SCHEME OF LOAN AGAINST PROPERTY (LAP)
1. PURPOSE
Personal needs.
(Borrower to disclose specific purpose of loan and also to give undertaking that the loan shall not be used for speculative purposes.)
2. ELIGIBILITY
(i) Confirmed/permanent employees of State/Central Govt. their Boards/ Corporations/ Undertakings and Other Income Tax Assesses.
(ii) Customers with a satisfactory track record of three years (i.e. net profit in the immediately three preceding year) belonging to following categories:-
· Retail Traders/ Whole–sale Traders.
· Professionals & Self-employed.
· Enterprises in Service Sector
· Manufacturing concerns.
Which are functioning/ operating/carrying out their business/ profession as:
1. Individuals;
2. Sole – Proprietorship firms;
3. CIBIL score less than 600 will not be considered.
NOTE :-
(i) At the time of processing of loan the borrower’s place of residence should be at Bank area of operation.
3. INCOME CRITERIA
(i) For salaried and other income tax assesses:
Minimum gross monthly salary of Rs.30,000/- for last three years (salaried class) or minimum gross annual income of Rs.3,60,000/- (for other income tax assesses).
(ii) For Business Enterprises:
Minimum net annual income / net Profit Rs.3,60,000/- and above for last three years.
iii) Common for both categories:
Income of spouse / earning children / parent’s can be taken into consideration for the purpose of EMI/ or (for determine the loan amount). In such cases, they should be made co-borrowers subject to maximum one co-borrower.
–Regular income from all sources including Rental Income can be considered provided the sanctioning authority is satisfied with the proof of income. In such cases
it should be substantiated by proof in the form of Latest I.T. Return/Latest salary slip with Form 16 or Latest salary slip /Statement of Account for the last six months in which income is being credited on regular basis.
4. NATURE OF FACILITY :- Term Loan /overdraft on monthly reducing drawing power (DP) basis.
5. LOAN AMOUNT:
Minimum: Rs 1.00 Lakh Maximum: Rs.60.00 Lakhs (subject to CMA norms).
6. ASSESSMENT OF LIMIT
a) The assessment of limit will be carried out keeping in view two parameters as under and limit shall be fixed least of the followings:-
b) Maximum 50% of the realizable value of the property.
c) Maximum ten times of Annual Gross Income /net Profit, whichever is lower.
7. Repaying Capacity :-
a) The monthly carry home salary / income of the borrower(s) (including deduction of proposed loan installment) under no circumstances should be less than 50% of his/her gross income/Net profit.
b) Repaying capacity/ assessment of loan, is to be calculated on the basis of latest salary slips for salaried borrower(s) and on the basis of latest ITRs for other than salaried borrower(s). Further, regularity of salary/income is to be ensured by taking 3 years ITRs/Form 16/ BS (Whichever is applicable) for all borrower(s), i.e., salaried & other than salaried.
c) Wherever ‘Income of spouse/earning children / parents is taken into consideration for assessment of limit and/ or repaying capacity; Gross Income/Gross salary shall be considered for the purpose of computation of assessment of limit
d) Specific care exercised with respect to IT returns showing SUDDEN SPURT in the salary/ income levels. Recommending/sanctioning authority to fully satisfy himself/herself before considering acceptance of such income/salary. Justification/basis of the same provided in the recommendation/sanction note.
e) Eligible Property – Residential and commercial property of Chandigarh Housing Board, Chandigarh, (free-hold), Housing Board, Haryana and Haryana Urban Development Authority (HUDA) within Chandigarh & Panchkula city.
8. REPAYMENT PERIOD:
(i) Loan amount together with interest to be repaid in maximum 120 Equated Monthly Installments (EM) OR up to the age of 65 years, whichever is earlier, by ascertaining the regular income of prospective borrower.
(ii) For Recovery/ Repayment of EMIs:
Recovery/ Repayment of EMIs in all Retail Loan accounts be considered through
PDCs /Standing Instruction. Mandate of the customers for debiting their accounts through Advance cheques signed by the borrower repaying monthly installments under the cover of letter be obtained. Such Post dated advance cheques should be obtained of that account whose statement of account is obtained and not of our Bank where a shadow account is opened just for getting cheque book.
9. SECURITY
(a) Loans/advances shall be sanctioned against the Equitable Mortgage of the non-encumbered residential House/Flat or commercial property (in the shape of building) self occupied or vacant standing in the name of the:
(i) Individual Borrower or co-borrower;
(ii) Spouse of the borrower;
NOTE:
Loan can also be sanctioned against the property Standing in the name of Spouse and other near relatives, i.e., Father, Mother, Brother, Children (major) of individual borrower. However, the owner (s)/joint owner(s) of IP be made co-obligant (s)/guarantor(s).
(b) Personal guarantee of the owner of the property be obtained in all cases. Further, where loan is allowed against the property of other specified persons, other than the borrower himself, as per details available in the security clause, who will be required to stand as guarantor, a minimum of six advance Cheques, signed by such guarantor/s be also obtained along with letter of deposit.
10. INSURANCE
Comprehensive insurance of the property mortgaged for the Construction Cost only, i.e., value of land should not be included for the purpose of insurance. Cost of insurance to be borne by the borrower.
11. Rate of interest :- Fix option As applicable at the time of sanction
– Fixed rate of interest option will be subject to re-set clause of one years. There will, however, be no application of re-set clause for a repayment tenor upto two years. The re-set clause will be as under :-
“Interest rate shall be reviewed and re-set on completion of a block of one years. Year of first disbursement, whatever be the month of availment, will be taken as first year and year will cover the period from 1st April to 31st March. As and from 1st April, after completion of every block of one year, the interest rate as re-set will be applied. If there is any delay in revision/re-set of interest, appropriate adjustment will be made in the account, effective from 1st April of the year. If the interest rate is not re-set, until it is reset, rate as prevailing before will be applied. If interest rate is not re-set in the year when it is due, it shall be open to the Bank to re-set the interest in any subsequent year and in such event, the interest rate as re-set, will be applicable from 1st April of the year in which it is re-set for the remaining years of block of two years. Only Bank has full discretion to fix/prescribe/revise/re-set the rate of interest”.
Accordingly, the rate of interest in the loan accounts sanctioned under fixed option shall be reset on 1st April every year, after completion of every block of one year, and rate shall continue to be fixed till next applicable reset date.
The borrower(s) will be required to exercise fix rate of interest option at the time of submission of loan application.