Being a Commercial Bank

8/8/2019 Being a Commercial Bank

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Being a Commercial Bank, giving Loans and Advances is among our primary activities. Apartfrom our participation in meeting both Term Loan and Working Capital requirements ofAgriculture sector, Trade and Service sector, Large/Medium and Small Scale Industriessector, Infrastructure sector etc. including taking care of their Export/Import and non-fundbased needs like Letter of Credit, Bank Guarantee etc., we have a fairly large basket of loanproducts specially designed to suit your personal needs. Salient features of some of the

more attractive Personal Loan Schemes are described below.

UCO Shelter UCO Car UCO Trader

Education Loan UCO Cash UCO Rent

UCO Mortgage UCO Securities UCO Real Estate

UCO Nari Shakti UCO Shopper UCO Pensioner

UCO Emd Loan UCO Swabhiman

Reverse Mortgage LoanScheme for Senior Citizen

Interest Subsidy Scheme

for Housing the UrbanPoor (ISHUP)

UCO SHELTER

This housing finance scheme brings to you an excellent opportunityto have your own house or flat. The scheme has been carefullytailored to suit your requirements and match your capacity. Thereasonable 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 suchrepayment.

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 Banks own Term Deposit.


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Purpose

Purchase of new independent house/ready built flat for residential purpose.

Construction of independent house on the site already owned by the applicant or siteproposed to be purchased from own sources.

Purchase of old house/flat not more than 30 years old, free from tenancy and constructedas per approved plan.

Extension/Repair/Renovation of existing house/flat not more than 50 years old.

Takeover of home loans availed from other banks/FIs subject to certain terms.

Furnishing of house to be constructed/acquired with UCO Shelter Loan.

Loan for more than one purpose is allowed

UCO Shelter Loanee may be allowed to avail personal loan also under certain conditions.

Purchase of plot of land for housing purpose under certain conditions.

Quantum of loan

The quantum of loan will be decided as per loan entitlement subject to a maximum of 85%of the total project cost of construction/purchase price of house/flat. Required margin of15% may be by way of cost of land.

Quantum of loan for furnishing will be 75% of cost of such furnishing subject to a ceiling of

20% of loan eligible for construction/acquisition of house/flat.

The area-specific maximum limits for construction/purchase are as under :

Rural Areas : Rs.25 Lac

Semi-urban/Urban/Metro Areas : Rs.100.00 Lac

Maximum limits for Repair/Extension/Renovation are Rs.7.50 lac in rural areas and

Rs.25.00 lac in Metro/Urban/Semi-Urban areas.

Purchase of Land financing the cost of land in deserving cases upto 50% of cost of landpurchased from Urban Development Authorities/Govt. Bodies subject to the ceiling of 30%of the project cost (i.e. Cost of land + Construction Cost).

Loan Entitlement

Within the above limits, loan entitlement will depend on the following income criteria:


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Monthly income should be equal to/more than EMI + Rs.4,000/- in case of a family with upto four members Salaried/Non-salaried and agriculturist and banks own staff are entitledfor loan

With increase in number of members, monthly income requirement goes up progressivelyby Rs.1,000/- for each additional member. Income of spouse & major children may be

considered for enhancing the loan entitlement on their agreeing to stand as guarantor/ co-obligant

Loan limit can be enhanced if additional liquid security is offered.

Second Loan- Allowed for repair/renovation/extension of existing house after one year offirst loan with minimum margin requirement of 25%

Processing Fee

0.5% of the loan amount minimum Rs.1000.00. Only 0.25% payable on issuance of in-principle sanction. Balance amount payable on final sanction.

No processing fees for take over loan.

Click here for rate of Interest :

Repayment

The maximum period of repayment is 25 years inclusive of moratorium. However, themonthly interest charged during the moratorium period will have to be paid. The entire loanwill have to be adjusted before retirement or 65 years of age, whichever is earlier.Repayment may be made by deduction from monthly salary or by means of post dated

cheques. Flexibility in repayment is permissible through stepped up EMIs and in case offarmer borrower, repayment is linked to crop cycles. Both in case of Salaried and nonsalaried person, repayment period may be enhanced to certain period over and above theprescribed period depending upon repaying capacity of the co-applicant.

Prepayment charge

2% of the prepaid amount, if the loan is prepaid within 3 years. No prepayment chargesthereafter. However, no pre-payment charges are to levied if loan is pre-paid from ownsource.

Tax Benefits

Tax relief on principal and interest components of this loan would be available as perprovisions prevailing under Income Tax Act.

Insurance

Insurance cover on property under UCO Griha Raksha Yojna Scheme of NICL and personalaccident benefit to the borrower is available on death only to cover the outstanding balance


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under UCO Griha Lakshmi Yojana Scheme (UCOGLYS). Group insurance cover to home loanborrowers is available against any type of death from Rs.50000/- to Rs.100.00 lac underUCOGLYS..

For more details, please contact your nearest UCO Bank branch.

UCO CAR

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

Eligibility

Salaried Persons

The applicant must be a permanent employee having completed 2 years of service andremaining period of service of more than 5 years. The minimum monthly take-home paymust be Rs. 7,500/- + EMI.

Professional & Businessmen

Minimum income should be Rs. 1.20 Lac per annum as per Income Tax Return/Assessment.

LIC Policy equal to the amount of loan should be assigned in favour of the Bank.

Quantum of loan

The amount of loan would be 85% of the cost of vehicle or Rs. 7.50 lacs whichever is lowerin case of purchase of new car. For purchase of old car, the maximum quantum would be60% ( if age of car is more than 4 years old ) and 70% ( if the age of car is upto 4 yearsold) of the cost of the vehicle or Rs.3.50 lacs maximum. For second hand vehicle "certificateof fitness" and valuation certificate is required.

1% service charge is applicable subject to a ceiling of Rs.1000/- only.

Repayment

The loan amount together with interest will have to be repaid within a maximum of 60months. In case where at source deduction is not possible, repayment should be made bypost dated cheques in 60 installments. In case of second hand/Pre-used vehicle the loanwith interest should be repaid within the residual economic life of the vehicle but notexceeding 36 installments.


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0.5% charge is levied on pre-paid amount if loan limit is above Rs. 2 Lac.


For more details please contact your nearest UCO Bank branch.

UCO TRADER

It is a loan for financing working capital and Term Loan needs of

Retail and Wholesale trading activities other than Export. Retail andWholesale trade in various types of commodities (not services)excluding those items which are specifically prohibited/restricted bythe Bank, are financed through this scheme. Fund based Advance isgranted by way of Cash Credit against stock as well as Book debt and Term Loan foracquisition of fixed assets to run the trade and business.

Eligibility

Existing enterprises engaged in business for at least 2 years and earning profit during thelast 2 years.New trading unit started by existing UCO Trader borrowers or their close relatives/

allied/associate/connected concern under certain terms

New trading units as well as units which have not completed two years can be financedmaximum upto Rs.10 lac under certain terms

Quantum of loan

Minimum Rs. 1 Lac and Maximum Rs 200 Lac

Within fund based limit of Rs. 200 lac, term loan up to Rs. 25 lac can also be sanctioned foracquisition of fixed assets. Repayment period of Term Loan not to exceed 60 months.Besides the above quantum of fund based limit, NFB limit by way of Inland LC/Bank

Guarantee if needed, may be issued maximum up to 50% of FB working capital limit.

Salient features

Margin

y No margin is required for Cash Credit in case of existing units & 20/25% for newunits while computing drawing power

y Margin for Term Loan, LC & BG is 25%


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y Application is simple; Balance Sheet is not required for limit up to Rs 10 lac and notcompulsory for limit below Rs 50 lac subject to certain conditions.

Security

y Primary-Hypothecation of stocks and book debt.y Collateral-100% for Cash Credit (against stocks only ) and Term Loan, 125% for

Cash Credit(against stocks and debtors)


Processing Charges- 0.50% of fund based limit, 0.25% of Non-Fund based limit.For more details please contact your nearest UCO Bank branch.

EDUCATIONLOAN

Click here to apply online

Download UCO Education Loan Application Form - (pdfversion)

Scope:

The scheme extends a helping hand to meritorious students desirous ofpursuing basic/higher/professional/technical education either in India orabroad. The parents will become co-borrowers with their dependant (student) if the latter

applies for educational loan.

Studies in India

School education including plus 2 stage.

Graduation courses leading to degrees like B.A., B.Sc., B.Com. etc.

Post Graduate courses leading to Masters degrees as also Ph.D.

Professional courses in Engineering, Medical, Agriculture, Veterinary, Law, Dental,Management, Computer, etc.

Computer Certificate courses of reputed institutes accredited to Universities or DoE.

Courses like ICWA, CA, CFA, etc.

Studies Abroad

Graduation : Job oriented professional / technical courses offered by reputed Universities.


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Post Graduation : MCA, MBA, MS, etc.

Courses conducted by CIMA London, CPA in U.S.A., etc.

Eligibility

Applicant must have secured admission to professional/technical course through EntranceTest/Selection Process.

Secured admission to foreign University / Institution.

No maximum or minimum income is prescribed for parents/family.

Age limit :

18 to 25 years for graduation course may be extended from 28-30 years for general andSC/ST candidates respectively.

21 to 28 years for post-graduation course etc. may be extended from 30 -33 years forgeneral & SC/ST candidates respectively.

Quantum of loan

Need based finance subject to repaying capacity of parents/students with following ceilings :

Studies in India : Maximum Rs. 10.00 Lac

Studies Abroad : Maximum Rs. 20.00 Lac.

The loan amount under the scheme would be for meeting the following expenses :

Course Fees

Hostel/Boarding Fees including caution deposit/building fund etc.

Books, Stationery & Equipment required for the course, including Computers.

Examination/Library/Laboratory fees.

Travel Expenses/Passage for studies abroad.

Security

Upto Rs.4.00 lacs No security

Above Rs.4.00 lacs Collateral securities by way of suitable 3rd party guarantee or tangiblesecurity equivalent to loan amount.

Margin


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Upto Rs. 4 Lac - Nil

Above Rs. 4 Lac Studies in India - 5%

Studies Abroad - 15%

Service Charge : There is no processing fee /no service charge

Interest Rates-

Click here to view the rate of Interest

Repayment

The loan will be repaid in 5-7 years after commencement of repayment. There will bemoratorium for repayment during "the course period +1 year or 6 months after getting job,which ever is earlier".

1% interest concession may be provided, if the interest is serviced during moratoriumperiod.


UCO CASH

This is a Personal Loan scheme to meet the domestic needs likemarriage, medical, traveling and other social obligations.

Eligibility

Permanent Employees or those who have completed 3 years of service. Minimum take-home pay should be 40% of gross salary after all deductions including EMI against this loan.Regular income may also be reckoned for eligible quantum.

Quantum of loan

90% of the proposed expenditure or Rs. 2 Lacs whichever is lower. Additional amount maybe sanctioned within the quantum ceiling to the existing eligible borrowers.

Security


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Loan will be on clean basis with two guarantors Spouse and other than Spouse havingequal income with that of the applicant.

Click here for Interest Rates

Repayment

The loan amount with interest is repayable in 48 EMIs through salary deduction of employeeborrower. But one year before retirement.

Service Charge : 1% (minimum Rs.500/-)


UCO RENT

This is a loan against the security of future receivables i.e.assignment of future rent receivable, for productive purposes e.g.augmenting earnings like investing in securities, undertaking repairs & renovation of theproperty, etc.

Eligibility

Owners i.e. lessors of houses/flats/godowns/warehouses etc. only are eligible under thescheme. The owner may be an individual, a firm or a company. Properties belonging tocooperative societies are not considered for sanction of loan under the scheme.

Quantum of loan

Maximum 80% of the total rent receivable during the unexpired period of lease less taxdeduction at source.Minimum Rs. 1 Lac


Repayment

The repayment period can be extended upto a maximum period of 84 months.

Processing fee


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1. Fresh Sanctions : 1% of the sanctioned loan amount.2. Review on run down Balance: Rs.225.00 per lac, Min.Rs.250.00, Max. Rs.56000.00


UCO MORTGAGE

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

Eligibility

y Maximum age limit of the borrower should be 65 years on the date of application.y Loans can be sanctioned in the form of term loan or overdraft.Quantum of loan

Maximum (Rs) Minimum (Rs)

50 Lac 2 Lac

Click here to view rate of Interest

Repayment

Facility

Term Loan Maximum 84 E.M.I.

Overdraft 15% reduction in the overdraft limitby the end of each year so thatadvance is completely liquidated bythe end of 7th year.

Interest should be serviced everymonth.

Salient Features

Processing Fee 1% of loan amount

Prepayment Charges 1% of amount prepaid


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y While determining repayment capacity, income of spouse can also be taken. In thatcase loan should be in joint names.

y The condition of maintaining 40% of net take home is applicable to both Salaried andnon-salaried person. In case of non-salaried person, their annual Gross Income, asper IT Returns, is to be divided by 12 to arrive at Monthly Gross Income. LikeSalaried persons, their NET monthly income after all deductions including monthly

installment of proposed Term Loan and/or monthly interest on Overdraft andproportionate principal amount to the extent of 15% of the O.D. limit/balance shouldnot be less than 40% of their Gross monthly income.

y If credit facility is granted against building/flat/apartment, the same should not bemore than 30 years old.


UCO SECURITIES

Under the scheme credit facilities are extended to borrowers against financial securitiesissued by Central Govt./State Govt./RBI in the form of National Savings Certificates, KisanVikas Patra, Govt. Securities and Relief Bonds. Loans are also sanctioned against LifeInsurance Policies of Life Insurance Corporation of India and bonds/debentures issued byspecific Public Financial Institutions.

Eligibility

y The securities should be in the name of the borrower or any one of the jointborrowers.

y The securities should be transferable and can be assigned/pledged in favour of theBank.

Quantum of loan

It will be determined on the basis of discounted face value/maturity value/surrender valueof the transferable security at 13.50% (BPLR -1.00%).

Click here for rate of Interest

Repayment

Facility


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Demand Loan Loans should be adjustedfrom the maturity proceedsof securitiesassigned/transferred

Overdraft

Cash Credit


UCO REAL ESTATE

Under the scheme advances are extended to thePromoters/Developers of real estate who should be well establishedand experienced in their line of activities at least for a period of threeyears. Cooperative Societies are not eligible to be borrowers under theScheme.

Eligibility

Only builders of repute, integrity and excellent track record and professionally managed areeligible for such finance. They must have at least 3 years experience in the line and musthave successfully completed 2-3 projects. The financial position of the builders/developers

as per last audited balance sheet must be satisfactory. Financing would be subject tocommercial viability and sufficient cash generation to repay the loan.

Pre-requisites

a. Details of the project cost and means of finance

b. Profitability statement

c. Annual Cash Budget for the duration of the loan showing monthly/quarterly cash inflowsof the specific project along with repayment schedule

d. Audited financial statements for the last 3 years, the current year's estimate andprojections for next 3 years or till the completion of the project

e. Original Title Deed of the land, detailed estimate of the proposed construction from aChartered Engineer/Architect and permission from the competent authority of the propertyin case it is falling under Urban Land Ceiling Act


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f. Documents like non-encumbrance certificate, certified copy of R.S. Parcha, current,renew/Municipal receipts, Lawyer's opinion on ownership and marketable title andsanctioned plan.

g. The Bank should enter in to a legally vetted tripartite agreement with promoter andbuyer that should ensure among other covenants adherence to National Building Code

(NBC).

Quantum of Loan

The quantum of advance will be assessed on the basis of peak level deficit projected in theCash Flow Statement in the Budget, as submitted by the borrower applicant.

Security:

(a) Primary: The land and building to be constructed on the land shall form the primarysecurity. The value of primary security should be adequate to cover the Bank finance.

(b) Collateral: Collateral in the form of equitable/registered mortgage of other land andbuilding of adequate value of promoter/ guarantor may be taken.

Margin- 25% (minimum)

Insurance-Building to be comprehensively insured against fire, riot and other damageswith Bank's clause.


Processing & Up-Front Fees

a. Processing fees1. Fresh Sanctions : 0.80% on the amount of loan applied for along with theapplication. 1.20% processing fee of

the sanctioned loan amount.2. Review of TL on run down Balance : Rs.125.00 per lac, Min. Rs.250.00, Max.Rs.56000.003. Renewal of CC/WC : Rs.395.00 per lac or part thereof Min.Rs.700.00

b. Upfront fee will be 1% of loan amount sanctionedDelivery of Credit

The credit /quasi credit requirement of the Construction company by way of cashcredit/overdraft/short term loans linked to each specific project for a maximum periodcovering the period of construction plus 12 months will be considered on merit. Bid bond,Bank Guarantee for raising mobilization of advance, performance guarantee and guaranteefor release of retention money etc. will also be considered on merit. Disbursement will be inphases depending upon the progress of work as certified by Chartered Engineer/Architects.

Repayment


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Repayment is to be made in one or two installments after completion of the project and saleof the flats. Sales realizations in one Project should not be diverted to another Project.


UCO NARI SHAKTI

This Scheme is aimed at providing financial assistance to salariedwomen, in line with the broad objective of the Government towardswomen's empowerment.

Salient features

Eligibility

Applicant should be either a permanent employee or have completed 3 years of service.Minimum take-home pay should be 40% of gross salary after all deductions including EMIagainst this loan. Regular income other than Salary Income may also be reckoned forconsidering the eligible amount.

Quantum of loan

90% of the proposed expenditure or Rs. 2 Lac whichever is lower. Additional loan amountmay be allowed within the quantum ceiling to the existing borrower for the purpose theearlier loan was sanctioned.

Security:

Loan will be on clean basis with two guarantors including that of Spouse/Nominee ofPF/Gratuity. One guarantor other than spouse may be waived if additional liquid security isprovided up to 40% of the loan amount.

Click here to view rate of Interest :

Repayment

The loan amount with interest is repayable in 60 EMIs but one year before retirement

Service Charge - 1% (Min. Rs.500/-)


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UCO SHOPPER

It is a Consumer Loan scheme for Salaried Persons, Professionalsand Businessmen for purchase of a whole range of consumer durables and two-wheelers.Consumer durables like TV, Computer, Refrigerator, Air-conditioner or any other itemacceptable to the Bank, and Two-wheelers can be purchased through this scheme.

Eligibility

Salaried Persons

Persons permanently employed in Govt./Semi-Govt. or reputed private concerns withremaining period of service of more than 5 years with annual take-home pay not less thanRs. 36,000/-. Income of spouse can also be reckoned to arrive at the stipulated take-homepay.

Professionals & Businessmen

The earnings of the applicant should not be less than Rs. 1 lac per annum as per IncomeTax Returns/Certificate. LIC policy is to be assigned in favour of the bank for an amountequal/or more than the loan amount in case of non-salaried person.

Quantum of loan

y Maximum : Rs. 1,00,000/-y Minimum : Rs. 10,000/-y (Subject to maximum 10 times of monthly take-home pay in case of salaried

persons).

Margin

In case of two wheelers minimum margin is 10% and for consumer durables the minimummargin is 15%.

Click here to view rate of Interest :

Service Charge

2% service charge subject to a maximum of Rs. 500.00 will be taken at the time ofsanction.

Guarantee


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Personal guarantee of a person acceptable to the Bank is required.

Repayment

The Loan is repayable together with interest within a maximum period of 60 months inequated monthly installments either through salary deduction or through post-datedcheques. No charge is levied for pre-payment.


UCO PENSIONER

Short Term loan is extended through this scheme to Pensioners who receive pensionthrough our Branches. War widows drawing family Pension are also eligible.

Purpose

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

Depends upon the monthly pension: 10 times of monthly pension or Rs. 1 lac whichever islower.

There is no processing charge or service charge.

Rate of Interest

Repayment

Repayable within 12 to 24 months. It can be extended to 36 months in genuine cases butnot beyond the period of 70 years age inclusive of repayment period. No pre-paymentcharge is levied.

For more details please contact your nearest UCO Bank branch


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UCO EARNEST MONEY DEPOSIT LOAN SCHEME

Loan scheme for financing for Earnest Money Deposit for booking housing plots/flats offered

by various Urban/Metropolitan Development Authorities & Housing Boards.

Eligibility

Indian residents having regular documented source of income. Minimum 21 years of ageSingly/Jointly as permitted by State Housing Boards/Urban DevelopmentAuthority/Metropolitan Development Authority. The facility is to be allowed to only thoseapplicants who fulfill all the eligibility criteria under UCO Shelter Scheme.

Amount of Loan

Maximum not to exceed 80% of the EMD.

Processing Charge

Rs. 300.00 upfront per application

Margin - 20%

Interest Rates - 9.00% (Fixed)

Prerequisites-

y Letter of undertaking to be obtained from SHB/UDA/MDA of having noted Bank's lienand refund the amount through UCO Bank in case of unsuccessful applicants

y In case of allotment of plot, housing loan under UCO Shelter can be availed by theapplicants. In such case the loan for EMD shall be adjusted against the loan grantedfor purchase of land and construction of house thereon.

Repayment- 24 monthly installments


UCO SWABHIMAN - REVERSE MORTGAGE LOAN MORTGAGE LOAN SCHEME FORSENIOR CITIZEN


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Bank introduces UCO Reverse Mortgage Loan Scheme for Senior Citizens, under ReverseMortgage a Senior Citizen, owning a house/flat, can avail of a monthly stream of Incomeagainst the mortgage of his/her property while remaining the owner and occupying thehouse throughout his/her lifetime, without repayment or servicing of the loan.

Eligible Borrowers Senior Citizens of India.

Purpose Supplementing Senior Citizens Income

Loan Amount Based on valuation of the property and age of theborrower Maximum Rs.50 lacs

Period of Loan Minimum 5 years and maximum 15 years.

Mode of Disbursement Monthly/Quarterly with fixed/increasing Equatedmonthly Disbursement with an option to avail One-time lump sum payment after 12 months from the firstdisbursement during entire tenure of 15 years as perchoice of the borrower.

Security Equitable Mortgage of the residential property owned &

self occupied by the Senior Citizen borrower.

Rate of Interest 10.50% (fixed) with reset clause after 3 years.

Repayment The outstanding loan will be due when the lastborrower dies/permanently moves out of thehouse/would like to sell the home.

Loan will be liquidated by sale of property.

Option available with the legal heir(s) to repay the loanand redeem, the house property.

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)

'Affordable Housing for All' is an important policy agenda of the Government of India.Accordingly The Cabinet Committee for Economic Affairs has approved an Interest SubsidyScheme for Housing the Urban Poor in order to ameliorate the living conditions ofEconomically Weaker Section/LIG population in urban areas. Primary objective of thescheme is to provide interest subsidy support.

Objective:

The key objective of the scheme is to enable Economically Weaker Sections (EWS) and LowIncome Group (LIG) households to avail affordable housing loans for purchase ofhouse/construction of new house.

Definition:


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a) EWS- Economically Weaker Sections are those households having monthly income uptoRs.3300/-

b) LIG- Low Income Groups are those households having monthly income betweenRs.3301/- to Rs. 7300/-

Target Group:

Individuals /NGOs for on lending to their group members. Preference will be given to SCs,STs, Minorities, Person with disabilities and Women beneficiaries in accordance with theirproportion in the total population of city/urban agglomerate during the 2001 census.

Applicants planning to form cooperative group housing societies or organizations likeEmployees Welfare Housing, Labour Housing, etc. should be given preference and wheneverpossible construction of houses by such cooperatives by way of 1+3 storied buildings shouldbe promoted so that cost of land is shared among beneficiaries. However, this is not amandatory requirement. Both individuals as well as group Housing borrowers are equallyeligible under the scheme.

Target Borrower:

Identification of beneficiaries will be undertaken by Urban Local Bodies or Local NodalAgencies and they will assist the borrowers in paper works and procedure of bank loan.However the borrower would be free to approach and negotiate a loan under the schemedirectly with the bank branch.

Preference:

Preference will be given to Scheduled Caste, Scheduled Tribe, Minorities, Person withdisabilities and Women beneficiaries in accordance with their proportion in the total

population of the city/urban agglomerate during the 2001 census

Stipulations:

The ultimate beneficiariesshould not own a house in his/her name or in the name ofhis/her spouse or any dependent child. But such beneficiariesshould own land in hisname in case of application for construction of new house.

Area of operation:

Urban area. Zonal Offices will be advised to submit us a list of branches at urban area forimplementation of the scheme.

Nodal Agency:

NHB and HUDCO were selected by the Government of India to act as intermediary financialinstitutions that would be responsible for administering the subsidy. Before implementationthe Bank has to sign a MOU with any of the two organizations. We have signed MOU withNHB.

Loan amount:


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a) EWS- Maximum loan of Rs.1 lac ( Rs one Lac Only) for a house of at least 25 sq mts.

b) LIG- Maximum loan of Rs.1.60 lac( Rs one Lac sixty thousand Only) for a house of atleast 40 sq mts. However subsidy will be available for loan upto Rs. 1 lac only.

Disbursement:

Disbursement will be made on a phased manner depending upon the progress ofconstruction. Branch will monitor the construction of the dwelling units financed under thescheme, including the approvals for the building design, infrastructure facilities etc. as alsothe quality of the construction and verify through site visits etc. the expenditure incurredupto different stages of construction. In case of construction disbursement may be done bydebiting the respective loan account and crediting the savings bank account of theborrower. However in case of purchase of a ready built house the payment should be madedirectly to the vendor by issuing Demand Draft/ Pay Order as the case may be by debitingthe loan account of the borrower.

Rate of Interest:

Interest @8.50% p.a. for first 5 years with a provision to reset after 5 years from the dateof drawal of first installment for all loan under the scheme.

Sanctioning Authority:

All the loan applications under the scheme will be processed and sanctioned at the RetailProcessing Centres at Zonal Offices and in case there is no Retail Processing Centres at anyZonal Office, at the branches identified by the respective Zonal Office. On receipt of thesanctioned proposals the branch will disbursed the loan following all the stipulation noted bythe Retail Processing Centres at Zonal Office/Processing Cell.

However before sanctioning any loan it should be ensured that the borrower have sufficientrepaying capacity based on the average monthly income of the applicant for last three yearsand monthly family expenditure depending upon the size of family.

Pre-payment charges:

There will be no pre-payment charges for any loan sanctioned under the scheme.

Subsidy:

The subsidy will be 5% p.a. on interest charged on the admissible loan amount for bothEWS and LIG, over the full period of the loan for construction or acquisition of a new house.

The Net Present Value (NPV) of the subsidy will be arrived at on the basis of notionaldiscount rate of 9% p.a. (equivalent to Government Security rate) for the period of the loanand on the interest chargeable at the time the loan is contracted.

The subsidy will be credited upfront to the borrowers account and interest will be calculatedon the net amount of loan at the agreed rate of interest.


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Procedure for claiming Subsidy:

Participating branches will claim interest subsidy for the entire period of any loan disbursedduring the quarter to Head Office, Priority Sector Department through their respective ZonalOffices.

Branches should submit their claim within 3 days of close of a quarter to their respectiveZonal Offices and the Zonal Offices in turn will submit it to Head Office, Priority SectorDepartment within 7 days of close of a quarter.

Repayment:

Loan will be repaid in 180 to 240 EMI depending upon the income of the borrower. Howeverbranches may prefer for 20 years repayment, to get full benefits of Interest Subsidy andlower EMI.

Equated Monthly Installments (EMI )

Loan will be repaid as per following EMI Chart

Particulars Table-1 Table-2

Loan Amount Rs.1,00,000=00 Rs.1,60,000=00

Rate of Interest @8.50% ( Fixed ) @8.50% (Fixed )

Terms ofRepayment

180 months 240 months 180 months 240 months

Subsidy perborrower

Rs.45,443=00

Rs.63,693=00 Rs.45,443=00

Rs.63,693=00

NPV of Subsidy Rs.29,112=00 Rs.35,458=00 Rs.29,112=00 Rs.35,458=00EMI Rs. 698=00 Rs. 560=00 Rs.1,289=00 Rs.1,081=00

Security:

a) Primary- Mortgage of the dwelling house

b) Collateral/Third Party Guarantee: NIL

Documents:

Loan Application form duly vetted by urban local bodies along with the following;

y Income certificate issued from the ULBy Copy of the land Recordsy Copy of updated payment receipt of Government revenuesy Non-encumbrance Search Certificate.

Process Note


22/22

A declaration from the borrower having been understood the impact of Fixed/Floating Rateof Interest.

Supervision:

It should be ensured that the housing unit is completed within one year period

from the start of construction. On a half yearly basis a certificate of utilization of subsidyand also a certificate in relation to the progress of the construction leading up to thecompletion of the housing unit have to be submitted. Branch will have to submit a certificateon completion of the housing unit.

Processing Charges:

There will be no processing charges for any loan sanctioned under the scheme.

Classification:

All loans sanctioned under the scheme will be classified as Priority Sector Advance under

Sub category Housing