.Agriculture 2.Small Scale Industries 3.Small Road and Water Transport Operators 4.Retail Trade 5.Small Business 6.Professional and Self-employed Persons 7.State-sponsored bodies for Scheduled Castes and Tribes 8.Education 9.Housing

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10.Consumption Loans

COMPANY BACKGROUND

Founded in 1943, UCO Bank is a commercial bank and a Government of India Undertaking. Its Board of Directors consists of Government representatives from the Government of Indiaand Reserve Bank of India as well as eminent professionals like accountants, management, experts, economists, businessmen etc.

OVERVIEW: UCO Bank is in the service of Community Since 1943. UCO Bank has nearly 2000 service units spread all over India. UCO Bank also operates in two Major International Financial centres namely Hongkong

and Singapore. UCO Bank has our correspondents /Agency arrangements all over the world. UCO Bank undertakes Foreign Exchange Business in more than 50 centres in India. UCO Bank has Foreign Exchange Dealing operations at 4 Centres.

HERITAGE: The idea of a truly Indian Bank was first conceived of by Late Mr. G.D. Birla, the doyen ofIndian Industrial renaissance, after the historic “QUIT INDIA” movement in 1942.Soon thisnascent idea came into reality and, on the 6th of January 1943, The United Commercial BankLtd, was born with its registered and Head office at Kolkata. The very first Board of Directorswas represented by eminent personalities of the country drawn from all walks of life, and thisall-India character of the bank has been assiduously maintained till this day not only in thecomposition of its board but also in the geographical spread of its 1700 odd branches in thecountry as well as in its overseas centres in Singapore and Hongkong.

Having traversed periods of expansion and consolidation, the Bank was nationalized by the Government of India on the 19th July 1969 whereupon 100 per cent ownership was taken over by the government in UNITED COMMERCIAL BANK. This historic event brought about a sea-change in the entire fabric of the bank's thinking and activities, commensurate with the government's socio-political approach of mass banking as against class banking hitherto practised. Branch expansion started at a fast pace, particularly in rural areas, and the bank achieved several unique distinctions in Priority Sector lending and other social upliftment activities. To keep pace with the developing scenario and expansion of business, the Bank

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undertook an exercise in organizational restructuring in the year 1972. This resulted into more functional specialization, decentralization of administration and emphasis on development of personnel skill and attitude. Side by side, whole hearted commitment into the government's poverty alleviation programmes continued and the convenorship of State Level Bankers' Committee (SLBC) was entrusted on the Bank for Orissa and Himachal Pradesh in 1983.

The year 1985 opened a new chapter for the Bank as the name of the Bank changed to UCO BANK by an Act of Parliament. The customer friendly and socially committed character, however, remained even with this change in name which has, over the years, been regarded as one of the well known and vibrant banks in the country. Today, with all its inner strengths, UCO Bank has come a long way to symbolize friendliness for customers and efficiency in its banking business. Truly, UCO Bank HONOURS YOUR TRUST.

VISION OF UCO BANK To emerge as the most trusted, admired and sought-after world class financial institution and to be the most preferred destination for every customer and investor and a place of pride for its employees.

MISSION OF UCO BANK

To be a Top-class Bank to achieve sustained growth of business and profitability, fulfilling socio-economic obligations, excellence in customer service; through upgradation of skills of staff and their effective participation making use of state-of-the-art technology.

Global banking has changed rapidly and UCO Bank has worked hard to adapt to these changes. The bank looks forward to the future with excitement and a commitment to bring greater benefits to you. UCO Bank, with years of dedicated service to the Nation through active financial participation in all segments of the economy - Agriculture, Industry, Trade & Commerce, Service Sector, Infrastructure Sector etc., is keeping pace with the changing environment. With a countrywide network of more than 2000 service units which includes specialised and computerised branches in India and overseas, UCO Bank has marched into the 21st Century matched with dynamism and growth.

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STRENGTHS OF UCO BANK

Country-wide presence Overseas Presence with Profitable Overseas Operations Strong Capital Base High Proportion of Long Term Liabilities A Well Diversified Asset Portfolio A Large and Diversified Client Base Fully Computerised Branches at Major Centres Branch representation in Top 100 Centres (as per deposits) in the country

ORGANISATION STRUCTURE

Headquartered in Kolkata, the Bank has 35 Regional Offices spread all over India. Branches located in a geographical area report to the Regional Office having jurisdiction over that area. These Regional Offices are headed by Senior Executives ranging upto the rank of General Manager, depending on size of business and importance of location. The Regional Offices report to General Managers functioning at Head Office in Kolkata.

COMMITMENT TO CUSTOMERS

In all our promotional activities, we will be fair and reasonable in highlighting the salient features of the schemes marketed by us. Misleading or unfair highlighting of any aspect of any scheme/service marketed by the Bank leading to unfair practice shall not be resorted to by the Bank.

In commemorating the 50th Year of Independence of India, the Bank released a booklet entitled " Our Commitment to Customers " incorporating the Citizen's Charter on services provided by the Bank.

In our continuing endeavour to serve our customers better, we have considerably extended the business hours for public transaction at the branches on all week-days. We have also introduced a number of NO HOLIDAY branches. These branches are open all 365 days a year. Besides, several of our branches have Express DD Counter from where Demand Drafts can be purchased without any waiting time.

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UCO BANK’S PRODUCT AND SERVICES

1. NRI Banking

2. Foreign Currency Bank

3. Finance/Services to Exporters

4. Finance/Services to Importers

5. Remittances

6. Forex & Treasury Services

7. Resident Foreign Currency (Domestic) Deposits

8. Correspondent Banking Services

9. All General Banking Services

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OVERVIEW OF CREDIT APPRAISAL

Credit appraisal means an investigation/assessment done by the bank prior before providing any loans & advances/project finance & also checks the commercial, financial & technical viability of the project proposed its funding pattern & further checks the primary & collateral security cover available for recovery of such funds.

Brief overview of credit:

Credit Appraisal is a process to ascertain the risks associated with the extension of the credit facility. It is generally carried by the financial institutions which are involved in providing financial funding to its customers. Credit risk is a risk related to non repayment of the credit obtained by the customer of a bank. Thus it is necessary to appraise the credibility of the customer in order to mitigate the credit risk. Proper evaluation of the customer is performed which measures the financial condition and the ability of the customer to repay back the loan in future. Generally the credit facilities are extended against the security know as collateral. But even though the loans are backed by the collateral, banks are normally interested in the actual loan amount to be repaid along with the interest. Thus, the customer's cash flows are ascertained to ensure the timely payment of principal and the interest.

It is the process of appraising the credit worthiness of a loan applicant. Factors like age, income, number of dependents, nature of employment, continuity of employment, repayment capacity, previous loans, credit cards, etc. are taken into account while appraising the credit worthiness of a person. Every bank or lending institution has its own panel of officials for this purpose.

However the 3 ‘C’ of credit are crucial & relevant to all borrowers/ lending which must be kept in mind at all times.

a. Characterb. Capacityc. Collateral

If any one of these are missing in the equation then the lending officer must question the viability of credit.

There is no guarantee to ensure a loan does not run into problems; however if proper credit evaluation techniques and monitoring are implemented then naturally the loan loss probability / problems will be minimized, which should be the objective of every lending officer.

Credit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and

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instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.

Credit allows you to buy goods or commodities now, and pay for them later. We use credit to buy things with an agreement to repay the loans over a period of time. The most common way to avail credit is by the use of credit cards. Other credit plans include personal loans, home loans, vehicle loans, student loans, small business loans, trade.

A credit is a legal contract where one party receives resource or wealth from another party and promises to repay him on a future date along with interest. In simple terms, a credit is an agreement of postponed payments of goods bought or loan. With the issuance of a credit, a debt is formed.

Basic types of credit

There are four basic types of credit. By understanding how each works, you will be able to get the most for your money and avoid paying unnecessary charges.

Service credit is monthly payments for utilities such as telephone, gas, electricity, and water. You often have to pay a deposit, and you may pay a late charge if your payment is not on time.

Loans let you borrow cash. Loans can be for small or large amounts and for a few days or several years. Money can be repaid in one lump sum or in several regular payments until the amount you borrowed and the finance charges are paid in full. Loans can be secured or unsecured.

Installment credit may be described as buying on time, financing through the store or the easy payment plan. The borrower takes the goods home in exchange for a promise to pay later. Cars, major appliances, and furniture are often purchased this way. You usually sign a contract, make a down payment, and agree to pay the balance with a specified number of equal payments called installments. The finance charges are included in the payments. The item you purchase may be used as security for the loan.

Credit cards are issued by individual retail stores, banks, or businesses. Using a credit card can be the equivalent of an interest-free loan--if you pay for the use of it in full at the end of each month.

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Brief overview of loans:

Loans can be of two types fund based & non-fund based:

FUND BASED includes:

1. Working Capital2. Term Loan

NON-FUND BASED includes:

1. Letter of Credit2. Bank Guarantee3. Bill Discounting

Fund Base:

Working capital

The objective of running any industry is earning profits. An industry will require funds to acquire “fixed assets” like land, building, plant, machinery, equipments, vehicles, tools etc., & also to run the business i.e. its day-to-day operations.

Funds required for day to-day working will be to finance production & sales. For production, funds are needed for purchase of raw materials/ stores/ fuel, for employment of labor, for power charges etc. financing the sales by way of sundry debtors/ receivables.

Capital or funds required for an industry can therefore be bifurcated as fixed capital & working capital. Working capital in this context is the excess of current assets over current liabilities. The excess of current assets over current liabilities is treated as net, for storing finishing goods till they are sold out & for working capital or liquid surplus & represents that portion of the working capital, which has been provided from the long-Term source.

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Term Loan

A Term Loan is granted for a fixed Term of not less than 3 years intended normally for financing fixed assets acquired with a repayment schedule normally not exceeding 8 years.

A Term Loan is a Loan granted for the purpose of capital assets, such as purchase of land, construction of, buildings, purchase of machinery, modernization, renovation or rationalization of plant, & repayable from out of the future earning of the enterprise, in installments, as per a prearranged schedule.

From the above definition, the following differences between a Term Loan & the working capital credit afforded by the Bank are apparent:

o The purpose of the Term Loan is for acquisition of capital assets.

o The Term Loan is an advance not repayable on demand but only in installments

ranging over a period of years.o The repayment of Term Loan is not out of sale proceeds of the goods & commodities

per se, whether given as security or not. The repayment should come out of the future cash accruals from the activity of the unit.

o The security is not the readily saleable goods & commodities but the fixed assets of the

units.

It may thus be observed that the scope & operation of the Term Loans are entirely different from those of the conventional working capital advances. The Bank’s commitment is for a long period & the risk involved is greater. An element of risk is inherent in any type of Loan because of the uncertainty of the repayment. Longer the duration of the credit, greater is the attendant uncertainty of repayment & consequently the risk involved also becomes greater.

However, it may be observed that Term Loans are not so lacking in liquidity as they appear to be. These Loans are subject to a definite repayment programme unlike short Term Loans for working capital (especially the cash credits) which are being renewed year after year.

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Term Loans would be repaid in a regular way from the anticipated income of the industry/ trade.

These distinctive characteristics of Term Loans distinguish them from the short Term credit granted by the banks & it becomes necessary therefore, to adopt a different approach in examining the applications of borrowers for such credit & for appraising such proposals.

The repayment of a Term Loan depends on the future income of the borrowing unit. Hence, the primary task of the bank before granting Term Loans is to assure itself that the anticipated income from the unit would provide the necessary amount for the repayment of the Loan. This will involve a detailed scrutiny of the scheme, its capital assets. Financial aspects, economic aspects, technical aspects, a projection of future trends of outputs & sales & estimates of cost, returns, flow of funds & profits.

Non-fund Based:

o Letter of credit

The expectation of the seller of any goods or services is that he should get the payment immediately on delivery of the same. This may not materialize if the seller & the buyer are at different places (either within the same country or in different countries). The seller desires to have an assurance for payment by the purchaser. At the same time the purchaser desires that the amount should be paid only when the goods are actually received. Here arises the need of Letter of Credit (LCs). The objective of LC is to provide a means of payment to the seller & the delivery of goods & services to the buyer at the same time.

Definition

A Letter of Credit (LC) is an arrangement whereby a bank (the issuing bank) acting at the request & on the instructions of the customer (the applicant) or on its own behalf,

o Is to make a payment to or to the order of a third party (the beneficiary), or is to accept

& pay bills of exchange (drafts drawn by the beneficiary); oro Authorizes another bank to effect such payment, or to accept & pay such bills of

exchanges (drafts); oro Authorizes another bank to negotiate the Terms & conditions of the credit are

complied with. against stipulated document(s), provided that

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o Bank Guarantees:

A contract of guarantee is defined as ‘a contract to perform the promise or discharge the liability of the third person in case of the default’. The parties to the contract of guarantees are:

a) Applicant: The principal debtor – person at whose request the guarantee is executedb) Beneficiary: Person to whom the guarantee is given & who can enforce it in case of

default.c) Guarantee: The person who undertakes to discharge the obligations of the applicant in

case of his default.

Thus, guarantee is a collateral contract, consequential to a main co applicant & the beneficiary.

Purpose of Bank Guarantees

Bank Guarantees are used to for both both preventive & remedial purposes. The guarantees executed by banks comprise both performance guarantees & financial guarantees. The guarantees are structured according to the Terms of agreement, viz., security, maturity & purpose.

Branches may issue guarantees generally for the following purposes:

a) In lieu of security deposit/earnest money deposit for participating in tenders;b) Mobilization advance or advance money before commencement of the project by the

contractor & for money to be received in various stages like plant layout, design/drawings in project finance;

c) In respect of raw materials supplies or for advances by the buyers;

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d) In respect of due performance of specific contracts by the borrowers & for obtaining full payment of the bills;

e) Performance guarantee for warranty period on completion of contract which would enable the suppliers to period to be over; realize the proceeds without waiting for warranty) To allow units to draw funds from time to time from the concerned indenters against part execution of contracts, etc.

f) Bid bonds on behalf of exportersg) Export performance guarantees on behalf of exporters favoring the Customs

Department under EPCG scheme.

o Bill discounting:

Definition:

As per Negotiable Instrument Act, “The bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of that instrument.”

Discounting of bill of exchange:

A seller (Drawer) if need cash, may handover the B/E to the Bank, NBFC, a company or a high Net worth Individual and obtain ready cash this is known as discounting of bill. the practice in India is that, the financing organization holds the original B/E till the drawee pays on maturity. For discounting the bill, financiers charge an interest on the bill amount for the duration of the bill which is called discount charges. Normal maturity periods are 30, 60, 90, 120 days.

Types of Bills

1. Demand Bill2. Usance Bill3. Documentary Bills

a. Documents against acceptance (D/A) billsb. Documents against payment (D/P) bills

4. Clean Bills

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Advantages

To Investors -ShortTerm source of Finance -Outside the purview of Section 370 of Indian Companies 1956 -No tax deducted at source -FlexibilityTo Banks -Safety of Funds -Certainty of Payment -Profitability

CREDIT INVESTIGATIONCredit investigation start from the time bank officials starts getting the lead for the prospectivecredit clients. It basically involves collection of data about the client through various mediums.after collection of data (both Financial and Non-Financial) people try to understand them andapply the same in credit sanctioning policy.

Data received about the client are to be investigated by bankers both efficiently and effectively.Efficient investigation will ensure that time and money is not wanted in the process. Effectiveinvestigation means the collection and interpretation of all the relevant data. Much of data could be collected may not be really needed. Unnecessary data can make the investigationcostly and prohibitive. The investigation aims at understanding the character and nature of theborrower by acquiring necessary information needed to determine his ability to service thepersonal loan.

Need for Credit Investigation

The main purpose of the credit investigation is to determine the business reputation, credibilityand responsibility of the individuals involved with particular reference to:

Experience in the line of their activity

Dealings with customers Trading or Dealing with them

Management Capability

Professional reputation with their bankers

History of payment record and fulfillment of financial obligations

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Honesty and integrity

Willingness to repay the debt

How this Credit Investigation does Works:

As said earlier the credit investigation involves study of both Financial and Non-Financial aspect of the prospective borrowers. It includes ascertaining the credit worthiness of theguarantors also. The Credit officer has to consider a number of aspects before sanctioningthe loan.

The data to be collected during credit investigation depends on a number of factors, some of which are mentioned below:

How well the customer is already known to the bank?

How much of information was obtained during the initial interview?

The size of the personal loan.

Information already available with the bank about the customer

The risk that are specifically associated with the case

The borrower’s financial strength

The Value and liquidity of the primary and collateral security

Sources of Information available for Credit Investigation:

Sources of information available for credit investigation may be broadly classified internal andexternal.

Internal sources are those which are available within the bank, like the following: Particulars relating to the account including its past history

Its past financial statements and analysis thereof

Current or previous borrowing and rating awarded

Summary of past dealing with the borrower

Conduct of the account

Financial discipline practiced by the borrower in the past

Cooperation extended in documentation

Balance in other deposit account

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Previously gathered information on the borrower and kept in record

External sources are those which may be got from other like the following:

Reference provided by the borrower

Meetings with the borrower

Circulars issued by the IBA\FEDAL

Information obtained from the other banks and institutions

Reports of credit rating agencies like CRISIL,ICRA

Reference with the government bodies and organizations

Information from present and past employees of the borrower

TYPES OF PRODUCTSCREDIT\LOANS

Being a commercial bank, giving loans and advances is among the primary activities of the bank. Apart from the participation in meeting both term loan and Working capitalrequirements of Agriculture Sector, Trade and Service Sector, Large\Medium and SmallScale Industries Sector, Infrastructure Sector etc, including taking care of their Export\Import and Non-Fund Based needs like Letter of Credit, Bank Guarantee, Etc Uco Bankhas a fairly large basket of loan products specially designed to suit people’s personalneeds. Salient features of some of the more attractive Personal Loan schemes aredescribed below.

UCO SHELTER/HOME LOAN

UCO EDUCATION LOAN

UCO CAR LOAN

UCO CASH/PERSONAL LOAN

UCO PENSIONER LOAN

UCO NARI SHAKTI

UCO MORTGAGE LOAN

UCO TRADER LOAN

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UCO CASH

OBJECTIVE-To extend financial assistance to certain segment to meet unforeseen domestic likes marriage, education, social obligations etc. ELIGIBILITY-Applicant should be either a permanent employee or have completed minimum 3 years of service in the same organization and having a salary tie up arrangements with our branches.

INCOME CRITERIA-Net Take Home Pay should not be less than 40% of the gross Salary afterdeductions of PF, IT and other statutory deductions including proposed EMI of UCO CASHLOAN and loans granted by his employer.

QUANTUM OF LOAN- 90% of proposed expenditure (Max Rs 2.00 lakhs)

MARGIN-10% of proposed expenditure

RATE OF INTEREST- For Women Base Rate+4.40% p.a.(floating) For Men Base Rate+5.40% p.a.

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GUARANTEE- a. Personal guarantee of spouse/nominee of PF/Gratuity of Borrower b. In addition, personal guarantee of one person having income equal to that of the borrower. c. Guarantee as in (b) may be waived if liquid collateral security (LIC/NSC/KVP/FDR/KY/RELIEF BOND) having face value (Surrender value in case of LIC) of 40% of loan amount offered.

REPAYMENT- For Women 60 and For Men 48 Equated Monthly Installment PROCESSING FEE- 1% (Min Rs 750)

SANCTIONING AUTHORITY- Scale-I Scale-II Scale-III Scale-IV 1.00 lakh 1.00 lakh 1.00 lakh 2.00 lakh

UCO PENSIONER

OBJECTIVE- Pensioners who receive pension through our branch only. War widows and widows drawing family pension through our branch are also eligible provided there is another co-borrower of sufficient means.

Purpose

For meeting medical expenses for self and dependants. Payment of mediclaim premium. Meeting marriage expenses. Educational and traveling expenses. Repairs/renovation of dwelling house. Funeral expenses.

QUANTUM OF LOAN- 10 times of monthly pension subject to a maximum of Rs 1,00,000 (Maximum of Rs 1,50,000 where family pension is admissible) Subject to repayment capacity & on merit of individual case, zonal head may permit deviation and allow enhancement upto 50% over the existing applicable maximum limit i.e. up to a ceiling of Rs 1,50,000 and Rs 2,25,000 to pensioners having provision of family pension.

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SECURITY - Clean To safeguard Bank’s interest irrevocable letter of authority from the pensioners to the bank authorizing the latter to recover the installments from out of the pension amount credit to his/her savings/current account (both in case of pensioners/war widows/widow).

GUARANTEE - a) Personal guarantee of spouse eligible to receive family pension in the event of death of the pensioner. In case of war widows/widows if co-borrower is not available , a third party guarantee having sufficient income should be positively obtained. b) Wherever possible, the branch should obtained personal guarantee of son/daughters in case the spouse is predeceased or a third party guarantee acceptable to the bank.

RATE OF INTEREST - Base rate + 4.20%

PROCESSING FEE - NIL

REPAYMENT - In 12 to 24 monthly installments after one month from disbursement In genuine cases repayment may be extended upto 36 months. NOTE: REPAYMENT SHOULD BE SO FIXED THAT THE LOAN IS FULLY REPAID BEFORE THE PENSIONER REACHES 70 YEARS AGE.

LENDING POWERS - Scale-I 1.50 lakh Scale-II 1.50 lakh Scale-III 1.50 lakh

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UCO SHELTER

This housing finance scheme brings to you an excellent opportunity to have your own house or flat. The scheme has been carefully tailored to suit your requirements and match your capacity. The reasonable rate of interest that you pay will be calculated on reducing balance, i.e. you do not have to pay interest on the loan installments actually repaid from the date of such repayment.

PURPOSE- UCO Shelter-Comfort scheme exclusively for take-over of Home Loans accounts from other banks and HFCs with unblemished credit history, subject to compliance of the following conditions: 1. Take-over of Home loans irrespective of limit and project cost. 2. Default less repayment for a minimum post-moratorium period of 12 months in the books of existing lender. 3. Where the account has run over 12 months with the existing lender, the entire period should be default less and no installment and/or interest shall remain overdue. 4. The account is standard asset with the existing lender;

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5. The account is covered by easily marketable house property with full construction and undisputed title; 6. The loan fulfills all our normal UCO Home conditions including income and loan eligibility criterions; 7. Existing Property not more than 30 years old. However, landed property without construction shall not be eligible for finance under the scheme.

ELIGIBILITY- You are eligible for a loan under UCO SHELTER singly or jointly as husband-

wife/parent-son/parent-daughter, if you are Indian resident having regular source of income. Minimum 21 years of age. Maximum 65 years of age inclusive of repayment period Singly or Jointly as Husband-Wife, Parent-Son & Parent-Daughter Maximum 75 years of age for Senior Citizens availing finance to secure Shelter in Old Age Home against full coverage by Bank’s own Term Deposit.LOAN AMOUNT- Minimum Rs 5 lakhs Maximum Loan amount for Metro/Urban/Semi Urban area Rs 100 lakhs for Rural areas Rs 25 lakhs As per area wise ceiling fixed under UCO Home loan scheme. *Higher limit may be considered, in deserving cases, with prior clearance from GM, Retail Banking.

REPAYMENT PERIOD -The maximum period of repayment is 25 years/300 EMI but should not be beyond retirement age.

MINIMUM MARGIN-Minimum 25% of aggregate finance inclusive of addition loans, if any, to fund expenses on fresh legal validation, valuation and mortgage creation charges. Original or accepted value of property, whichever is less, shall be taken into consideration for determination of margin.

VALUTION OF -The valuation of the take-over property shall be reckoned by accepting theTHE PROPERTY lesser amount of the following two valuations: Valuation at the time of initial finance with the existing Home loan provider.

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Valuation may be ascertained with reference to margin and loan amount mentioned in the original sanctioned letter and/or original valuation document. No proposal shall be processed without production of the original sanction letter by the borrower. Similarly, no proposal with prior take-over history shall be eligible for finance under the scheme. Fresh valuation/s by Bank ‘s empanelled valuer/s specially short listed by the Zonal Office for take-over of Home loan accounts under the scheme. In addition , where the valuation of the property exceeds Rs 50 lakhs, valuation by a second valuer shall be obtained as per existing Loan Policy guidelines. The Branch Head and the Second-in –Command in the branch would adopt general prudence in the matter both would certify such valuation as reasonable. As per Loan policy norms, the sanctioning authority shall have the discretion to reduce the value of property with cogent reasons.

LOAN TO VALUE - 80%(LTV) RATIO(maximum) PERSONAL - All loans under the scheme shall need guarantee coverage as under:GUARANTEE Salaried Class Borrower: Personal Guarantee of the spouse(if not co-applicant) or the beneficiary of the terminal benefits. Non - salaried Class Borrower: Personal Guarantee by one or more person having net means at least equal to the loan amount. The requirement of Personal Guarantee can be waived by the Sanctioning Authority if the life of the borrower is covered by UCO Griha Lakshmi Yojna Scheme of LICI.

TAX BENEFITS -Tax relief on principal and interest components of this loan would be available as per provisions prevailing under Income Tax Act.

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RATE OF INTEREST – Up to Rs.30.00 lacs: Base Rate ie,10.50% p.a., More than Rs.30.00 lacs to less than Rs.75.00 lacs :Base rate +0.25% i.e.10.75% p.a. and Rs.75.00 lacs & above:- Base rate+0.50% i.e.11.00% p.a.

PROCESSING CHARGES - NIL

CHARGES FOR LEGAL VALIDATION -The Borrower shall have the option to either pay the charges or ask & VALUATION OF Bank to fund the same by adding to the loan amount.PROPERTY CHARGES FOR - Wherever applicable, the borrower shall have the option to either pay theCREATING charges or ask Bank to fund the same by adding it to the loan amount.MORTGAGE/ REGISTERING MORTGAGES

UCO CARThis is an easy finance scheme for purchase of a new car as well as second hand vehicle not older than 5 years and economic life of a vehicle should be taken as 8 (eight) years from the date of manufacture of the vehicle.

TARGET GROUP-Employees/Salaried group, Permanent employee with min 2 years completed service and 5 years remaining service. Established professionals and Businessman

INCOME CRITERIA- For Salaried Person Minimum take home pay Rs 10,000 per month plus the amount of EMI for the proposed loan.

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For Non-Salaried Person Minimum income of Rs 2.40 lakhs p.a. as per ITR/Assessment as per ITR during the preceding year. Minimum average income for 3 preceding years should be Rs 1.5 lakhs. Adequate precaution is to be taken in verification of credit worthiness of the applicants. Clubbing of Income 1.Income of spouse and major children may be considered, at the discretion of the sanctioning authority, to compute/enhance loan eligibility, on their agreeing to stand as guarantor/co-obligant. Cogent documentary evidence should be insisted upon. 2.Likewise major children, having independent regular income, too, shall be eligible to get finance under UCO Car Scheme by clubbing income of regular earning parent/s. In such cases Co-obligation/guarantee of the parent/s will be a compulsory prerequisite.

3.Clubbing of income should be allowed in deserving cases only where the income of such joint applicant/guarantor is available for servicing of the loan throughout the entire tenure of the loan.MARGIN- 15% for new Vehicle 30 % for used Vehicle upto 4 years old; 40 % for used Vehicle of more than 4 years old, but upto 5 years of age Margin amount should be deposited upfront.

OUANTUM OF Maximum Rs 15 lakhs or 85% of the cost of the vehicle whichever is less.LOAN FOR - Loan upto Rs 25 lakhs can be sanctioned in eligible cases with prior approvalNEW VEHICLE of Zonal Manager

QUANTUM OF Least of the following three:LOAN FOR PRE – 1. 70% of the cost of the used vehicle up to 4 years old.USED VEHICLE 2. 60% of the cost of the used vehicle more than 4 years 3. Rs 3.50 lakhs maximum As per extent norms, in case of old vehicle, the borrower has to produce “Certificate of Fitness” from a qualified automobile engineer and a

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“Valuation Certificate” from the approved valuer/surveyor.

GUARANTEE/UNDERTAKING – For Salaried Person 1. Personal guarantee of spouse/nominee of PF/Gratuity of the borrower is compulsory. 2. Post dated cheques for all installments have to be taken without fail. For Non-Salaried Person 1. Personal Guarantee of spouse of the borrower is compulsory. 2. Post dated cheques for all installments have to be taken without fail. In Case of Loans to NRIs 1. One more personal guarantee of a person having income equal to that of the borrower or having minimum means of at least 200% of loan amount. 2. The guarantee as mentioned above for NRIs may be waived if 40% of the loan amount is covered by liquid collateral security.

REPAYMENT - New Car: Maximum 84 EMIs commencing from one month after disbursement.

Pre Used Car: For pre-used vehicle number of EMIs should be fixed in such a manner that the entire loan as well as interest is repaid within the residual economic life of the vehicle, but not exceeding 36 EMIs. RATE OF INTEREST NEW CAR(FLOATING)-LINKED - Repayment Upto 3 years Base Rate+1.75%WITH BASE RATE Repayment above 3 years and upto 7 years Base Rate+2.25%(BASE RATE AS ON DATE 10.5% P.A.) PRE-USED CAR Repayment Upto 3 years Base Rate+4.00% Repayment above 3 years and upto 7 years Base Rate+4.00%

PENAL INTEREST – Penal interest @ 2% per annum on the amount of default from the date of default till payment or realisation.

SECURITY - 1.Hypothecation of car. 2.Collateral Liquid Security, if any, offered/stipulated by sanctioning authority. (Collateral Liquid Security may be in the form of FDR/NSC/LIC (Surrender

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value)/Bank approved shares in demat form etc).

DISBURSEMENT – 1.Before issuing Draft/Pay Order branch should obtain document evidencing placement of indent by the borrower to the dealer for purchase of car. 2.The Draft/Pay Order should be sent directly to the dealer by Regd.Post/ Authorized official of the bank.

PROCESSING CHARGE – 1% of the loan amount subject to a ceiling of Rs 1500

INSPECTION –Periodical inspection should be carried out regularly as in case of any other loan.

PREPAYMENT - 1.No Pre-payment charges upto loan amount of Rs 2 lakhs.CHARGES 2.For loan above Rs 2 lakhs, pre-payment charges are to be levied. PRE-CAUTIONARYCHARGES - 1.Strict observation of KYC norms. 2.Margin to be deposited upfront. 3.Branch to obtain documentary evidence in respect of indent placed with the dealer for purchase of car, if necessary, further enquiries may be made with the dealer. 4.Draft/PO/Magic Cheque to be sent directly to the dealer by Regd. Post/ Authorized Official of the Bank. 5.The cost of the vehicle includes comprehensive insurance premium and road tax for the first year together with cost of accessories.

UCO CAR FOR MEMBERS OF STAFF(officers and Clerks)Terms and Conditions in addition to what have been prescribed under the scheme:1.A full time confirmed staff members (officers and Clerks) with a minimum of 2 years if completed service and 5 years of remaining service will be eligible.2.Eligible members of staff will maintain 40% take home pay after all deductions including deduction of the installment of the proposed loan throughout the currency of the loan.(This condition will apply in lieu of ’Income Criteria’ prescribed under UCO Car Loan Scheme). Further, there would be no provision for clubbing of income of spouse or children.3.Car loan shall have security coverage of lien on P.F. Gratuity and all other terminal benefits of the staff member.

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4.No car loan should stand in the name of the staff-member on the date of his application for a loan under UCO Car Loan Scheme. However, the staff-member who has outstanding balance in the staff car loan a/c under existing scheme for staff, may be considered for such loan provided the amount of recovery in respect of this loan as well as all other loans and statutory deductions leave at least 40% of the salary as his net take home pay.5.Other terms and conditions including rate of interest as amended/revised from time to time for general public under UCO Car Loan Scheme will apply to the members of staff.SANCTIONING AUTHORITY FOR STAFF MEMBERS

Category of Staff Sanctioning Authority

Officer & Clerk working at branches or atOffices under jurisdiction of any Zonal Office

Respective Zonal Head*(However in case of EL/VL branches,the Branch Head in SMGS-IV or SMGS-V Would be the sanctioning authority for Officers/clerks working under him/her)

For Clerks & Officers upto SMGS-IV workingIn HO

AGM(Personnel)

Officers in SMGS-V working in HO an ZonalHeads in SMGS-V

DGM(Personnel)

DGMs working in HO and Zonal Heads in TEG-VI

GM(Personnel)

GMs and FGMs ED/Chairman & Managing Director

UCO EDUCATION The scheme extends a helping hand to meritorious students desirous of pursuing basic/ higher/ professional/technical education either in India or abroad. The parents will become co-borrowers with their dependant (student) if the latter applies for educational loan.

OBJECTIVE-The Educational Loan Scheme aims at providing financial support from the banking system to meritorious students for pursuing higher education in india and abroad. The main emphasis is that a meritorious student, through poor, is provided with an opportunity to pursue education with the financial support from

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the banking system under affordable terms and conditions. The ultimate objective is that no deserving/meritorious student is denied an opportunity to pursue higher education merely for want of financial support.

ELIGIBILITY-a)Student must be an Indian National b)Secured admission to a higher education course in India or abroad through entrance test or selection process after completion of HSC (10 plus 2 or Equivalent) c)In some of the post graduate courses or research programs criterion for selection may not be the Entrance Test therefore selection based on marks obtained in qualifying examination, i.e. cut off marks, may be reckoned/ adopted as minimum eligibility criteria to determine merit for such courses. d)In all other cases of PG and other Research Courses, GM/FGM shall decide on case to case basis of course based on recommendation of the Zonal Manager on reputation, past track record for placement & employability of the institute to which admission is sought/obtained. e)Students securing admission through management quota for Degree/Diploma in Nursing courses are eligible subject to condition that fee structure stipulated by respective State Govt. only has to be considered. However students securing admission to all other courses through management quota are NOT eligible under the scheme.

f)Service area approach concept in the conventional way is not applicable.There has been a shift in the service area approach. The student should belong to the same District(domicile) in which the Bank Branch is located.

AGE LIMIT- No Minimum age criteria.However in case of minors’loan will be jointly in the name of parents and student and the student shall ratify the borrowing by acknowledging the debt on attaining major status i.e 18 years of age. Maximum Age Limit a)25 years for vocational training courses, job oriented diploma course & 30 years for post graduation diploma courses for general candidates. b)28 years for graduation & 30 years for post Graduation for general candidates. c)30 years for graduation/diploma & 33 years for post-graduation for SC/ST candidates.

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COURSES ELIGIBLE- Loans For Studies In India a)Approved courses leading to graduate/post graduate(Masters and PH D)degree and PG Diplomas conducted by recognized colleges/universities recognized by UGC/Govt./AICTE/AIBMS/ICMR etc. b)Professional courses: c)(Engg., Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc) d)Courses like ICWA,CA,CFA etc e)Courses Conducted by IIM,IIT,IISC,XLRI,NIFT,NID etc. f)Regular Degree/Diploma Courses like Aeronautical, Pilot training, Shipping etc approved by Director General of Civil Aviation/Shipping if course is pursued in India. g)Approved courses offered in India by reputed foreign universities h)Evening courses of approved institutes. i)Courses offered by National institutes and other reputed private institutions. j)Computer certificate courses of reputed institutes accredited to DOE or institutes attributed to universities. k)Degree oe Diploma courses on Teacher , Training, Nursing, B.ED courses conducted by Central/State Govt. approved private institutions. (The conditions for Teacher , Training, Nursing, B.ED courses are: ) I. It should not be a certification course. II.The fees should be as per the fees structure stipulated in Central/State/Govt. Colleges.

LOANS FOR STUDIES ABROAD a)Graduation:For job oriented professional/technical courses offered by reputed universities b)Post Graduation: MCA, MBA, M.S. etc c)Courses conducted by CIMA-London, CPA in USA etc. d)Degree/Diploma courses like Aeronautical, Pilot training, Shipping etc provided these are recognized by competent regulatory bodies in India/Abroad for the purpose of employment in India/Abroad.

EXPENSES CONSIDERED FOR LOANS - To extend finance for meeting the following expenses:

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a)Fees for the courses/Examination /Library/Laboratory b)Purchase of Books/Stationery & Equipment/Instrument/Journals/ Uniforms c)Caution deposit /Building fund/Refundable/Deposit supported by institution bills/receipts. d)Travel expenses/Passage money for studies aborad e)Hostel charges/Boarding cost run by Institutions/Private Hostel/Paying Guest Accommodation etc. f)Purcahse of Computers- essential for completion of the course. g)Any other expenses required to complete the course like study tours, project work, thesis etc. h)Reasonable lodging & broading charges will be considered in case student chooses/is required to opt for outside accommodation. Caution deposit, building fund/refundable deposit supported by institution bills/receipts amount shall not exceed 10% of the total tuition fees for the entire course.

Expenses towards purchase of books/equipment/instrument/uniforms/plus cost of computer plus other expenses like study tours, project work thesis etc put together may be capped at 20% of the total tuition fees payable for completion of the course.

QUANTUM OF FINANCE – Rs 10 lakh for studies in India. Rs 20 lakh for students abroad(subject to compliance of Exchange Control Regulations)

ASSESSMENT OF LOAN AMOUNT – While assessing the loan amount, the following to be kept in mind- a)Prospect of Future employment b)Expected realizable income c)Interest for the total period d)If interest during moratorium period is not serviced from beginning, the

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burden becomes high. Therefore, repayment schedule to be arrived at accordingly after ascertaining the repayment capacity.

MARGIN-Upto Rs 4 lakh- No Margin Above Rs 4 lakh –Students in India -5% Studies abroad-15% Margin to be brought in on year to year basis at time of disbursement Scholarship to be included in margin.

If the amount of scholarship is already received before disbursal, the installment amount will be proportionately reduced in proportion to the amount of scholarship received.

However , if the scholarship is received after the disbursal of the installment the scholarship amount should be remitted to the branch and the same should be credited to the loan account.

Student should provide an undertaking in this regard.

FAMILY INCOME- NO CEILINGSECURITY – Upto Rs 4.00 lakhs -No Security -Co-Obligation of Parents Above Rs 4.00 lakhs and below 7.50 lakhs - Co-Obligation of Parents -Collateral in the form of a suitable third party guarantee. -The bank may, at its discretion, waive third party guarantee if satisfied with the networth /means of parent who would be executing the document as “Joint Borrower”. Above Rs 7.50 lakhs - Co-Obligation of Parents -Tangible collateral security equivalent to full value of the loan. The security may be in the form of Land/Building/Govt. Securities/PSU Bomds Units of UTI/NSC/KVP/LIC Policy/Gold Shares, Debentures, Bank Deposits in the name of Student/Parent/Guardian or any other third party with suitable

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margin. Where the Land/Building is already mortgaged, the unencumbered portion can be taken as security as second charge provided that covers the required loan amount.

REPAYMENT -Repayment of the loan will be in Equated Monthly Installments for the periods as under: For Loan upto Rs 7.50 lakhs –Up to 10 Years For Loan above Rs 7.50 lakhs –Up to 15 years

-No prepayment penalty will be levied for prepayment of loan any time during the repayment period. -Repayment holiday/Moratorium: Course Period+1 year or 6 months after getting the job, whichever is earlier. -The interest accrued during the repayment holiday period to be added to the principal & repayment in EMI to be fixed. -If the student is not able to complete the course within the schedule time for reasons beyond his control, extension of time for completion of course may be permitted by sanctioning authority for a maximum period of 2 years. -In case the student discontinues the course midway, appropriate repayment schedule will be worked out by the bank in consultation with the student/ parent. -Certificate shall be obtained from the institute where the student is pursuing the course, informing reason for extension of course period or discontinuance of the course to enable the sanctioning authority to take appropriate decision on the matter.

RATE OF INTEREST-Interest to be charged at rates linked to the Base Rate. (Simple Interest to be charged during the repayment period holiday/Moratorium Period).

Upto Rs 4.00 lakhs: Base Rate + 3% (Base Rate being=10.50%) Above Rs 4.00 lakhs: Base Rate +3.75%

Students Satisfying DRI norms – Any Amount - 4% Student Satisfying 60% handicap – Any Amount – 4%

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Service of Interest during Moratorium Period is optional. Accured Interest will be added to the principal amount borrowed while fixing EMI for Repayment.

Penal Interest @ 2% p.a. to be charged on the overdue amount for the overdue period only for limits above Rs 4.00 lakhs.

INSURANCE-All education loan student borrowers’ life for the entire loan tenure are to be covered under Kotak Mahindra Old Mutual Life Insurance Company for group credit life cover.

TOP UP - A student who has availed Educational loan from any UCO Bank branch may be LOAN permitted to avail of the second loan subject to maximum aggregated amount of the loan. When a second loan will be sanctioned within the gestation period of first loan to pursue further courses,the following points should be taken into considerations: a)The repayment capacity of the students/parent must be considered carefully. b)The entire accumulated interest of first loan should be serviced by the parent. c)The repayment of the loan will commence after the completion of the second course and further moratorium period, as provided under the scheme. d)First loan outstanding to be transferred to the second loan to have only one loan account. e)Fresh documents to be executed with aggregate limit of the first and second loan.

MULTIPLELOAN- More than one member of same family can avail Education loan upto 4.00 lakhs and each applicant will be treated as individual loan without clubbing/insisting the income of the family and the security.

JOINT BORROWER-The joint borrower should normally be parent /guardian of the student borrower & in case of a married person, joint borrower can be either spouse or the parent/ parents-in –law.

SANCTIONING AUTHORITY AND DELEGATED POWER:

Education Loan Scale I Scale II Scale III Scale IV

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For Studies in India 4.00 lakhs 10.00 lakhs 10.00 lakhs Full PowerFor Studies in Abroad NIL 7.50 lakhs 10.00 lakhs Full Power

Educational Loan proposals beyond the delegated power of branches are to be forwarded to Zonal Office for disposal.

For second loan to existing UCO Educational loan borrower

Any educational loan proposal can be

rejected by branches/other sanctioning authority only with the concurrence of the next higher authority.NOTE: All the educational loan proposal under upto Rs 4.00 lakhs will be sanctioned at branches, which are attached to Retail Loan Hub (RLH).Proposals beyond 4.00 lakhs emanating from branches under RLH will be sanctioned by RLH.

DISBURSEMENT-The loan to be disbursed In stages as per requirement/demand directly to the institutions. Vendors of equipment/instruments to the extent possible.

PROCESSING FEE- No processing fee/Upfront charges may be collected on education loans.

FOLLOW UP-Branch to contact college/university authorities to send progress report at regular interval in respect of the student.

CAPABILITYCERTIFICATE- Sanctioning Authority can issue the capability certificate for students going abroad for higher studies.For this financial and other supporting documents may be obtained from applicants, if required.

(Same of the foreign universities require the students to submit a certificate

Scale of Branch Head Sanctioning Authority

Upto Scale-IIIOfficials In Scale-IV & above,Attached to Zonal Office, orZonal Manager

In Scale –IV and above Branch Head

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from their bankers about the sponsors’ solvency/financial capability,with a view to ensure that the sponsors of the students going abroad for higher studies are capable of meeting the expenses till completion of studies).

NO DUE CERTIFICATE-No due certificate will not be insisted upon as a pre-condition for considering educational loan.

However a declaration/an affidavit confirming that no loans are availed from other banks are to be obtained.

DISPOSAL OFLOAN -Loan applications have to be disposed of in the normal course within a APPLICATION period of 15 days. -Applications to be received either directly at bank branches or through on- line mode. -Upon receipts of application, standard acknowledgement giving reference number will be issued. -The acknowledgement will contain details of the bank official who, could be contacted in case of delay in disposal of application.

CONCESSION IN - 1% interest concession is available during the moratorium period, in such ROI of those cases where interest has been serviced regularly every month during the moratorium period. -Available for all loans irrespective of the amount. -The above concession is to be released at the beginning if the succeeding financial year by way of credit to loan account. -Adjustment for the broken period to be done after moratorium but before commencement of repayment period. -In any year during moratorium period if interest is not serviced, the borrower will not entitle for any interest concession for the remaining tenure of the moratorium period. INTEREST SUBSIDYUNDER CSIS SCHEME- Target Group

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Student should be under EWS (Economically Weaker Section) category i.e. gross annual parental income from all sources would not be more than 4.50 lakhs.

Subvention/Subsidy Type -Full interest subsidy on education loan (for course period + moratorium period of maximum 1 year) to grant relief to students belonging to EWS -Interest subsidy is admissible upto a loan amount of Rs 10 lakhs and disbursements made on and from 01-04-2009. -Subsidy to be claimed once in a year after the completion of preceding financial year. STAFF RELATEDCASES - a)Staff related cases to be sanctioned by authority one step higher to the sanctioning authority. b)Clearance from HO PAD/concerned sanctioning authority to be obtained as per circular No. CHO/SISB/35/2000-01 dt.25.1.2001 c)Under this scheme no security is insisted upon upto the loan amount of Rs 400 lakhs. d)In case of the loan amount is above Rs 4.00 lakhs,Collateral security equal to 100 % of the loan or co-obligation of parents/guardians/third party for 100% of the loan amount.

UCO MORTGAGE

Under the scheme credit facilities are considered upto 60% value of the property located in metro/urban/semi-urban centers to meet financial needs of government employees, employees of schools, colleges, PSU, reputed corporate business enterprises, professionals and businessmen with regular source of income and filing IT return against mortgage of their immovable property with clear Title.

PURPOSE-Credit facility will be sanctioned to various segments of population to meet their financial needs against mortgage of their immovable property located in

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metro/urban/semi-urban centres.

NATURE OF FACILITY - Term Loan

TARGET GROUPAND ELIGIBILITY- Employees of Central and State Govt., Schools, Colleges, Public Sector Undertakings, Reputed Corporate Business Enterprises.

Non-Salaried class of people including professionals/Businessman who have regular source of income and are filing IT return.

Maximum age limit of the borrower on the date of applying for the credit facility is 65 years.

QUANTUM OF - Credit facility for an amount of 60 % of the value of the property inCREDIT FACILITY the form of non-agriculture land/land with building constructedAND FIXATION OF thereon/flat/apartment/commercial property in the name of the AMOUNT OF borrower (or in joint names) may be considered.SANCTION In case the property is rented, it is to be ensured that the valuation is suitably adjusted to ascertain the realizable value of the property due to tenancy condition. Minimum Amount: Rs 2 lakhs Maximum amount: Rs 50 lakhs However, the loan amount will be determined taking into consideration of the amount of regular income of the prospective borrower from all sources subject to the satisfaction of the sanctioning authorities on the sources of income as declared by the applicant. While determining repayment capacity income of spouse can also be taken into consideration, but in that case loan should be granted in joint names. Income other than salary income should be regular in nature and supported by documentary evidence as will be accepted to the bank.

In case of salaried persons, the take-home pay after all deductions including monthly installments of the proposed term loan should not

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be less than 40% of gross monthly income.

For non-salaried persons the monthly gross income may be computed from the yearly income declared for the previous financial year and dividing the same by 12.

The amount of depreciation as allowed by the Income Tax Act to businessmen and professionals, being the part of cash surplus available with them, may be added back to their net income for the purpose of determining the repaying capacity.

In case the property stands in the joint names credit facility will be considered in joint names.

REPAYMENT- Maximum 84 Equated Monthly Installments irrespective of loan amount.

RATE OF INTEREST– Base Rate + 6.30% with monthly rest subject to revision to be made by the bank from time to time at its sole discretion. (Base Rate= 10.5%)

SECURITY-Equitable Mortgage (EM)/Registered Mortgage of unencumbered non-agriculture land/residential house/flat/apartment/commercial property situated in metro/urban/ semi-urban centres in the name(in joint names) of the prospective borrower. In some of the states like Maharashtra, Gujrat, Madhya Pradesh and Tamil Nadu etc. Creation of equitable mortgage attracts payment of stamp duty and the memorandum of Entry/Recital or any writing evidencing creation of Equitable mortgage is to be compulsorily registered under the Registration Act. Branches in such states must follow this procedure while creating Equitable Mortgage.

In case of availment of credit facility against property in the name of a third party, the owner of the property shall have to stand as a guarantor.

In case, after the availment of the loan, the property is desired to be let out, permission of the bank would be required failing which such occupation will be treated as trespassing and appropriate measures will be taken by the bank.

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Permission of the bank would be granted only where the proposed rental/lease is in favor of institution of repute or an employee working in an institution of repute and the leased rentals/monthly rentals will be assigned to the bank.

If the property, for any reason, need to be sold out, the total dues of the bank are to be adjusted by release of the title deed of the mortgaged property. However the borrower will have the provision for substitution of the property of the same or higher value in case he/she wants to continue the credit facility.

In case of loan against mortgage of commercial property, a Tripartite Agreement has to be entered into between the Owner/Mortgagor of the one part, the occupiers of the several portions of the commercial property, who are paying rents or other consideration to the other Owner/Mortgagor in respect of their occupied portions of the Second Part and the Bank of the Third Part, stipulating inter-alia that the rents and considerations which are being paid to the Owner/Mortgagor shall be directly credited to the Owner’s/Mortgagor/s loan account with the bank regularly till loan account is fully adjusted.

UCO Mortgage proposals secured by commercial real estate are to be reckoned as Exposure under Commercial Real Estate and would require prior administrative clearance as per extant norms.

INSURANCE-The property will be insured against fire, riots and wherever required against other probable hazards such as floods, lighting, cyclone etc. by the borrower with the usual ‘Bank Clause’ for the value of the property with our channel partner.

SANCTIONING POWER

GENERALGUIDELINES -The property already mortgaged with the bank under UCO Mortgage Loan Scheme may be considered for granting other loan in personal/mid market segment (excluding UCO Real Estate and UCO Rent) as security to cover both the loans, by the Zonal Office on case to case basis on merits without diluting

Scale-I Scale-II Scale-III

Rs 5.00 lakhs Rs 10.00 lakhs Rs 20.00 lakhs

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margin on security and eligibility norms under any of the scheme(s)

In other words, if any of two loans in personal/mid market segment are given to the same borrower (s), the security and eligibility norms should be satisfied for the both the cases.

Care should be taken with regard to creation and extension of charge by way of equitable/registered mortgage to cover both the loans as per extant guidelines of the bank.

Income of the borrower should be as per Income tax Return Assessment Order/ Salary Certificate of the Employer whichever is applicable, depending on the type of the borrower.

Identification/Selection of the borrower should be done judiciously.

Valuation of the immovable property will be done by valuer approved by the bank at the borrower cost. Sanctioning authorities will ensure that the valuation has been made keeping in view the rates notified by the Competent Authorities for the areas concerned. Legal opinion is to be obtained from an approved counsel for the property which is being accepted as security certifying that the title to the property vests with the borrower and same is clear and marketable. The legal opinion so obtained should be kept on record. Pre-Sanction and Pre-Disbursement inspections of the immovable property offered as security is to be conducted by the Sanctioning Authorities to ensure that in case of need the same is enforceable and readily saleable.

The bank has the right to foreclose the account if more than three installments fall overdue. Proposals secured by commercial real estate require prior administrative clearance.

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DOCUMENTATION – Loan Application Term Loan Agreement Irrevocable letter of Authority for remitting EMIs out of salary of the employee to the bank acknowledgement from the employer to be kept on record. Irrevocable letter of Authority for debiting the amount of installments from salary account to be obtained or otherwise, post dated cheques signed by the borrower representing the monthly installments along with letter of deposit to be obtained.

Equitable/Registered Mortgage of the immovable property is to be created as per procedures prescribed by the bank. Undertaking of not letting out the property on lease/rent without prior permission of the bank.

Tripartite Agreement in respect of commercial property as indicated above.

PROCESSING FEE –@ 1 % of loan amount sanctioned

PREPAYMENT CHARGES -1 % of amount prepaid

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UCO TRADER

It is a loan for financing working capital and Term Loan needs of Retail and Wholesale trading activities other than Export. Retail and Wholesale trade in various types of commodities (not services) excluding those items which are specifically prohibited/restricted by the Bank, are financed through this scheme. Fund based Advance is granted by way of Cash Credit against stock as well as Book debt and Term Loan for acquisition of fixed assets to run the trade and business. PURPOSE – Term loan and working capital needs of clients engaged in retail, wholesale trading activities (excepting Exports) and services sector who are willing to furnish mortgage of property and or other acceptable security of adequate value.

ACTIVITIES ELIGIBLE FOR – a)Existing enterprise engaged in business (not prohibited/restricted in Bank’s FINANCE loan policy Documents) for at least 2 years and earning profit during the last 2 years. However, new trading units as well as service unit, which have not completed two years, can be considered under the scheme up to maximum limit of Rs 100 lakhs only. Activities Covered a)Trading activity other than Export b)Retail and wholesale trade in various types of commodities and excluding those specifically prohibited/restricted in bank loan policy documents viz.

For speculative purposes

Proposals from defaulters of our bank(excluding exempted categories)

For sensitive commodities as informed by RBI from time to time

which directly or indirectly violate the spirit of selective credit control Commodities, the possession of which is prohibited by the law of the

land. Sanction of fresh loans to clear the NPA accounts in the group/

associates.

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Credit proposals from companies/borrowers whose name(s) appear

in defaulters/suit filed accounts list published by the RBI from timeto time.

c)Service Sector d)Exceptions can be made in respect of the company/promoters if the bank is satisfied that they are not willful defaulters and satisfactory explanation is available for being a defaulter. This would be subject clearance from CMD or in his absence by ED.

ELIGIBILITY –As a proof of genuine trading activity, the applicant should produce Trade License/Certificate issued under Shop & Establishment Act/Sales Tax Registration Certificate/Vat Registration Certificate/Drug License/Certificate issued by the Govt. body for retail trade such as ration and civil suppliers etc. as may be applicable under local laws. Command Area 1.Factory/Business premises or residence should be located within 20 km of the radius for Scale-I, II & III Branches. Further, location of business premises, residence and collateral security should be within city/town/ Panchayat Samity limits. 2.For Scale-IV and V Branches, command area would be the city limit within which factory/business premises/residence should be located. However Scale -IV and V may accept collateral security anywhere in India irrespective of distance only after verification of the security/title deeds etc. by the nearest branch of our bank.

QUANTUM OFFUND -Minimum – 1.00 lakhs Maximum – 100 lakhs New units as well as units, which have not completed two years, can be financed under the scheme to a maximum limit of Rs 10.00 lakhs

ELIGIBLE CREDIT FACILITIES

A. FUND BASED -Cash credit against stocks and Book-debts not exceeding 90 days (may be allowed up to 120 days with the permission of Regional Office) can be

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sanctioned under UCO TRADER Scheme. NOTE: i)NO CASH CREDIT WILL BE SANCTIONED AGAINST BOOK DEBTS ONLY ii)LIMIT AGAINST BOOK DEBT WILL NOT BE MORE THAN 50% OF THE TOTAL ASSESSED LIMIT. Ad hoc facilities can be sanctioned upto 20% of the regular sanctioned limit by the branch heads in Scale-IV and above after satisfactory conduct of the account subject to minimum period of 2 years valid for a maximum period of 3 months or till regular enhancement is considered whichever is earlier. Ad hoc proposals pertaining to other branches would be considered by the concerned Zonal office/competant authority.

B.NON-FUND - Inland L/C –Sight-DP or DA with usance period not exceeding 90 days. BASED (Usance period may be relaxed upto 120 days with the permission of ZM) Inland BG –For purposes connected with the trading activity of the client with validity period upto a maximum of 1 year including claim period.

In case of genuine requirement by the trader, Foregin Letter of credit limit may be considered with usance as applicable for inland letter of credit, with the permission of Zonal Manager. N.B. :Such non-fund based limit not to exceed 50% of the fund based W/C limit sanctioned.

C.TERM LOAN –Within fund based limit of Rs 200 lakhs, term loan up to Rs 25 lakhs can also be sanctioned for acquisition of fixed assets including building, renovation of office/show room/go-down, purchase of equipment, furniture, vehicles such as:

Showcases, Basic office amenities like computer hardware.

Furniture layout for storage/display of goods traded, cold storage

facilities. Neon lighting, hoarding, display panels.

Billing equipment, safety equipment etc.

Other facilities aimed at enhancing customer convenience like Air-

Conditioning.

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Purchase of delivery van, trolley etc.

REPAYMENT OF TERM LOAN -Sanctioning authority shall decide on the repayment period for term loan based on the assessment of the repaying capacity of the borrower and the period shall not exceed 60 months from the date of sanction.

CONSTITUTION OFBORROWER

Individual

Proprietorship

Partnership

Limited Company (Public/Private)

HUF

The borrowing concern should deal exclusively with our bank only.

SUBMISSION OF FINANCIAL - a)For Limits of Rs 1.00 lakhs up to and inclusive of Rs 20.00 lakhsSTATEMENTS 1.No financial statement should be insisted. However, Sales Tax Assessment Order or Return/VAT Assessment Order or Return/ Service Tax Assessment or Return may be obtained subject to availability. 2.In other cases sanction of limit is based on self declaration by the applicant. 3.Inspection of borrower’s shop, godown, books & record of sale shall remain in force. b)For limits above Rs 20.00 lakhs but below Rs 50 lakhs 1.For sales Tax leviable item – Sales Tax Assessment Order/VAT Assessment Order/Service Tax Assessment Order is required. 2.Where Sales Tax Assessment Order/VAT Assessment Order /Service Tax Assessment Order is not available, latest Audited Financial Statement is to be obtained. c)For limits of Rs 50.00 lakhs and upto Rs 200.00 lakhs Submission of Audited Balance Sheet and Financial Statements are mandatory.

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SECURITYCOVERAGE – PRIMARY :Hypothecation of Stocks, Book-debts and Fixed Assets for existing units making profit at least for last two years. But for new units and units which have not completed two years, book debts will not be taken into account while calculating Drawing Power. COLLATERAL

Tangible collateral securities in the form of mortgage of land(not

agriculture land) and building.[Property to be mortgage may be ONLY in the name of either Borrower, Proprietor, Partner, Director or their close relative (Viz. Spouse, Parent, Brother, Sister, Son, Daughter) who should stand as guarantor.

NSCs, LIC Policies, KVPs, Govt. Bonds, FDRs, standing in the name of

borrower, proprietor, partner/director only. Note: Agriculture land and shares are not to be accepted by way of collateral security. VALUE OF COLLATERAL

The total fund based limit to be allowed should not to be above 60% of the

realiseable value of the property (Land or Building) and value of otherliquid security after considering corresponding margins.

Note : The extent of collaterals needed is to be decided with reference to fund-based limits only. Non-fund based limit need not be taken into account for this purpose. However, for creating mortgage/charge on other collateral securities, the security documents should be got executed for amounts equivalent to the aggregate fund based and non-fund based facilities.

Pre-sanction inspection in respect of immovable property is mandatory irrespective of amount of loan or value of security. Record of inspection of security (immovable property) has to be prepared as per format PSVR-4

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along with route map of the immovable property to be mortgage and kept with security documents. Pre-sanction inspection may be conducted along with the borrower. Photos of property with the borrower and owner of their representative are to be taken and kept on record.

Second physical inspection of the mortgage property has to be carried out by an officer other than the officer, who conducted pre-sanction inspection /visit of the site/property offered as security. The officer assigned the job of second verification/inspection should inspect the immovable property and verify the copies of relevant documents/papers. The officer shall prepare the Inspection Report as per the specified format enclosed as PDIR (Pre-Disbursement Inspection Report) and submit to the lending branch with copy to branch, where equitable mortgage of Title Deed is created. Lending branch shall disburse the loan only after getting a satis- factory report from the officer conducting second inspection. In case, any discrepancy is observed in the second Inspection/Verification report (PDIR) as compared to PSVR-4, the sanctioning authority shall take his own decision on the matter.

Branches should adhere to the procedures as laid down in Bank’s Manual of instructions Vol. VI-Advances-General regarding creation of equitable mortgage strictly and ensure that no deviation takes place in the matter. Brach should forward the documents to bank’s empanelled lawyer for Non- Encumbrance certificate and detailed report on title under cover of a letter indicating the terms of reference, the specimen of which is enclosed as Annexure-7. Branches should also obtain from the Bank’s empanelled lawyer the non-encumbrances certificate and detailed report on the title of the property as per format marked Annexure-8. An affidavit (enclosed as Annexure-9) is to be obtained from the owner(s) of the property. Whenever any doubt arises about genuineness of Title Deed of a property offered to the Bank as security, the empanelled lawyer of the Bank should be instructed to obtained a Certified copy of the Title Deed of the Property from the concerned Registration Office and verify the same meticulously with the deed submitted by the borrower giving emphasis not only in contents, but also the details of the Stamp Papers including printed Sl.No., Date of Purchase of the Stamp of the original Title Deed, Rubber Stamps of the

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Registration Office, affixed thereon including the registration particulars endorsed at the back of the Title Deeds etc. before causing search of the property. After having been satisfied about the authenticity of the Deed, search should be caused. Further, in states where registration is required for creation of EMTD the Branch Manager should ensure that the required amount has been deposited towards registration of the EMTD. If property belonging to the 3rd party is offered, branches should satisfy themselves about the identity of the person offering his property. Br. Manager/Officer designated by him should visit the site of the property, talk to the owner, ascertain the relationship with the proposed loanee and the reasons/consideration for his offering the property for the purpose of mortgage. In case of 3rd party mortgage, adequate precaution should be taken so as to ensure that the security offered is genuine and there is no fraudulent transaction. For term loan assets purchased/created out of bank finance should be obtained as security. No increase in collateral is required as the term loan shall be within the overall eligible finance only under the scheme. That is, total of working capital and term loan components should not be above 60% of realizable value of the collateral security.

Note: (1)Wherever the security is in the form of land and building, equitable/ registered mortgage has to be created. (2)No relaxation in collateral security coverage at the time of enhancement of limit is to be permitted.

VALUATION REPORT – Valuation certificate for landed property offered as collateral security to be obtained from approved valuer.The valuer should indicate the date and time of his visit to the flat/plot/property and enclose photographs of the property along with owner also mentioning landmarks nearby in his valuation report. Where

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valuation of a property as a whole exceeds Rs 50.00 lakhs, a confirmation of a second empanelled valuer should be obtained. Branch Manager should also make his assessment about market value by physical inspection and local enquiry. Valuation Certificate (Value of Property/lies below 50.00 lakhs) from a second valuer may be obtained if sanctioning authority feels that the value given by First Valuer is on higher side. For LIC Policy, surrender value only should be considered.

GUARANTEE –By all directors of the company(in case the borrowing concern is a limited company) -By all the partners of the firm(in case the borrowing concern is a partnership firm) -By Karta and all major coparceners of HUF(in case the borrowing concern is HUF) -By owners of immovable properties offered as collateral security.

MARGIN ON – NIL (1) Stocks & Books Debts –While computing Drawing Power only 50% of the sanctioned limit should be allowed to be availed against the Book Debt. (a)In case of new unit margin of 20 % in stock should be maintained while calculating drawing power. (b)Margin on immovable property would be 40% of the realizable market value of immovable property and/or (c)10% on FDR(in case limit is sought against FDR as additional limit above 60% of project value) and/or (d)15% on surrender value of LIC policies, NSCs and Govt. Bonds(in case limit is sought against policies, NSCs and Govt. Bonds as additional limit) (2)LC/BG – Minimum Margin for LC/BG is 25% (cash/FD)

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(3)Term Loan – Margin for term loan is stipulated at 25% of value of the assets to be purchased and/or cost of expenditure to be incurred.RATE OFINTEREST –Base Rate + 3.75% with monthly rest subject to revision to be made by the bank from time to time at its sole discretion.COMMISSION ON BG –Rs 170 + 2.20% p.a. (Min Rs 170 + 1.10% i.e. charges for 2 Quarters) Rs 170 + 3.30% p.a. (Min Rs 170 + 1.65% i.e. charges for 2 Quarters) Charges are to be recovered upfront for the full period including the claim period including the claim period. Service Tax and Education Cess are to be loaded.

PROCESSINGCHARGE –0.50% of the Fund Based Limit + 0.25% of Non-Fund Based Limit (one time). 50% of the applicable processing charge will be recovered at the time of submission of the final proposal. Such amount will be fully refundable if the proposal is rejected and if the proposals is sanctioned but not availed by the borrower, no refund will be made. Rest 50% of the applicable processing charge will be recovered at the time of disbursement. Service Tax and Education cess are to be loaded. Processing charge may be waived in case of taken over accounts from other banks which will be permitted by Zonal Heads on merit.

RENEWAL CHARGES –At the same rate as Processing Charges.

COMPUTATION OF –Minimum – Rs 1.00 lakhsLOAN AMOUNT Maximum – Rs 200 lakhs

COMPUTATION OF LIMITS Limits will be calculated for fresh cases as follows: @ 60% on realizable market value of immovable property and/or @ 90% on FDR(in case limit is sought against FDR as additional limit above 60% of project value and/or) @ 85% on surrender value of LIC policies, NSCs and Govt. Bonds(in case limit is sought against policies, NSCs and Govt. Bonds as

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additional limit) OR 20% of gross Annual Sales(for existing units) as reflected in the last Sales Tax Assessment Orders/Sales Tax Return/Vat Assessment Order or Return/Service Tax Assessment Order or Return/Declaration given by the borrower, whichever is less.

For Existing Standard Accounts: (a)Where renewal is not due, existing limit may be allowed to continue till the due date of next renewal. (b)On the next renewal if no enhancement is sought, then the provision of margin would be as under where collaterals has been provided in the form of EMTD: (i)Next Renewal-No margin. The existing margin to be maintained, if provided earlier during last sanction/renewal. (ii)2nd Renewal -10% (minimum) (iii)3rd Renewal - 20% (minimum) (iv)4th Renewal - 40% (minimum) i.e. within a period of 4 years the 40% margin to be ensured. (v)Where renewal is sought with enhanced limit, there 40% margin to be maintained for the total limit and not only on enhanced portion (for mortgage collaterals) Enhancement of limit beyond Rs 125.00 lakhs can be considered up to 20% every year subject to maximum of Rs 200.00 lakhs. In other words, enhanced limit should not exceed 120% of existing limit beyond Rs 125.00 lakhs.

Where limit is secured by liquid collaterals there 10% or 15% margin on collaterals must be maintained from the next date of renewal, both for the existing limit as well as for enhanced limit.

Term Loan : For Term Loan nee based limit within the ceiling (Rs 25.00 lakhs) to be fixed with 25% margin. The applicant should be able to repay the dues (EMI)from his profit/income. Competent authority to sanctioned should be

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satisfied on the same before fixing the repayment period of maximum 60 months. Non-Fund Based Limit : Non-Fund Based Limit should not exceed 50% of Fund Based Working Capital Limit as per existing guidelines.

For New Unit : The Maximum Limit will be Rs 10.00 lakhs For new units the lower of the value between 20% of Projected Sales and value of security after margins, will be set as the limit.

However, drawings will be allowed as per Drawing power which will be calculated taking margin as 20% on the basis of paid stocks.

PROCESS NOTE& CERTIFICATE –Revised process note as per Annexure-10 and/or 11 should be used and a certificate regarding pre sanction visit of applicant’s/guarantor’s residence and place of business of borrower, Verification of Stocks, Statement of means, Valuation of Collaterals from approved valuers and legal opinion of empanelled lawyer and any adverse remark of the borrower has to be kept in bank record.

DOCUMENTS/PARTICULARS TO -(A)For limits of Rs 1.00 lakhs and above but up to and inclusive of BE FURNISHED BY Rs 20.00 lakhs : THE PARTY WHILE (i)Application Form, Sales Tax Assessment Order or Return/VATAPPLYING FOR Assessment Order or Return/Service Tax Assessment Order orCREDIT FACILITIES Return subject to availability. (ii)Statement of existing current account/Cash credit account with other banks for last 6 months in case of take over of accounts. (iii)Statements of Means. (iv)Monthly declaration of Stocks, debtors and sales in Annexure-12. (v)Quarterly Statements with details of Stocks and Debtors (with opening and closing of Stocks, item with value and age-wise

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break-up of debtors) in CMR-14 &14A.

(B)For limit above Rs 20.00 lakhs but below Rs 50.00 lakhs : (i)Application form (ii)Latest Sales Tax Assessment Order/VAT Assessment Order/ Service Tax Assessment Order/Audited Financial Statement. (iii)Statement of existing current account/Cash credit account with other banks for last 6 months in case take over of accounts. (iv)Statement of Means (v) Quarterly Statements with details of Stocks and Debtors (with opening and closing of Stocks, item with value and age-wise break-up of debtors) in CMR-14 &14A. NOTE: For all limits beyond Rs 20 lakhs and above but below Rs 50 lakhs Balance sheet should be obtained (where Sales Tax Assessment Order/VAT Assessment Order/Service Tax Assessment Order is not available) only for the purpose of ascertaining the sales, profit and net worth of the unit, which should be positive.

(C)For limits of Rs 50.00 lakhs and above & up to Rs 200.00 lakhs : (i)Application Form (ii)Audited Balance Sheet and Profit & Loss Account. This would be mandatory for all accounts above Rs 50.00 lakhs irrespective of the fact whether sales tax/VAT/Service Tax assessment order is available or not. (iii)Statement of existing current account/Cash credit account with other banks for last 6 months in case take over of accounts. (iv)Statement of Means (v)Quarterly Statements with details of Stocks and Debtors (with opening and closing of Stocks, item with value and age-wise break-up of debtors) in CMR-14 &14A.

For limits above Rs 50.00 lakhs the Audited Financial Statements should be obtained for checks at entry level and not from the angel of assessment, which shall continue to be on the basis of turn over. The financial statement should be consulted on the following:

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i)Gross Sales, Net Worth and Net Profit ii)Current Ratio : 1:1 Bench Mark, Minimum 0.8:1 iii)TOL/TNW : 6:1 Bench Mark, maximum 8:1

(D)For new units or units, which have not completed two years : (i)Application Form (ii)Projected B/S & P/L A/c for one year. (iii)Statement of existing current account, if any, with other banks for last 6 months. (iv)Statement of Means (v)Monthly declaration of Stocks, debtors & sales in Annexure -12 in case of units, which have not completed two years. (vi) Quarterly Statements with details of Stocks and Debtors (with opening and closing of Stocks, item with value and age-wise break-up of debtors) in CMR-14 &14A in case of units, which have not completed two years.

For term loan the following additional documents should be submitted by the applicant : a)Application for loan. b)Quotation from reputed suppliers regarding asset to be purchased.

SECURITY DOCUMENTS TO -1.D P NoteBE OBTAINED 2.Letter of Waiver 3.Letter of Continuity 4.Term Loan Agreement 5.Hypothecation Deed for Stocks/Machineries 6. Hypothecation Deed for Book-Debts 7.Extension of charge over Current Assets for Non-Fund based limits. 8. Hypothecation of Plant and Machinery as additional security for both fund based and non-fund based limit wherever applicable, as per format given in Advance manual. 9.Personal guarantee of Partners/Directors/Karta & Coparceners and owner of the immovable properties. 10.Counter guarantee in A88B for BG facility

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11.Documents/Formalities for EMTD 12.Any other related document.

CREDIT REPORTS –Not required. But Statement of Means submitted by the borrower/ guarantor should be verified either by the advance in charge or the Br. Manager. The following noting should be made in the statement of means – “The correctness of the facts contained in the statement has been verified by the undersigned to the extent possible for the documents/ papers furnished by the borrower and also by making enquiries from the market ” Name of the Official Signature Date CONVERSION OFEXISTING ADVANCE -Permissible subject to compliance of all terms and conditions of TO UCO TRADER AND revised UCO TRADER Scheme.VICE VERSA Borrowers enjoying a limit of Rs 200.00 lakhs or below under UCO Trader scheme and with satisfactory track record for a minimum of two years since sanction of the limit and requiring enhanced limit more than Rs 200 lakhs based on need based assessment of working capital may migrate to General Advances, outside UCO Trader Scheme.

TAKE OVER – Permissible subject to – a)Satisfactory Credit Information Report from that bank that the a/c is standard asset & regular. Credit Information Report in IBA format (Annexure-17) should be obtained after sanction but before disbursement. Statement of a/c should be scrutinized to ensure that borrower is disciplined and turnover is commensurate with limits requested. b)Entire Assets and Liabilities to be taken out from transferor bank. c)Letter of relinquishment of charge on movable & immovable properties by transferor bank in our favour should be obtained. d)Takeover norms for taking over accounts from other Banks as per Loan Policy Documents2010,are to be duly complied with.

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SUBMISSION OFFINANCIAL -Periodic Stock statements have been dispensed with. However, stock STATEMENTS, QIS statements will be obtained only once at the time of execution of MSOD documents and as on 28th Feb every year to evidence bank’s hypothecation charge against the current assets of the borrower. All immovable properties offered should be inspected by the field staff, once before sanction and at the following periodicity after disbursal. For Standard Asset : Once a year by Field Officer Sub Standard Asset : The account to be reviewed immediately and the inspection to be done at quarterly intervals.

PRECAUTION FORSANCTIONING LIMIT -Before Sanctioning limit against Book Debts it should be ensured AGAINST BOOK DEBTS that borrower is maintaining books of accounts up to date. (i)Cash Credit limit only against Book Debts will not be sanctioned. (ii)Further, limit against books Debts will not be more than 50% of the total limit. (iii)Book Debts are on account of genuine trade transactions. (iv)Proper books & records are maintained.

MONITORING – 1.In case the turnover in the account (credit operations) is below 60% of the accepted sales, Branch should ascertain the reasons thereof. If reasons are not acceptable, the limit should be reduced proportionately and efforts should be made to obtain additional collateral security to strengthen the loan at least for the period requested for by the borrower to adjust the excess drawings. 2.Branch to compare credit turnover in the account with the accepted turnover on half yearly basis. 3.Inspection/verification of stocks & receivables to be conducted monthly/ quarterly. 4.Adverse features to be reported to RM. 5.Monthly Credit Monitoring Report (MCMR) should be sent in CMR-5 with FB & NFB limit of Rs 25.00 lakhs and above. 6.Report on compliance of terms of sanction should be sent to Sanctioning Authority & Monitoring Authority in CMR-6 enclosed in Annexure-16.

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7.Stock Audit once in every year may be done wherever needed with the permission of Sanctioning Authority.

CATEGORISATION UNDER P.S. –Limit up to Rs 20 lakhs comes under priority sector.

DELEGATED AUTHORITY (For UCO Trader Only) (Rs in lakhs)

FUND BASED Scale –I Scale –II Scale –III

Secured Cash CreditAgainst pledge/Hyp. of Stocks/book-debts&TL

5.00 10.00 25.00

NON-FUND BASED ONLY

a)L/C –DP/DA(usanceupto 90 days, margin25% cash/FDR)

2.50 5.00 12.50

b)BG (Margin 25% Cash/FD )

7.50 15.00 37.50

Aggregate of fund based & non fund based limit under UCO Trader not to exceed

TIMEFRAME FOR –Branches are allowed time maximum up to 20 days from the date of SANCTION/DISPOSAL receipt of the proposal from the applicant. For proposal falling under the power of RO, the concerned RO will be allowed 10 days more(from the date of receipt of the proposal from the branch) for sanction/disposal. Total period would be maximum 30 days.

INSURANCE –Stocks and fixed assets should be insured against fire, burglary and other perils

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through reputed insurance companies.

CREDIT RATING –For credit limit of Rs 25 lakhs and above, the accounts are to be rated as per existing norms for general advance. The purpose of rating is for ascertaining the quality of the asset and not for deciding the rate of interest.

DRAWING POWER –Drawing Power in case of Cash Credit limit is to be calculated based on declaration of Stocks, Debtors and Sales/Statement of Stock & Book Debts every month in the format CMR-14 and CMR-14A. Drawing Power is the least of value of Stock including Book Debts and Cash Credit limit in case of existing trading units. In case of new units as well as units, which have not completed two years, margin of 20% in stock should be maintained while calculating Drawing Power. In other words, Drawing Power is the least of 80% of Stock including Book Debts & Cash Credit limit.

RENEWAL OFLIMIT -For renewal/review, all the process of fresh sanction as carried on in this scheme is to be adopted.

DEVIATIONS –Deviations from the above scheme, for limits beyond Rs 200.00 lakhs for specific cases, must be forwarded to FGM Office/Head Office for in-principle clearance.

Annexure-1 Application FormAnnexure-2 Statement of MeansAnnexure-3 PSVR-1Annexure-4 PSVR-2 Annexure-5 PSVR-4Annexure-6 PDIRAnnexure-7 Letter to be addressed to Bank’s Empanelled Lawyer by the BranchAnnexure-8 Non-Encumbrances Certificate and Detailed Report on Title.Annexure-9 Declaration by the Borrower/Mortgager as affidavit Annexure-10 Process Note (Cash Credit)Annexure-11 Process Note (Term Loan)

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Annexure-12 Declaration of Stocks, Debtors & SalesAnnexure-13 Bank’s prescribed Stock Statement with details of Stocks (CMR-14)Annexure-14 Statement of Book Debts (CMR-14A)Annexure-15 Stock Inspection Report (CMR-3A)Annexure-16 Certificate of Compliance of the terms of sanction (CMR-6A &CMR-6B)Annexure-17 Credit Information Report in IBA format.

CASESTUDIES

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Case -1

Computation of Loan amount Under UCO Education Loan Scheme, for a loan proposal of Rs 2.79 lakhs for studying in India.

Controlling Branch: DURGAPUR MAIN BRANCHMemorandum to the Deputy Zonal Manager, Zonal Office, Burdwan .

Sub: Loan Proposal for Rs.2.79 lac under UCO Education Scheme/ A/C. S. CHANDA

1.Name of the applicant :Mr. S CHANDA 2. Father’s name : Sri. M. S. Chanda Durgapur, 3. Address ( Residence ) :A1/17, XYZ, Durgapur W.B. Pin :713213 4. Date of birth of the applicant : 02-04-19885. Loan applied for : Rs.279000/-6. Purpose :For Pursuing Two year MBA & PGPBM ( Post Graduation Programme In Business Administration) from Bengal Institute of Business Studies at 18D, Lake View Road, Kolkata-700029. (Batch 2011-2013) 7. Name of Institution : Bengal Institute of Business Studies 18D, Lake View Road Kolkata-7000298. Duration of the course : 2 years 9. Detailed Expenses & Source YEAR Admn+Tuti

on+Dev Fees (Rs.)

Air Passage Fees/Otheers.

Hostel/Boarding charges Rs

Books /Stationery/Computer (Rs.)

Total (Rs.) Own Contribution/ amt already paid i.e Margin Rs

1st

Semester73000 49000 20000 1,42,000.00 Rs.1,42,000/-

2nd

Semester73000 20000 93,000.00

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3rd

Semester73000 20000 93,000.00

4th

Semester73000 20000 93,000.00

TOTAL 292000 49000 80000 4,21,000.00

Resource gap: Rs. 4,21,000.00 – Rs. 1,42,000.00 = Rs. 2,79,000.00

Semester

Total Expenses

Own Contribution

Bank Loan

Cummulative Bank Loan

Accrued Interest

1st 1,42,000.00

Rs.1,42,000/-

0.00 0.00 0.00

2nd r 93,000.00

0.00 93,000.00

93,000.00

6745.00

3rd 93,000.00

0.00 93,000.00

1,86,000.00

13485.00

4th 93,000.00

0.00 93,000.00

2,79,000.00

20230.00

3rd year

4,21,000.00

0.00 2,79,000.00

40455.00

Total 80915.00

After Course period + Moratorium period total dues to the Bank would be Rs. (279000.00 + 80915.00) = Rs. 3,59,915.00

EMI on Rs. 3,59,915.00 .00 would be Rs. 8210.00/- Repayable in 60 EMIs ( Based on prevailing rate of interest @ 14.50 % p.a. I,.e. Base Rate + 3.75 % p.a.), commencing from not later than July 2014. During course period interest will be at simple rate and thereafter it will be compounded monthly.

10. Bank loan applied for : Rs.279000 /-

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10.a.Eligible Loan Amount : Total Course fee – Amt. already Paid=Rs.421000/- Rs 142000/- =Rs.279000/-11. Expected Monthly Income after completion of studies : Rs. 25000 /- (as assessed by applicant) : Rs.20000 /- (as assessed by us)12. Monthly Family expenses : Rs.10000/- (as assessed by applicant) : Rs.10000/- (as assessed by us)13. Available amount for repayment : Rs.15000 /-(as assessed by applicant) : Rs.10000/- (as assessed by Us)14. Repayment Holiday : One year after the completion of the course or six

months after getting job which ever is earlier. 15. Rate of Interest : BASE RATE + 3.75 p.a. % i.e. 14.50 % p. a. at present (Simple during the repayment holiday) subject to change in Base Rate by Bank/ RBI guidelines. After completion of the repayment holiday/moratorium period, the Rate of Interest will be reset and will be charged on compound basis.

16. Repayment: - Repayment will commence after one year of the completion of the course or six months after getting the job which ever is earlier. However, repayment will commence not later than July-2014. Repayment will be made in 60 EMIs. EMI will be calculated by the Branch on the outstanding balance as on that date from which EMI will be considered, at the rate of interest prevailing on that particular date. Interest rate is subject to change by RBI guideline / Bank BPLR and Base Rate. 17. Collateral Security: Nil

18. Guarantor/ Co-borrower:Personal guarantee of Parent- a) Sri. M. S. Chanda Durgapur, father of the applicant will stand as guarantor for the loan.

b) Mrs. Arati Chanda - mother of applicant will be the co–applicant for the loan.

19. Affiliation: The MBA Degree is awarded by Punjab Technical University, a University recognized by UGC/ Ministry of HRD, Govt. of India.

20. Recommendation: Considering the above mentioned facts, we commend for a Term Loan for Rs.279000/- (Rupees Two lacs seventy nine thousand only) in favour of Sri S. Chanda under UCO Education Loan Scheme subject to fulfillment of terms and conditions mentioned in Annexure A.

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(-----------------------------)

Senior Manager(Retail)

CASE -2Computation of Loan amount Under UCO Home Shelter.

Sub: UCO Home Loan proposal of Mr. LAKSHMAN CH. MALIK FOR Rs.9.50 lacControlling Branch: SEHARA We have received one UCO Home loan proposal from our SEHARA Branch for Rs. 9,50,000.00 for sanction from our office. The proposal was vide their letter Ref No. NIL dated 16.03.2012.The details of the proposal are as follows :

APPLICANT CO-APPLICANTName MR.L CH. MALIK MRS.KAKALI MALIKAddress VILL. KUARA,P.O.&P.S RAINA

Dist. Burdwan, PIN-713424VILL. KUARA,P.O.&P.S RAINADist. Burdwan, PIN-713424

Phone No.&PAN NO. 78.......AE439485385

V.CARD-AZVC34567

Age 54 years(Dt. Of birth 02.01.1958) 44 Yrs.(Dt. Of Birth-01.01.1968)

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Relationship with applicant

Self WIFE

No. of dependents 2 naQualification M.A B.ED MadhyamikOccupation Service, ASSISTANT TEACHER

SEHARA BAZAR C.K.INSTITUTIONHOUSE-WIFE

Monthly income fromSalary/business

Rs. 37410/- Gross (As per Pay Slip for the month of Jan—2012

NIL

Purpose of Loan Construction of groundfioor residential building at mouza-Deno, under Sub- Registry Office- Madhabdihi, R.S Khatian No.408. , L.R. Khatian No.1457 JL NO.111, Dag NO.278 PS.RAINA on a plot of land measuring 0.12 Acres,

Requirement and source of fund

Requirement of Funds: Cost of Construction as per estimate : 11,56,108.00.00Total : 1156108.00.00

Source of Funds:Own Source: Rs.2,31,121.00Loan Required from Uco Bank: Rs.8,00,000.00Total Rs.1099747.00

Repayment period 65 Months (No. moratorium)

Computation of Housing Loan Limit :(A) Limit as per Parameter (1) Total Construction Cost (As per Estimate) Rs. 1156108.00Less : Margin @ 20% (Minimum) Rs. 231121.00Loan entitlementGrihalakshmi Premium:TOTAL

Rs. 924987.00Rs. 20368.00Rs. 9,45,355.00

(B) Limit as per Parameter (2) Applicant Co-Applicant Total

Gross Monthly Income (GMI)( as per IT Return) Rs. 37410.00 X Rs. 37410.00

60 % of GMI Rs. 22446.00 X Rs.22446.00

Existing Deduction Rs. 3386.00 X Rs. 3386.00

Amount available for Home Loan EMI Rs.19060.00 X Rs. 19060.00

Eligible Limit (Rs19060.00/Rs2050X Rs.1Lac) = Rs. 9,29,756. Say , Rs.9,29,000.00*EMI per Lakh @ 11.00% i.e. Base rate + 0.25% (Loan amt Rs.<30 lacs, Period =65 ) = Rs.2050/-(C) Limit as per Parameter (3) : 60 times of Net Monthly Income = (Rs.37410.00-816.00)=34024 X 60= 20,44,440.00

Loan Entitlement – Lowest of Loan applied, A, B and C above : Rs. 9,29,000/-

Security & Guarantee :

Security : Primary – EMTD land and building to be constructed and situated at mouza-Deno, under Sub- Registry Office- Madhabdihi, R.S Khatian No.408. , L.R. Khatian No.1457 JL NO.111, Dag NO.278 PS.RAINA on a plot of land measuring 0.10 Acres. The land was converted fromsali to Bastu vide memo no.Conv/(1-10)/493/R-II /10 Dated 20.05.2010 OF B.l.& L.R.O RAINA-BLOCK-II

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Guarantee : The loan will be secured by personal guarantee of Mr. Kalyan Ch. Mandi colleague of the applicant. Assistant teacher Sehara Bazar C.K. Institution having monthly salary of Rs.33450.00, Net Salary Rs.29260.00Insurance : The borrower is to be insured under “UCO Griha Lakshmi Yojana” Scheme. The property is to be insured under “UCO Griha Raksha” policy with Reliance General Insurance Co. Ltd.

Rate of interest : Floating Rate : Base Rate + 0.25 %, presently 11.00% p.a. (In terms of Circular No. CHO/RM/28/2011-12 Dated 12.11.2011) or any other rate as may be prescribed by Bank/ RBI from time to time.

Mode of Payment : PDC - Twelve post dated cheques are to be obtained on the date of the first disbursement. This process should continue on an ongoing basis for every subsequent twelve month period till the entire loan is liquidated.

Moratorium : No Moratorium

EMI during Moratorium : NA

EMI after Moratorium : Rs.19045/-

Processing and Documentation Charges : As per norms.

PRE-SANCTION VERIFICATION REPORTSTYPE OF FORM PSVR – 1 PSVR - 2 PSVR - 4DATE OF VISIT 05.03.2012 06.03.2012 05.03.2012NAME OF THE OFFICER VISITED

XYZ, Asstt.Manager

ABC, Manager PQR, Asstt.Manager

Legal Opinion obtained : Yes – Legal opinion has already been obtained vide non-encumbrance search certificate dated 17.012012 empanelled Lawyer Mr. Subrata Chakraborty,

Branch Recommendation : Branch has recommended a UCO Home Loan in favour of Mr. L Ch. Malik vide their Process Note Dated .07.03.2012

CIBIL REPORT: CIBIL Report for the applicant, co-applicant and Guarantor has been generated and nothing adverse has been found.Considering the eligibility of the Applicant under UCO Home Loan Scheme, income of the applicant, recommendation made by the Branch in their Process Note we recommend for sanction of a Term Loan of Rs.9,29,000/- under UCO Home Loan Scheme in favour of Mr.L Ch. Malik subject to compliance of all the terms and conditions of UCO Home Loan Scheme and following additional Terms and conditions:

1) KYC Norms must be fulfilled/Photograph of the guarantor to be obtained and to be kept in the loan file.

2) Second physical verification of the property is to be conducted before disbursement of Loan as per specified format - PDIR

3) An undertaking should be obtained from the borrower before disbursement of the Loan to the effect that funds obtained from the Bank shall not be invested in the Capital Market.

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4) After disbursement, the borrower should furnish a certificate to the Branch confirming that funds have been utilized for the purpose for which it has been sanctioned / disbursed.

5) Bank will always be at its liberty to stop making further advance(s) or cancel the credit facilities at any time without previous notice and without assigning any reason even though the said limit(s)/ credit facility (ies) has/ have not been fully availed of.

6) Branch must closely monitor the account.

7) Branch must obtain an undertaking from the borrower that he has not availed any loan from any other Bank/ F.I. Placed for Decision.

Dealing Officer

Decision of CAG;

Recommended for approval of a Home Loan for Rs. 9,29,000/- in favour of Sri L Ch. Malik.

Sr Manager Sr. Manager Sr. Manager Dy.Zonal Manager(II) (Credit) (CR-MON) (Recovery)

(--------------------) Dy.Zonal Manager(I)

Decision of the Zonal Head Perused/ Not Perused

(------------------) Dy.General Manager Zonal Head

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COMPUTATION OFWORKING CAPITAL

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Case -3Computation for Sanction/Renewal of Loan proposal under UCO Trader scheme for a loan amount of Rs.92.00 lakhs from existing Rs. 22.00 lakhs.(Working Capital/MPBF is to be calculated.)

SECTOR PRIORITYACTIVITY Processing of paddy seed.

PROPOSAL IS FOR NOTING REVIEW OF TERM LOAN AT RUN DOWN BALANCE OF RS.22.72 LACS AND RENEWAL OF THE CC LIMIT AT THE EXISTING LIMIT OF RS.92.00 LACS.

NAME OF THE CONTROLLING BRANCH: BHATAR BRANCH1. General Profile

1.1. Name of the Borrower :M/SRAMNAGAR SEED FARM

1.2 Constitution : PARTNERSHIP

1.3. Date of Incorporation :01.08.2000

.4. Sector (Public/Private) : Private

1.5 Group/House : No Group

1.6. If under MRTP : No

1.7 Nature of Industry/Activity : PROCESSING OF PADDY SEED Location: Regd. Office : RAMNAGAR, HARGRAM, BURDWAN P.O. HARGRAM ,

: District : BURDWAN

Controlling Office : -do-Factory : -do-

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1.8. Name of Partner

Sl. No.

Name Address Worth in Rs. Lacs. (as on 31/03/2010)

% of share

1. Sk. Abdul Zabbar Vill.: ramnagar, PO:Hargram,PS: Bhatar, Dist: Burdwan

36.49 10.00

2 Sk. Alauddin Do 23.55 5.00

3. Sk. Nuruddin Do 19.05 5.00

4. Sk. Nurul Islam Do 5.49 5.00

5. Sk. Saidul Islam Do 1.80 5.00

6. Sk. Durjan Do 35.52 5.00

7. Ajifa Bibi Do 5.04 10.00

8. Zamenara Bibi Do 4.02 10.00

9. Ayesha Begum Do 1.26 5.00

10. Nur selina Begum Do 1.56 5.00

11. Nasima Begum Do 1.52 5.00

12. Fatema Bibi Do 5.60 5.00

13. Nira Sekh Do 2.00 10.00

14. Most Mumtaz Begum Do 2.01 5.00

15. Sk. Sadika Alam Do 2.01 10.00

1.09. Asset Classification - Standard

1.10 Credit Rating Based on BS dated 31.03.2009(Audited) : ‘B’

1.11. Brief History:M/s Ramnagar Seed Farm has very good reputation in the market for their quality seeds. The unit carries on business of the seeds (Aman, Kharif & Boro Paddy, Mustard seeds etc.) The seeds are branded as “Sonali Fasal” & the licence No. 397/SAO (B)/BH. The seeds after undergoing certain processing with machinery & by technical experts are sold in the market. The unit purchases breeder seeds f rom Orissa University of Agriculture and Technology, Bhubaneswar, breeder seeds of paddy and Rice Research Station, Chinsurah, Pulses and old Seeds Research Station, Berhampur, West Bengal, Central Rice Research Institute, Cuttack, orissa and other research centres. The products (seeds) of the farm have a good market, demand in West Bengal and in surrounding states. The farm expanded its capacity

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to produce more seeds to meet the demands of the farmers for scientific cultivation and to get yield more for which Term Loan of Rs.27.00 lacs has sanctioned on 06-02-2009.

Manufacturing ProcessSun drying of the seeds

□Processing with the machines

□Packing of the processed seeds

□The packed seeds are stored in godown for months to reduce moisture content for

making suitable quality seeds.□

The processed seeds are tested where genetic conditions are examined and those seeds are given to Seed Testing Officer for germination and quality up gradation .

□The farm received certificates from the Seed Certification Agency of west Bengal.

□Marketing and selling through wholesalers/distributors.

Marketing of the project : The produced sees have immense demand in West Bengal. It reveals that there is a ready market of about 600 to 700 MT of certified seeds of different crops (mainly paddy seeds) per year. There are many customers/buyers all over West Bengal with whom the company has reliable business contact. Marketing of the product through all these connections is possible for the company.

1.12. Share Holding Pattern : Mentioned above.

1.13 Stock Market Perception :Not applicable

2. Sanction particulars

Date Authority

Latest Renewal cum enhancement of CC limit from Rs.50.00 lacs to Rs.92.00 lacs and fresh sanction of Term Loan of Rs.27.00 lacs

06.02.2009 Chief Officer(BH-PS)

3. Proposed Limits from our Bank Rs. in Lacs

Nature of Facility Existing Limit Proposed LimitFY 2009-10

Fund BasedTerm Loan 27.00 22,72 (WDB)Cash Credit 92.00 92.00

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Non Fund Based Nil NilTotal Limit 119.00 114.72

4. Present position of the Account with our bank including adhoc limit, if any : Rupees in LacsNature of limit Limit Value

ofsecurity

Drawing power (Stock statement as on 15.05.10)

Balance outstanding as on 16.06.2010

Irregularity

Remarks

Term loan 27.00 684.00 as on 15.05.10

NA 22.72 NilWorking capital (Fund Based) Cash Credit

92.00 92.00 91.57 Nil

Total fund based 119.00

114.29

Non fund based 0.00 Nil0.00 0.00

Grand Total 119.00

114.29

Group Commitments, if any with our Bank : No Group A/C financed by us.

Detailed Position of All Group Accounts : Not Applicable

5. Value of the account (Rs. in Lacs)Particulars For the previous

year (2009-10)For the current year (2010-11)- up to 31.05.2010

Interest earned 7.08 1.14Non interest income 0.24 --Total value 7.32 1.14

6. SALIENT FINANCIAL INDICATIORS AND WORKING RESULTS:

(Rs. in Lacs)

  31.03.08 31.03.09 31.03.10 31.03.11

  Audited Audited Provisional Projected

Authorised Capital 0 0 0 0

Paid Up Capital 16.10 15.47 42.67 56.19

Net Worth 20.84 50.64 67.2 81.65

TNW excl Revaluation Reserve 20.84 20.47 49.34 63.79

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TNW less Investments20.84 20.47 49.34 63.79

in subsidiaries

TNW treating Unsecured20.84 20.47 49.34 63.79

Loan as quasi Equity

Long Term Secured Loans 39.93 42.54 42.00 37.26

Long Term Un Sec Loans 0 0 0 0.00

Of which from Promoters 0 0 0 0.00

Net Fixed Assets 39.93 70.69 63.22 55.97

Capital Work In Progress 0 0 0 0

Non current Assets 0.55 0.55 0.55 0.55

Inventories 62.45 86.08 96.87 107.00

Receivables 14.32 37.42 15.47 12.3

Other Current Assets 15.59 38.51 82.68 28.04

Total Currant Assets 92.36 162.01 195.02 147.34

Other Current Liabilities33.53 86.27 77.46 2.81

excluding BB & TL payable within 1Yr.

Bank Borrowings 78.47 126.51 131.99 137.26

Total Current Liabilities 83.67 170.24 167.45 102.81

Net Working Capital 8.69 -8.23 27.57 44.53

T/L payable within 1 Yr. 0 3.86 3.86 3.86

Current Ratio        

with TL Inst due with in 1 yr. as CL 1.10 0.93 1.14 1.38Current Ratio without TL payable within 1 Yr. as CL 1.10 0.95 1.16 1.43

Debt Equity Ratio        

Considering all Out side5.37 10.39 4.25 2.20

liabilities TOL/TNW

TOL/Adj TNW 5.37 10.39 4.25 2.20

TOL/TNW + Quasi Equity 5.37 10.39 4.25 2.20

Net Sales 686.55 646.45 675.7 743.28

Operating Profit 4.08 4.38 5.97 7.6

Other Income 0.66 0.62 0.7 0

Profit before Depreciation20.74 19.03 23.8 26.39

Interest & Tax

Depreciation 5.18 5 7.47 7.25

Interest 10.82 9.03 9.66 11.54

Tax 0 0 0 0

Profit after Tax (PAT) 4.74 5 6.67 7.6

Cash Accruals 9.92 10 14.14 14.85

% increase in Net sales 0.00% -5.84% 4.52% 10.00%

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% Op Profit/Net Sales 0.59% 0.68% 0.88% 1.02%

% PBDIT/Net Sales 3.02% 2.94% 3.52% 3.55%

% PAT /Net Sales 0.69% 0.77% 0.99% 1.02%

% Interest /Net Sales 1.58% 1.40% 1.43% 1.55%

Return on Capital Employed 15.10% 7.80% 8.09% 8.63%

Interest cover Times 1.92 2.11 2.46 2.28

Funding Pattern of Current Assets

 31.03.08

31.03.09 31.03.10 31.03.11

  audited AuditedProvisional projected

NWC To TCA 9.41% -5.08% 14.14% 30.22%BB to TCA 54.29% 51.83% 46.14% 67.87%Sundry Creditors to TCA 0.24% 22.35% 0.00% 0.00%OCL to TCA 36.07% 30.90% 39.72% 1.91%

Total100.00

%100.00

% 100.00% 100.00%

Source & Application of Funds Rs. in lacs

 31.03.08

31.03.09 31.03.10 31.03.11

  audited AuditedProvisional projected

Long Term Source 49.17 63.01 91.34 101.05Long Term Application 40.48 71.24 63.77 56.52Long Term Surplus/Deficit 8.69 -8.23 27.57 44.53Short Term Source 83.67 170.24 167.45 102.81Short Term Application 92.36 162.01 195.02 147.34Short Term Surplus/Deficit -8.69 8.23 -27.57 -44.53

Comments: Surplus long term fund has been utilized for short term uses except during 2008-09.

Review of financial parameters:

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TURNOVER : Sales during 2008-09 slightly decreased (5.84%)to Rs.646.45 lacs compared to Rs.686.55 lacs . This is slightly improved to Rs.675.70 lacs ( with 4% increase) and further improved to Rs.743.25 lacs (with 10% increase)PROFITABILITY:. The profitability is showing increasing trend. The firm incurred huge loss of Rs.30.17 lacs by investing its fund in Mutual Fund Business. We took up the issue with the firm asking reasons for investment of their fund in the Mutual Fund with indication that by availing Bank’s loan, they are not at all permitted for such investment, as it is totally against their purpose of activity for which they are enjoying credit limits from our Bank. The party has regretted vide their letter dated (Blank) and stated that they were misguided by their consultant. However, they have realised further amount of Rs.12.13 lacs as final payment from the Mutual Business and as a result, the loss in Mutual Business has reduced to Rs.17.86 lacs and promised to make good the loss from their capital.

LIQUITY:Current Ratios as at 31.3.08 & 31.3.09 are not t comfortable and as on 31.3.09, it is just less than 1. This is projected to improve to 1.14 as on 31.3.11 which still below the bench mark of 1.33 but very close to minimum required level of 1.17:1. The Debt Equity Ratios are also very higher. NETWORTH: The net worth of the firm is increasing but considering abnormal loss in Mutual Fund Business, this has suffered. However, with retaining the salary, intt. On capital and others, the net worth is increasing.

7. Proposal:

The proposal is for noting review of term loan at Run Down Balance of Rs.22.72 lacs and renewal of the CC limit at the existing limit of Rs.92.00 lacs. a) Review of Term Loan:- A Term Loan of Rs.27.00 Lacs was sanctioned on 06.02.2009 for expansion of the project for which additional civil construction, additional plant & machinery etc were required. Half yearly repayment @ Rs.1.93 lacs for 13 Hly & Rs.1.91 lacs for last instalment was scheduled and the T/L is regular in repayment of upto date instalments including interest. We propose for noting review of term loan and permitting continuation of the limit at the run down balance of Rs.22.72 lacs as on 16.06.2010. on the existing terms & conditions.

Debt Service Coverage Ratio

(Rs.inlacs)

 31.03.0

9 31.03.10 31.03.11 Total

  Auditedprovision

al ProjectedProfit After Tax 5 6.67 7.6Depreciation 5 7.47 7.25Interest 9.03 9.66 11.54Total (A) 19.03 23.8 26.39 69.22Repayment of Term loan 3.86 3.86 3.86Interest 9.03 9.66 11.54Total (B) 12.89 13.52 15.40 41.81DSCR 1.48 1.76 1.71Average DSCR 1.66

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b) Working Capital Fund Based Limit: Initially, the firm was sanctioned Working Capital Fund Based(Cash Credit) Limit of Rs.12.50 Lacs on 25.02.2004 and gradually CC limit was enhanced time to time and last time it was renewed from Rs.50.00 lacs to Rs. 92.00 lacs on 06.02.2010. The present proposal is for renewal of Working Capital Fund Based (Cash Credit-Hypo) Limit at existing level of Rs.92.00 Lacs.

Assessment of Working Capital Requirements:

Financial Parameters

31.03.08

31.03.09 31.03.10 31.03.11

  Audited audited Provisional projected

Current Ratio 1.10 0.95 1.16 1.43

TNW ( Rs. in lacs) 20.84 20.47 49.34 63.79

Debt Equity Ratio 5.37 10.39 4.25 2.20

Operating Profit/Sales% 0.59% 0.68% 0.88% 1.02%

Net Working Capital(Rs) 8.69 -8.23 27.57 44.53

 

31.03.08

31.03.09 31.03.10 31.03.11

  audited audited Provisional projected

Assumptions        

Sales Gross 686.55 646.45 675.7 743.28

Sales Net 686.55 646.45 675.70 743.28

Cost of Production 646.05 603.82 633.22 689.75

Cost of Sales 646.05 603.82 633.22 689.75

Raw Material con 603.7 542.11 571.3 625.22

% COP/Sales 94.10% 93.41% 93.71% 92.80%

%COS/Sales 94.10% 93.41% 93.71% 92.80%

% RM/COP 93.44% 89.78% 90.22% 90.64%

Level of Holdings

31.03.08

31.03.09 31.03.10 31.03.11

Raw Material        

Imported 0.00 0.00 0.00 0.00

Indegenious 62.45 86.08 96.87 10738(Days)

58(Days) 62(Days) 62(Days)

Conusmable spares 0 0 0.00 0.00

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Work in Progress 0 0 0 00 0 0 0

Finished Goods 0 0.00 0.00 00 0 0 0

Receivables 14.32 37.42 15.47 12.3

8(Days)21(Days) 8(Days) 6(Days)

Other Current Assets 15.59 38.51 82.68 28.0416.88% 23.77% 42.40% 19.03%

Sundry Creditors 0.22 36.21 0 00 24 0 0

Other Current Liabilities 33.31 50.06 77.46 2.81Comment on Holding periods: Raw materials: Provisional/projected Raw materials holding has parity as compared to actual as on 31.03.09.

Debtors Turnover: Debtors as on 31.3.10 ( at 8 days) & 31.03.11( at 6 days) has parity with the figure as at 31.03.08(at 8 days) and at lower level as compared to audited as on 31.03.09.(at 21 days) Hence, this may be accepted.

 

31.03.08

31.03.09 31.03.10 31.03.11

Raw Materials 62.45 86.08 96.87 107.00

Working Progress 0 0 0 0

Finished Goods 0 0 0 0

Consumable Spares 0 0 0 0

Receivables 14.32 37.42 15.47 12.3

Advance to Suppliers 1.64 0.00 58.15 0.00

Cash & Bank Balance 4.52 22.92 6.24 9.75

Other current assets 9.43 15.59 18.29 18.29

Total Current Assets 92.36 162.01 195.02 147.34

Sundry Creditors 0.22 36.21 0 0

Other Current Liabilities 33.31 50.06 77.46 2.81

Working Capital Gap 58.83 75.74 117.56 144.53

Computation of Permissible Bank Finance

 31.03.08

31.03.09 31.03.10 31.03.11

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  audited audited Provisional projected1. Working Capital Gap 58.83 75.74 117.56 144.532. Minimum stipulated 23.09 40.50 48.76 36.84 NWC(25% of CA)        3. Actual/Projected NWC 8.69 -8.23 27.57 44.534. Item (1) - Item (2) 35.74 35.24 68.81 107.705. Item (1) - Item (3) 50.14 83.97 89.99 100.006. Permissible Bank Finance 35.74 35.24 68.81 100

Turnover Method31.03.08

31.03.09 31.03.10 31.03.11

  audited audited Provisional projectedI) 25% of the Sales accepted 171.63

8 161.61 168.93 185.82II) 20% of the Sales 137.31 129.29 135.14 148.66III) Margin Required [ I minus II ] 34.33 32.32 33.79 37.16IV) Margin (NWC) available 8.69 -8.23 27.57 44.53V) Item [ I ] minus Item [ III ] 137.31 129.29 135.14 148.66VI) Item [ I ] minus Item [ IV ] 162.94

8 169.84 141.36 141.29VI) higher of ( V ) or( VI ) 162.95 169.84 141.36 141.29Permissible Bank Finance  162.95 169.84  141.36  141.29 

MPBF under 2nd method and Turnover method are arrived at Rs.100.00 lacs and Rs.141.29 lacs respectively but as per party’s request and branch recommendation we are recommending for renewal of the limit at the existing level of Rs.92.00 lacs. It may be mentioned that the party initially requested for sanction of adhoc limit of Rs.20.00 lacs for one month with renewal of existing limits.

8. Details of Security for Credit facilities:Nature

Primary Security For Term Loan:1) Hypothecation of Plant & Machinery, Furniture Fitting etc. at the factory shed, purchased or to be purchased for the Seed Farm unit at Vill-Ramnagar, P.O. Hargram, P.S. Bhatar, West Bengal, Ph.No. 0342-2322848(Res), 0342-2322284, 2322174, 2322175(Office) valued Rs.33.03 lacs.

2) Factory land and building at Ramnagar at plot no-329,332, JL no-98, Mouja-Hargram, KH No-458, 1470 of 15 satak in the name of Abdul Zabbar, Abdul Hakim valued Rs.15.66 lacs as on 22.03.09 by Sri Bhabani

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Shankar Dey, our empanelled lawyer. The said land, on which the factory is constructed, has been leased to in the name of M/S RAMNAGAR SEED FARM . For Cash Credit :Hypothecation of inventory, s tocks of Raw Materials, Work in progress, finished goods etc. Book-Debt and other current assets.

Collateral Security 1. FDR valued Rs.12.00 lac + accrued interest.

2. Land and residential building in the names of Sk. Durjan,Sk. Khorjan, Sk.Abdul Zabbar, Sk Abdul Hakim with LR Plot No 2861/3279 L.R.KH. N0s. 846,847,848,849 JL No-63 Mouja- Palar, Area -8.5 Satak valued Rs.23.55 lacs on 16.03.09 by our Bank’s empanelled valuer sri Bhabani Shankar Dey. 3. Residential building and godown on a land measuring 14 satak at Bhatar, RS & LR plot no-2979, RSKH no 383, JL no-63, Mouja-Palar valued Rs. 47.62 lac on 16.03.09 by Sri Bhabani Shankar Dey. Break up of total valuation of Rs47.62 lacs Land- Rs.14.56 lacsResidential building- Rs 7.65 lacsGo-down- Rs.23.36 lacs Others - Rs 2.05 lacs Total= Rs.47.62 lacs

9. Pricing Existing ProposedCredit Rating “A” as per audited result

as on 31.03.2008“B” as per audited result as on 31.03.2009.

Rate of Interest

Term Loan- BPLR+2% i.e 14.25% p.a. with monthly rests.

Cash Credit- BPLR + 1.5% i.e presently 13.75% p.a. with monthly rests.

The interest @ 7.75 % p..a above the UCO Bank base rate which is at present 8 % p.a. subject to minimum rate of interest of 15.75 % p.a. with monthly rests.*

The interest at the rate of 7.25 per cent per annum over the Base Rate of UCO Bank as notified from time to time subject to minimum of 15.25 per cent per annum with monthly rests, shall be calculated and charged on daily balance in bank’s favour due upon the said Cash Credit Account till the same is duly

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liquidated and shall be paid by the borrowers as and when demanded by the bank. *.

Processing charges

As per Bank’s extant guidelines

As per Bank’s extant guidelines -

*The above rate of interest may be revised or increased by the bank in its sole discretion as per the change in base rate of the bank and notified by the bank at its website and / or published in newspapers from time to time and the borrower hereby agrees to such revision and increase in the rate of interest and this agreement shall be construed as if such revised or increased rate of interest were mentioned herein and agreed to be paid by borrower and are hereby secured. ( As per Head office, Law deptt’s circular No. CHO/LAW/06/2010-11 dated30.06.2010.)

10. Bank officials’ comments on conduct of the Account:

a)Whether the accounts are regular. Also furnish brief remarks about the conduct of borrower.

The operation of the cash credit account is more or less satisfactory. Term loan accounts are regular.

(b) Comments on utilization of limit The firm has utilized the limit fully. (C)Comments on tern over/operations of the accounts/realization of bills:

The operation of account is satisfactory.

(d) Comments on LC, Guarantee limits utilization and devolvement of LC and invocation of Guarantee (if any)

NA

(e) Whether term loan/DPG installments are being paid as per schedule.

Yes

(f) Whether necessary financial discipline is being observed by the concern in regard to submission of statement etc. and if not, what steps have been taken.

Yes, the firm adheres to financial discipline by submitting necessary statements as and when required.

(g) Whether is borrower is complying with RBI guidelines with regard to inland credit purchases through the bills acceptance and payment of dues to suppliers in SSI category.

Yes

(h) When the stock/machinery was last inspected? State adverse features noticed, if any.

The stocks/machinery of the firm was last inspected on 18.03.2010 by Mr. S.Das, Manager. No adverse feature was noticed.

(i) State the major irregularities pointed out in internal inspection, statutory audit report, RBI inspection and Concurrent Audit and rectification thereof.

The firm has incurred a loss of Rs.30.17 lacs from investment in mutual fund business in 2008-09. However, as per provisional balance sheet as on 31-03-2010 the firm has adjusted loss on Mutual Fund to the tune of Rs.12.31 lacs.

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Thus the loss on Mutual Fund as on 31-03-2010 is Rs.17.86 lacs . The firm has been cautioned for not to invest in Mutual Fund in future so long as they are enjoying Bank’s Credit limit. The partners vide their letter dated Nil has mentioned that investment made in Mutual Fund was due to misguidance by the consultant and they promised not to make any such investment in future.

(j) Last MCMR submitted for the month Feb’ 2010Compliance of sanctioned terms of last sanction

Complied fully except investment in Mutual Fund..

11. SWOT SNSLYSIS

Strength, Weakness, Opportunity and Threat of M/S. Ramnagar Seed Farm are analysed below.

Strength: 1. The partners are experienced in the line of business.

2. The firm is continuously making profit in the operation of their main line of business.3. They have built up a reputation in their operations.4. They have wide coverage of sellers as well as purchasers.5. Bank finance is backed by adequate primary and collateral security.

Weakness:1. Recently the farm has invested in mutual fund where they incurred loss of Rs. 30.17 lacs. The said investment is against the stipulation of sanction given by the financing Bank. However the matter has been brought to the notice of the partners and they have given an undertaking for not to make any such investment in future as long as Bank finance is with them.

Opportunity:

1.Growth of demand of product is increasing.

Threat:1.Entry of new entrepreneurs with higher production capacities resulting in lower prices.

12. Policy Compliances: Particulars Eligibility Criterion as

per the Bank’s Loan policy.

Score Compliance.

Industry There is no restriction in financing to any unit processing seed.

--- Complied

Borrower’s standard based on audited BS as on 31.03.09

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Credit Rating. B+ (minimum) ‘B’ Not Complied.(it’s a renewal at existing level)

Management rating score 66.66% (minimum) 76.92% Complied.Asset Classification. Standard. Standard. Complied.TOL/TNW TOL/TNW

3:1(benchmark) but should not exceed 3.50:1

10.39 Not Complied.(it’s a renewal at existing level. The unit has suffered loss to the tune of Rs.30.17 lacs in mutual fund business which has resulted in increase of the DE ratio)

Current Ratio 1.33 but not below 1.17 0.93 Not Complied(It’s a renewal at existing level. The unit has suffered loss to the tune of Rs.30.17 lacs in mutual fund business which has resulted in decrease of the current ratio.)

Exposure Norms Individual –Rs.85600 LacsGroup -Rs.228200 Lacs

Rs.114.72 LacsRs.114.72 Lacs

CompliedComplied

13. Recommendation:

In view of what has been stated above and also considering the satisfactory performance of the firm except loss in investment in mutual fund business, we recommend before the Competent Authority i.e. Zonal Manager for noting review of term loan at run down balance of Rs.22.72 lacs & renewal of Working capital Fund based (Cash Credit-Hypo.) Limit at existing level

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of Rs.92.00 lacs. for the existing activity of processing of paddy seeds at RAMNAGAR, HARGRAM, BURDWAN P.O. HARGRAM , District : BURDWAN in favour of M/S Ramnagar Seed Farm subject to compliance of the terms & conditions contained in the memorandum/Annexure-I(Part A & B) The details of the facilities recommended for approval: Rs. in lacsNature of Facility Existing Limit Proposed Limit

Fund BasedTerm Loan 27.00 22,72 (WDB)Cash Credit 92.00 92.00

Non Fund Based Nil NilTotal Limit 119.00 114.72

(---------------) DCO, Credit.

Decision of CAG to whom it is placed for Approval :

……………….. …………………… ………………….. ………………. (DCO) (CO) (CO) (CO-BHPS)

Recommendation by Asstt. General Manaer:

(-------------------) Asstt,. General Manager

Decision of the Sanctioning Authority :

(----------------) Deputy General Manager

M/S Ramnagar Seed Farm ANNEXURE I (Part A)Controlling Branch: Bhatar Branch

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Terms & Conditions:Facility –INature of facility

Term Loan

Limit Rs.22.72 Lacs (Rupees Twenty Two Lacs seventy two thousand only)-Noted review of the limit & permitted continuation of the limit at the run down level.

Primary Security

1) Hypothecation of Plant & Machinery, Furniture Fitting etc. at the factory shed, purchased or to be purchased for the Seed Farm unit at Vill-Ramnagar, P.O. Hargram, P.S. Bhatar, West Bengal, Ph.No. 0342-2322848(Res), 0342-2322284, 2322174, 2322175(Office) valued Rs.33.03 lacs.

2) Factory land and building at Ramnagar at plot no-329,332, JL no-98, Mouja-Hargram, KH No-458, 1470 of 15 satak in the name of Abdul Zabbar, Abdul Hakim valued Rs.15.66 lacs as on 22.03.09 by Sri Bhabani Shankar Dey, our empanelled lawyer. The said land, on which the factory is constructed, has been leased to in the name of M/S RAMNAGAR SEED FARM .

Review charge As per Bank’s extant guidelinesRate of interest The interest @ 7.75 % p..a above the UCO Bank base rate which is at present 8 %

p.a. subject to minimum rate of interest of 15.75 % p.a. with monthly rests.The above rate of interest may be revised or increased by the bank in its sole discretion as per the change in base rate of the bank and notified by the bank at its website and / or published in newspapers from time to time and the borrower hereby agrees to such revision and increase in the rate of interest and this agreement shall be construed as if such revised or increased rate of interest were mentioned herein and agreed to be paid by borrower and are hereby secured.

Repayment Principal amount was stipulated to be repaid in 14 equal half yearly instalment of which first 13 half yearly instalments will be @ Rs. 1.93 lac w.e.f. sept’09 and the last instalment i.e. 14th half-yearly instalment will be Rs.1.91 lacs. The interest will be serviced as and when charged.

Facility-IINature of facility Working Capital Fund Based (Cash Credit- Hypo.) Limit approved Rs.92.00 Lacs (Rupees Ninety Two lacs only) at existing level.Primary Security Hypothecation of inventory, s tocks of Raw Materials, Work in progress,

finished goods etc. Book-Debt and other current assets.Processing charge

As per Bank’s extant guidelines

Validity of sanction

3 months from the date of conveying sanction.

Purpose Working capital for running the processing of paddy seeds.

Collateral Security

1. FDR valued Rs.12.00 lac + accrued interest.

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( Both for Term Loan & Cash Credit Loan)

2. Land and residential building in the names of Sk. Durjan,Sk. Khorjan, Sk.Abdul Zabbar, Sk Abdul Hakim with LR Plot No 2861/3279 L.R.KH. N0s. 846,847,848,849 JL No-63 Mouja- Palar, Area -8.5 Satak valued Rs.23.55 lacs on 16.03.09 by our Bank’s empanelled valuer sri Bhabani Shankar Dey.3. Residential building and go-down on a land measuring 14 satak at Bhatar, RS & LR plot no-2979, RSKH no 383, JL no-63, Mouja-Palar valued Rs. 47.62 lac on 16.03.09 by Sri Bhabani Shankar Dey. Break up of total valuation of Rs47.62 lacs Land- Rs.14.56 lacsResidential building- Rs 7.65 lacsGo-down- Rs.23.36 lacs Others - Rs 2.05 lacs Total= Rs.47.62 lacsPrimary Security (as mentioned above) for Cash Credit limit will be available as collateral security for Term Loan and Primary Security for Term Loan will be available as collateral security for Cash Credit.

Margin

25% on stocks & 40% on receivables for which drawing power should be allowed on paid stocks only.

Rate of interest The interest at the rate of 7.25 per cent per annum over the Base Rate of UCO Bank as notified from time to time subject to minimum of 15.25 per cent per annum with monthly rests, shall be calculated and charged on daily balance in bank’s favour due upon the said Cash Credit Account till the same is duly liquidated and shall be paid by the borrowers as and when demanded by the bank.The above rate of interest may be revised or increased by the bank in its sole discretion as per the change in base rate of the bank and notified by the bank at its website and / or published in newspapers from time to time and the borrower hereby agrees to such revision and increase in the rate of interest and this agreement shall be construed as if such revised or increased rate of interest were mentioned herein and agreed to be paid by borrower and are hereby secured.

Drawing Power Drawal will be regulated by monthly stock statements. DP should be arrived at after deducting the unpaid stocks.

All other existing terms & conditions remain unaltered & in force.

Basis of Valuation

Value of inventories/ Goods in Transit - At Invoice price or sales price, whichever is lower.)

Periodicity of Stock statement

Monthly within the 1oTH day of the month following the month to which such statement relates failing which penal interest will be charged. Valuation of stocks to be certified by appropriate authority like stock auditor C.A etc. once in every six months. Non submission of stock statement in time will attract penal interest.

Storage & Possession

Stored in the shop/go-down of the firm, stock in transit (or other places with prior permission of the Bank).

Inspection The stocks etc at shop/ go-downs etc are to be inspected by the bank once in every quarter and the report thereof should be kept on record.

Insurance The entire current assets charged to the banks will be comprehensively insured, with Reliance Insurance Company, for the full value against risk of loss due to fire, burglary or any other risk pertaining to assets. The

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policy will be taken in the joint names of the banks and the borrower with standard bank clause, the cost of which to be borne by the firm. The Bank, if deemed necessary reserves the right to insure the mortgaged property offered as collateral security to secure the loan and in such cases, the amount of premium will be recoverable from the company.

Processing charge

As per extant guidelines of the bank.

Commitment Charge

As per extant guidelines of the bank.

Penal Interest Non compliance of terms & conditions of sanction will attract Penal Interest as per Bank’s extant guidelines.

Other terms & conditions:

1. MCMR to be submitted to ZO, Credit Monitoring Dept as per extant guidelines of HO by the branch.

2. Borrower(s) and/or Guarantor should give their consent for disclosure of credit information to CIBIL/RBI in terms of directions issued by RBI (branch to obtain from borrower and/or Guarantor their consent as per text provided in Annexure I of Head Office Circular No. CHO/ADV/30/2003-04 dated 7.1.04.

3. The firm shall submit audited financial statements and reports within 6 months from the close of relevant financial year. Non submission of stock statement & other returns including yearly financial results in time will attract penal interest.4. All inspection /audit charges, documentation/ legal charges etc. in connection with the credit facility to be borne by the borrower.

5. The firm should display a board in a prominent place in the factory/business premises indicating that the assets/stocks are hypothecated to our bank.

Annexure-II-Part-C

STANDARD COVENENTS FORMING PART OF TERMS AND CONDITIONS; 1. The Bank will have the right to examine at all times the Firm’s books of accounts and to have the plant inspected from time to time by officer(s) of

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the bank and/or qualified auditors or concurrent auditors appointed by the bank and/or technical experts and/or management consultants or other persons of the bank’s choice. Cost of such inspections will be borne by the Firm.

2. During the currency of the bank’s credit facilities, the Firm will not, without the bank’s prior permission in writing;

a) Effect any change in the Firm’s capital structure (except issue of Bonus Shares by capitalizing its reserves);

b) Implement any scheme of expansion / modernization / diversification / renovation or acquire any fixed assets during any accounting year, except such schemes which have already been approved by the bank;

c) Formulate any scheme of amalgamation or reconstruction;

d) Invest by way of share capital in or lend or advance funds to or place deposits with any other concern; normal trade credit or security deposits in the normal course of business or advances to employees can however be extended;

e) Enter in borrowing arrangements either secured or unsecured with any other bank, financial institutions, company or persons;

f) Undertake guarantee obligations on behalf of any other Company, firm or person;

g) Monies brought in by principal shareholders / depositors will not be allowed to be withdrawn without the bank’s permission;

h) Create any further charge, lien or encumbrance over the assets and properties of the Firm to be charged to the bank in favour of any other bank, financial institutions, company, firm or persons;

i) Sell, assign, mortgage or otherwise dispose of any of the fixed assets charged to the bank;

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3. The borrower should obtain certificate from Pollution Control Board and submit copies to the bank and should renew the same from time to time.

4. The company should undertake to pay statutory liabilities such as PF, ESI and its dues to SSI etc. regularly in time.

5. The Bank reserves the right to modify/revise/add any other terms and conditions as it may deem fit at its absolutely own discretion.

6. The Bank reserves the right to discontinue the facilities/advances/loans to withhold or stop any disbursement without giving any notice, in case of non- compliance/breach of any of the terms and conditions stipulated herein and from time to time as also in the relevant documents or any information/particulars furnished to us found to be incorrect or in case of any development or situation where in the opinion of the bank, its interest is likely to be judiciously affected by such continuation or disbursement.

7. The borrower and/or guarantors should give their consent for disclosure of credit information to CIBIL/RBI in terms of directives issued by R.B.I. Branch is advised to obtain from the company and guarantors their consent as per text provided in Annexure-I to Head Office Circular No.CHO / ADV / 30/2003-04 dated 7.1.2004

8. In case of prepayment of installment(s), prepayment charges @ 2.0% shall be levied on the prepaid amount.

9. Commitment Charges @ 1/12th percent on the unutilized Cash Credit limit for that month shall be levied in case the average availment of cash Credit limit during a month is less than 70% of the sanctioned limit the event.

10. The company should display a board in a prominent place in the factory premises indicating that the assets/stocks are hypothecated to our bank.

11. Limit cancellation clause: Bank will always be at its liberty to stop making further advance(s) or cancel the credit facility (ies) at any time without

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previous notice and without assigning any reason even though the said limit(s) / credit facility ( ies) has / have not been fully availed of..

12. Rating down gradation clause: Audited Financial statements are to be obtained from the borrower within the stipulated period of 7 months from the date to which it relates and rating to be updated as per the latest financials. Non submission of audited financials by the borrower within 7 months from the relevant date will attract downgrade in rating by one notch. Rate of interest shall be charged according to revised rating. Further non submission within next 3 months will attract another downgrade by one more notch and rate of interest shall be applied accordingly. No concession in rate of interest will be admissible in such cases.

13. Undertaking: An undertaking to be obtained from the borrower that he is not a director or specified near relation of a director of a Banking Company as well as specified near relation of a senior officer of the bank ( Scale IV & above ) The borrower to go through the terms and conditions thoroughly and mistake/ discrepancies , if any found out , to be informed to the branch immediately. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MAJOR LEARNING:o Financial Analysis is not the only requirement-overall analysis is must.o Understanding the nature of business and the market conditions is crucial for

effective credit appraisalo Real time communication with employees helped me enhance my communication

and Team skills.o Decent understanding of the credit appraisal techniques.

RECOMMENDATION:o The loan processing time should be reduced.

o The bank should focus more on advertising to increase awareness among the public

about the services that it offers.o Need for improvised methods that are on par with international standards.

o Revising the factors on which appraisal is to be done from time to time.

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CONCLUSIONThe study finally revealed that the society, particularly low middle income group have the opportunity to improve their economic level and living standard by making proper utilizationof this financial support come from the Bank/Govt. Study of different working group on prioritysector advances support these notions.

The result in this study is restricted within the performances of UCO Bank branches functioningunder Burdwan region. The sample size in also not very large. In future the study can be conducted on a large sample incorporating other nationalized bank, State bank and its subsidiariesfor achieving more meaningful data.

BIBILOGRAPHYBooks: Banking Law and Practice by Dr.P.N.Varshney Banking Strategy, Credit Appraisal and Lending Decisions by Hrishikesh Bhattacharya Credit Appraisal, Risk analysis and Decision Making by D.D. Mukherjee Financial Management by Ravi M. Kishore

Magazines and Journals: Different Circulars of UCO Bank on Credit and Loan Policies IBA Bulletins and Journals Manual of Instructions of UCO Bank Vol. –VI (Advances –General)

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Internet: The official site of UCO Bank www.ucobank.in

Google www.google.com

The Official Site of Reserve Bank of India www.rbi.co.in

APPENDICES B/G – Bill GuaranteeDRI – Differential Rate of InterestEWS – Economically Weaker SectionEM – Equitable MortgageEMI – Equated Monthly InstallmentEMTD – Equitable Mortgage Title DeedFDR – Fixed Deposit ReceiptHFCs –Housing Finance CompanyHUF –Hindu Undivided Family

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IBA – Indian Banking AssociationKVP – Kissan Vikash PatraKY – Kuber YojnaL/C – Letter of CreditLIC – Life Insurance Corporation (Bond)NSC – National Saving CertificateNPA – Non-Performing AssetPF – Provident FundRLH – Retail Loan HubROI – Return on InvestmentRBI – Reserve Bank of India