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sgwAi m AP CPjU AW

(PlP)
STATE BANK OF INDIA OFFICERS' ASSOCIATION
( KARNATAKA)

Dos

&

Donts

in Day to Day Banking

A STUDY CIRCLE PUBLICATION OF SBIOA(K)


# 65, State Bank Buildings, St. Mark's Road Bangalore - 1--560 001 2009

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FOREWORD
In one of the General Body meetings member had suggested that Association should bring out a book on Do's and Donts covering all aspects of banking. Though a commitment was given in the General Body Meeting that efforts would be made to bring out the book at the earliest, in spite of our best efforts we could not do so. However, now, I am happy to inform that we are able to bring out the book as promised. We have endeavoured our best to collect and produce as many do's and don'ts covering all facets of banking which would enable our members to follow the laid down systems and procedures and also follow the bank's instructions. Though we have been advising our members in every Zonal Conference and also in every interaction with the members to follow the laid down Systems and Procedures, many of our members are still falling in the net of Disciplinary Proceedings unwittingly in their eagerness to achieve the budgets and targets fixed by the controllers, and also due to heavy pressure of work. The book on Do's and Don'ts is brought out in a very simple manner and through bullet points. I am sure, if our members follow these meticulously, they would not only be able to protect themselves, they would also be protecting the interests of the bank. I would request all our members to kindly go through the book at least once, and preserve the book for regular usage. I place on record the efforts of all the office bearers and also many members including faculty of SBLC Bangalore who had contributed to bring out this book. My compliments are due to Com. Y. Sudarshan the Dy. General Secretary for having co-ordinated the compilation.

G. MUTHUSWAMY General Secretary


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INDEX
Chapter 1 2 3 4 5 6 7 8 9 10 11 Subject Customer Identification Advances SME Advances Per Segment Advances Including Staff And Home / Vehicle Loans Agricultural Advances NPA Accounts Foreign Exchange Cash Department Government Business General Banking System, Technology & ATM Page 5 11 25 36 51 61 69 74 77 83 88

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CHAPTER - 1

CUSTOMER IDENTIFICATION
ACCOUNTS OF INDIVIDUALS
The customer identification will be on the basis of documents provided by the customer as (a) Proof of identity and (b) proof of address. Prescribed application form along with Photographs of the customer is to be invariably obtained in all cases. (a) Proof of identity (any of the following with authenticated photographs thereon):
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Passport Voter ID card PAN Card Govt./Defence ID card ID cards of reputed employers Driving License Pension Payment Orders issued to the retired employees by Central/State Government Departments, Public Sector Undertakings Photo ID card issued by Post Offices. Photo identity card issued to bonafide students by a University, approved by University Grant Commission
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(UGC) and/or an Institute approved by All India Council for Technical Education (AICTE). (b) Proof of current address (any of the following)
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Credit Card Statement Salary slip Income/Wealth Tax Assessment Order Electricity Bill Telephone Bill Bank account statement Letter from reputed employer Letter from any recognized public authority Ration Card Voter ID Card (only if it contains the current address) Pension Payment Orders issued to the retired employees by Central / State Government Departments, Public Sector Undertakings, if it contains current address. Copies of Registered leave & License Agreement/Sale Deed/Lease Agreement may be accepted as proof of address. Certificate issued by hostel and also, proof of residence incorporating local address, as well as permanent address issued by respective hostel warden of aforesaid University / institute where the student resides, duly countersigned by the Registrar/Principal/ Dean of Student Welfare. Such accounts should be closed on completion of education/ leaving the University/ Institute. For students residing with relatives, address proof of
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relatives along with their identity proof, can also be accepted provided declaration is given by the relative that the student is related to him and is staying with him. While the above set of documents should normally suffice to establish both the identity and the correct address of the applicant, wherever this is not so (e.g. PAN Card and Salary Slip together may not provide proof of address) applicants to be asked to give additional documents e.g. a letter from the employer giving the correct address, credit card statement etc. In case of joint accounts, applicants who are not closely related to each other would be required to establish their identity and address independently.

KNOW YOUR CUSTOMER (KYC) GUIDELINES GUIDANCE NOTE & INDICATIVE CHECKLIST FOR BRANCHES
(OTHER THAN INDIVIDUALS) Obtain brief details of Proprietor / Partner / Promoters / Directors, viz.,
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Full name and their identity check with photo-identity proof issued by Government (Passport / Driving Licence / PAN Card, etc.) Address (Office & Residence) with telephone / fax / email / mobile Other concerns of the same Promoters / Group. Details of educational qualifications, experience, etc. of the Promoters.
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Make a visit to the factory / site, Registered Office / Corporate Office. Make market enquiries through our own customers / Chamber of Commerce / Industry Associations / Panel Auditors or other sources. Obtain Audited Financials for the last 3 years to ascertain Units performance and other financial details (in case of existing Units). Scrutinise necessary Registration Certificates, Partnership Deed, Trust Deed, Registration Certificate from the Registrar of Societies / Partnership Firms, Certificate of Incorporation / MA / AA, as the case may be. Peruse Certificate of Commencement of Business in the case of Public Limited Companies and Private Limited Companies being a subsidiary of a Public Limited Company. Whether licence / permission / approval by regulatory authority obtained, if necessary. Details of Associate Concerns with their borrowing arrangements.

If it is a running Unit, obtain details of l Existing borrowing arrangements l Major shareholders l Associate Concerns What are the guidelines in Customer Identification Procedures in respect of accounts of Companies? Besides prescribed application forms and photographs of persons who will be operating the account, the following documents are also to be obtained:
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COMPANIES
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Certificate of Incorporation. Memorandum of Association. Articles of Association. Certificate of Commencement of Business. A copy of the Resolution of the Board of Directors for opening of the account. Identification of those who have authority to operate the account.

What are the guidelines in Customer Identification Procedures in respect of accounts of Hindu Undivided Family (HUF)? HUF comes into being because of a particular concept under Hindu Law, whereby all the members of the family reside together jointly, carry on a business activity jointly and hold the property jointly and, therefore, it is termed as Hindu Undivided Family. Besides prescribed application forms and photograph of person who will be operating the account, the following documents are also to be obtained:

HINDU UNDIVIDED FAMILY (HUF)


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Declaration from the Karta. Proof of identification of Karta. Prescribed Joint Hindu Family all the adult co-parceners.

Letter signed

by

What are the guidelines in Customer Identification Procedures in respect of accounts of Trusts? Besides prescribed application forms and photographs of
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persons who will be operating the account, the following documents are also to be obtained:

TRUSTS
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A copy of the resolution. Trust Deed. A copy of the Registration Certificate. Power of Attorney granted to transact business on its behalf (wherever applicable). Any officially valid document to identify the Trustees, Settlors, Beneficiaries and those holding Power of Attorney.

What are the guidelines in Customer Identification Procedures in respect of accounts of Partnership Firms? Besides prescribed application forms and photographs of persons who will be operating the account, the following documents are also to be obtained:

PARTNERSHIP FIRMS
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Partnership Deed. Partnership Letter. Introduction from a person known to the Bank. Registration Certificate (in case of Registered Firm). Any officially valid document identifying the partners and the persons having Power of Attorney and their addresses. Telephone bill in the name of the Firm / Partners.
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CHAPTER - 2

ADVANCES
PROCESSING
Dos
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Keep a check list of required forms/documents /particulars to be obtained from the prospective borrowers and give them a copy of the same to enable them to produce all the required data at the time of submission of the loan application. On receipt of the same, acknowledge and enter in the loan applications received & disposed register. Give them a definite date and time when they should approach you again to enquire about the fate of the application. Scrutinize the papers along with the application and in case you need any clarifications/further documents, note down all of them and inform the applicant to submit them in one lot.

Donts
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Dont make the applicant run around number of times. Dont depend on the consultants to furnish the required data. Instead, keep in touch with the applicants to elicit the required information.
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VERIFICATION OF DOCUMENTS
Dos
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Ensure that the KYC formalities are completed. If the applicant is a Company, obtain a copy of certificate of incorporation, the Memorandum and Articles of Association, Copy of Resolution passed by the Board of Directors, Certificate of Commencement of Business (in case of public limited companies) and verify them thoroughly to know about the objectives of the company, place of Registered office, borrowing powers of the company, authorized persons to sign the documents, affixation of common seal of the company, etc. Conduct a thorough search in the office of the Registrar of Companies to know about the previous borrowings of the company, and subsisting charges. If the applicant is a partnership firm obtain a copy of the Partnership Deed and Partnership letter. Partnership Deed to be registered with the registrar of firms. If the applicant is a trust, obtain a copy of the Trust Deed and also a copy of the Resolution passed by the Trustees, and bye-laws of the trust. If the applicant is a Society, obtain a copy of the Byelaws of the Society and a copy of the Resolution passed by the Board of Directors. Do follow the KYC (Know Your Customer) norms in respect of all the above cases. If any property is offered as security, obtain all the original documents and submit the same to the Banks approved legal advisor for Title investigation Report (TIR), to know about the genuineness of the documents, ownership,
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transferability and marketability of the properties in question. TIR to be obtained on standard format only.
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Obtain Valuation Report from the Banks approved Engineer/Valuer and critically examine the same. Obtain Search Reports from Banks approved Company Secretaries and carefully verify them for existing charges if any.

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Do not proceed with processing of the loan application unless you have verified the above documents and are satisfied about the genuineness of the applicant, guarantors, and the securities offered. Do not read only the last para of the Title Investigation Report and create the equitable mortgage. Instead read thoroughly the entire legal opinion and if there are any flaws/conditions mentioned in the opinion, arrange for obtention and rectification of the flaws and then only accept the property as security and create mortgage.

PRE SANCTION INSPECTION


Dos
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Visit the Business Premises of the company/ firm, Registered Office if situated elsewhere other than the factory premises, the Promoters/Directors residences, guarantors residences and also the properties offered as security and make enquiries about the genuineness of the ownership and prepare a rough sketch indicating the close by landmarks and file the same along with the
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application for future reference. Measurement of the property is a must.


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Make a note in the Original Application, the date, time and your observations if any, of the pre-sanction inspection. This is very very important. Prepare a report and submit the same to your immediate senior and after his verification file the same along with the original application. Carefully verify the properties, along with the legal opinion and valuers report. Enquire in the neighborhood about the applicant, guarantors etc. Verify whether all the licenses required for doing the business are obtained by the applicant. (Viz. SSI Certificate, Sales Tax/VAT Certificates, Power sanction, Water and Sewage board approvals, NOC from pollution control authorities, etc.) If existing unit, verify all the records to know about the performance of the unit, orders on hand, suppliers/buyers particulars, discretely enquire with the employees about the performance of the unit, existing borrowings if any with other banks, salary/wage dues if any etc. If term loan is involved, opinion report about the suppliers to be obtained from their bankers. Pre sanction inspection is a must. Dont avoid it. It is also necessary to to note down the date of pre-sanction inspection, observations if any, on the file.
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APPRAISAL
Dos
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Analyse the Balance Sheet thoroughly and read the Directors Report and Auditors Report to find out if there are any qualifying remarks. Avoid highly ambitious projections, arrive at meaningful and achievable targets and accordingly arrive at the sanctionable limits after due discussions with the borrowers. Stipulate covenants which are possible to implement. Obtain the necessary opinion reports from all concened and compile opinion reports on the guarantors and the borrowers and keep them in the file before sanctioning the limits. If any querries are raised by the sanctioning authority, obtain satisfactory replies from the applicants and advise the same at the earliest to the sanctioning authority. Prepare the control forms and submit the same to the respective authorities as soon as the loans are sanctioned. Ensure that the approved control forms are received at the branch and file the same along with the security documents. Reply to the queries raised in the control form without fail. Dont stipulate conditions which are impossible to fulfil by the borrowers. Dont conceal any negative information which you come to know while appraising. Bring it along with mitigating factors to the notice of the sanctioning authority for their consideration.
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Donts
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Dont disburse the loan without completing all the formalities.

DOCUMENTATION
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Keep ready all the documents that are required to be obtained from the borrowers/guarantors. Ensure that the documents are stamped as per the Latest State Stamp Act as applicable to the place of execution. Prepare the sanction letter in two perfectly identical original sets and advise the borrower to return one of them signed by the borrowers guarantors and third party mortgagors, if any in acceptance of the terms and conditions. In respect of companies obtain the necessary board resolution for execution of the documents and the common seal of the company may need to be affixed if called for in the Articles of Association. Ensure that the documents are properly filled in and are complete in all respects before they are executed by the borrowers, guarantors & third party guarantor if any. Ensure that the signatures of the borrowers and the guarantors are obtained at all the places that are necessary. Rubber stamps of the unit and common seal of the company have to be affixed in your presence and properly witnessed. Ensure that the authorized official on behalf of the bank signs the security documents wherever necessary and signatures of witnesses are obtained at stipulated places.

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Ensure that the documents are executed in our own premises and the documents are dated and the place of execution is marked on all the documents. In case if the documents are to be executed elsewhere than the branch, ensure that the documents are stamped as applicable to the place of execution and the fact that the documents are executed elsewhere has to be noted in the Cash Credit Register/Term Loan Register. In case of Partnership firms obtain Partnership letter in the prescribed format duly signed by all the partners. All documents to be signed by all the Partners. In respect of Hindu Undivided family, HUF letter to be obtained. Enter the documents in the Documents Execution Register. If any property is offered as security, Equitable mortgage or Registered Mortgage as per the terms of sanction has to be obtained. In case of equitable mortgage prepare form A and obtain the signatures of the borrowers or guarantors as the case may be and enter the details of execution in the EM Register chronologically. Hand over Form A to the mortgagors and ask them to post the same to the banks address. In case of extension of Equitable mortgage, enter the same in the EM Register and obtain form B duly signed by the borrower/guarantor as the case may be. Please note EM can be created only at notified centres. So, before execution of EM ensure that the Centre is notified for that purpose. If not, create the EM only at the nearest Notified Centre and obtain a copy of the recital and file the same along with the documents.

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Obtain all the documents mentioned in the TIR in original and number the same serially and retain the same alongwith other security documents safely. Serially number all the security documents and ensure that they are properly secured and stored in a safe place. (Either in the Strong Room or in a fire proof safe).

Donts
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Do not release the limits without completion of all the formalities All a) b) c) the formalities means : Security Documentation Mortgage Creation Charge filing in ROC, in case of Borrower Companies, and execution of proper documents as stipulated by the sanctioning authority.

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Do not obtain blank documents for eventual completion. Do not encourage piece meal execution of documents. All the borrowers and guarantors should be present at the time of execution of the documents. Do not hand over the documents to the borrowers for execution elsewhere. As far as possible the documents should be executed in your presence. Do not obtain Photocopy of the documents. Do not understamp the documents or use invalid stamps. Do not obtain unnecessary documents. Do not create EM on the basis of Certified copies/photo copies of the title deeds. Do not accept conditional legal opinion.
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DISBURSEMENT Dos
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Ensure that all the terms and conditions stipulated in the sanction note are complied with by the borrower/guarantor. Recover all the charges stipulated viz. processing fee, EM charges, upfront fee etc. In case of term loans issue BCs/Inter office instruments in favour of the suppliers and send the same direct to the vendors along with a covering letter by registered post. Ensure that the entire margins stipulated by the bank are brought in upfront by the borrowers and a certificate to this effect is obtained from the auditors wherever necessary. In respect of companies ensure that the charges are registered with the Registrar of Companies within the stipulated time and proof by means of a search report of such registration is obtained and retained along with the documents. Ensure end use of funds. Do not release the funds without completion of all the formalities and compliance of all the stipulated terms and conditions and covenants by the borrower as per the sanction letter. Do not send the DDs for supply of machines through the borrower. Send them by registered post alongwith a covering letter. Do not deviate from the laid down instructions/stipulations. In case any deviation is required then bring it to the notice of the sanctioning authority in writing and only after obtention of their approval proceed ahead.
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Donts
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Do not allow excess drawings without prior approval from the sanctioning authority.

INSPECTION & FOLLOW-UP Dos


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Maintain DAILY LIST. This is most important Ensure that the borrower submits the Stock Statements every month and scrutinize the same thoroughly and critically analyse. Do not write anything on the Stock Statements. Compare the stock statement with the previous months statement to ascertain if there are non-moving stocks, sundry debtors beyond the cover period, long pending sundry creditors etc. Verify whether any machines are idling, if so the reasons therefor. Verify the electricity meter reading to understand the level of activity. Discretely verify from the employees whether the salaries and wages are paid in time. Verify the purchase and sale invoices and also the sundry debtors and sundry creditors registers. Verify whether the Banks name plate is displayed at proper place and any other banks Boards are on display. In respect of large advances it is always better to inform the borrower in advance about the date and time of inspection so that he can keep ready certain records and information for the purpose of inspection. Sometimes it may be necessary to make surprise visits also.
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Verify whether all the assets financed by the Bank are available in the unit. Ensure that the stocks and the machinery are insured for the correct value and our charge is noted on the insurance certificate/policy. A copy of the insurance certificate/policy should be sent to the borrower and his acknowledgement should be obtained. In case the borrower insists for covering specific risks the same thing should be done invariably. Verify whether the address of the unit is properly indicated in the policy. Whenever there is a change in the address the same should be informed to the Insurance company and necessary endorsements are made in the insurance policy. In case the stocks are sent for further process to other places, such addresses should also be informed to the insurance company and a suitable note is made in the policy to cover such stocks for the risks mentioned in the policy. Diarise the date of execution of the documents and ensure that the documents are revived before the completion of 21/4 years. Diarise the date of insurance and promptly renew the same with necessary changes if any before the due date. If vehicles are financed ensure that our charge is noted in the RC Book and a copy of the RC Book is kept along with the documents. Ensure that the vehicles are insured properly and a copy of the insurance policy is kept along with the documents. Ensure that our hypothecation clause is noted in Insurance policy as well.
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Ensure that the Financial Statements are obtained quarterly, half yearly and yearly and the same are critically analysed and put up to the controllers with your observations for their consideration and file the same in the units file. Obtain standing instructions for recovery of the Term Loan installments and Interest and ensure that the same are recovered without fail. If any SI could not be put through due to inadequate balance in the account, recover the same at the earliest and inform the borrower to arrange for funds. Depending on the size of the unit, decide a threshold amount up to which cheques can be passed without reference to you, and ensure that any cheque beyond the threshold amount should be referred to you before they are paid. This is to ensure the end use of funds. Scrutinise the Vouchers of your units without fail on a day to day basis, to ensure that the cheques are issued by the units for the right purposes. In case there is a need to allow excess drawings to the units, advise the units to submit their request in advance and after verifying about the genuineness of the request put up a note to the sanctioning authority for permission to allow the excess drawings. Submit excess drawings reports monthly before 10th of the next month to the authority concerned and get their approval. Ensure that such excess drawings are ratified by the companies in their respective boards, and obtain a copy of the resolution passed by the Boards ratifying the excess drawings, and retain the same along with documents.
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As and when the limits are due for renewal/review, obtain all the necessary financial documents in advance and arrange for renewing the limits before due date without fail. In respect of units financed by the Bank whenever you observe any negative features, or come across any information which is detrimental to the interests of the bank, bring it to the notice of the sanctioning authority. In case inspection is not possible due to the vastness of the units operations, multifarious products, spread over of manufacturing units at various places, stocks are maintained at various distribution points and meaningful inspection can not be conducted for any other reason, then obtain permission from the sanctioning authority for waiver of inspection. Obtain Audited Balance Sheet and critically analyse the same along with the projections made at the time of sanction of limits and submit a note to the sanctioning authority with your observations for their consideration. In case any corrective measures are to be initiated to rectify certain aberrations, initiate the same immediately without any loss of time. In case of multiple financing, put in place a mechanism to obtain and share the informations with regard to the unit at regular intervals. If any irregularities are pointed out by the Statutory Auditors, Credit Auditors, Risk Focussed Internal Audit, RBI Audit, Income leakage Audit and Concurrent Auditor, do rectify the same immediately. In case it is not possible to rectify, do bring it to the notice of the Sanctioning authority and obtain their approval for continuing the irregularity.
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Do maintain the correspondence systematically and ensure that the same is properly filed and secured and the files are readily available at any point of time. Do understand that there is no room for complacency in advances. Keep your ears and eyes open to the happenings in the units. Do not allow excess drawings casually. Do not allow excess drawings as a routine. Do not be overawed by the size of the unit and allow drawings without taking proper care and ensuring end use of funds. Do not forget to insure the assets financed by the Bank for necessary risks and at regular intervals. Do not suppress certain information which is detrimental to the interests of the Bank. Do inform the same to the sanctioning authority without fail and obtain their permission for future course of action to rectify the position. Do not violate any of the laid down instructions.
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CHAPTER - 3

SME ADVANCES
APPLICATIONS Dos
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Have preliminary discussion with the prospective Borrower. Enquire about his family background. Know what his qualifications are. Know what his experience in the activity / proposed activity is. Check the originals of Identity Proof, Address Proof, Qualification Proof, and experience Proof. (as per KYC norms) Attest the Xerox copies of the above. If applicant is a Company, obtain copies of certificate of Incorporation, Memorandum & Articles of Association and scrutinize carefully. Look out for power to borrow in the memorandum of Association. If the applicant is a Partnership firm obtain copy of the partnership deed duly verifying with the original. Ensure that the Power to Borrow is incorporated in the deed. If the applicant is a Trust, obtain copy of the Trust Deed duly verifying with the original. Know the requirement of the prospective borrower. Give him the suitable application form.
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Obtain the fully filled up application form along with other documents. Obtain copies of Title Deeds and other documents in case there is a Mortgage of Immovable Properties. Obtain Quotations, if the applicant is seeking Term Loan. Obtain previous two years Financials and next two years projections in the appropriate format - if necessary obtain Financials under CMA format. If Term Loan is required projections of next five to seven years(as the case may be) to be obtained. Enter the application in Loan Applications Received & Disposal Register. Do not involve middle men for sourcing the application. Do not promise anything. Do not accept applications under any outside pressures.

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Donts
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PRE SANCTlON INSPECTlON Dos


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Inform the customer well in advance about your visit. Take the application along with all other documents. Have a casual enquiry about the applicant in the neighborhood. If it is an existing unit, have casual interactions with the employees. Look for Name boards and other Certificates. Look for any other signs of Borrowing arrangement with other Banks like Hypothecation Board etc.,
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Scrutinize the necessary Licenses issued by the Local Authorities. If it is an SSI, scrutinize SSI Certificate, and the expiry date if any. Verify Original Sales tax and VAT Certificates, NOC from Pollution Control Board (if necessary). If existing unit, go through the Sales Invoices, Sales Registers. Purchase Bills. Purchase Registers. Stock Register etc., Have thorough discussion with the prospective borrower. Ask as many meaningful questions as possible and get answers. Offer the prospective Borrower suitable product to suit his requirement. Verify the availability and Quantum of Power required. Check the availability and source of water. Verify the source of raw materials and how the same will be procured. Verify the records pertaining building/shed where the activity will be conducted. (Whether leased or owned). If leased, the validity period of the lease agreement. Verify the Addresses Given in Various Certificates like SSI, VAT, IMPEX etc., and confirm their correctness with actual location of the unit. Give details of all our charges to the prospective borrower. (Processing/upfront charges, EM charges, Stamp duty, Legal Opinion charges, Valuation Charges etc.,) Carryout inspection of Collateral Security if any. Identify the property with the documents available.
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Enquire in the neighborhood about disputes, if any, regarding the property. Guarantors, if any to be interviewed and identified. Give the customer probable date by which the decision will be conveyed. Obtain Assets and Liabilities Statements of Borrower and Guarantor. If a Term Loan is to be considered verify the Quotations. Discreet Enquiries about the Vendor should be done, if necessary make a visit to the Vendor. Do not Commit anything.

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Donts
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LEGAL OPINION
Dos
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Send the copies of Title Deeds and Other documents directly to the Banks Panel advocate along with contact numbers of the prospective borrowers. Inform the applicant to submit all original papers. Obtain the legal opinion from the Advocate directly with in a reasonable period. Read the Legal opinion in full. Look for conditions if any. Ensure that the Search Report is enclosed along with the opinion. Ensure that the Legal Opinion is in the Banks Prescribed Format.
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Donts
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Do not send the documents through the applicant. Do not use the services of the same advocate for all proposals.

VALUATION
Dos
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Ensure that the valuator is on the Banks Panel. Inform the name of the valuer to the applicant. Receive the valuation report directly from the Valuer. Scrutinize the Valuation Report Carefully. Ensure that the Address and other Descriptions given in the Legal Opinion match with that of the Valuation Report. Ensure that the Photograph of the Property is scanned in the Report. Ensure that the Valuation Report contains the Sketch Map of the property. Compare the Valuation of property with market value prevailing in the area. Do not entrust the valuation to Valuers other than the banks approved Valuers. Do not use the services of same valuer for all valuations.

Donts
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PROPOSALS
Dos
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Keep all the documents ready. Analyze the financials in the appropriate formats.
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Discuss with the sanctioning authority about the proposal with the analysis of financials. Finalize the Quantum of Advance and inform the applicant about his eligibility. Prepare the proposals in the appropriate format. Incorporate in the proposal all the information which are available, furnished and you know during the interaction with the applicant. Comment on the other accounts held by the applicant/ guarantor like Housing Loan, Car Loan etc. Compile opinion report on the Borrower/Guarantor. Obtain opinion report from other banks in the IBAs standard Format. Put up the proposal for sanction to the appropriate authority. Ensure that all queries raised by the sanctioning authorities are answered and clarified. After the proposal is sanctioned look out for conditions of sanction and ensure their compliance. Put up the control report to the appropriate authority. Look out for the conditions, if any, imposed by the controlling authority. Comply with all pre disbursement conditions of the sanctioning authority and controlling authority. Intimate the applicant about the sanction of loan. Obtain convenient date for documentation. Do not hide any information you know. Do not disburse the loan before sanction. Do not misguide the sanctioning authority.
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Donts
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DOCUMENTATION
Dos
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Use appropriate documents. Fill up the documents in full at the appropriate columns. Obtain appropriate stamp paper or get the documents stamped according to the State Stamp act. (Embossed.) Call the Borrowers/Guarantors on the appointed day. Get the signatures of the Borrowers/Guarantors on each and every page and wherever additions and deletions are made. Affix necessary rubber stamp, wherever they have signed. (except wherein they have signed in their individual capacity) If it is a company get the Resolution passed by the Board of Director in the appropriate format. Affix Companys Common Seal at the appropriate places and get the authorized signatures of the Directors. If partnership entity, get the Partnership Letter in the prescribed format of the Bank signed by all the partners. If HUF, HUF letter to be obtained. Verify once again whether the Borrowers / Guarantors have signed wherever required and that the documents are fully filled up. Enter the documents in the document execution Register. Secure the documents with tag and keep them safely as per bank instructions. Diarize the date for obtaining the revival letter. Do not under stamp the documents. Do not use Xerox copies of documents.
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Donts
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Do not keep stamp papers blank. Do not use invalid stamp papers. Do not take the signature of the borrowers / guarantors on the blank document.

EQUITABLE MORTGAGE
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Read the legal opinion carefully. Look out for any conditions - like obtension of Upto date EC etc., Obtain all original Title Deeds and other documents as required in the Legal Opinion and copies of other documents. Number the same as per the legal opinion. Identify the person depositing the Title Deeds and ensure the genuineness of the person. Obtain all the documents mentioned in the legal opinion. Record the recital in the appropriate Form/Register. Obtain the signature of the Borrower/Guarantor (as the case may be) in the acknowledgments (Form A/B- SME6/8) and ensure the same is sent by Registered Post to the Bank Address. Ensure that the place you are creating an Equitable Mortgage is a Notified Centre as per State Government Gazzette. Secure all the Documents with tag and keep it in a Folder/ Cover. Keep the documents in Fire Proof Safe/ Strong Room. Ensure that the documents are not laminated.
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Donts
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Do not obtain certified copies of title deeds unless specified in the legal opinion. Do not accept conditional legal opinion.

ACCOUNT MAINTENANCE
Dos
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Read the sanction note carefully. Look out for any pre disbursement conditions. Recover all charges, like Processing, Upfront Fee, EM charges, etc. if not already done. Comply with all pre-disbursement conditions imposed by the Sanctioning Authority and the Controlling Authority. Open the accounts giving all the details as required by CBS. Give correct product code for each facility. Connect collateral security if any, to the accounts opened. Obtain Stock Statement if it is an existing unit. Verify the Stock Statement. If necessary conduct/arrange for an inspection. If satisfied, enter the Stock Statement and arrive at the appropriate Drawing Power. If a Term Loan Disbursement is involved, issue DD / Bk Cheque / IOI direct to the Vendor with a covering letter by Registered Post. Conduct/arrange for inspection of the Assets purchased out of Bank Funds and get yourself satisfied. If new Cash Credit Account is sanctioned, call for the
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quotations from the Suppliers of Stock and issue DD/IOI Bankers Cheque directly to the suppliers. Conduct/Arrange for Inspection after the Goods have arrived. Obtain stock statement from the borrower and arrive at the Drawing Power based on the Stock Statement. Diarise the Date of Document for obtaining the Revival Letter after 21/4 years. Ensure that the borrowers submit Stock Statement regularly as per the scheme. Monthly, Quarterly, Yearly etc., Enter the same in DP Register or CBS and arrive at the DP. Compare the Stock Statement with previous Stock Statements Look out for obsolete stocks which are lying for a long time. Verify the Sundry Debtors Statement carefully. Remove the Debtors which are outstanding for more than the stipulated Period from the list. If necessary call for the copies of invoices from the borrower. Verify the Sundry Creditors level from the Stock Statement. Look for the warning signals. Monitor the accounts carefully. Verify the cheques issued by the borrower. Look out for large withdrawals. Obtain financial statements at regular intervals and put up for review/renewal. Give Standing Instructions for credit to Term Loan account. Monitor the Standing Instructions which are not carried out.
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Ensure that the interest instalment on Term Loans is paid regularly. Follow up with the customer if the Term Loan Installments and Interest are not being serviced properly.

Donts l Do not release Term Loan Payment direct to the Customer. l Do not send the DD/Bankers cheque through the customer.
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CHAPTER - 4

PER SEGMENT ADVANCES AND STAFF ADVANCE ACCOUNT


HOME LOANS
Interview
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Interview the borrower: Enquire about his job, since when he is working in the existing post/ place, names of some of his colleagues, his native place, name of landlord, his family members, other working members of his family (for a minimum period of 5 years). The prospective borrower should be given a list of documents required to be furnished to the bank for considering his proposal. After initial interview and after deciding to give him loan, then only he should be asked to provide the necessary papers related to property to be Mortgaged / property for considering Housing Loan, Approved plan, Legal Opinion on the property etc.

KYC
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Obtain address proof, photo identity etc., (Copy of RC book, PAN Card, Passport, Election ID card, ID card issued by reputed companies, Telephone bill etc) as per KYC norms.
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Application
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Help the applicant in filling up the relevant data / information in the Loan Application. Obtain necessary Signatures of the Borrower / Guarantor on the Loan Application. The loan Application so received should be entered into Application Received and Disposed Off Register. Obtain latest salary slip and ensure that the net salary shown is the amount he has received as credit to his SB account maintained at the branch. This is to ensure that the necessary deductions are being made in the salary are shown in the salary slip. His Bank account statement may be perused to ascertain any outside / other borrowings. For arriving at the total income of the applicant you can add the salary/income, of the spouse, expected monthly rent from the house to be constructed or any other regular income. Obtain copies of Income Tax Returns filed by the applicant and verify the same with the Originals held by the applicant. Wherever Xerox copies of the documents are obtained please verify the same with the originals and evidence the same before acting upon it.

Salary
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Inspections - Pre Sanction / Post Sanction


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Before the loan is sanctioned Visit / Inspect the spot / site and satisfy that it is as per the chakbandi / as described in the Sale Deed. Pre-sanction inspections a) office/work place of the applicant, b) Residence c) IT. verification and estimate verification.
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Ensure that all the necessary civic amenities such as Light / Water / Drainage facilities are available/ provided to the site. This is required to ensure / arrive at the expected rent. Record your observations in the Loan appraisal/Inspection Register. Irregularities, if any observed during your inspection should be reported to the Controllers for their guidance. Inspections should be conducted at required intervals regularly.

Check-off
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Ensure that the applicant is a permanent employee of the company / Govt. establishment by cross checking with the company, if possible. For check-off facility - obtain irrevocable Letter of Authority from the employer for making payment out of any amount payable to the employee eg. Terminal benefits in case of retirement, resignation discontinuance of service or death. Obtain undertaking from the employer to obtain a NOC from the bank before settling the dues of the borrower on transfer, resignation, retirement etc.,

Equitable Mortgage
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Equitable Mortgage can be created only by deposit of Title Deed or such other documents which convey the title to the property such as Sale Deed / Partition Deed / Deed of Assignment / Gift Deed Lease Deed etc. Evidence the Equitable Mortgage by recording the recital, obtaining letter of Confirmation. While creating EM - Give acknowledgement of Title Deeds held clearly stating the particulars of the property and the documents.
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Verify that all the pages of the Title Deed are presented. Obtain signature of all the owners of the said property on the acknowledgement form. Details in Form - A/B to be filled in same ink as that used for signing by property owners.

Certified copies of the Title Deeds should not be accepted for creation of Equitable Mortgage.

Sanction
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After completing all formalities you should put up recommendations to the Competent Authority for sanction of loan. Obtain post dated cheques for eventual presentation. After the loan is sanctioned the same should be put up for control to the next higher OfficiaI. Disbursement to be made only in phases, co-relating to the actual progress made in respect of construction of house/ flat. In case of purchase of house/flat, the sanctioned amount to be paid by DD/Bankers Cheque in favour of the seller, at the time of Registration of the property at Sub-Registrars Office. The Field officer to be present at the time of Registration and hand over the sale proceeds DD/BCs. At no point of time, proceeds to be handed over to the borrower before registration.

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Insurance
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The property so financed should be properly insured. Try to cover the life of the borrower through SBI Life Insurance.
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Dos
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The builder should be in the line of activity for a minimum period of 10 years and should be approved by Bank (AGM (Region)/ AGM Branch has powers to approve individual projects promoted by Builder). Due Diligence on Builder/KYC Norms of seller to be done. Legal Opinion/TIR to be gone through and followed meticulously. In case of take-over of accounts, prescribed norms to be followed. The running bill should be in tune with the estimate and to be certified by approved empanelled engineer after visit to the site. It is desirable to get a photograph of the building with date of visit duly attested by the borrower/engineer and kept along with the loan documents. Do not give false promise of sanctioning loan. CERTIFIED Copies of the Title Deeds should not be accepted for creation of Equitable Mortgage. Do not sanction loan / consider the property for security where the legally transferred ownership cannot be established. The applicant should not be asked to provide information documents piece meal. Instead, all the necessary documents should be sought in first visit only. Dont accept the Valuation of the property as it is - You should make your own valuation by discreet enquiries and taking into account the prevailing rates in the vicinity. Conditional Legal Opinion should not be accepted / considered. No spaces in the Security Documents should be left blank
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Donts
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i.e. all relevant columns should be filled in properly. Security documents should be written in one colour ink and by one person only.
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Do not release the housing loan instalment without actually inspecting the progress of construction. Do not release / disburse the loan in cash. Do not forget to include the name of the customer for Personal Accident Scheme.

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VEHICLE LOANS (CAR / JEEP)


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Ascertain the credit worthiness of the applicant (verify the conduct of other accounts maintained at the branch). Find out the eligibility of the applicant. Obtain post dated cheques wherever Check Off facility is not available. Obtain a quotation from the applicant. Verify the rates quoted by the vendor - includes Insurance, Road Tax etc., whether rates are inflated to get more loan amount. Only on completing the formalities release the loan. Loan can be given for purchase of vehicle on road cost i.e. including Registration, Insurance, Road Tax etc. If spouse income is considered for arriving at eligibility he / she should be taken as Guarantor for the loan. Demand draft comprising of Bank Loan and the Customers Contribution should be drawn in favour of the Authorised Dealer of the vehicle. The DD should be sent directly to the Dealer with a covering letter stating that the DD should be appropriated towards purchase of the vehicle as described in the letter and not for settling any other dues of the borrower.
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Ensure that the vehicle is released only after it is duly insured with New India Assurance Co - as we are the Corporate Agents of New India Assurance Company. Insurance should be Comprehensive with Banks interest as Hypothecatee. The vehicle should be Comprehensively Insured for market value or 10% above the loan amount, whichever is higher. Obtain & keep on record the copy of the Vehicle Insurance policy. Advise the borrower to register the vehicle with concerned Road Transport Authority within a stipulated time. Obtain the photo copy of the R.C. Book (Registration Certificate) and verify the same with the Original. Ensure that the remarks Hypothecated to State Bank of India indicating Banks Charge is entered in the RC book. Obtain Invoice / Receipts / Bills issued by the Dealer of the Vehicle for having delivered the vehicle and hold the same in borrowers file. Inspect the vehicle - verify the specifications. Obtain blank RTO Forms No. 29/30 and No. 34/35 duly signed by the borrower at the time of documentation. Hologram to be affixed on Form No. 35 and on letter issued to RTO for cancellation of Lien / Hypothecation against the vehicle financed by the bank. Maintain a register for recording the business sourced by the Dealers for making payment of Service Charges. Help the customer to get the necessary Cash Discounts / Rebates / Free Gifts, Accessories / Corporate Discounts etc. from the Dealer being announced from time to time.
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USED VEHICLES / TAKE-OVER


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In case of loan for purchase of used cars (Second Hand) ensure that the vehicle is not more than 5 years old and no Insurance claim is availed. For second hand vehicles Valuation of the Vehicle from a reputed / Govt. recognized Valuer to be obtained. Repayment for Old vehicles (Second hand) should not be more than 7 years for salaried class and 5 years for others from the date of original sale. Ensure to obtain No Dues Certificate from the previous Banker (if any). Verify the Original RC Book for any charge of previous Banker. If loan is to be liquidated with the previous banker, obtain a letter from the banker stating that they will issue no due certificate and also cancel/lift the charge marked on the vehicle, on receiving the amount from us. In such case the DD should be sent directly to the Bank. In case of taking over of loan from other Bank ensure that the repayment has started and the account is not a NPA. If the vehicle (Second hand) is purchased from Maruti True Value the payment should be made to the Maruti True Value Dealer and not to the original Owner. However, you should obtain an Indemnity on the letter head of the company (Refer Circular No. 290 dated 13.02.2006 issued by LHO Bangalore).

Dos
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Any deviation from the existing scheme should be approved by the controllers. Obtain Form No. 29 and Form No.30 signed by the applicant.
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Margin money to be deposited in the SB A/c of the applicant. Advise the dealer in writing to get the Hypothecation Charge noted in the RC Book and vehicle Insurance Policy. In case repayment period exceeds the retirement age of the salaried applicant, proof of income such as pension, rental income, income on deposits etc. to be obtained. In case of financing for second hand vehicles, Certificate of Fitness, Valuation of the vehicle from reputed mechanics to be obtained and kept along with loan documents. Do not issue any letter stating that loan will be sanctioned before completing the formalities. Only Second Hand vehicle can be financed and not further i.e. third hand and forth on. Do not disburse loan by crediting the proceeds to the customers a/c or by disbursing cash.

Donts
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PERSONAL LOANS - XPRESS CREDIT


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Employees of PSU/Govt. establishment who are drawing their salary through the accounts maintained with us and where check off facility is available, are eligible. Employment certificate / salary slip to be obtained. Check the salary credited with, that shown in the salary slip. Ensure that the applicant is on permanent role of the company / govt. establishment. The loan should be sanctioned strictly as per the minimum / maximum amount prescribed by the Bank. Necessary processing fees to be recovered.
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Verify the failed standing instructions for necessary follow up. Keep in touch with the salary Disbursement Authorities in case salary of any employee is not being credited to the account.

GOLD LOANS
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Gold loan can be sanctioned to individuals who are over 21 years of age with a steady source of income against the collateral security of Gold Ornaments. Proper introduction of the borrower is important and minimum capacity to service the interest is necessary. Refer to the LHO circulated gold rates for the advance value of gold. Cash Officer should ensure the purity of gold ornaments by both touch stone and specific gravity method. If necessary the cash officer should utilize the services of a reputed jeweler in town to verify the genuineness of the gold ornaments at the cost of the borrower and a certificate of purity to be obtained from him. The repayment period for Gold loan should not be more than 30 months. Current Account Over draft can also be sanctioned but to the customers of good standing only. The necessary Processing fees should be recovered for the sanction of loan. If the loan is not closed within the stipulated period, notice should be sent to the borrower to repay the loan with interest and the matter should be advised to the Controllers
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and their approval to be obtained for auctioning the ornaments to recover the banks dues.
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If the borrower fails to repay the loan outstanding the ornaments should be auctioned in public by fixing floor price depending on the market value of the ornaments.

Donts
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Ornaments with alphabetic initials/ names should not be accepted. Do not allow / permit the customer for misutilising the Gold Loan facility to keep their valuables safely with the Bank. To obviate such possibility a service charge of 1% of the original limit sanctioned should be charged in addition to the regular interest.

GUIDELINES FOR THE BRANCHES WHERE RASMECC / RACPC IS ESTABLISHED


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Branches should interview the applicant for ascertaining his requirement / eligibility. On ascertaining his requirement / eligibility he should be asked to submit necessary papers i.e. proof satisfying KYC norms, duly filled in Loan application, Salary Slip, Employment Certificate, IT. Returns for 3 years, relevant papers of the property with legal opinion, valuation certificate, approved house plan, estimated cost of construction etc., Obtain particulars of employer company. Pre sanction inspection to be conducted and the findings should be properly recorded. The applicant should not be asked to follow up with the CPC for sanction of loan instead the branch should follow up with the CPC.
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PERSONAL LOAN SCHEMES


Dos
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KYC Norms to be completed before taking up the appraisal of loan. Statements of bank accounts for the last six months to be obtained evidencing salary credits or business transactions. Proof of business address, in case of non salaried borrowers. Brief write up of securities charged in respect of other loans availed from our Bank/other Banks, Housing & Auto finance Companies / other sources. Latest Salary Certificate in original or proof of income in case of self employed / professionals. Last three years Income Tax returns duly acknowledged by IT. Department. TDS Certificate - Form 16 (Photocopies to be kept after verifying with the originals). Copy of identity card issued by the employer. Proof of residence (Driving Licence /utility bills, Voters ID Card etc.) Due Diligence of the employer, i.e. its constitution, activity, employee base, sales/net profit etc., for the past 3 years. Visit to place of residence and Company where borrower is working and discrete enquiry about his salary, designation etc. Letter from the employer about his experience and providing check off from salary if requested.
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GENERAL
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You should know your advance products as well as that of your competitors. While informing the customer the benefits of our products you should also tell about the disadvantages / demerits of availing loan with your competitors. This will enable you to market / sell your products. Ascertain the credit worthiness of the applicant (verify the conduct of other accounts maintained at the branch). Find out the eligibility of the applicant. Obtain post dated cheques wherever Check Off facility is not available. Do not issue any letter stating that loan will be sanctioned before completing the formalities.

Documents Required
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If considered for sanctioning Housing loan: Record of Rights, Khata Utara, Mutation entries showing the flow of title and other rights, Chakbandi (sketch) which shows the exact location of the said property, Property tax paid receipt for 3 years, Encumbrance Certificate for the past 13 years should be obtained. Documents showing title to the property i.e. Sale Deed / Partition Deed / Gift Deed / Relinquishment Deed, Lease Deed etc., to be obtained in Original Only. Valuation of the land / building from the Bank approved / empanelled Valuer. As regards Leased property- valuation to be obtained at the original value only, as the leased property cannot be sold / alienated so easily for realizing our debt. Obtain Legal Opinion on the property to be mortgaged from
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the Bank approved / empanelled Advocates. Read the Legal Opinion so obtained and evidence the same.
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Obtain no due certificate from other Banks / or from the Bank where he is maintaining account / drawing salary etc. Verify the Estimated cost of construction taking into account the prevailing rate of construction. The Estimated cost of construction should be verified & attested by the Bank Empanelled Engineer. This is to prevent the borrower availing more loan by inflating the cost of construction. Verify whether necessary permission to construct the house is obtained from the concerned Municipal Authorities and its validity. If the applicant is our existing customer, furnish the details of his connection i.e. details of other accounts and their conduct. Compile Opinion report on the Borrower and Guarantor every year. While releasing the housing loan instalment obtain latest photograph of the house at every stage and hold the same on record. Obtain the Completion Certificate issued by the Municipal Authorities for releasing the last installment. In case of apartments - verify the total number of apartments exists on the premises. Make discrete enquiries in this regard. In case of take over finance - accompany the borrower to the Bank Obtain the documents immediately. Verify that the documents are complete (no page is missing) in the presence of the borrower and the previous banker.
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Only standard loan where property is registered in the name of borrower to be considered for take over.

While creating EM - Give acknowledgement of Title Deeds held clearly stating the particulars of the property and the documents. Verify that all the pages of the Title Deed are presented. Obtain signature of all the owners of the said property on the acknowledgement form. - Form - A/B to be filled in same ink as that signed by property owners. When Extension of EM is done, obtain balance confirmation of other existing loans and Revival letter.

On closure of housing loans - Verify in presence of property owners that all pages of Sale Deed(s) are in tact. All related documents of the property to be returned back. Acknowledgement on COS-49 to be taken from parties who created EM.
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CHAPTER - 5

AGRICULTURAL ADVANCES
APPLICATIONS
Dos
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Interview the borrower thoroughly, know his experience in the field. Know his requirements, family background etc. Fill the application properly without leaving anything blank and obtain the signatures of the borrower/ guarantors.. As per KYC norms obtain address proof, and photo identity etc. Enter the application in the Application Received and Disposed register. Give the borrower a letter detailing the documents required for sanction of loan. Give him the date on which you are going to conduct pre sanction survey to enable him to be present in the village to assist you in your work. Gather full information about the applicant from other borrowers of the village.

Donts
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Do not entertain middleman for identifying the applicant and also during pre sanction survey. Do not take application under pressure. Do not conduct pre sanction before taking application.
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DOCUMENTS TO BE OBTAINED Dos


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Record of Rights. Khata Utar showing the entire land holdings of the applicant. No Due certificate from the society, co-operative banks and other commercial banks operating in the area. Mutation entries showing the flow of title and other rights. Chakbandi showing the exact location of the lands. Nil Encumbrance Certificate for the past 13 years. Original Title deeds, partition deeds. Valuation of the lands/ property to be mortgaged. 3 pass port size photographs. Quotations in case of ATL advances. Technical report from the competent persons in case of Lift Irrigation schemes, poultry advances, Drip irrigation schemes etc.

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Donts
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Do not accept certified copies of title deeds, laminated copies of the title deeds. Do not accept quotations from firms which are not dealing in items which borrower wants to purchase. Do not accept the documents from other than applicant.

LEGAL OPINION
Dos
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Read the legal opinion fully once you receive the same and evidence the same.
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Ensure that translation memo is attached to it if the title deed is in vernacular language. Ensure that search report is enclosed along with fee receipt. Ensure that legal opinion is unconditional. Ensure that legal opinion is on Banks specified format. Ensure that legal opinion is taken from the advocate who is on the Banks panel. Do not send the documents to the lawyer through applicant.

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Donts
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PRE SANCTION / POST SANCTION INSPECTIONS


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Inspect the village, applicants lands, house and ascertain correctness of information given by the applicant. Take the opportunity to talk with other people in the village and ascertain the correctness of the information given by the applicant. Visit the Rural Bank, society, village panchayat to ascertain the correctness of information provided by the applicant. Record all your observations in your pre sanction / post sanction report. Ensure that regularity is maintained in conducting inspections. Report all irregularities observed during inspections to your controllers and seek their guidance. Carry Inspection registers during your inspections and record your observations then and there only. If the advance is for vehicles, ensure that vehicle is
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registered with RTO and copy of RC book is obtained with Banks charge.
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Visit the villages in the early morning or late evening when farmers are free from their routine. Do not take the assistance of a middleman during inspections. Do not avoid going for inspections, which gives you useful information. Do not take sides with any particular group in the village. Be impartial and friendly with everybody. Do not be misled by anybodys opinion.

Donts
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PROPOSAL
Dos
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Prepare the proposal carefully, incorporating all the information gathered during your pre sanction survey. Work out all necessary financial data, analysis, DSCR, income generation, pre implementation/ post implementation of the project. If the borrower is already enjoying other limits like vehicle loan, HTL, etc record the status and comment the conduct of these accounts. Compile opinion report on the borrower/ guarantor. Your recommendations should be precise, and unambiguous and convey clear message to the sanctioning authority. If, in your opinion the proposal is not worth sanctioning, recommend for rejection without any FEAR.
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Donts
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Do not hide any information known to you. Do not keep any thing blank in your proposal.

SANCTION
Dos
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Obtain sanction from the competent authority before disbursement. Record sanction in the Application Received and Disposed Register. Submit control form to the next higher authority for control. Prepare appropriate security documents and call the borrower on a mutually agreed date for execution of documents. Do not disburse the loan before sanction. Do not misguide the sanctioning authority on any points.

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Donts
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DOCUMENTATION
Dos
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Use appropriate documents. Fill all the documents properly. Obtain necessary stamp papers for the documents. Obtain signatures of the borrowers/ guarantors on each and every page of the agreement. Ensure that none of the borrower/ guarantor is a minor. If a borrower is a minor, signature to be obtained from the natural guardian. For this permission from the competent authority is necessary.
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Mention date and place of execution on each document. Obtain witness letter if the borrower affixes his left hand thumb Impression. Ensure that Letter of Arrangement is signed by all the borrowers/guarantors and the Branch Manager. Record the execution of documents in the Documents Execution Register as well as in the Daily list for revival of the documents. Do not use photo copy documents. Do not keep stamp papers blank. Do not take signatures of the borrower/ guarantor on the blank documents.

Donts
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EQUITABLE MORTGAGE
Dos
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Obtain legal opinion from the Banks empanelled advocate before creation of the EM. If the title deed is in the vernacular language, obtain Translation Memo for the same. Also ensure that search report and fee receipt is enclosed to it. Read the legal opinion carefully as to the title of the borrower and inspect the property before creation of the EM. Obtain ROR , EC, Original sale deed, Mutation entries, valuation of the property for creation of the EM. Obtain necessary Stamp duty before creation of EM. If the property belongs to a person other than the borrower, the owner of the property should be made as guarantor. Other wise EM has no legal validity.
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Ensure that the date of the EM be same as of date of other documents. If the date of the EM is prior to the date of the documents, EM becomes invalid. Write the recital in the Title Deed Register ( EM Register) and obtain the witness of other two officers / employees. Give Form A/B to the borrowers to enable them to post by Registered post. Obtain vardi from the borrowers to create charge on the mortgaged property. Create the Banks charge on the mortgaged property and obtain ROR afresh to ensure that Banks charge is noted. Obtain EC for the broken period to ensure that no other charge has been created by the borrower during the intervening period. Insure the property after creation of the EM. Do not accept laminated title deeds. Do not accept conditional legal opinion.

Donts
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DISBURSEMENTS FOR ACC ACCOUNTS


Dos
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Disburse in cash / kind in case of ACC Obtain receipts/ bills for the amount disbursed to ensure end use of the finance. Disburse in stages that too after visiting the fields. Obtain approval of the controllers for any deviation. Do not disburse in full in cash. Do not ignore scale of finance while disbursing the loans.
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Donts
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FOR ATL ACCOUNTS


Dos
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Obtain quotations for the assets to be purchased. Ensure that the supplier who is giving quotation is an authorized dealer in that particular product which borrower intends to purchase. Disburse the amount through Banks DD favouring supplier and forward the same direct to the supplier alongwith a letter by registered post. Obtain receipts/ bills / invoices from the supplier for having delivered the goods. Inspect the assets immediately after the delivery. Obtain insurance for the assets created. Do not credit the loan amount to his SB account or do not disburse in cash.

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Donts
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TRACTOR LOANS
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Follow only Scoring Model Method (All Plus Schemes Withdrawn). Ensure the Tractor/ trailor is registered with RTO immediately and obtain a copy of the RC book and confirm that banks charge is duly noted. Obtain blank RTO forms No. 29/30 and 34/35 in two sets. In case of joint borrowers, obtain consent letter from all the borrowers to register the vehicle in the name of one person only. Ensure that Banks Hypothecation is painted on the Tractor/trailor. Obtain supplementary hypothecation letter recording
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details of the Model No, Engine No, Chasis No, RTO Registration No. etc.
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Branches can finance only for those models of tractors which have completed the commercial test from organisation, viz., Central Farm Machinery Training and Testing Institute (CFMTTI), Budni (Madhya Pradesh) or Farm Machinery Training and Testing Institute (FMTTI), Hissar. The list of such tractors is being circulated from time to time. Do not keep duplicate set of keys of tractor in case received from the dealer directly along with documents.

Donts
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FOR LIFT IRRIGATION SCHEME ADVANCES


Dos
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Obtain Technical Report from the competent authority. Obtain Water permission from the Irrigation Dept. Obtain power sanction letter from the Electricity Board. Ensure that technical report is calculated correctly as to HP of the pumpset and pressure of the pipes. Obtain consent / agreement from the farmers in whose lands the pipes are laid. Obtain insurance immediately. for pumpset and accessories

BAD LOAN MANAGEMENT


Dos
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Identify all the NPA accounts as per the IRAC norms. Submit your recommendations to transfer these accounts to Recalled Assets accounts.
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If, legal action is to be initiated, initiate the same immediately. File the suit, FDP, EPs in time. Obtain advocates acknowledgement when you hand over security documents for filing suit. Obtain status of suits filed cases from the respective advocates every quarter. Update suit Filed Register on receipt of status report from the advocates.

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H Review the suit filed cases quarterly and submit your recommendations to your controller as to continuance of legal action.
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Maintain Written Off Accounts register and record the particulars of written off accounts. Make sincere efforts for compromise proposals. Attend the court evidences with all preparations. Do not keep NPA accounts in live ledger. Do not apply interest to NPA accounts. Do not show NPA account as Standard Account as it attracts accountability. Do not renew, sanction another loan when one account of the borrower is NPA.
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Donts
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CHAPTER - 6

NON PERFORMING ASSETS


LIST OF REGISTERS TO BE MAINTAINED BY FOs
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Loan application received and Disposal Register Segment wise Document Execution Register for CC/TLIDL Control Forms sent register Inspection Register - Field Officer wise Segment wise village wise Insurance Register DP Stock Statement Register EM Register Extn of EM Register Title Deed Register Daily list for Revival Letters Field Officers Tour Dairy Back up register for Movement of NPAs Recalled Asset Register INCA Register Written off Account Register AUCA Register Suit Filed Account Register Under CBS there is a provision for creating due dates for revival/inspection.
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OTHER IMPORTANT ASPECTS


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Technical write-offs against 100% provisions already available. Policing of assets (Regular supervision and follow up) Enforce legal system available to banks for enforcement and recovery. Unit visit- physical inspection verification of security is a must. Scrutinise loan document /security documents and ensure they are enforceable. Interaction with borrowers and other lenders for information about the borrowers assets legal heirs not known to the bank. Have control over recovery process through Advocate Enforcement agency/DRT functionaries. Review of reports put up by the inspection functionaries responsible for follow-up and supervision. Arrange for sale of the moveable assets of the unit at the earliest to avoid security charges/insurance/removable by the owner or others. Investigation by the outside agency to be arranged wherever required. Gather all relevant information on the borrower from the neighbors/ other lenders. Arrange for Regular Advocate Meet at branch for review of the status of the cases. Prepare History Sheet for each account /case. Prepare ABC analysis for amount wise and asset vise. Record your observations in the inspection register / suit filed register.
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Furnish the Asset details of the borrower not mortgaged to the Bank to the dealing Advocate for filing attachment before judgement. On obtaining the DRT order or the court decree got through the decree whether it is as per our prayer including the rate of interest. Verify the asset details before submitting Form 16 for attachment of the assets immediately after the DRT order / file the Execution petition on obtaining the Decree. Make periodical visit to the borrowers residence / send correspondences through post to keep track of the borrowers change of residence. Try to communicate with the borrowers over residential telephone. Gather information about the borrowers wife/ children education and age which may be useful at the time of filing the L R details to the court to avoid future investigation charges. Location of the assets mortgaged to the bank with proper postal address and landmarks be prepared and kept on record. Agri Field Officers to prepare route map of the area of operation under his control with name of the village and distance. Repayment period for restructured debts should not exceed seven years from the date of implementation.

REASONS FOR SPURT IN TECHNICAL NPAS IN CBS BRANCHES


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Stock statement to be input in the system through security creation menu at laid down periodicity say once in a month.
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DP to be renewed in the system at laid down periodicity. Checking of reports generated during pre-migration. Ensure migration of all fields from Bankmaster to CBS Keyin correct details of repayment schedule in case of loan accounts. Define periodicity of interest application in case of agricultural advances. Define interest compounding frequency in case of educational loans. Recovery of processing / other charges. Repayments to term loans should be posted by selecting repayment menu in the system and not through general posting. Furnishing notional limit expiry date in case of CC/OD at the time of migration and prevent/do not allow CC/OD accounts limit to get expired. Please furnish Limit expiry date at the time of renewal. Renew DP in the system at laid down periodicity. security created in the system should be authorized by another user at branch.

FAILURE OF STANDING INSTRUCTIONS/ORDER


Reasons
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Posting Restriction on primary account. Non-availability of balance / funds in the account. Standing order date is subsequent to credit of salary pension resulting in withdrawal of credit by account holder through ATM. Accounts having STOP status on account of noncompliance of KYC in CBS.
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Dos & Donts


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Branches should exercise constant vigil by scrutinizing report on probable NPAs, which is stamped by CDC at regular interval. As and when standing order is input in the system to recover loan instalment, user has to remove posting restrictions in respect of debit other transactions so that SI will not fail for the reason Restrictions. Standing instruction date should coincide with date of credit of salary or pension to SB/CA. In respect of salaried employee / pensioners, branches to use Hold required as Yes so that system would hold the SI amount the moment salary/ pension is credited to the account and SI will not fail for want of balance. However, branches should get consent of the customer in the SI requisition letter before using this option. Whenever SI fails for want of balance in respect of other type of customers, immediate steps to be taken to put through manual transaction. Branches should scrutinize meticulously Failed Standing Instruction report every day. In case of 00 account, if the customer has SB account also which is being operated regularly, in the CC/OD limit input screen, branches should use Dr interest field as transfer and furnish SB account number, so that on the next day of interest application system will recover interest amount by debit to SB account and credits to 00 account. In case the customer does not intend to operate the 00 account regularly, then branches should sanction only demand loan and under repayment schedule they should select frequency as End or term for both principal and interest column.
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Wherever branches have resorted to rephasement of term loans / demand loans, effort should be made to contact the borrower and obtain their consent to recovery higher instalment. Wherever incorrect loan term has been given, the same should be immediately amended. Wherever incorrect account type / sub-category is given, it should be amended immediately. Repayment schedule is generated for the first time in case of term loans at the time of creating repayment schedule. Once the loan is fully disbursed branches have to regenerate repayment schedule again. Further, if there is any change in terms and conditions viz. interest rate, loan term, again repayment schedule has to be regenerated and this is necessary in CBS. In respect of loan accounts, while creating repayment schedule in CBS, EM-1 option should be exercised, only in respect of P segment advances (other than staff advances.) The other two options that is Principal equally distributed and Navigated repayment should be used when the instalments are equal or varying. Whenever negotiated option is excercised, Projected interest option should invariably be created in the repayment schedule.

EMI
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AGRICULTURAL ADVANCES
Cash Credit Accounts:
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Non creation of security in the system, Limit getting expired, DP becoming NIL after expiry date and Non- 66 -

recovery of interest are reasons for emergence of Technical NPAs.


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Create security in the system. Get the limit renewed and enter the particulars in the system. Agricultural crop loans (direct advance) interest to be recovered along with principal on due date.

Term Loans
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Reasons for accounts becoming NPAs could be: Non creation of security Not inputting interest application start date Non selection of loan term correctly including moratorium period Incorrect repayment schedule creation Non recovery of loan instalment and interest

HANDLING OF DRT CASES


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Before going for sale of the property mortgaged to the Bank insist for declaration of the Assets belonging to the defendants. Valuation of both the property mortgaged and the identified property to be made and submitted to DRT for fixing the Flore price. Any work like serving of summons Affixture Attachment of property, delegated by the Presenting Officer, DRT to the bank official to be carried with the assistance of outside security agency Advocate. All legal enforcement has to be carried out between sun rise and sunset in presence of at least two independent witnesses of repute and known to the bank.
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Any resistance by the borrower(s) should be recorded indicating the conduct and the manner and extent of resistance and the same to be recorded in presence of the witnesses and keep the controller court informed. At the time of taking possession, inventory of the assets should be taken in the presence of the witnesses and the borrower if he is present and their signature should be obtained. A Mahazar should also be drawn in detail and duly witnessed. Mahazar should specify the following: The date and time of seizure, the location where the seizure was done, Names and address(es) of the persons present at the time of seizure, Presence or the absence of the borrower or the guarantor, the time taken for effecting the seizure, details about the method and manner in which the seizure was effected, description of the assets seized, Existing condition of the assets seized, Approximate value of the items seized, Signature of the persons effecting the seizure, Signature of the independent witness, and Signature of the borrower or the guarantor if present and willing to sign or the reason for their refusal to append their signature.
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CHAPTER - 7

FOREIGN EXCHANGE
LETTERS OF CREDIT & IMPORT BILLS
Dos
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Open LC for import transactions only for customers and open the LC only if the party has got sanction limit. Allow import of restricted items as per procedure laid down in the Exim Policy. Handover import documents only to drawee or his P A holder against property acknowledgement. Allow payment for import by debit to customers account. Verify the imported items under the LC. Issue amendments to LC only on the basis of written request and beneficiarys consent to be obtained. Verify whether the payment method in Letter of Credit is done as per FEMA guidelines or not. In case of default payment, crystallise the bill on 10th day from the date of receipt. Insist for insurance cover at the time of opening the LC. Allow opening of LC on DA basis provided the Usance does not exceed more than 180 days. Allow opening of Transferable LCs provided transfer is restricted to specified second beneficiaries whose credit report is satisfactory.
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Verify the Letter of Credit application form to ensure whether they are properly filled and stamped. Report to the RBI (Reserve Bank of India) if the Bill of Entry is not received. Opinion reports to be obtained on overseas suppliers. Legal compliance certificate to be furnished by officials who authorize LCs > 1 cr. Consent of beneficiary to be obtained while amending LCs. Accepted bills of exchange to be held with import documents. Acceptance of bill of exchange should be made within 48 hrs of presentation. Import collections not paid on due date even after acceptance - to be advised to remitting bank for disposal instructions. LCs should not normally be issued for customers who do not enjoy credit facilities with the Bank. Ensure separate sanctioned limits for purchase of bills under LC for export bills and inland bills. All LCs should be issued bearing the legend with recourse. Do not issue the Letter of Credit if the customer doesnt have IEC number. Do not open LC without proper transport documents. Do not allow advance payment without proper documentation. Do not forward the documents to third party without permission from the importer.
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Donts
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Do not import prohibited or restricted items without import license. Do not allow direct remittance of import bills beyond the limit and without EC copy of bill of entry. Do not open revolving LC without safety clause. Do not amend the Letter of Credit for import of those items which is either restricted or prohibited. Do not allow import documents received under collection paid without verifying importers line of business and financial standing.

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EXPORT BILLS
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All negotiations are to be authorized by appropriate authority. Copies of LCs under which export bills are negotiated to be held with documents after original LC has been duly endorsed. In case of discrepant export documents, discrepancies should be listed in the covering letter sent to the LC opening bank. Discrepancies in export documents should also be advised in writing to the exporter for rectification. Opinion reports to be obtained on overseas buyers. Export bills for which PCFC was availed should be discounted under EBR and not sent on collection. ECGC for pre shipment credit and post shipment credit to be obtained.

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BANK GUARANTEES
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Legal compliance certificate to be furnished by officials signing the guarantees for BG and LCs above 1 crore.
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Liability limitation clause and notwithstanding clause to be invariably included in all guarantees. Individual / omnibus counter guarantees to be obtained for all customers. Branches should not issue BG for more than 18 months without obtaining prior administrative clearance of the appropriate authority. No bank guarantee should normally have a maturity of more than 10 years. Dont amend the BGs unlike in the case of LC. Instead issue fresh guarantees canceling the earlier ones. BG can be cancelled prior to expiry of the period only with the consent of both the parties to the contract i.e. the beneficiary and the applicant. The beneficiary of the bank guarantee can invoke in writing or by authenticated swift message.

FC NOTES / FCTC
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Retention limit for foreign currency notes / FC travellers cheques to be reviewed at annual intervals. Verification of stock of FCN / FCTC along with cash and security forms to be done at half-yearly / quarterly intervals. Both joint custodians acknowledgement to be obtained for foreign currency notes purchased from various customers during the day. FCN supplied to other branches should have been acknowledged by both joint custodians. FCTC balance stock needs to be aligned with American Express at quarterly intervals.
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INWARD REMITTANCES
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The inward remittance are to be credited to the customers account within 10 days from the date of receipt of remittance advice from abroad for remittance upto equivalent US $ 5000 and an intimation to be sent to the beneficiary within 3 working days (reckoning Saturday as a working day) from the date of receipt of advice in respect of remittances exceeding equivalent of US $ 5000. Contributions received from foreign sources for credit to the account of association/organisation which should be credited to the account, if the association/organisation registered under Ministry of Home Affairs, Govt of India. Ascertain the purpose of remittance in case of inward remittance equivalent of Rs. 1,00,000/- and more.

BUYERS CREDIT / FORWARD CONTRACTS


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Buyers Credit arranged for trading transactions requires specific approval of sanctioning authority. Board resolution to be obtained from all companies for obtention of buyers credit. Forward contracts - undertaking from company to be obtained to produce documentary evidence before maturity of the contract. Certificate to be obtained from customers that no other forward contract has been booked with other ADs for the same underlying exposure. Forward contract limits / margin matrix to be approved / reviewed on annual basis. Buyers credit to be extended for a maximum period of 365 days from the date of Bill of lading in case of raw materials and for 3 years in case of capital assets.
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CHAPTER - 8

CASH DEPARTMENT
Dos
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Collapsible grills gates at the Branch Entrance. Burglar alarms with foot pedal operating switches & connected to Auto Dialer. Fire Alarms with separate Auto - dialer numbers. Time Locks to be operational. Auto Locks for single window doors. Snap locks for cash drawers. CCTV systems with master & slave monitors to cover all cash. handling Areas. 90 days video recordings to be available at any point of time. Fully operational and tested Hotline telephones. Vendors/Services providers of all security systems to check and Certify periodically. Sandbag/Pillbox arrangements to be made within available space in the premises. Defective/faulty fire arms to be repaired/replaced immediately. Round the Clock armed protection for strong Room & Premises in case of Currency Chest. Liaison with local Police for patrolling.
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Non-Currency Chest - Minimum Cash Balance. Currency chest - Excess cash to be diverted for other needy Chest. Cash Remittance to be sent invariable under Armed Guard/Police Escort as per policy. Communications with regard to Cash remittance should be strictly Confidential. Remittance vans should vary their routes randomly. Currency operations to be made by locking the strong room grill door. Frisking to be made by the security guard on the person entering the chest. Vault Control Register to be maintained & entered on a daily. basis with timings. Fortnightly verification of currency chest. Bi-monthly verification by the official other than joint custodian. Regular soiled note remittances to be sent to RBI. T E 1. Register to be maintained. Cash Receipt delivery books to be maintained by all SWO & Cash Officers & entered & acknowledged on daily basis. Cash Officer Cash jotting book to be maintained & entered on daily basis. Pest control measures have to be ensured quarterly. Police patrolling-check point or Police point book to be made available to police on petrol duty and to be verified by BM on weekly basis. It is to be insured that all receptacles are operated at regular intervals and no portion of it lies dormant for a long time.
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SWO Cash Box Receipt/Delivery Register has to be maintained. Fire extinguishers to be renewed on due dates.

Donts
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Do not allow any person unconnected with strong room inside. Do not forget to lock the boxes containing cash while delivering it to cash counters or for the purpose of cash Remittance. Do not operate the strong room frequently without any valid reason. Do not allow Sweeper /Cleaner alone inside the Strong room. Do not forget to check the waste bins held by Sweeper/ Cleaner who was inside the Strong room Do not allow Messengers to operate the Cash bins even under direct supervision. Dont allow Messengers to stalk/remove the cash bundles from cash bins even under direct supervision. Do not allow packing of Notes for the purpose of Remittance without direct supervision. Do not operate in the strong room without the presence of other joint custodian. Do not allow anybody to enter cash cabins who are unconcerned for the same.
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CHAPTER - 9

GOVERNMENT BUSINESS
Dos
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Strings has to be fixed correctly so as to reach figures on day today basis to CDC. Verify whether WEB VOLTAS on SBI TIMES on day today basis reaches branches. Wherever branch name figures in defaulting list they have to go to VOLT AS error report, regenerate the report and rectify. Please note that funds are settled based on strings generated. Strings are not generated properly and account not settled by GAD within precribed time, loss at the rate of 8% to be borne by bank. Which will harm the image of the bank and individual officials will be held accountable for such an income leakage. DMS to be verified and despatched properly to link office. Currency Transfer has to be reported immediately otherwise heavy penalty to be paid to RBI - Penalty @ Bank Rate + 2%. Do not report the wrong entries. Do not delayed the reporting as delayed reporting attracts interest at 8% to be paid to RBI.
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Donts
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FOCAL POINT BRANCHES


Dos
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All Focal Point branches to ensure that main scroll and challans are submitted to respective Zonal Acounts Office within prescribed time of 7 days from the date of transaction. All the branches which are authorised to collect direct tax revenue are to be impressed and operating staff to be senstised for feeding PAN / TAN and other entries correctly. All the receving branches have to exchage GAD2 GAD 3 and reconcile the transaction.

GOVERNMENT SPONSORED SCHEMES


Dos
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Pre-sanction inspection is a must. See the viability of the project. Timely submission of subsidy claims to link office. Claim coverage under CGTMSC. Maintain perodicity of inspection / Maintain Standard Inspection Register. Follow up of advances and Obtention of revival letters in time/ Diarising for the same. Enlist the support of licence department officials in recovery/ Be in constant touch with them. Involve in Identification of beneficiaries - Service Area is applicable for Govt. Sponsored Schemes. Physical verification of units/ Ensure end use of funds.
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Donts
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Do not entertain middlemen or agents. Do not issue Bankers cheque demand draft favouring parties directly. Do not deviate norms and procedure set by department. Do not finance for units which are in negative list of activities.

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GOVERNMENT BUSINESS INSTRUCTIONS FOR DEALING AND RECEIVING BRANCHES


Dos
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State Government transactions should only be routed through STATE GOVT GENERAL ACCOUNT. Transfer the closing balance of SGL01 dated 30TH JUNE to state Government transactions to respective FSLO on 5th July through schedule no. 03/07 as the case may be. Transfer the closing balance of GAD 5 statement as on June to respective Focal Point branches through schedule no.03/07 as the case may be. Arrange to send the TR dated July along with copy of SGLO 1 of June to the FSLO for State Govt transactions. Arrange to send TR of July GAD2 for the period from Oct to June along with GAD5 Statement of june to respective Focal Point branches for Central Government transactions. In case branch is linked to more than one Focal Point/ Link/Nodal branch, segregate the balance to be transfered to each one of them as per relative GAD2 statements and tranasfer the balances accordingly.
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Donts
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State government transactions should not be routed through Focal point link branch Government General Account. No dealing branch will originate the entry on GAD(9595).

FOR FOCAL POINT/LINK/NODAL BRANCHES Dos


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On receipts of TR advices dated July respond the entries through schudule No.04/08 latest by July end. In case of difference between the amount transferred and balance held at Focal point branth hold the difference in IBIT account. Take up the matter urgently with the dealing branch concerned and ensure adjustment of IBIT entries at the earliest. Please ensure that all GAD 4 statement upto June have been sent to Govt. operations department LHO for onward submission to GAD Mumbai. Arrange to fax the GAD 4 statements of June and July and TR advice dated july to GAD immediately.

FOR TAX COLLECTING BRANCH Dos


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Accept single copy challan only instead of 4 copies. Type 281 for deposit of TDS/ TCS. Type 280 for deposit of Advance tax / self assessment tax / Tax on regular assessment / tax on distributed profits of Domestic companies / tax on distributed income to unit holders.
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Type 282 for Hotel receipts/Interest tax/state duty/ Expenditure tax / Gift tax / Wealth tax / Securities Transaction tax. Type 283 for Fringe benefit tax. Ensure correct 10 digit Tax deduction account number (TAN) for TDS/TCS payment/permanent account number(PAN) for other direct tax and name and address of the tax payer on each challan used for depositing tax. Put stamp of the branch on the counterfoil of the challan in a legible manner mentioning challan identification number(CIN). CIN should comprise BSR code of seven digits, challan serial number upto 5 digits and challan tender date/CIN is useful for verifying - the amount of tax paid, tax payer, IT Authorities and Bankers. Ensure CIN given on the counterfoil is the same as the one digitized and uploaded in OLTAS. Advice taxpayers to check status of challan through challan status inquiry. Monitor whatever you have uploaded through the special link provided to every collecting branch. Make sure that the challan details quoted in your tax returns (Both TDS and income tax) is the same as what is provided in the counterfoil of the challan provided by the bank. In case of PPF, ensure correct rate of interest applied and interest calculated is correct and fed correctly into the system.
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Donts
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Do not accept challan having invalid PAN/TAN. Do not accept challan of TDS/TCS payments having PAN. in place of TAN and challan of on TDS/TCS payments having TAN in place of PAN. Do not give challan serial number of more than 5 digits. Do not digitize cheque realisation date in place of challan tender date. Do not use same challan for depositing various types of tax like advance tax, self assessment tax etc. Do not make mistake in Financial year and Assessment Year. TRANSACTIONS

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Branches has to send figures before 11 AM of next day to RBI, otherwise. Penal interest will be levied. Individual officers will be held accountable. CONCLUSION

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State Bank of India is premier govt bank dealing with all govt business. It earns crores of rupees as revenue and serves the state and central government who are our major customers. We are the custodian of major currency chests. We should strive hard to retain and gain much more govt business. Hence we should be double carefull in settling transacations correctly. On day today basis.
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CHAPTER-10

GENERAL BANKING
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Crossing stamp - All cheques, drafts and other instruments, whether drawn on the branch or on other offices of the bank must be branded with the Banks crossing stamp immediately. Outstanding entries - Branch Managers should make timely and proper follow up of outstanding entries in Branch suspense account. All the officials must ordinarily obey the instructions of their Branch Manager. It is the duty of officers to report to the controlling authority any deviation from the rules and regulations of the Bank which they consider detrimental to the Banks security. The safe deposit receipt relating to the box containing the duplicate keys of the Branch should be entered in the appropriate section of Branch document register and kept in the BMs safe. Inward Mail - Enter all the letters/documents in respective registers before sending to respective desks/depts. Fax/e-mail messages to be cross checked and verified before being acted upon. Opening of accounts - Ensure compliance with KYC norms. Independent verification of adress of applicants by reference to prescribed documents to be done meti colour. Letter of thanks to be sent to the account holder, and
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acknowledgements to be monitored. The applicant should attend the Bank personally. Proper care to be taken in issue of cheque books to representatives of account holders.
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Proper noting of stop payment (Stopped cheques) instructions should be done in the system as well as relevant registers. Close watch to be kept on dispropotionate transactions especially in new accounts, inoperative accounts and non home transactions. Staff accounts - An employee should not maintain more than one account (SB/CA). All transactions by way of deposits, advances, collection, remittances etc. should be subject to strict scrutiny at prescribed intervals. Periodical rotation of staff is an important exercise, both with a view to providing job satisfaction, enhancement of all round knowledge of employees and to ensure compliance of preventive vigilance mechanism. Remittances and collections - Large credits through bank drafts/clearing, immediately after opening of an account and withdrawals in a short span of time to be viewed with caution. Please ensure Check signal and double signature system for SCs of Rs. 50,000/- and above. Ensure intelligent scrutiny while passing / negotiating high value instruments received for payment in inward clearing, especially dividend warrants/refund orders. Special care to be taken in the area of discounting of cheques, like follow up of despatch of cheques discounted, not discounting local cheques, prevention of any attempt of Kite flying, attending caution memos/IOR memos promptly etc. Drawals against cheques collection should not be allowed as a matter of routine and if allowed should be recorded and reported promptly on the same day for confirmation.
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Duplicate pass book should be issued, only after thorough enquiries, under proper authority. Account payee cheques endorsed to third parties should not be collected. In the case of foreign nationals, copies of residential permits issued by the police departments have to be obtained before opening of the account. While making payments, signature to be verified and a noting to that effect made where found necessary. In case of issuance of cheque book to a bearer, account holders acknowledgement should invariably be obtained. Customers may be advised that they should place a carbon, face upward, in between cheque leaves while writing cheques to avoid forgery. Proper custody and control over issue/use of security forms and holograms should be strictly ensured. All entries put through in Branch clearing on sechdule No.s 09 and 10 should be passed only by the branch Manger. A copy of the orginal schedule reported earlier should also be enclosed. All IOA memos should be attended to promptly. More than ordinary attention should be paid to high value entries. All care to be taken while paying cheques, drafts etc. and one should ensure that they are not from the lost list. Ultraviolet Lamp may be used to detect fake instruments. Proper record should be kept of the receipt/delivery of the clearing instruments. Under no circumstances should a copy of Power of attorney, other than the copy certified by a court be acted upon.
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While opening an account in the name of a partnership firm, along with copy of partnership deed, Banks prescribed form of partnership letter (COS 37) should be taken. No partner is authorized to delegate his authority to an agent, the authority should be signed by all the partners. SB a/c can be opened in the sole name of a minor if he/she is 10 years of age or above, provided he/she can sign uniformly. If 2 minor depositors approach the Bank for opening an account in the style E or S their request cannot be acceded to. But 2 minors can open a joint account to be operated upon by both of them jointly. No cheque book should be issued to an illiterate. The withdrawal forms relating to illiterate should be filled in by the counter clerk. Thereafter the passing officer should ascertain from the depositor, the correct amount of the withdrawal. All portions of the trust deed detailing the powers and duties of trustees which affect the trust account must be entered in power of attorney register. The activities of trust should be in accordance with object/purpose of the trust. Nomination can be made in favour of only one individual. All the nominations, cancellation of nominations and alteration of nominations are required to be witnessed. Where the nominee is a minor, the depositor may while making the nomination, appoint another individual, not being a minor, to receive the amount of the deposit on behalf of the nominee (minor) in the event of the death of the depositor during the minority of the nominee. All the depositors should be requested to nominate and if the depositor does not wish to make nomination, the same should be recorded on the account opening form, under his full signature.
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If the amount of the term deposit and matured deposit is Rs.20,000/- or more it must be paid to the depositor by an account payee Bankers cheque/draft or by credit to depositors account. VVR / day book checking not to be given a go bye under any circumstance. Allotment of the same to be done meticulously and intelligent scrutiny of vouchers and relevant books to be done by Branch Managers at specified periodical intervals. Proper followup of missing vouchers and their entry in missing vouchers registers is a must.
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CHAPTER-11

SYSTEM, TECHNOLOGY & ATM


DESKTOP
Dos
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Desktop includes personal computers, laptops and servers provided by bank for individual use. Protect your password. Install anti-virus and personal firewall in your system Always take backup of the system data or critical files and store it securely. Always store your critical files in the hard disk with a password. Take adequate measures for physical protection & logical protection. Do not leave your system unlocked. Do not disable the security settings / BIOS settings in your system. Do not install any software or application which is not essential or not authorised by the Bank. Do not connect modems to these machines unless otherwise approved by the appropriate authority. Do not change any hardware configuration, settings in operating system or any applications installed on their desktops.
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Donts
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PASSWORD
Dos
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Keep the minimum length of the password as 8 characters. Use a mixture of numbers, special characters and symbols and different cases. Keep changing your password at periodic intervals. In the extreme circumstances, if the password has to be shared, then change it immediately. Take precautions to protect your password and the Banks sensitive information and responsibility for the usage of your password.

Donts
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Do not use birthdays, names of the family members, pet names etc. Do not use the word password for password and or any other dictionary word. Do not share your password with anyone. Do not write your password anywhere on your desk / board. Do not use the same password for all your accounts.

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E-MAIL
Dos
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Ensure that your emails are encrypted when it travels over the net. Users should protect their email account on the server through strong password. Users should exercise caution in providing their email account or other information to websites or any other Internet forum.
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Users should promptly report all suspected security vulnerabilities or incidents that they notice with the Email system to IT Networking Department. Sensitive information may get revealed unintentionally due to unsafe practices. Care should be exercised in the following scenarios to protect sensitive informationa. Reading confidential documents in public places. b. Discussing confidential information in public places. c. Working on laptops in public places. d. Answering to queries over phone to unverified persons.

Donts
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Do not provide official email address in response to a website or newsgroup Do not respond or forward a spam mail (chain mails / junk mail). Just delete it. Do not open an attachment received from unknown source, like discussion board! mailing list. Do not open email that is meant for other person, if it has come to you wrongly. Do not indulge in sending or forwarding following categories of emails within or outside the bank Emails with any libelous, defamatory, offensive, racist or obscene remarks. Emails containing messages that may damage the reputation of the bank. Unsolicited emails to large number of which can be considered as mail spamming. Emails containing any document, other information protected by copyright, privacy or disclosure regulation.
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INTERNET
Dos
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Limit use of web browser for business purposes only. While visiting web sites for banking transactions / confidential information etc ensure that sites use SSL technology. Look for the lock symbol on web pages seeking critical information - like username / password, credit card number etc. Always type the address on the browser to access a site do not use the links provided by spam mails. Ensure that downloads, if any, are scanned for virus before opening them. Maintain different passwords for Login and for Transactions. Please log off from www.onlinesbi.com and Instant SBI and close the browser window after you have fmished your session. Avoid writing down your Username and password in your diary or such place, which can be accessed by others. It is advisable to change your password if you believe that anyone has managed to get access to it. Enter your user-id and password only in the space provided for- that you are normally used to. Change passwords at least once every 90 (ninety) days. Make the password difficult for others to guess or crack but easy for you to memorise and remember. An acceptable password must have characters from at least three (3) different character types upper case, lower case, digits, Special Characters, etc.
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A password that includes a sample from a rich character set is difficult to crack. Latest version of browsers should be used to connect to the Internet as they afford higher level of security. Continuous updation of antivirus softwares will offer more resistance to newer viruses. When not in use disconnect your computer system from the Internet to avoid unwanted access to the information on your system. Give your user id and password only at the authenticated login page.

Donts
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Do not use Internet facilities to Download or distribute malicious software or tools or to deliberately propagate any virus. Do not violate any copyright or license agreement by downloading or distributing protected material. Do not upload files, software or data belonging to bank to any Internet site without authorization of the owner of the file / software / data. Do not share any confidential or sensitive information of the bank with any Internet site unless authorized by superior / controller. Do not post views or opinion on behalf of the bank unless authorized by top management. Do not post remarks that are defamatory, obscene or not in line with banks policy on the subject. Do not conduct illegal or unethical activities including gambling, accessing obscene material or misrepresenting the bank.
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Do not in case such misuse of the Internet access is detected, bank can terminate. the user Internet account and take other disciplinary action.

GENERAL
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The LAN Access, Data Security, User Access and Backup are achieved through a combination of sign-on / sign-off procedures, passwords, together with user and transaction capability levels to protect financial and customer information For all user-input transactions financial and non financial, including reversals and correction entries and those in intermediate accounts, vouchers should be prepared. The vouchers, after they are entered in the system, will be retained by the maker where transactions do not require any further checking. Where transactions involve checking by an official/two officials, as the case may be, the vouchers will be retained by the last checker. The Day Books should be checked by official other than the person to whom it relates and a day book allotment register is to be maintained at the branch and should be initialed by the officials concerned for being received and checked the same. The register should be scrutinized by the Branch Manager/Divisional Manager.

ATM
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Maintain ATM Cash Back up Register. Carry on Periodical verification of cash in ATMs on the lines of cash verification in Currency Chest or Cash in Hand at branches, in addition to the verification by the ATM Joint Custodians on a daily basis is necessary.
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Maintain a Register for changing the Password. Mention the date on which the password is changed and record the same. Password should be entered in Branch Document Register. Branches are required to refer to the reports daily for reconciliation of all disputes in respect ATM Transaction;. Admin Function has to be performed on the basis of the Corrections to be Made report to make a Rectification.

OPERATIONS FOR NCR ATMS


Dos
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Mode of operation of ATM has to be changed to Supervisor mode IT Normal mode for the purpose of loading cash by changing the switch provided. In order that ATM branches have uniformity in maintenance of books and records, the ATM Cash Back up Register (Annexure VI) has been introduced. It is imperative that the Inc Bal figures in the register should match with the INC figures shown in the Admin Slip. The Inc Bal is cumulative figure of all cash loaded in the ATM and the cash replenished should be added to the opening Inc Bal. The End Balance in Admin Slip represents the real physical cash in the ATM. Similar entry should be made for Dec i.e. decrease in Admin Slip in a separate register or a separate folio in the same register. DEC represents cash decreased from the ATM. The cumulative figure of Dec should match with the similar figure in the Admin Slip. Periodical verification of cash in ATMs on the lines of cash verification in Currency Chest or Cash in Hand at branches, in addition to the verification by the ATM Joint Custodians on a daily basis is necessary.
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Maintain a Register for changing the Password. Mention the date on which the password is changed and record the same. Branches are required to refer to the reports daily for reconciliation of all disputes in respect ATM Transactions. Admin Function has to be performed on the basis of the Corrections to Be Made report to make a Rectification.

Donts
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Do not leave the ATM Hood open un-attended. Do not leave the ATM room shabby and un-cleaned Do not keep the hood key or battery room key inside the ATM room. Do not leave the ATM Room leaving the ATM safe open. Do not open the ATM Hood keeping the ATM room Collapsible shutters open so as to be seen by the public while operating the ATM for cash replenishment. Do not count the cash in ATM room keeping open the collapsible shutters of the ATM Room, so as to be visible to the public. Do not share your part of password to other joint custodian. Do not discuss the issues or steps of ADMIN operation of ATM in public or loudly. Do not delegate the duties to be performed by you to others, especially in cash replenishment. Do not keep the password unchanged for a long period.
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NOTES

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