09DM149

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BY:
TANU MOTWANI
PGDM (FINANCE)-09DM149
BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY,
GREATER NOIDA
2009-2011
FACULTY GUIDE: DR LRAMANI
INDUSTRY GUIDE: MR RA!ENDER GAUR

SUMMER INTERNSHIP REPORT
THE CREDIT PROCESS
F"#$%&' G$()*: I+)$,&-' G$()*:
P-./ D- L R"0"+( M- R"1*+)*- G"$-
B(-%" I+,&(&$&* ./ M"+"2*0*+& T*#3+.%.2' G*+*-"% M"+"2*-(O4*-"&(.+,)
G-*"&*- N.()" 5(,36"7-('" H.$,(+2 F(+"+#* L&),
N*6 D*%3(

BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY (BIMTECH)
GREATER NOIDA
2
TITLE:
A%(2+(+2, -*(+/.-#(+2 "+) *+3"+#(+2 *8(,&(+2 #-*)(& 4-.#*,,*,, 9' )*:*%.4(+2 0*&-(#, "+)
0*",$-*,, #"4&$-(+2 )"&" 4.(+&, (+ %."+ "44%(#"&(.+,, "44-"(,"%, "+) -*#.-), (/(%*,,
#.04$&*- ,',&*0,), 6(&3 " :(*6 &. "+"%';(+2 "+) 0(&(2"&(+2 -(,7 -*%"&*) &. #-*)(& ./ %."+**,
3
Summer Project Certificate
This is to certify that Ms. Tanu Motwani, Roll No. 09M!"9 a stu#ent of P$M%&inance' has
wor(e# on su))er *ro+ect title#, THE -REIT PRO-ESS,, at .ishwa(riya Housin/ &inance
0t#., after tri)ester 1III in *artial fulfill)ent of the re2uire)ent for the *ro/ra))e. This is her
ori/inal wor( to the 3est of )y (nowle#/e.
ate455555555555555 Si/nature4 5555555555555555
%&aculty $ui#e4 r. 0. Ra)ani.'
6IMTE-H SE70
4

AC<NOWLEDGEMENT
I a) e8tre)ely /rateful to M-R.3(& M(,3-", -hief E8ecuti9e Officer, .H&0,for /i9in/ )e the
o**ortunity to wor( on this *ro+ect, which hel*e# )e learn a lot an# inte/rate )y theoretical
(nowle#/e with the *ractical wor(in/s of a fast #e9elo*in/ co)*any.
I woul# also li(e to than( )y *ro+ect /ui#e M-R"1*+)*- G"$-, $eneral Mana/er, O*erations
.ishwa(riya Housin/ &inance Pri9ate 0t#, New elhi for /ui#in/ )e throu/h )y Su))er
Internshi* *ro+ect in s*ite of his 3usy sche#ule . His encoura/e)ent, ti)e an# effort are /reatly
a**reciate#.
I sincerely than( )y faculty /ui#e P-./ D- L R"0"+(, e*art)ent of P$M %&inance' at
6irla Institute of Mana/e)ent Technolo/y, $reater Noi#a for su**ortin/ )e #urin/ this *ro+ect
an# *ro9i#in/ )e all the in*uts necessary to carry out this *ro+ect.
7n#, I woul# li(e to than( all the res*on#ents for s*arin/ their *recious ti)e to offer their
9alua3le o*inions an# su//estions throu/h the sur9ey that was con#ucte# 3y )e in course of this
*ro+ect.
&inally, )y heartfelt than(s to all the *eo*le an# staff at .ishwa(riya Housin/ &inance 0t#,
res*ecte# faculty )e)3ers at 6IMTE-H an# all )y 3elo9e# frien#s who ha9e #irectly or
in#irectly a**reciate#, critici:e# an# su**orte# )y wor( an# hel*e# )e to re)ain )oti9ate# for
the co)*letion of this *ro+ect.
%Tanu Motwani'
5

CERTIFICATE FOR COMPLETION OF PRO!ECT
This is to certify that Ms. Tanu Motwani has successfully co)*lete# the *ro+ect on =THE
CREDIT PROCESS> at .ishwa(riya Housin/ &inance 0i)ite#, elhi as *art of the
re2uire)ent of the fulfill)ent of course curriculu) for the awar# of the Post $ra#uate i*lo)a
in Mana/e)ent %&inance' un#er )y /ui#ance.
Si/nature of &aculty $ui#e4
Prof. r. 0. Ra)ani
6irla Institute of Mana/e)ent Technolo/y
$reater Noi#a
6
S N. P"-&(#$%"-, P"2* +.
-o9er *a/e !,;
Title of the *ro+ect <
Su))er *ro+ect -ertificate "
7c(nowle#/e)ent =
-ertificate of co)*letion%faculty /ui#e' >
-ertificate of co)*letion%in#ustry /ui#e' >
E8ecuti9e Su))ary ?
!
!.!
!.;
!.<
!."
Intro#uction
@hat is Housin/ &inance
In#ustry O9er9iew
Present Situation of Housin/ &inance In#ustry in In#ia
Ho)e 0oan *ro9i#ers in In#ia
9
!0
!!A!"
!=A;0
;!A;"
;
;.!
73out .ishwa(riya Housin/ &inance 0t#.
S@OT analysis of co)*any
;=A;B
;?
< The e8istin/ cre#it *rocess of the co)*any%.H&0' ;9A<;
"
".!
The *ro*ose# *rocess of the co)*any%.H&0'
6enefits of the *ro*ose# *rocess
<<A?=
?>
= New *ro*ose# loan *olicies%.H&0' ?BA!!>
>,B,? -onclusion, 6i3lio/ra*hy !!BA!;!
B 7**en#i8 %!A ?' !;;A!"0
TABLE OF CONTENTS
E?ECUTI5E SUMMARY
7
.ishwa(riya Housin/ &inance 0t#. %.H&0' is a *u3lic li)ite# co)*any incor*orate# in ;000
with the Re/istrar of -o)*anies %Re/n No.4 ==A!0"9=>'.
It is a Housin/ &inance -o)*any %H&-' re/istere# an# re/ulate# 3y the National Housin/ 6an(
%NH6', a wholly owne# su3si#iary of the Reser9e 6an( of In#ia. .H&0 was re/istere# in ;00;
3y the NH6, an# su3se2uently issue# with *er)ission to raise *u3lic #e*osits %-ertificate of
Re/istration No. 0!.00=9.0" #ate# B Octo3er ;00"'. .H&0 is one of only a3out ;0 H&-s issue#
with such *er)ission as of #ate.
The -o)*any o*erates two satellite offices for *ur*ose of loan ori/ination an# client ser9ice in
Palwal an# $ur/aon, 3oth within elhi N-R. It is antici*ate# that this networ( of ser9ice
centres, su**orte# 3y the controllin/ 3ranch in elhi %South E8tension, NSEAII', will /row
further in the followin/ year as #is3ursals /row in the core )ar(et of elhi N-R, as well as in
Cai*urA7lwar %Ra+asthan' an# 6hu3aneswarA-uttac( %Orissa'.
The -o)*any has recently ta(en u* a new cor*orate office in $reen Par(, New elhi.
This *ro+ect co9ers two *arts which starts with the e8istin/ cre#it *rocess in or#er to /et insi/ht
into the o*erations of the co)*any. The ne8t *art #eals with enhance# cre#it *rocess. 7fter the
e8ecution of the enhance# *rocess the cre#it ris( woul# )iti/ate consi#era3ly an# the co)*any
which is on the e8*ansion )o#e woul# 3e a3le to o*erate efficiently an# sustaina3ly for 3usiness
" ti)es )ore than at *resent. The last *art #eals with the ERP in*ut sheets an# MIS re*ort
structures throu/h which the co)*any can analy:e its 3usiness an# /row further.
PART 1: The existing credit process o the co!p"n# is e$cient or s!"%% &'siness
(o%'!e "nd is done !")or%# !"n'"%%#* The !"in o&)ecti(e o st'd#ing the existing
process +"s to get the insight into ho+ the %o"ns "re processed "nd +h"t "%%
p"r"!eters "re considered or s"nctioning the %o"n* The res'%t o the st'd# he%ped
in identi#ing the %oop ho%es in the s#ste!, !"-ing it !ore ro&'st to s'st"in "%!ost
4 ti!es !ore &'siness th"n "t present*
PART 2: The proposed process %"#s do+n "%% the proced'res "nd intric"cies o the
entire credit process step +ise +hich +o'%d i!!ense%# he%p the credit dep"rt!ent
te"! to s"nction the %o"n .%ter the high ris- "pp%ic"nts ro! the %o+ ris- "pp%ic"nts
hence !itig"ting the ris- consider"&%#* It "%so st"nd"rdi/es the entire process so
th"t it c"n &e rep%ic"ted "t !'%tip%e &r"nches o the co!p"n# +hich is on the "st
tr"c- exp"nsion in the next 203 #rs "s it +i%% &e oper"ted thro'gh the ERP s#ste!
"%re"d# existing +ith the co!p"n# +hich non0'nction"% e"r%ier is integr"ted in the
proposed process*
PART 3: This p"rt o the pro)ect proposes the ne+ po%icies s'ggested to the
co!p"n# in order to 'psc"%e the &'siness -eeping " 't'ristic (ie+* This +i%% he%p the
co!p"n# h"(e c%"rit# in "%% the nor!s go(erning the credit process +hi%e "ppr"ising,
s"nctioning , dis&'rsing %o"ns "s +e%% "s +hi%e co%%ecting the rep"#!ents*
1
1INTRODUCTION
11 WHAT IS HOUSING FINANCE@
Housin/ finance is a 3roa# to*ic, the conce*t of which can 9ary across continents, re/ions an#
countries, *articularly in ter)s of the areas it co9ers. &or e8a)*le, what is un#erstoo# 3y the
ter) Dhousin/ finance, in a #e9elo*e# country )ay 3e 9ery #ifferent to what is un#erstoo# 3y
the ter) in a #e9elo*in/ country.
The International Union for Housin/ &inance, as a )ultinational networ(in/ or/ani:ation, has no
official *osition on what the 3est #efinition of housin/ finance is. Howe9er, the selection of
2uotes 3elow is offere# as a sna*shot of what housin/ finance as a to*ic co9ers4
DHousin/ finance 3rin/s to/ether co)*le8 an# )ultiAsector issues that are #ri9en 3y constantly
chan/in/ local features, such as a countryEs le/al en9iron)ent or culture, econo)ic )a(eu*,
re/ulatory en9iron)ent, or *olitical syste),
(2009) L.A# C3(B$(*- "+) M(#3"*% L*", H.$,(+2 F(+"+#* P.%(#' (+ E0*-2(+2 M"-7*&,, 4
888
In a##ition, the conce*t of housin/ finance an# housin/ finance syste)s has 3een e9ol9in/ o9er
ti)e. 0oo(in/ at #efinitions fro) the )i#A!9?0s, we see that housin/ finance was #efine#
*ri)arily in ter)s of resi#ential )ort/a/e finance4
DThe *ur*ose of a housin/ finance syste) is to *ro9i#e the fun#s which ho)eA3uyers nee# to
*urchase their ho)es. This is a si)*le o3+ecti9e, an# the nu)3er of ways in which it can 3e
achie9e# is li)ite#. Notwithstan#in/ this 3asic si)*licity, in a nu)3er of countries, lar/ely as a
result of /o9ern)ent action, 9ery co)*licate# housin/ finance syste)s ha9e 3een #e9elo*e#.
Howe9er, the essential feature of any syste), that is, the a3ility to channel the fun#s of in9estors
to those *urchasin/ their ho)es, )ust re)ain.,
(19CD) M"-7 B.%*"&, N"&(.+"% H.$,(+2 F(+"+#* S',&*0, E A C.04"-"&(:* S&$)', 4 1
Howe9er, in )ore recent years, a nu)3er of other )uch wi#er #efinitions ha9e a**eare#4
DPut si)*ly, housin/ finance is what allows for the *ro#uction an# consu)*tion of housin/. It
refers to the )oney we use to 3uil# an# )aintain the nationEs housin/ stoc(. 6ut it also refers to
the )oney we nee# to *ay for it, in the for) of rents, )ort/a/e loans an# re*ay)ents.,
(2009) P*&*- <(+2, U+)*-,&"+)(+2 H.$,(+2 F(+"+#* E M**&(+2 N**), "+) M"7(+2 C3.(#*,,
4F
2
.-
DThere is reco/nition of other rele9ant for)s of housin/ finance Fa*art fro) resi#ential )ort/a/e
financeG such as #e9elo*er finance, rental finance, or )icrofinance a**lie# to housin/. e9elo*er
finance is often in the for) of unre/ulate# a#9ance *ay)ents 3y 3uyers, an# #e9elo*ers
so)eti)es *ro9i#e lon/Ater) finance to 3uyers throu/h install)ents sales when )ort/a/es
)ar(ets are not accessi3le. Microfinance for housin/ is ty*ically use# for ho)e i)*ro9e)ent or
*ro/ressi9e housin/ *ur*oses. 0oans are ty*ically /rante# without *le#/in/ *ro*erties. 7lthou/h
the o9erall i)*act of )icrofinance in housin/ re)ains li)ite#, this acti9ity can re*resent an
i)*ortant source of fun#in/ for those in the infor)al sector.,
(2009) L.A# C3(B$(*- "+) M(#3"*% L*", H.$,(+2 F(+"+#* P.%(#' (+ E0*-2(+2 M"-7*&,, 4
888((
12 I+)$,&-' O:*-:(*6
T-")(&(.+"% S&-$#&$-* ./ &3* M.-&2"2* M"-7*& (+ I+)("
The /o9ern)entEs su**ort to housin/ ha# tra#itionally 3een centralise# an# #irecte# throu/h the State
Housin/ 6oar#s an# e9elo*)ent 7uthorities. In !9B0, the central /o9ern)ent set u* the Housin/ an#
Ur3an e9elo*)ent -or*oration %HU-O' to finance housin/ an# ur3an infrastructure acti9ities. In
!9BB, Housin/ e9elo*)ent &inance -or*oration %H&-' was the first housin/ finance co)*any in the
*ri9ate sector to 3e set u* in In#ia.
The *u3lic sector insurance co)*anies 1 0ife Insurance -or*oration of In#ia %0I-' an# $eneral
Insurance -or*oration of In#ia %$I-' were also )an#ate# to su**ort housin/ finance acti9ities, 3oth
#irectly throu/h their housin/ su3si#iaries %3oth esta3lishe# in !9?9' an# in#irectly throu/h a )an#ate#
re2uire)ent to in9est a certain *ro*ortion of their annual accretion in socially oriente# sche)es which
inclu#es housin/.
In !9??, the National Housin/ 6an( %NH6' was esta3lishe# as a !00H su3si#iary of the Reser9e 6an( of
In#ia, %the central 3an( of the country', to *ro)ote housin/ finance throu/h a refinance )echanis) to
3an(s, housin/ finance co)*anies %H&-s' an# other institutions an# also to function as the su*er9isory
an# re/ulatory 3o#y for housin/ finance co)*anies.
-urrently there are ;0 H&-s a**ro9e# for refinance assistance fro) NH6.
7lthou/h co))ercial 3an(s were the lar/est )o3iliser of sa9in/s in the country, tra#itionally 3an(s were
rather reluctant to len# for housin/ as they *referre# financin/ wor(in/ ca*ital nee#s of in#ustry. Se9eral
3an(s ha# set u* housin/ finance su3si#iaries which functione# as in#e*en#ent units with little su**ort or
interest fro) their *arent 3an(.
34
The housin/ finance sector in In#ia has un#er/one un*rece#ente# chan/e o9er *ast ten years. 7s
far as the contri3ution to $P is concerne#, it is a)on/ the )ost i)*ortant sectors of the In#ian
econo)y. Its i)*ortance
En/ine for e2uita3le econo)ic /rowth
Po9erty re#uction
Ta(in/ *art in financial sector li3eralisation
-reate an# )eet /rowin/ housin/ #e)an#
C3"-"#&*-(,&(#, ./ 2-.6&3 .:*- &3* '*"-,
Prior to !9?0s
S*ecialise# len#ers, H&-s
6an(Iinsurance co)*anies s*onsore# H&-s
6uil#er an# -o)*any *ro)ote# H&-s
!9?<A;00<
7//ressi9e entry of 3an(sA e8istin/ *layers lose their )ar(et share
Irrational co)*etition
Ra*i# #is3urse)ent
-re#it 2uality issues
;00< onwar#s
Oli/o*olistic )ar(et share, 3ut )ost incre)ental /rowth co)es fro) a few
More rational )ar(et
Sustaine# )ort/a/e /rowth at ;=H
I+/%$*+#(+2 /"#&.-,
Socio cultural factors such as lifestyle chan/es, re/ional shifts an# /rowin/ *o*ulation
Econo)ic factors such as fiscal concessions, interest rates an# inflation
Technolo/ical factors such as har#ware an# software i)*ro9e)ents
Re/ulatory factors such as R6I an# NH6 re/ulations
L.6 M.-&2"2* P*+*&-"&(.+
es*ite the frenetic *ace of /rowth in housin/ finance o9er the *ast fi9e years in In#ia, )ort/a/e
*enetration as a *ercenta/e of $P re)ains lowJ a**ro8 >ABH %NH6, ;00B'.This is low when
co)*are# with countries such as the -hina an# Malaysia, where the co)3ine# 9alue of
)ort/a/es *asses !;H an# ;; H res*ecti9ely of $P. In#iaEs *erfor)ance has is on the u*swin/
an# is currently low as the tren# has starte# not lon/ a/o. This )eans that there are consi#era3le
33
/rowth o**ortunities in housin/ finance. This is further corro3orate# 3y the fact that #es*ite the
recent, i)*ressi9e rate of /rowth in the housin/ finance sector, financin/ throu/h the
or/anise#Ifor)al sector continues to account for only ;= H of total ca*ital e8*en#iture in
housin/ in In#ia %I-R7, ;00<' which is *ri)arily )et 3y the for)al sector. @ith /rowin/
#e)an# for housin/, there is *lenty of roo) for entry an# /rowth of the infor)al sector as well.
T-*+), "+) #3"-"#&*-(,&(#, ./ I+)("+ H.$,(+2 F(+"+#* I+)$,&-'
Increased Urbanisation
7s the In#ian econo)yEs #e*en#ence on a/riculture (ee*s #ecreasin/, stron/er econo)ic /rowth
has also o*ene# u* )any new a9enues for e)*loy)ent, es*ecially in ur3an areas. $rowin/
ur3anisation an# occu*ational shifts fro) a/ricultural to )anufacturin/ an# ser9icesArelate# +o3s
ha9e 3een well correlate# with chan/in/ attitu#es towar#s consu)*tion an# retail finance %SSKI,
;00>'. 7s a result, In#ia continues to un#er/o a transfor)ation with ra*i# )i/ration to the ur3an
areas. In#iaEs ur3an *o*ulation is e8*ecte# to increase ra*i#ly while the rural *o*ulation
e8*eriences slower an# e9entually ne/ati9e /rowth. 7n e8*an#in/ ur3an *o*ulation (ee*s the
housin/ stoc( un#er *ressure an# creates #e)an# for housin/ finance. This will also create
newer se/)ents that nee# to 3e ta**e# to sustain lon/ ter) /rowth.
Favourable Socio-Economic and Demographic Factors
The socioAecono)ic 3rea(Au* of the In#ian *o*ulation can 3e seen as a *yra)i#, with a
su3stantial lowAinco)e se/)ent of the *o*ulation at the 3ase %inco)es 3elow INR ! la(h', a
/rowin/ )i##le class %inco)es 3etween INR ; la(h an# = la(h *er annu)' an# a s)all,
affluentIrich class %inco)es a3o9e INR = la(h *er annu)' at the to*. This structure is e8*ecte# to
chan/e towar#s a L#ia)on#E sha*e 3y ;0!0, as the )i##leAinco)e /rou* 3eco)es lar/er with a
su3stantial se/)ent of the lower inco)e /rou* e8*ecte# to )o9e u* to the )i##le inco)e
se/)ent. In#ia is one of the youn/est nations in the worl# with an a9era/e a/e of ;?." years.
6ein/ )ore econo)ically secure with a #yna)ic +o3 )ar(et an# stron/ /rowth, the new ur3an
*o*ulation is li(ely to resort to housin/ cre#it earlier in life. This is reflecte# in the fall in the a/e
of an a9era/e ho)e loan 3orrower fro) a3out "= years to a <0A<= year ran/e to#ay. The
Lwor(in/ *o*ulationE, #efine# as 3ein/ 3etween != an# >" year ol#, is e8*ecte# to increase fro)
>;.= H in ;00; to o9er B0 H in ;0<0 %N-7ER, ;00='. The tar/et a/e /rou* for retail, an# for
that )atter housin/, finance is 3etween the a/es of ;= to =9 years an# is e8*ecte# to /row at a
-7$R of ;.! H o9er ;00;A;0!!, co)*are# with an o9erall *o*ulation /rowth of !.= H o9er the
sa)e *erio# %SSKI, ;00>'.
Enhanced Affordabilit
32
Housin/ to#ay has har#ly e9er 3een at )ore affor#a3le le9els in In#ian history. Esti)ates show
that affor#a3ility %i.e., the ratio of the *rice of a resi#ential *ro*erty to the annual inco)e of the
3orrower' has i)*ro9e# si/nificantly. &or instance, for a ty*ical Mu)3ai su3ur3 in !99=, it too(
a3out ;; ti)es a 3orrowerEs total annual inco)e to *urchase a house, while in ;00> this ratio
#ro**e# to only fi9e ti)es %H&-, ;00>'. Such enhance# affor#a3ility can also 3e attri3ute# to
the ra*i# rise in househol# earnin/s o9er the *ast #eca#e. The a9era/e househol# inco)e in
ur3an areas has /rown at a co)*oun#e# !0 H in no)inal ter)s o9er the last #eca#e
%-RISI0,;00>'.
!a" #enefits
In or#er to hel* 3oost ho)e ownershi*, the /o9ern)ent has offere# ta8 incenti9es to in#i9i#uals
who o*te# for ho)e loans. Interest *ay)ents on a housin/ loan u* to INR !=0,000 *er annu)
an# annual re*ay)ents u* to INR !00,000 are eli/i3le for #e#uction fro) a 3orrowerEs /ross
inco)e. These ta8 3enefits ha9e consi#era3ly re#uce# the effecti9e rates of interest on loans, to
the e8tent that it is )ore 3eneficial to 3orrow fro) a 3an( or housin/ finance co)*any than to
use oneEs own fun#s. &or instance, a 3orrower o*tin/ for an INR ; )illion, !=Ayear loan at 9.= H
*er annu) will effecti9ely 3e *ayin/ an interest rate of =.>? H *er annu) %H&-, ;00>'. @hile
9arious ta8 co))ittees ha9e #eclare# in fa9our of re)o9in/ a host of current e8e)*tions an#
#e#uctions in the Inco)e Ta8 7ct, it is unli(ely that the /o9ern)ent will eli)inate those on
housin/ loans, in reco/nition of the fact that fiscal incenti9es ha9e 3ooste# ho)e ownershi*.
<*' D'+"0(#, ./ H.$,(+2 F(+"+#* (+ I+)("
The increasin/ a9aila3ility of housin/ finance M low interest rates ha9e #ri9en the 3oo) in
housin/ *urchases
Housin/ finance *enetration is e8*ecte# to i)*ro9e in ur3an areas M reach <?H 3y &N!< M
reach >.=H in rural areas 3y &N!<
D(,9$-,*0*+&,
6etween &N0< A&N0?, housin/ finance outstan#in/s are esti)ate# to ha9e /rown at a -7$R of
a3out <!H, )ainly #ri9en 3y #is3urse)ents
Key #ri9ers for /rowth in #is3urse)ents4
!. E8tensi9e 3ranch networ(s of len#ers across In#ia
;. Increasin/ acce*ta3ility of loans a)on/ custo)ers
<. -o)forta3le custo)er earnin/ *rofile, as the )a+ority of custo)ers earn salaries an# ha9e a sta3le
source of inco)e
". -o)fort of len#ers in the sale of collateral in case of #efaults
Interest Rates4 In#ian H& *rinci*ally 3ase# on floatin/ rate len#in/
Reflecte# in 0I- H&0Esloan *ortfolio, with O9>H of its in#i9i#ual loan a**ro9als 3ein/ floatin/
rate loans as of the year en#e# &N 09
33
Housin/ loans are offere# for an a9era/e tenure of !<A!= years, while lia3ilities for len#ers are
/enerally for less than !0 years
&loatin/ rates are reset when the cost of fun#s for len#ers increase
A:*-"2* T(#7*& S(;* (ATS)
7TS for new ho)es is esti)ate# to ha9e /rown at a -7$R of !?H in ur3an areas M at a -7$R of !;H
in rural areas
C.04*&(&(.+- H*-* %"', &3* 2-.6&3
The in#ustry has seen co)*etition at le9el of 3orrowin/ at an# a3o9e INR !0 la(h. Howe9er,
)a+ority of *o*ulation re2uirin/ housin/ finance falls in the 3rac(et of INR <AB la(h. 7s
)entione# in a3o9e *oints, this se/)ent is a)on/ the fastest increasin/ se/)ent with enor)ous
#e)an# for housin/ finance. 7l)ost all (ey *layers refrain fro) /rantin/ the a3o9e )entione#
loan a)ount. Thus, this se/)ent offers hu/e sco*e of /rowth. The custo)er 3ase co)es fro)
u*co)in/ In#ian )i##le class which woul# re2uire housin/ in a3un#ance. @ith ti)e, )ore
*layers are e8*ecte# to enter this se/)ent. The a3o9e )entione# se/)ent is a niche se/)ent an#
)ore un#erstan#in/ of the custo)ers of this se/)ent is nee#e#. This calls for )ore fiel# research
an# #e9elo*in/ )ore custo)er frien#ly offerin/s. @ith carefully #rafte# offerin/s, /rowth can 3e
tre)en#ous. 7s of now, there are har#ly any *layers in this se/)ent. 7n# /ettin/ access to
s*ecialist housin/ finance co)*anies is #ifficult for lower inco)e /rou*. Un#erstan#in/ the
*ros*ects offere# 3y this sector, .H&0 has tar/ete# it with its uni2ue offerin/s that can fulfil
custo)er nee#s.
C3"%%*+2*, "+) I,,$*,
.ariation in stan#ar#s
-ost of fun#s
ue #ili/ence issues
In#ustry fra/)entation
-onflictin/ interests
Micro financin/ for houses
Reachin/ a *otentially lar/e 3ase of custo)ers
$ettin/ access to relia3le infor)ation a3out 3orrowerEs cre#it history
T3* W"' F.-6"-)
Se/)ente# a**roach
Intro#uction of new *ro#ucts *ertainin/ to nee#s of the custo)ers
-onsu)er awareness an# infor)ation
6uil#in/ infor)ation #ata3ase
Intro#uction of safety nets such as )ort/a/e insurance, 3etter access to cre#it history
7##ress lon/ ter) fun#in/ issues
34
1F P-*,*+& S(&$"&(.+ ./ H.$,(+2 F(+"+#* I+)$,&-' (+ I+)("
L(/* #'#%* 4.,(&(.+
Housin/ finance as a financial ser9ice is relati9ely youn/ in In#ia. The /rowth in housin/ an#
housin/ finance acti9ities in recent years reflect the 3uoyant state of the housin/ finance )ar(et
in In#ia. The real estate sector is the secon# lar/est e)*loy)ent /enerator in the country.
In !9B0, the state set u* the Housin/ an# Ur3an e9elo*)ent -or*oration %HU-O' to finance
housin/ an# ur3an infrastructure acti9ities, in !9BB, the Housin/ e9elo*)ent &inance
-or*oration %H&-' was the first housin/ finance co)*any in the *ri9ate sector to 3e set u* in
In#ia.
-urrently there are ;9 H&-s a**ro9e# for refinance assistance fro) NH6.
The followin/ ty*es of ho)e loans are /enerally a9aila3le in the )ar(et4
P Ho)e E2uity 0oans4 7 for) of finance to the custo)er 3y way of )ort/a/e of e8istin/
*ro*erty to the financier for ta(in/ a loan for so)e other *ur*ose. The current )ar(et 9alue of
the *ro*erty is the 3asis for *ro9i#in/ ho)e e2uity loans.
P Ho)e E8tension 0oans4 The *ur*ose of this loan is the e8tension of e8istin/ houses ti(e
the a##ition of roo)s, toilet facilities etc. Such loans fall un#er the cate/ory of ho)e loans.
P Ho)e I)*ro9e)ent 0oans4 These loans are *ro9i#e# )ainly for re*airs an# )aintenance
of e8istin/ housesA These coul# inclu#e internal an# e8ternal re*airin/, water*roofin/ an#
roofin/, co)*lete interior reno9ation, tilin/ an# floorin/ etc.
P Ho)e Purchase 0oans4 &inance *ro9i#e# for the *urchase of rea#yA)a#e houses.
P 0an# Purchase 0oans4 These loans are 3ein/ *ro9i#e# for the *urchase of lan# for the
*ur*ose of construction of resi#ential houses.
35
B$,(+*,, #'#%*
E8&*-+"% F"#&.-,
G.:*-+0*+&
Policy 7nnouce)ent in 0ast Quarter
N6&-sE /rowth ha# 3een constraine# #ue to lac( of a#e2uate ca*ital.
On ; Canuary ;009, the /o9ern)ent an# the Reser9e 6an( of In#ia announce# another set of
)easures to sti)ulate the econo)y, after ha9in/ announce# a few )easures in ece)3er ;00?.
The *ac(a/e focuses on4
Re9i9in/ #e)an# for the housin/ sector 3y facilitatin/ Rs.",000 crore reRnancin/ facility for
National Housin/ 6an( %NH6', /rantin/ *riority sector len#in/ status to loans u*to a )a8i )u)
li)it of Rs.;0 la(h *er #wellin/ *er fa)ily 3y housin/ Rnance co)*anies with the a**ro9al of
NH6, concessional treat)ent to co))ercial real estate loans which ha9e 3een restructure# u*to
<0 Cune ;009 an# lowerin/ the interest rates on ho)e loans u*to Rs.;0 la(h.
36
The *ac(a/e will not *ro9i#e a )a+or 3oost to the resi#ential )ar(et i))e#iately as *ro*erty
*rices *lay an i)*ortant role while )a(in/ a 3uyin/ #ecision. Pro*erty *rices continue to re)ain
hi/h with an a9era/e ho)e in )etro cities costin/ well a3o9e Rs.;0 la(h, the u**er li)it of the
a)ount on which interest rate concession is /rante#.
The /o9ern)ent ease# the e8ternal co))ercial 3orrowin/ %E-6' nor)s 3y allowin/ nonA
3an(in/ finance co)*anies an# housin/ finance co)*anies to raise )oney o9erseas throu/h
&--6s su3+ect to R6I a**ro9al.
G*+*-"% P.%(#'
P.%(#' C3"+2*, E84*#&*) (+ &3* N*"- F$&$-*
S.#("%
The )ort/a/e *enetration continues to re)ain a3ys)ally low 1 in In#ia the )ort/a/e to $P
ratio is at aroun# >H %in &N0?' a/ainst o9er =!H in the US7. E9en if one were to 3ench)ar(
a/ainst )ore co)*ara3le counter*arts, the ratio ran/es fro) !=H to ;0H for )ost South East
7sian nations.
Hi/h #own *ay)ent re2uire)ent an# nonAa9aila3ility of the title #ee#s in the a3sence of lan#
recor#s are so)e of the reasons res*onsi3le for the ina3ility of the co)*anies in reachin/ out to
the 9ast *o*ulation li9in/ in rural areas.
D*0.2-"43(#
Housin/ finance assistance of for)al institutions has 3een li)ite# to the )i##leAinco)e an#
hi/hA inco)e /rou*s. -o)*anies ha9e also not 3een a3le to *enetrate the rural areas.
D*0"+) A+"%',(,
E+) $,*-,
The housin/ finance sector in In#ia has un#er/one un*rece#ente# chan/e o9er the *ast two
#eca#es. The consu)*tion *attern a)on/st the In#ian *o*ulation is e8*ecte# to chan/e 9' 201F
T3* ,&-(:*-, "-* %*,, 9$& ",4(-*-, "+) -(#3 "-* ,(2+(/(#"+& 3(23*- #.04"-*) &. 200F

37
R*"% "+) N.0(+"% G-.6&3
The tower interest rate re/i)e, risin/ #is*osa3le inco)es, sta3le *ro*erty *rices an# fiscal
incenti9es )a#e housin/ finance attracti9e 3usiness for co))ercial 3an(s. &urther, housin/
finance tra#itionally has 3een characteri:e# 3y low non*erfor)in/ assets %NP7s' an# /i9en the
9ast #e)an# for housin/ loans, al)ost at t the )a+or co))ercial 3an(s *lun/e# into the 3usiness
of housin/ finance. The ro3ust /rowth #urin/ the last #eca#e has 3een tri//ere# 3y a nu)3er of
factors, so)e of which are liste# 3elow4
P Ta8 re3ates on housin/ loans announce# consistently in the annual 3u#/ets of the country.
P &attin/ interest rates on ho)e loans4 &i8e# interest rates calculate# on an annual rest 3asis
for a loan of Rs. ! )illion for tenure of != years ha9e fatten fro) !>H in !99BA9? to 9.=H in
;00=A0>. &loatin/ rates for short )aturity housin/ loans are to#ay ho9erin/ in the ran/e of B.B=A
9.B=H.
P $reater a)ount of *rofessionalis) of the real estate #e9elo*ers an# 3uil#ers who are
ca*a3le of ac2uirin/ clearer titles an# co)*letin/ the *ro+ects on ti)e.
P 6orrowers can raise u* to !00 H of e9en !!0H %in which case the ten#ers *ro9i#e
financial assistance for the co)*lete *ro*erty 9alue, sta)* #uty, re/istration an# an a##itional
!0H is /i9en for the interior #ecorations' of their 3orrowin/ re2uire)ent fro) the ten#ers.
31
The Ho)e loan sector in In#ia is the *iA9otal role *layer in the /rowth of the real estate scenario
in In#ia. @ith ta8 incenti9es /i9en to the housin/ finance sector in the annual 3u#/et of ;00!,
transactions relate# to 3uyin/ an# sellin/ of resi#ential *ro*erties increase# consi#era3ly an#
was )uch hi/her as co)*are# to *re9ious years.
Since the new class of 3uyers are relati9ely youn/er set of custo)ers who are )ore aware a3out
le/al #ocu)entation an# a**ro9als, 3uyers are now )ore Sen#AusersS rather than in9estorsJ the
*ro*erty )ar(et in In#ia un#er/oes transfor)ation to ali/n itself with /lo3al stan#ar#s with an
increase# e)*hasis on 2uality M cost control an# #ocu)entation )etho#s. In the current
econo)y of In#ia, the real estate sector has the )a8i)u) *ro*ensity to /enerate inco)e an#
#e)an# for )aterials, e2ui*)ent an# ser9ices. It can 3e sai# that housin/ finance co)*anies
were for)e# for coAe8istin/ with 3uyerSs re2uire)ents of housin/ loans for in9estin/ in
*ro*erties. Ho)e loans are )a#e a9aila3le 3y financial institutions to 3oth In#ian an# NRI
custo)ers at floatin/ an# fi8e# rate of interest an# also at attracti9e EMI o*tions.
&or construction or 3uyin/ a new ho)e
&or ho)e re*airs an# reno9ations
&or *urchase of *lots
7/ainst )ort/a/e of *ro*erty
No ta8 3enefits are a9aila3le for NRI custo)ers unless you file returns an# there3y 3eco)e
eli/i3le to a9ail of the ta8 3enefits.
6esi#es ho)e loans, -o))ercial *ro*erty loans are also a9aila3le an# #ifferent financial
institutions in In#ia *ro9i#e co))ercial loans at #ifferent rates an# #ifferent u**er li)its.
Real estate loans are a9aila3le to 3uil#ers, *ro)oters an# real estate #e9elo*ers. The e8*erience
an# financial stan#in/ of the 3uil#ers is ta(en into account 3efore the loan is /rante# which is to
3e returne# with the )ini)u) install)ents.
To#ay, the a)ount of )oney that a city #weller s*en#s on rent is rou/hly the sa)e, or only
sli/htly less than the a)ount he *ays as an EMI on a housin/ loan. Earlier the ho)e loan sector
in In#ia was solely #e*en#ent on nationali:e# an# *u3lic sector 3an(s, 3ut the entry of *u3lic
sector 3an(s into the housin/ finance 3usiness )ar(e# the 3e/innin/ of the first roun# of interest
32
rate cuts. 7n# this re#uction in interest rates has enhance# the 3orrowin/ *ower of custo)ers.
Moreo9er, H&-s are offerin/ incenti9es to attract in9estors li(e
So)e co)*anies sanction the housin/ loan without re2uirin/ you to i#entify *ro*erty as
a *reAre2uisite for eli/i3ility
&ree acci#ent insurance M *ro*erty insurance
@ai9in/ of *reA*ay)ent *enalty
@ai9in/ of *rocessin/ fee
There are a few #ocu)ents which the finance co)*anies re2uire for settin/ u* criteria for
eli/i3ility of Ho)e loans.
S"%"-(*) E04%.'** S*%/-*04%.'*)
The latest salary sli* showin/ statutory
#e#uctions
-o)*utation of inco)e for the *re9ious two
years, certifie# 3y a -hartere# 7ccountant
&or) !> %showin/ ta8 #e#ucte# at source 3y
e)*loyer'
Profit M 0oss 7ccount an# 6alance Sheet for
the *re9ious two years, certifie# 3y a -hartere#
7ccountant
Proof of a/e %3irth certificateI9oter i#entity
car#I*ass*ortIschoolAlea9in/ certificateI9ali#
#ri9in/ license
Proof of a/e %3irth certificateI9oter i#entity
car#I*ass*ortIschoolAlea9in/ certificateI9ali#
#ri9in/ license'
Proof of resi#ence %*hone 3illIelectricity
3illIration car#'.
Proof of resi#ence %*hone 3illIelectricity
3illIration car#'.
24
The realty 3oo) in In#ia has /i9en a new #i)ension to the finance sector in In#ia A 3oth in
Ho)e 0oans an# Ho)e Insurance se/)ents. This has not only /i9en a co)*etiti9e e#/e to the
finance co)*anies to *ro9i#e attracti9e o*tions to custo)ers 3ut has also contri3ute# to the
increase# in9est)ents in the real estate sector. This has resulte# in !< new institutions forayin/
into the housin/ finance 3usiness in the last three years.
M"1.- H.0* L."+ P-.:()*-,
6an(s M Pu3lic
Sector Housin/
&inance
-o)*anies
State 6an( of In#ia, -or*oration 6an(, Pun+a3 National 6an(,
-entral 6an(, ena 6an(, 7llaha3a# 6an(, 6an( of Maharashtra,
6an( of 6aro#a Housin/ &inance, -an &in Ho)es, $I- Housin/
&inance, 0I- Housin/ &inance, PN6 Housin/ &inance, S6I Ho)e
&inance, -ent 3an( Ho)e &inance, HU-O, 0I-, etc.
&inancial
Institutions
H&-, I-I-I 0t#, -iti3an(, HS6-, Stan#ar# -hartere#A $rin#
lays, I6I 6an(, etc
H.0* L."+ P-.:()*-, (+ I+)("
Real estate in In#ia is currently one of the hottest in9est)ents o*tions in 7sia. 7 recent sur9ey of
the real estate scenario ac(nowle#/e the In#ian )etro*olis of Mu)3ai, 6an/alore an# New
elhi as the to* three in9estorsS choices for real estate in9est)ent in 7sia. 6ut there were
concerns )ainly relate# to the a9aila3ility of necessary fun#s for in9est)ent an# in the )ore
recent ti)es, the 3oo) in the real estate )ar(et o*ene# the #oors for a host of realty fun#s fro)
financial institutions. Prior to fi9e years, the real estate se/)ent in In#ia was neither or/ani:e#
nor were there too )any lar/e institutions in the construction in#ustry. 6ut now with an
or/ani:e# finance sector an# with the increase in trans*arency le9els, it has 3eco)e easier to
create financin/ 9ehicles.
The #ecrease in housin/ loan interest rates an# an increase of #is*osa3le inco)e has contri3ute#
lar/ely to an increase# #e)an# in the resi#ential se/)ent. In s*ite of a rise in ho)e loans interest
rates an# 2ualitati9e sanctions 3ein/ le9ie# 3y the R6I on 3an(s, 3uyin/ interest has not wane#
3ecause ho)e loans are still chea*er than ten years a/o. The retail )ar(ets are also un#er/oin/ a
#efinin/ chan/e with the intro#uction of lar/er retailin/ for)ats. The financial institutions also
waste# no o**ortunity in ta**in/ the fun# re2uire)ent caterin/ to the inflow of *otential 3uyers
in the retail sector. @hile )ost fun#s were initially floate# 3y financial Institutions or 3an(s such
as H&-, I-I-I 6an( an# I6I 6an( to na)e a few, real estate #e9elo*ers li(e 0& Uni9ersal
23
an# e9en retailers such as Pantaloons Retails %In#ia' ha9e now entere# the real estate sector for
creatin/ )ore retail facilities an# ha9e 3een hu/ely successful.
7s the realty *rices in In#ia s(yroc(ets, housin/ co)*le8es )ushroo)in/ an# city lan#sca*es
3eco)in/ unreco/ni:a3le, the /rowth across all real estate se/)ents an# e8*erts esti)ate that
#e)an# will re)ain stea#y at the currently hi/h le9els 3ecause of the i)*ro9in/ econo)ic
en9iron)ent an# the real estate sector is e8*ecte# to /row <0H e9ery year. This risin/ *ro*erty
*rices encoura/e 3an(s an# financial institutions to len# )ore with the increase in collateral
9alues. 7lthou/h the ho)e loan *ro9i#ers ha9e hi(e# their rates twice in less than three )onths,
ho)e loans continue to 3e nearly "= *er cent chea*er than what they were in early ;00!. 6ecause
if statistics are referre# to, the interest rates which now ran/e 3etween 9A!0 *er cent, are still
)uch lower than what they were ten years a/o, at !>A!B *er cent.
In a##ition to fun#s 3ein/ raise# 3y the In#ian financial institutions li(e H&-, I-I-I an# I&-
a3roa#, the )oney coul# 3e use# to #e9elo* 3usiness an# IT *ar(s an# townshi*s. 7 stu#y has
re9eale# that as )any as one )illion ho)es are finance# e9ery year in In#ia now with an
esti)ate# ho)e )ort/a/es )ar(et of UST !0.B 3illion A contri3utin/ to In#iaSs *heno)enal
realty *ros*ect.
T"8 B*+*/(&, .+ H.0* L."+,
7s the In#ian real estate )ar(et )a(es an u*war# swin/, an# in9estors o*t for housin/ finance
or ho)e loans, ta8 3enefits o3taine# fro) the) is a lucrati9e o*tion. -usto)ers a9ailin/ of
Ho)e 0oans can clai) a certain *ortion of the interest an# *rinci*al that they *ay towar#s the
loan install)ents for re#ucin/ ta8 lia3ility. Resi#ent In#ians are eli/i3le for certain ta8 3enefits
on *rinci*al an# interest co)*onents of a loan un#er the Inco)e Ta8 7ct, !9>!. Moreo9er, an
a##e# ta8 3enefits un#er Sec ?0 - on re*ay)ent of *rinci*al a)ount u* to Rs. !,00,000 *.a. can
3e a9aile# that can further re#uce your ta8 lia3ility 3y a3out Rs. <0,000 *.a.
Ta8 3enefits can 3e clai)e# on 3oth the *rinci*al an# interest co)*onents of the ho)e loan as
*er the Inco)e Ta8 7ct, !9>!. These #e#uctions are a9aila3le to assesses, who ha9e ta(en a loan
to either 3uy or 3uil# a house, un#er Section ;"%3'. Interest on 3orrowe# ca*ital is #e#ucti3le u*
to Rs !=0,000 if the followin/ con#itions are satisfie#4
-a*ital is 3orrowe# on or after 7*ril !, !999 for ac2uirin/ or constructin/ a *ro*erty.
The ac2uisitionIconstruction shoul# 3e co)*lete# within < years fro) the en# of the
financial year in which ca*ital was 3orrowe#.
The *erson, e8ten#in/ the loan, certifies that such interest is *aya3le in res*ect of the
a)ount a#9ance# for ac2uisition or construction of the house
22
7 loan for refinance of the *rinci*le a)ount outstan#in/ un#er an earlier loan ta(en for
such ac2uisition or construction.
If the con#itions state# a3o9e are not fulfille#, then the interest on 3orrowe# ca*ital is #e#ucti3le
u* to Rs <0,000 thou/h the followin/ con#itions ha9e to 3e satisfie#4
-a*ital is 3orrowe# 3efore 7*ril !, !999 for *urchase, construction, reconstruction
re*airs or renewal of a house *ro*erty.
-a*ital shoul# 3e 3orrowe# on or after 7*ril !, !999 for reconstruction, re*airs or
renewals of a house *ro*erty.
If the ca*ital is 3orrowe# on or after 7*ril !, !999, 3ut construction is not co)*lete#
within < years fro) the en# of the year, in which ca*ital is 3orrowe#.
In a##ition to the a3o9e, *rinci*al re*ay)ent of the loanIca*ital 3orrowe# is eli/i3le for a
#e#uction of u* to Rs !00,000 un#er Section ?0- fro) assess)ent year ;00>A0B.
T*-0, "+) #.+)(&(.+, /.- ":"(%(+2 T"8 9*+*/(&, .+ H.0* L."+,
!. Ta8 #e#uctions can 3e clai)e# on housin/ loan interest *ay)ents, su3+ect to an u**er
li)it of Rs !=0,000 for a financial year. Interest on the fresh loan can 3e clai)e# as a
#e#uction, su3+ect o the state# u**er li)it.
;. 7n a##itional loan for e8tensionIa##ition to the sa)e house an# the *ersonSs #e#uctions
on the e8istin/ loan are less than Rs !=0,000J he can clai) further 3enefits fro) the
a##itional loan ta(en, su3+ect to the u**er li)it of Rs !=0,000 for a financial year.
<. Ta8 3enefits un#er Section ;" an# #e#uction un#er section ?0- of the Inco)e Ta8 7ct
can 3e clai)e# only when the *ay)ent is )a#e. If a *erson fails to )a(e EMI *ay)ents,
he cannot clai) ta8 3enefits for the sa)e.
". 7ccor#in/ to the Inco)e Ta8 7ct, only the *erson who has ta(en the loan can clai) ta8
re3ates.
=. The interest on ho)e loans ta(en for re*airs, renewals or reconstruction, also 2ualifies for
the #e#uction of Rs !=0,000.
>. 7 hus3an# an# wife, 3oth of who) are ta8A*ayers with in#e*en#ent inco)e sources, /et
ta8 #e#uction 3enefits, with res*ect to the sa)e housin/ loanJ to the e8tent of the a)ount
of loan ta(en in their own res*ecti9e na)e.
B. If a *erson 3uys a house an# sells it within the sa)e yearIafter < years, an# if any *rofit is
)a#e, then a ca*ital /ains ta8 lia3ility arises on the sa)e for which the in#i9i#ual is
lia3le to *ay shortAter) ca*ital /ains ta8 since the sale too( *lace in the sa)e year. 6ut, if
23
the sale ha# ta(en *lace after < years, then a lon/Ater) ca*ital /ains ta8 lia3ility woul#
ha9e arisen.
?. If it is *ro9e# that the ho)e loan is si)*ly an arran/e)ent 3etween the loanAsee(er an#
the 3uil#er or with a thir# *arty for the *ur*ose of clai)in/ ta8 3enefits, then ta8 3enefits
will not 3e allowe# an# 3enefits, *re9iously clai)e#, will 3e clu33e# to the inco)e an#
ta8e# accor#in/ly.
9. Ta8 3enefits on interest on housin/ loans are allowa3le only for the ori/inal loan an# for
a secon# loan ta(en to re*ay the first loan an# not for su3se2uent loans. This )eans that
if you ha9e alrea#y a9aile# of one loan to refinance the ori/inal loan an# want to now
a9ail a thir# loan to refinance the secon# loan, ta8 re3ate on interest *ay)ents will not 3e
*er)issi3le. This is 3ecause the Section ;" %!' only tal(s of the secon# loan an# not of
su3se2uent loans. E9en if you ta(e the secon# loan at a rate of interest hi/her than the
ori/inal loan, you will 3e eli/i3le for a ta8 re3ate on the secon# loan.
24
25(,36"7-('" H.$,(+2 F(+"+#* L&)
C.04"+' B"#72-.$+)
.ishwa(riya Housin/ &inance 0t#. %.H&0' is a *u3lic li)ite# co)*any incor*orate# in ;000
with the Re/istrar of -o)*anies %Re/n No.4 ==A!0"9=>'.
It is a Housin/ &inance -o)*any %H&-' re/istere# an# re/ulate# 3y the National Housin/ 6an(
%NH6', a wholly owne# su3si#iary of the Reser9e 6an( of In#ia. .H&0 was re/istere# in ;00;
3y the NH6, an# su3se2uently issue# with *er)ission to raise *u3lic #e*osits %-ertificate of
Re/istration No. 0!.00=9.0" #ate# B Octo3er ;00"'. .H&0 is one of only a3out ;0 H&-s issue#
with such *er)ission as of #ate.
The -o)*any o*erates two satellite offices for *ur*ose of loan ori/ination an# client ser9ice in
Palwal an# $ur/aon, 3oth within elhi N-R. It is antici*ate# that this networ( of ser9ice
centres, su**orte# 3y the controllin/ 3ranch in elhi %South E8tension, NSEAII', will /row
further in the followin/ year as #is3ursals /row in the core )ar(et of elhi N-R, as well as in
Cai*urA7lwar %Ra+asthan' an# 6hu3aneswarA-uttac( %Orissa'.
The -o)*any has recently ta(en u* a new cor*orate office in $reen Par(, New elhi.
B-(*/ "9.$& P-.0.&*-, "+) D(-*#&.-,
The co)*any, at the ti)e of incor*oration, was *ro)ote# 3y se9en #irectors.Presently, the 6oar#
has !0 )e)3ers, co)*risin/ nota3le in#i9i#uals retire# fro) the ci9il ser9ice %In#ian
7#)inistrati9e Ser9ice, In#ian 7u#it an# 7ccounts Ser9ice, etc.' as well as youn/ *rofessionals
hol#in/ en/ineerin/ an# )ana/e)ent #e/rees. The 6oar# /ui#es the )ana/e)ent 3y *ro9i#in/
strate/ic in*ut an# o9ersi/ht, re9iewin/ *erfor)ance, ensurin/ /o9ernance an# co)*liance, as
well as authorisin/ (ey #ecisions. It acts in the lon/ ter) interests of sharehol#ers of the
-o)*any, an# to this en#, o9ersees )ana/e)ent.
T3* S3"-*3.%)(+2
The -o)*anyEs e2uity is closely hel#, with four sharehol#er /rou*s ownin/ o9er ?=H of the
-o)*any. The co)3ine# sharehol#in/ of irectors with fa)ilies is o9er >?H. The Mana/in/
irector, alon/ with fa)ily hol#s su3stantial sta(e, an# therefore ali/n)ent in lon/ ter)
o3+ecti9es 3etween owners an# )ana/e)ent is assure#, an# the -o)*any #oes not ta(e an
un#uly short ter) 9iew of its 3usiness.
25
G-.6&3 (+ S"+#&(.+ "+) D(,9$-,*0*+&,
is3ursals ha9e /rown at a -o)*oun# 7nnual $rowth Rate %-7$R' of >BH since ince*tion,
a/ainst an in#ustry -7$R of a3out ;=H as in#icate# in NH6 annual re*orts.
Rs, %"cs
LOANS
SANCTIONED
2004-
05
2005-
0
200-
0!
200!-
0"
200"-
0#
200#-
10$%&'.1
0( 200#-10E
HUSIN5 6O7NS 343*33 236*3 337*3 22*44 72*44 673*66 3434*23
NON0HOUSIN5 6O7NS 24*64 36*54 55*75 64*25 35*25 24*23 332*32
CU)ULATIVE TOTAL 11.#5
3#4.!
5
!"!."0 #4!.!
5
1055.!
0 1!51.5! 21!".#5

LOANS DISBURSED
2004-
05
2005-
0
200-
0!
200!-
0"
200"-
0#
200#-
10$%&'.1
0( 200#-10E
HOUSIN5 6O7NS 336*13 232*1 253*25 22*44 36*25 673*66 3434*23
NON0HOUSIN5 6O7NS 24*63 36*5 47*75 64*25 33*45 24*23 332*32
CU)ULATIVE TOTAL
15!.4
2
3".!
2 "!.!2
"4!.
! "#!.3! 15#3.24

2020.2
The o'tst"nding %o"n porto%io st"nds "t Rs 3222*75 %"cs "s o 33 8"n'"r# 2434*
LOAN
PORTFOLIO
2003-
04
2004-
05
2005-
0
200-
0!
200!-
0"
200"-
0#
200#-
10
$%&'.1
0(
200#-
10E
Ho'sing 241*62 216*64 372*37 544*57 572*33 542*56
3343*4
3
3632*14
Non0Ho'sing 25*53 7*47 31*33 62*65 347*7 324*63 332*32 372*24
TOTAL 234.15 2#4.11 3#!.50 10.22 "."1 30.1 1222.!1!#2.0
26
! 5 0
G-.6&3 (+ P-./(&"9(%(&'
The -o)*any has 3een *rofita3le since ince*tion, showin/ EPS of Rs 0.?= in ;00BA0? an# Rs
!.;" in ;00?A09. Post ta8 *rofita3ility has /rown at a -7$R of ?=H since ;00<A0", which
#e)onstrates the soun#ness of the -o)*anyEs 3usiness )o#el.
27
21 SWOT ANALYSIS
21
PART 1
F THE E?ISTING CREDIT PROCESS
22
F1 I+&-.)$#&(.+
The co!p"n# pri!"ri%# t"rgets the MI5s +ith %o"n re9'ire!ent o "&o't Rs* 70
34 %"-hs* T#pic"%%#, s'ch c'sto!ers "%% in the e"rning &r"c-et o Rs* 306 %"-hs
per "nn'!* The co!p"n# is "%so t"rgeting 'pco!ing to+ns "nd se!i0'r&"n
"re"s "s the t"rgeted c'sto!er &"se is expected to &e o'nd in these "re"s
in "&'nd"nce*
F2 M"-7*& S&-"&*2'
:H;6 is oc'sed on the <ne+%# &"n-"&%e= seg!ent o the !"r-et, i*e* those
%o+er>!id !idd%e inco!e ho'seho%ds th"t "re ne+%# entering the or!"%
.n"nci"% ser(ices sector "s c'sto!ers* The ?o!p"n# "i!s to !eet their
d+e%%ing needs in ter!s o &'#ing " p%ot, or " constr'cted ho'se or @"t,
t#pic"%%# in " Tier II or Tier III 'r&"n "re"* The t#pic"% si/e o ho'sing %o"ns the
?o!p"n# "d("nces h"s &een in the r"nge o Rs 5034 6, "%tho'gh it is %i-e%# to
go 'p in the co!ing #e"rs* The ?o!p"n# "d("nces non0ho'sing %o"ns "s
+e%%, +ithin NHA g'ide%ines, &'t these "re " s!"%% percent"ge o its &'siness*
The pro!otion"% "cti(ities the co!p"n# +ishes to 'ndert"-e in 't're0
o 7ppropri"te 'se o e%ectronic "nd print !edi"
o ?o0 hosting "nd sponsoring propert# exhi&itions
o Tie 'ps +ith de(e%opers
o ?'sto!er ed'c"tion thro'gh ree inor!"tion
o 7ppropri"te credit inr"str'ct're
o Ne+s%etters pro(iding -e# insights into &'siness ch"%%enges "nd oBering
so%'tions to the!
o Stress on the "ct th"t the &est ind'str# pr"ctices "re o%%o+ed in the
co!p"n#
o The processes o%%o+ed "re c'sto!er oriented
o P"# speci"% "ttention to needs o c'sto!ers in t"rget "re"s, design
"ppropri"te oBerings "nd "d(ertise the! "t the e"r%iest
FF T3* E8(,&(+2 C-*)(& P-.#*,,
The *rocess of /ettin/ a ho)e loan starts with a for)al a**lication for the loan. This
inclu#es *ersonal, resi#ential, inco)e, e)*loy)ent, e#ucational #etails, #etails a3out the
*ro*erty, esti)ate# costs an# current )eans of financin/ the *ro*erty.
The a**lication for) )ust 3e su**orte# with 9ali# #ocu)ents to su3stantiate the facts.
$enerally the co)*any as(s to su3)it followin/ #ocu)ents.
34
Inco)e *roof
7/e *roof
I#entity *roof
7##ress *roof
E)*loy)ent #etails
Proof of e#ucational 2ualifications
etails a3out the *ro*erty if finali:e#
6an( state)ents
The *ur*ose of the entire e8ercise is to ascertain the suita3ility of a a**licant for a ho)e loan.
The inco)e #ocu)ents an# 3an( state)ents *ro9i#e 9ital clues to the 3an( re/ar#in/ a**licantEs
financial health.
5"%$"&(.+ "+) :*-(/(#"&(.+ ./ 3.0* %."+ "44%(#"+&
7fter a**lyin/ successfully for the ho)e loan an# su3)ittin/ the *rocessin/ fees, the co)*any
e9aluates a**lication, #eci#es in *rinci*al a3out ho)e loan an# re2uires a *ersonal )eetin/.
This #ecision for *ersonal interaction is ta(en within ;A< #ays of su3)ittin/ a co)*lete
a**lication. The *ur*ose of this *ersonal interaction is to (now )ore a3out the 3orrower an# his
re*ay)ent ca*acity.
Satisfie# 3y a**lication an# *ersonal interaction, the co)*any *rocee#s to 9erify all the facts
that are )entione# in the a**lication for ho)e loan. 7 fiel# in9esti/ation *rocess is initiate# A to
confir) an# 9ali#ate e9erythin/ state# in the a**lication for). Qualifie# re*resentati9es are sent
to a**licantEs office an# *lace of resi#ence to ascertain the facts. The references *ro9i#e# in the
a**lication are cross chec(e# an# 9erifie#.
5*-(/(#"&(.+ ./ -*4"'0*+& #"4"#(&'
Once the fiel# in9esti/ations o9er, the co)*any /oes ahea# to 9erify re*ay)ent ca*acity. This is
the )ost 9ital *art of any ho)e loan *rocess. If the co)*any fin#s that allSs well an# is
con9ince# 3y a**licantEs re*ay)ent ca*acity, it sanctions the ho)e loan.
O//*- %*&&*- /.- 3.0* %."+
The co)*any then *re*ares an offer letter which contains the followin/ #etail4
The a)ount of ho)e loan sanctione#
33
The interest rate a**lica3le on your ho)e loan
@hether the interest rate is fi8e# or floatin/
Nour ho)e loan tenure
The )o#e of re*ay)ent of the ho)e loan
If any s*ecial sche)e a**lies to the ho)e loan, its #etails
The ter)s an# con#itions associate# with the ho)e loan
If the a**licant fin#s the offer attracti9e an# a/ree with all the facts )entione# in the offer letter,
then *ro9i#es an acce*tance co*y to the co)*any.
5*-(/(#"&(.+ ./ &3* 4-.4*-&'
The co)*any 9erifies the *ro*erty in 2uestion. The ho)e loan is a secure# loan with the
*ro*erty 3ein/ use# as the security or collateral. So, the ori/inal #ocu)ents of the *ro*erty are
su3)itte# to the co)*any. The title #ee#s, noAo3+ection certificates an# other #ocu)ents
re2uire# 3y the co)*any are to 3e su3)itte# in ori/inal an# the co)*any (ee*s the) safely until
the entire loan a)ount is re*ai#. 7fter ta(in/ the *a*ers, co)*any con#ucts a le/al chec( so as to
9erify that the *ro*erty has a clear title an# the ho)e loan is 3ein/ #is3urse# to the ri/ht *erson
an# for the ri/ht reasons.
7lon/ with the le/al chec(, co)*any also sen#s e8*erts to the location of the *ro*erty to
con#uct a technical 9aluation. If the *ro*erty is un#er construction, the co)*any 9erifies the
sta/e of construction, 2uality of construction, *ro/ress of construction, locality etc. an# e9aluate
the *ro*erty on esta3lishe# *ara)eters. In case where the *ro*erty is rea#y or is 3ein/ resol# the
co)*any 9erifies the ownershi*, )aintenance, a/e of *ro*erty, 2uality of construction, locality
an# re2uire# le/al clearances.
The sole *ur*ose of all this e8ercise is to ensure that the *ro*erty has a clear title, is technically
soun# an# )eets the 9aluation stan#ar#s of the co)*any.
T3* )(,9$-,"% ./ 3.0* %."+
Once the for)alities are co)*lete# an# the co)*any is satisfie# with the le/al, technical an#
financial 9aluation of the *ro*erty, the re/istration *rocess for the ho)e loan 3e/ins. The le/al
#ocu)ents are to 3e *re*are# on sta)* *a*ers of re2uire# #eno)inations in a for)at a**ro9e#
3y the co)*anySs lawyer. The ho)e loan a/ree)ent is then si/ne# an# the *ost #ate# che2ues
are su3)itte# for the a/ree# ter). 7fter the ho)e loan a/ree)ent the loan #is3ursal *rocess
3e/ins. e*en#in/ on the ho)e loan *ur*ose, an# the a/ree# ty*e of #is3ursal %lu)* su) or in
sta/es', co)*any #is3urses the ho)e loan a)ount.
32
PART 2
4 THE PROPOSED CREDIT PROCESS
33
41 OB!ECTI5E
-urrently, the co)*any has an ERP syste) that can only )aintain the #ata3ase for not a 9ery
lar/e nu)3er of clients an# it can /enerate the EMI sche#ules of the clients. It is not e2ui**e#
to han#le the wor( loa# of a lar/e nu)3er of clients. Since the co)*any wants to e8*an#, it
nee#s a ro3ust syste) to hel* it co*e with wor( *ressures as well as hel* in ensurin/
co)*liance an# s)ooth functionin/ of the co)*any. It woul# also hel* in )onitorin/
co)*anyEs *erfor)ance an# (ee* a ti/ht control o9er 9arious *rocesses. The co)*any wants
that the ERP syste) shoul# 3e a3le to *erfor) the followin/ functionsA
ERP ", " 0.+(&.-(+2 "+) #.+&-.%%(+2 ,',&*0:
1 M"(+&"(+ " )"&"9",* ./ %"-2* +$09*- ./ #%(*+&,
This is necessary since with e8*an#in/ o*erations, the clientele woul# also increase.
@ithout the ai# of an efficient ERP syste), it woul# 3e #ifficult to /et access to client #ata3ases
an# thus, efficiency woul# /o #own.
2 F$+#&(.+ "#-.,, &3* :"-(.$, 9-"+#3*,
@ith e8*an#in/ o*erations, there woul# 3e 3ranches at #ifferent *laces. To inte/rate the #ata
an# ha9e a har# loo( at the functionin/ of the co)*any, an efficient ERP is nee#e#
F P-.:()(+2 -*4.-&, .+ " )"(%', 6**7%', 0.+&3%', B$"-&*-%', 3"%/ '*"-%' "+) "++$"%%'
This is necessary to *re9ent financial )is)ana/e)ent an# also )onitor the co)*anyEs
functionin/
4 C.04"-"&(:* 4-*,*+&"&(.+ "#-.,, :"-(.$, 4"-"0*&*-,
7i#s 9arious ty*es of analysis an# also hel*s in fatho)in/ o**ortunities an# *ro3le) areas
D R*")' 6(&3 #$--*+& ,&"&$, ./ "%% #%(*+&,
This is nee#e# to re#uce ti)e ta(en to *erfor) 9arious tas(s an# thus, increase efficiency
G G(:(+2 (+/.-0"&(.+ "9.$& #%(*+&, "44-."#3(+2 &3*(- -*4"'0*+& )"&*,, &3* #3*B$* +.,
"0.$+&, 9"+7 "+) 9-"+#3 )*&"(%,, *&#
This ai#s the collection *rocess
H M"(+&*+"+#* ./ "%% "##.$+&, ", 6*%% ", #"%#$%"&(+2 &3* )$*,, "--*"-, .- "+' .&3*-
4"'0*+&, &3"& " #%(*+& (, -*B$(-*) &. 4"'
C G*+*-"&(+2 ,+"4,3.&, "9.$& #.%%*#&(.+,, 6.-7 (+ 4-.2-*,,, +*6 #%(*+&, "))*) "+) )*/"$%&*-,
.+ " 6**7%' 9",(,
This is nee#e# to (ee* the functionin/ of the co)*any s)ooth an# soun# as well as (ee*
efficiency le9els hi/h. It can also 3e an in#icator towar#s future issues an# can also tell a3out
the chin(s in #ifferent *rocesses an# also if so)e *rocesses are not 3ein/ *ro*erly *erfor)e#
34
42 THE PROCESS MAP
35
36
37
31
32
44
43
42
CREDIT PROCESS
STEP 1
ON LOAN RE*UEST $KNOW YOUR CUSTO)ER(
O91*#&(:*:
To lay #own e8*licit criteria for acce*tance of custo)ers.
To )onitor hi/h 9alue cash transactions an# Ior transactions of sus*icious nature.
To #e9elo* )easures for con#uctin/ #ue #ili/ence in res*ect of custo)ers an# re*ortin/
of such hi/h 9alue transactions.
To )ana/e the ris(.
P-.#*)$-* :
On /ettin/ a loan re2uest fro) the sales e8ecuti9e, the tea) )ana/er I a**raisal officer
shoul# #o the followin/.
I#entify the source whether itEs throu/h referral, a#9ertise)ent, sales tea) or #irect sales
associate M enter in the ERP syste).
-onfir) the a9aila3ility of <YC %Know Nour -usto)er' #etails an# the financial
#ocu)ents as )entione# in the chec(list in the ne8t ste*.
7s( for lo/in fees %Rs. ;=00 U Ser9ice ta8'
F(%%(+2 $4 ./ &3* "44%(#"&(.+ /.-0, 4*-,.+"% )(,#$,,(.+ "+) #.%%*#&(.+ ./ ,$44.-&(+2
).#$0*+&
OB!ECTI5E:
To 9erify the i#entity an# Ior o3tain #ocu)ents re2uire# for the ris( cate/ori:ation.
To ensure that the i#entity of the custo)er #oes not )atch with any *erson with (nown
cri)inal 3ac(/roun# or with 3anne# entities such as in#i9i#ual terrorists or terrorist
or/ani:ations, etc.
To *re*are a *rofile for custo)ers 3ase# on ris( cate/ori:ation. %The custo)er *rofile
)ust contain infor)ation relatin/ to the custo)erEs i#entity, socialIfinancial status,
nature of 3usiness acti9ity, infor)ation a3out his clientsE 3usiness an# their location, etc.
The nature an# e8tent of #ue #ili/ence will #e*en# on the ris( *ercei9e# 3y the co)*any.
Howe9er, the see(in/ of such infor)ation )ust not 3e intrusi9e an# the -o)*any )ust
not use such confi#ential infor)ation cross sellin/ or any other *ur*oses'.
43
PROCEDURE:
-ate/ori:e the custo)ers accor#in/ to the ris( *ercei9e# to facilitate un#erta(in/ #ue
#ili/ence for the *ur*ose of ris( cate/ori:ation.
(() $o% &is'
0ow Ris( in#i9i#uals are those in#i9i#uals %other than hi/h net worth' an# entities whose
i#entities an# sources of wealth can 3e easily i#entifie# an# the transactions in whose
accounts 3y an# lar/e confir) to (nown *rofile. 0ow 1 ris( custo)ers will inclu#e
salarie# e)*loyees whose salary structures are well #efine#
*eo*le 3elon/in/ to lower econo)ic strata of the society whose accounts show s)all
3alances an# low turno9er
((() (edium &is'
The )e#iu) an# hi/h ris( custo)ers will 3e cate/ori:e# on the 3asis of the custo)erEs
3ac(/roun#, nature an# location of acti9ity, country of ori/in, sources of fun#s an# client
*rofile. Me#iu) Ris( custo)ers will inclu#e.
NonA resi#ent custo)ers.
hi/h net worth in#i9i#uals.
(((() )igh &is'
Hi/h ris( custo)er will ty*ically inclu#e
*olitically e8*ose# *ersons %PEPs' .
*ersons with #u3ious re*utation as *er *u3lic infor)ation a9aila3le.
*ersons whose sources of inco)e are not clear.
7ccounts of such custo)ers shoul# 3e su3+ect to intensi9e #ue #ili/ence.
7t the ti)e of fillin/ u* of the a**lication for) the co*ies of the )an#atory #ocu)ents
re2uire# as )entione# in the chec(list )ust 3e collecte# 3y the sales e8ecuti9e.
44
C3*#7%(,& ./ ).#$0*+&, &. 9* #.%%*#&*)
MANDATORY DOCUMENTS I <YC DETAILS
" R*,()*+#* P-../
&or resi#ence *roof the followin/ #ocu)ents shoul# 3e collecte#. %S*%/ "&&*,&*) c.4' ./
"+' .+*' later to 3e 9erifie# with the ori/inals 3y the 9erification officerIin char/e 3efore
a**raisal as )entione# in the 9erification ste*.
Ration car#
Pass*ort
Tele*hone 3ill
Electricity 3ill
6an( state)ent
9 I)*+&(&' P-../
&or i#entity *roof collect (S*%/ "&&*,&*) #.4' ./ "+' .+*' later to 3e 9erifie# with the
ori/inals an# concerne# authorities as )entione# in the 9erification ste*.
P7N %*er)anent account nu)3er' -ar#
ri9in/ license
Election I#entity -ar#
Pass*ort.
F(+"+#("% D.#$0*+&,
1) F.- S"%"-(*) (S*%/ "&&*,&*) #.4' ./ "%% ./ &3* /.%%.6(+2)
Salary sli*s of last < )onths.
0atest &or) A!>. If salary a3o9e Rs.!=, 000 *.).
-o*y of 3an( State)ent of salarie# account or any other 3an( account for last > )onths.
-o)*any *rofile if it is a lesser (nown or/ani:ation.
0oan state)ent with current outstan#in/ 3alance an# o9er#ue if any an# re*ay)ent
sche#ule.
2) F.- S*%/-*04%.'*) 4-./*,,(.+"%, (S*%/ "&&*,&*) #.4' ./ "%% ./ &3* /.%%.6(+2)
0ast < years IT returns of the a**licant alon/ with co)*utation of inco)e self atteste#.
0ast three years 6alance sheet an# Profit M loss 7I- of the fir) self atteste#.
6rief 6usiness Profile on letterhea# of the fir) 3y the a**licant.
7ll 3an( state)ents for last ! yr for sa9in/ 7I- an# -urrent 7I-.
Sho* M Esta3lish)ent 0icenseIre/istrationI.7T re/istrationIany other )an#atory license.
Partnershi* #ee# %if a**lica3le'
TS certificate i.e. &or) !>A7%if a**lica3le'
etails of )a+or financial transactions with the clients %if a**lica3le'
7#9ance ta8 *ai#Iself assess)ent ta8 *ai# challan.
45
F) F.- S*%/-*04%.'*) 9$,(+*,, (C.4' ./ "%% ./ &3* /.%%.6(+2)S*%/ "&&*,&*)
0ast < yrs inco)e ta8 return with co)*utation of inco)e self atteste#.
0ast < yrs 6alance sheet an# Profit M 0oss 7I- of the co)*any self atteste#.
6rief 3usiness *rofile on the letter hea# of the co)*any.
7ll 3an( state)ents for last ! year for sa9in/ 7I- an# current 7I-.
If P9t. 0t# then MOU
etails of contracts un#erta(en #urin/ last ; yrs.%If a**lica3le'
GENERAL DOCUMENTS
" G*+*-"% ).#$0*+&, (/.- "%% F #"&*2.-(*, ./ "44%(#"+&, (* ,"%"-(*), ,*%/-*04%.'*),
9$,(+*,,)
Recent Pass*ort si:e *hoto/ra*hs of the a**licant as well as the coAa**licant.
etails of e8istin/ loan %loan outstan#in/, total no4 of install)ents an# 3alance no4 of
install)ents with sche#ule.'
Pro*erty #ocu)ents of the *ro*ose# *ro*erty alon/ with necessary a**ro9al M chain
title.
9 G*+*-"% ).#$0*+& (/.- ,"%"-(*))
-o*y of e)*loyee I#entity -ar# %to 3e 9erifie# with ori/inal at the 9erification ste*.'
# G*+*-"% ).#$0*+&, (/.- ,*%/ *04%.'*) 4-./*,,(.+"%,) (C.4' ./ "%%) to 3e 9erifie# with
ori/inal at the 9erification ste*.
Professional Qualification certificate.
Practice -ertificate.
Salary certificate%in case of ha9in/ salarie# inco)e'
) G*+*-"% ).#$0*+& (/.- ,*%/ *04%.'*) 9$,(+*,,)
-o*y of list of clients.
NOTE: C.%%*#& &3* L.2(+ /**I#3"-2*, 9*/.-* &3* (+&*-:(*6 (, #.+)$#&*)
F(8 &3* (+&*-:(*6
46
The inter9iew is fi8e# after the lo/in fee is collecte#. The sales e8ecuti9e fi8es the
inter9iew of the a**licant with the tea) )ana/er *refera3ly at hisIher resi#enceIwor(
*laceI3ranch office.
7lso the a**licant nee#s to 3e infor)e# to 3rin/ the ori/inals of the #ocu)ents su3)itte#
with the a**lication for 9erification.
INTERVIEW
I+&*-:(*6 ./ &3* "44%(#"+&,
OB!ECTI5E:
To 9erify the #etails furnishe# 3y the a**licant in the a**lication for) , #ocu)ents
su3)itte# an# #urin/ the *ersonal #iscussion are consistent.
To assess the attitu#e of the a**licantIs M elicit a##itional infor)ation.
PROCEDURE
7fter the #ocu)ents are collecte#, the tea) )ana/er con#ucts the inter9iew of the
a**licants either at his wor( *lace or resi#ence or 3ranch office.
It shoul# 3e #one within ; #ays of the filin/ of the #ocu)ents. The Inter9iew
sheet shoul# 3e attache# alon/ with the for) as *er the for)at an# han#e# o9er to the
a**raisal officer.
E,,*+&("% P.(+&, &. 9* *:"%$"&*) 63(%* (+&*-:(*6(+2 "44%(#"+&
7 #iscussion Iinter9iew sheet has to 3e fille# u* 3y the tea) )ana/er an# *ut on recor#
with his o3ser9ations.
The #iscussionIinter9iew sheet )ust contain the followin/ infor)ation
Present acco))o#ation I co))unication a##ress with PIN-OE.
Ty*e of acco))o#ation shoul# 3e foun# as to whether it is %own, rental, *arental'.
Per)anent acco))o#ation with PIN-OE shoul# 3e recor#e#.
No. of #e*en#ants with their inco)e, a/e, health issues li(e *rolon/e# illness an#
e#ucation )ust 3e recor#e#.
E)*loy)ent history )ust 3e (nown li(e 4
Present ate of +oinin/4
Present esi/nation4
Presently re*ortin/ to4
47
Recor# the *ast e8*erience as well.
0ist of asset #etails li(e *arental *ro*erty, a/ricultural lan#, consu)er #ura3les, 9ehicles,
other than current *ro*erty.
0ist of lia3ilities #etails li(e loan a9aile# fro), current outstan#in/ a)ount an# no4 of
EMI, re*ay)ent sche#ule M any loan closure trac( recor#.
-hec( clients 6an(in/ ha3it4
Salary recei9e# throu/h 1cashIche2ue.
Salary 9ariance4 %If any'
0i(e 3i/ cash flows an# fun# transfers fro) un(nown accounts
The a3o9e nee#s to 3e 9erifie# fro) the 3an( state)ents.
$et the infor)ation of the *ro*erty to 3e finance# li(e4 lan#)ar(, lan# area, 3uilt u*,
)ar(et 9alue.
7s( for collateral security li(e 0ife Insurance Policy, NS- an# &s .etc. if a9aila3le.
V+,-./&0-1'
5ERFICATION OF <YC DETAILS AND OTHER DOCUMENTS
OB!ECTI5E:
To ensure the authenticity of all the infor)ation furnishe# 3y the a**licant in the
a**lication for), su3)itte# #ocu)ents, #urin/ *ersonal #iscussion an# inter9iew.
PROCEDURE4
1 R*,()*+#* 5*-(/(#"&(.+: This can 3e #one 3y fiel# e8ecuti9eIsales e8ecuti9e 3y *ersonal
9isit an# ca*turin/ infor)ation as4
The #uration of stay.
No4 of fa)ily )e)3ers.
0ife style %9ehicle )aintaine#, )o3ile 3ran#s, furniture, other a**liances, tra9ellin/
)o#e %*u3licI*ri9ate'.
0ocality.
7ccessi3ility of the a##ress.
7lso the a##ress 9erification li(e house no4Ilan#)ar( nee#s to 3e recor#e#.
-hec( the a##ress with the tele*hone 3ills, electricity 3ills, ration car# an# election
I#entity car# or rental lease a/ree)ent.
2 P3.&. I)*+&(&' :*-(/(#"&(.+ :
41
D-(:(+2 %(#*+,*: The *hotoco*ies of ri9in/ license shoul# 3e 9erifie# 3y the ori/inal
an# if #ou3t, it can 3e cross chec(e# with the res*ecti9e RTO. -o)*are the *hoto/ra*h M
si/nature.
E%*#&(.+ I #"-): .erify 3y the ori/inal. -hec( the I car# No4 *hoto, na)e, a/e, a##ress,
*lace of issue an# #ate of issue.
P",,4.-&: .erify 3y the ori/inal an# in case of #ou3t /et it 9erifie# fro) the R*2(.+"%
P",,4.-& O//(#* or fro) their official we3site.
P*-0"+*+& A##.$+& N$09*- C"-): To 3e 9erifie# fro) the Inco)e Ta8 #e*art)ent
we3site4 htt*4IItin.ns#l.co)Ionline*anintro.as*.
In case of 9ali# P7N, na)e of the P7N hol#er, #ate of 3irth, fatherEs na)e , last #ate of
P7N u*#ate as *er IT #ata3ase an# the status as De8istin/ an# 9ali#, will 3e #is*laye#.
If the P7N is a fa(e P7N as *er IT #ata3ase, the status will 3e shown as D&a(e P7N,.
In case the P7N is not foun# in #ata3ase, the res*onse will 3e Dnot in IT #ata3ase,. In
such cases, if the user is a3le to *ro9i#e a *roof of this P7N %co*y of P7N car# or P7N
allot)ent letter', NS0 will forwar# the sa)e to IT for in9esti/ation.
-hec( the si/nature of the a**licant on the car# with the si/nature on the for) M lo/in
fee che2ue.
F F(+"+#("% ).#$0*+&, :*-(/(#"&(.+:
(F.- ,"%"-(*))
I+#.0* T"8 R*&$-+: The TS a)ount can 3e 9erifie# fro) the we3site4
htt*4IItin.ns#l.co)Ionline*anintro.as*. usin/ the Per)anent account nu)3er or fro)
Inco)e Ta8 Office.
P"' ,%(4,: The Salary a)ount can 3e 9erifie# 3y contactin/ the co)*anyEs
accountsIfinanceIHRIa#)inistration #e*art)ent 3y as(in/ a3out the last /ross M net
salary #rawn 3y the e)*loyee an# cross chec( the a)ount )entione# in the salary sli*
su3)itte# 3y hi).
-hec( for e)*loyers na)e an# lo/o on the su3)itte# *ay sli*.
-hec( the #ate of *ay sli*s, as to whether they are latest *ay sli*s.
-hec( the na)e of the 3orrower, his #esi/nation an# #e*art)ent, *lace where he is
*oste# %siteI3ranchIoffice', #ate of +oinin/ etc.
42
-hec( the structure of the *ay sli* an# 9erify the sa)e with a**oint)ent letterI&A!>
-hec( the )o#e of *ay)ent. -ross 9erify an# chec( the salary cre#its in the 3an(
account.
B"+7 ,&"&*0*+&,: The 3an( state)ents of %,"%"-' "##.$+& ", 6*%% ", "+' .&3*-
"##.$+&' can 3e 9erifie# 3y chec(in/ the entries thorou/hly for )ini)u) of > )onths.
%-hec(e# for > )ore )onths in case of 9ariances an# #ou3t'
C3*#7%(,& /.- 9"+7 ,&"&*0*+&,
-hec( the 3an(Es na)e an# lo/o in all the state)ents.
-hec( for the na)e of the a**licant in all the state)ents.
-hec( the 7ccount No4 of the a**licant in all the state)ents.
-hec( the salary #e*osit a)ount whether it tallies with the *ay sli* su3)itte# or not.
-hec( the EMI a)ount #e#uctions for the loans a9aile# earlier if any.
-hec( the #e*osits an# with#rawals fre2uency an# a)ount. %If in cashIche2ue'
-hec( the che2ue no4 if with#rawals are throu/h che2ues.
-hec( the 3alance )aintaine# e9ery )onth.
-hec( for any *eculiar 9ariations in the #e*osits an# the with#rawals. %E/.!. If all
with#rawal che2ue noEs are in se2uence an# #e*osit che2ue on sa)e #ate of #ifferent
)onths ;. Hu/e cash flows shoul# 3e carefully e8a)ine# an# the source shoul# 3e
9erifie# with the a**licant'
Match the *rocessin/ fee che2ue aIc no4 with the accounts #isclose#, if it #oesnEt )atch
,then as( for the state)ents of that account.
If any fun# transferre# fro) other account an# not #isclose# note it an# as( for the
state)ents of that account.
-he2ue #ishonore# %#e*ositIwith#rawal' if any, clarifications to 3e see(e#.
-hec( for )aintainance of )ini)u) 3an( 3alance, che2ue #ishonore# char/es M E-S
returns.
(F.- ,*%/ *04%.'*) 4-./*,,(.+"%,)
54
I+#.0* T"8 R*&$-+: The TS a)ount can 3e 9erifie# fro) the we3site4
htt*4IItin.ns#l.co)Ionline*anintro.as*. usin/ the Per)anent account nu)3er or fro)
Inco)e Ta8 Office.
-hec( na)e, a##ress, fatherEs na)e an# *er)anent a##ress #etails.
-hec( the status of the assessee, assess)ent year, war#, ran/e where he has file# ITR
-o)*are the ac(nowle#/e)ent seal 3y the IT #e*art)ent with ran/e an# war# whether
they are sa)e.
-hec( the serial no. M a)ount of ITR.
-hec( the #ate of filin/ of each ITR to confir) that all the ITREs are file# re/ularly. In
case ; or )ore ITREs are file# in one stro(e or within a short *erio# of !; )onths, then
such inco)e shoul# nor)ally 3e not consi#ere# an# we shoul# as( for the co*ies of the
TS certificates or a#9ance ta8 *ai# challans. If the #ocu)ents *ro9e the /enuineness of
inco)e an# if a satisfactory rationale is for)e# for not fillin/ ITREs re/ularly in
res*ecti9e years the case )ay 3e consi#ere# as s*ecial case with *er)ission fro)
sanction authority.
The *ay)ent of the Inco)e Ta8 fro) the co*ies of challan shoul# 3e counter chec(e#
fro) the 3an( state)ent of the a**licant.
Mar( one ti)e inco)e an# e8*enses, if any in PM0 account.
Mar( any cash losses for the current year as well as *re9ious years.
-hec( the carry forwar# losses in the financial su3)itte#.
E8a)ine the no4 of years it has continue# to reflect in the ITREs
-hec( the source of Dother sources of inco)e, an# the re/ularity of the sa)e in *re9ious
years.
E8a)ine whether the *rofit an# #e*reciation ha9e 3een calculate# as *er accountin/
stan#ar#s.
-hec( the notes on accounts for any chan/e in the accountin/ *ractice that )ay ha9e
i)*act on the *rofita3ility.
The 3usiness shoul# 3e analy:e# to un#erstan# the nature of ris(, the #e*en#ence of
a**licantEs inco)e on the 3usiness an# ris( associate# with the 3usiness shoul# 3e
analy:e#. 6y calculatin/ the followin/ ratios4
-urrent Ratio V -urrent 7ssetsI-urrent 0ia3ilities
0i2ui#ity RatioV -urrent 7ssetsAIn9entoryI-urrent 0ia3ilities
e3t E2uity Ratio4 0on/ Ter) e3tINet @orth.
Interest -o9era/e Ratio4 %E6ITUe*reciation'Iinterest *ay)ents
Net Profit Mar/ins4 Net ProfitsISales
9 P-./(& - L.,, A##.$+& "+) B"%"+#* ,3**&: Inco)eAe8*enses in P M 0 7Ic shoul# 3e
9erifie# with ITR file#, e8*enses 3ills, salary sli*s of e)*loyees %if any' that are self
53
atteste#. If inco)e is )ore than Rs. = 0ac *.a then shoul# 3e certifie# 3y -hartere#
7ccountant.
# B"+7 ,&"&*0*+&,: The 3an( state)ents of %*ersonal as well as fir) accounts' can 3e
9erifie# 3y chec(in/ the entries thorou/hly for )ini)u) of !; )onths.
C3*#7%(,& /.- 9"+7 ,&"&*0*+&,
-hec( for the na)e of the a**licant in all the state)ents
-hec( the 7ccount No4 of the a**licant in all the state)ents
-hec( the client fee #e*osit a)ount in the co)*any account.
-hec( the #e*osits an# with#rawals fre2uency an# a)ount. %If in cash'.
-hec( the che2ue no4 if #e*osits an# with#rawals are throu/h che2ues.
-hec( for any *eculiar 9ariations in the #e*osits an# the with#rawals. .%e/.!. If all
with#rawal che2ue no4s are in se2uence an# #e*osit che2ue on sa)e #ate of #ifferent
)onths Hu/e cash flows shoul# 3e carefully e8a)ine# an# the source shoul# 3e 9erifie#
with the a**licant'
Match the *rocessin/ fee che2ue aIc no4 with the accounts #isclose#, if it #oesnEt )atch
then as( for the state)ents of that account.
-he2ue #ishonore# %#e*ositIwith#rawal' if any, clarifications to 3e see(e#.
-hec( for )aintenance of )ini)u) 3an( 3alance, che2ue #ishonore# char/es M E-S
returns.
4 F(+"+#("% ).#$0*+&, :*-(/(#"&(.+: (F.- ,*%/ *04%.'*) 9$,(+*,,)
" I+#.0* T"8 R*&$-+: The TS a)ount can 3e 9erifie# fro) the we3site4
htt*4IItin.ns#l.co)Ionline*anintro.as*. usin/ the Per)anent account nu)3er.
9 P-./(& - L.,, A##.$+& "+) B"%"+#* ,3**&: Shoul# 3e 9erifie# with ITR file#,
e8*enses 3ills, salary sli*s of e)*loyees %if any'
# B"+7 ,&"&*0*+&,: The 3an( state)ents of %*ersonal as well as co)*any accounts' can
3e 9erifie# 3y chec(in/ the entries thorou/hly for )ini)u) of !; )onths.
C3*#7%(,& /.- 9"+7 ,&"&*0*+&,
52
-hec( for the na)e of the a**licant in all the state)ents
-hec( the 7ccount No4 of the a**licant in all the state)ents
-hec( the #e*osits an# with#rawals fre2uency an# a)ount. %If in cash'
-hec( the che2ue no4 if #e*osits an# with#rawals are throu/h che2ues.
-hec( for any *eculiar 9ariations in the #e*osits an# the with#rawals.
Match the *rocessin/ fee che2ue aIc no4 with the accounts #isclose# ,if it #oesnEt )atch
then as( for the state)ents of that account.
-he2ue 3ounces if any.
Maintenance of )ini)u) 3alance.
D E04%.'0*+& 5*-(/(#"&(.+ ( F.- ,"%"-(*))
-all or *ersonally 9isit the a#)inIHR #e*t. of the co)*anyIe)*loyer .The fiel#
e8ecuti9eIsales e8ecuti9eIa**raisal officerIo*erations hea# where the a**licant is
wor(in/ shoul# 9erify the followin/ #etails.
ate of +oinin/.
E)*loy)ent nature% technicalI a#)inistrati9eIfiel#IsalesIhi/h ris('
Qualification #etails.
esi/nation.
Salary #rawn /ross M net %*re9ious )onth'
Other 3enefits entitle# an# a9aile#.
G P-./*,,(.+ 5*-(/(#"&(.+ ( F.- ,*%/ *04%.'*) 4-./*,,(.+"%,)
To chec( the financial sta3ility of the a**licant who is self e)*loye# *rofessional 9erify
the followin/ #etails.
Office owne#, or on rentW
No. of contracts on an a9era/e in a )onth. to 3e 9erifie# throu/h their recor#s
)aintaine#.
Profit )ar/in.
Ty*e of ser9ice whether itEs in #e)an# or not.
-o)*etition le9el. %hi/h or low'.
H B$,(+*,, 5*-(/(#"&(.+ (F.- ,*%/ *04%.'*) 9$,(+*,,)
53
The 3usiness stren/th can 3e 9erifie# 3y chec(in/
The turno9er of 3usiness fro) the .7T *ay)ents *ai# 3y the co)*any.
.erify the stoc( of the co)*any 3y chec(in/ the stoc( re/ister or *hysically 9isitin/ the
factory.
-hec( the no4 of e)*loyees, salary *ai# to e)*loyees
The *ro#uct #e)an# in the )ar(et.
The #aily sales of the 3usiness.
No. of or#ers on an a9era/e in a )onth fro) their recor#s.
The *rofit earne#.
Other e8*enses as *hone, trans*ortation, rent, electricity 3y chec(in/ the 3ills.
-o)*etition face# %hi/h or low'
0ocality of 3usiness shoul# 3e i#entifie# as In#ustrial, co))ercial, se)iAco))ercial,
resi#ential colony, slu).
The 3usiness *re)ise ownershi* shoul# 3e 9erifie# as to whether it is owne# 3y the
a**licant, fa)ily, on rent or is share#.
7fter the 9erification is #one )ar( the #ocu)ents collecte# an# 9erifie# in the ERP
software te)*late.
If after 9erification the a**licantEs financial *osition an# other #etails are satisfactory
then the tea) )ana/er forwar#s the file to the 3ranch )ana/er or else as(s for further
infor)ation re2uire# fro) the client throu/h the concerne# sales e8ecuti9e.
C3*#7 /.- 4*+)*+#' ./ &3* "))(&(.+"% ).#$0*+&, -*B$(-*) "+) #.+/(-0"&(.+ ./ &3*
).#$0*+&, J /**, #.%%*#&*)
This shoul# 3e #one 3y the 3ranch )ana/er 3efore the a**raisal is #one.
7ll the #ocu)ents )ust 3e collecte# as *er the o3ser9ations )a#e while 9erifyin/ an#
then a list of *en#in/ #ocu)ents nee#s to )aintaine# an# collecte# i))e#iately within a
wee(.
The *en#in/ #ocu)ents re2uire# )ay 3e as4
7##itional loan that a**licant )i/ht ha9e alrea#y ta(en 3efore.
7##itional 3an( aIc state)ents that )i/ht ha9e 3een o3ser9e# #urin/ 9erifyin/ the
#ocu)ents.
Other #ocu)ents corres*on#in/ to reflections )a#e while 9erifyin/ the ITR.
The collecte# #ocu)ents shoul# 3e file# an# recor#e# in the ERP syste) for a**raisal.
54
F** #-*)(&*) .- +.&@
The 3ranch )ana/er shoul# ensure that the fee is cre#ite# fro) the accounts officer
3efore the file lo/in. If the fee is cre#ite# then the file shoul# 3e lo//e# in or else it
shoul# 3e (e*t on hol# an# the tea) )ana/er shoul# 3e infor)e# who further infor)s the
a**licant an# /ets the fee.
F(%* L.2(+
The file lo/in ta(es *lace once the inter9iew sheet infor)ation an# the a**lication for)
infor)ation is (eye# in the ERP syste) 3y the tea) )ana/er an# the 3ac( office staff
res*ecti9ely.
5*-(/(#"&(.+ 9' 4*-,.+"% :(,(&,
7**raisal *rocess ta(es *lace in two *hases.
P3",* 14 The fiel# officer 9isits the resi#ence an# the wor( *lace of the a**licant an#
9erifies the infor)ation in the inter9iew sheet as well as a**lication for) an# /i9es his
o3ser9ation a3out the sa)e as follows4
R*,()*+#* 5*-(/(#"&(.+:
The #uration of stay
no4 of fa)ily )e)3ers
life style %9ehicle )aintaine#, )o3ile 3ran#s, furniture, other a**liances, tra9ellin/
)o#e %*u3licI*ri9ate'
locality
7ccessi3ility of the a##ress.
7lso the a##ress 9erification li(e house no4Ilan#)ar( nee#s to 3e #one.
-hec( the a##ress with the tele*hone 3ills, electricity 3ills, ration car# an# election
I#entity car#.
E04%.'0*+& 5*-(/(#"&(.+ (F.- ,"%"-(*))
-all or *ersonally 9isit the a#)inIHR #e*t. of the co)*anyIe)*loyer .The fiel#
e8ecuti9eIsales e8ecuti9eIa**raisal officerIo*erations hea# where the a**licant is
wor(in/ shoul# 9erify the followin/ #etails.
ate of +oinin/.
E)*loy)ent nature
Qualification #etails.
55
esi/nation.
Salary #rawn.
Other 3enefits entitle# an# a9aile#.
P-./*,,(.+ 5*-(/(#"&(.+ (F.- ,*%/ *04%.'*) 4-./*,,(.+"%,)
To chec( the financial sta3ility of the a**licant who is self e)*loye# *rofessional 9erify
the followin/ #etails.
Office owne#, or on rentW
No. of contracts on an a9era/e in a )onth. to 3e 9erifie# throu/h their recor#s
)aintaine#.
Profit )ar/in.
Ty*e of ser9ice whether itEs in #e)an# or not.
-o)*etition le9el. %Hi/h or low'.
B$,(+*,, 5*-(/(#"&(.+ (F.- ,*%/ *04%.'*) 9$,(+*,,)
The 3usiness stren/th can 3e 9erifie# 3y chec(in/
The turno9er of 3usiness fro) the .7T *ay)ents *ai# 3y the co)*any.
.erify the stoc( of the co)*any 3y chec(in/ the stoc( re/ister or *hysically 9isitin/ the
factory.
-hec( the no4 of e)*loyees, salary *ai# to e)*loyees
The *ro#uct #e)an# in the )ar(et.
The #aily sales of the 3usiness.
No. of or#ers on an a9era/e in a )onth fro) their recor#s.
The *rofit earne#.
Other e8*enses as *hone, trans*ortation, rent, electricity 3y chec(in/ the 3ills.
-o)*etition face# %hi/h or low'
0ocality of 3usiness shoul# 3e i#entifie# as In#ustrial, co))ercial, se)iA
co))ercial, resi#ential colony, slu).
The 3usiness *re)ise ownershi* shoul# 3e 9erifie# as to whether it is owne# 3y the
a**licant, fa)ily, on rent or is share#.
P3",* 24 I+&*-:(*6 2 9' "44-"(,"% .//(#*-:
7**raisal officer woul# con#uct a tele*honic inter9iew or a *ersonal inter9iew of the
a**licant as well as the coAa**licant an# (ey in the financial an# *ro*erty #etails into the
ERP syste).
A22,&-3&4
F(+"+#("% A44-"(,"%
56
OB!ECTI5E:
To chec( the cre#itworthiness of the a**licant an# the loan eli/i3ility so that the
re*ay)ent of the EMI is re/ular an# on ti)e.
To )iti/ate ris( 3y consi#erin/ the inco)e, no4 of #e*en#ents, assets M lia3ilities of
a**licantIs.
PROCEDURE
7fter 9erifyin/ all the #ocu)ents the a**raisal officer woul# e9aluate the a**licant on the
followin/ *ara)eters an# /i9e his o3ser9ations on the cre#itworthiness of the a**licant.
(F.- S"%"-(*))
N*& M.+&3%' I+#.0* This can 3e co)*ute# as follows4
-alculation of Net Monthly Inco)e for IIR %a**licant an# coAa**licant'
7## $ross salary
7## Incenti9e =0H of a9/. of last si8 )onths.
=0H of a9/. of last si8 )onths %rentalI*art ti)eIany other inco)e'
e#uct P&
e#uct install)ent of Personal loanIother loan
Misc. #e#uctions
Net inco)e for IIR %a**licantU coAa**licant'4 %$ross inco)eA $ross #e#uctions'.
2 F.- S*%/ E04%.'*) P-./*,,(.+"%,
N*& M.+&3%' I+#.0*
This can 3e co)*ute# as follows4
-alculate a9era/e of last <yrs Net *rofit as *er PM0 7I- after #e#uctin/ ta8 *ai# for the
res*ecti9e yearA %7'
79era/e Net Profit %7' 8 Multi*lyin/ &actor V 6
7##4
a. 79era/e of last < years #e*reciation%!00H' as *er the P M 0 7I- if assets are *hysically
9erifia3le.
3. 7ny other inco)e, not recor#e# in 3alance sheet whose source is 9erifie# at 9erification
ste*.
Net )onthly inco)e V X6 U %aU3'Y I !;
57
NOTE:
In case a**licant is a *artner in a *artnershi* fir), the )ulti*lyin/ factor will 3e allowe#
to the e8tent of a**licantEs share in the net *rofit of the fir) that too if it is a closely hel#
*artnershi* fir) %fa)ily )e)3ers'. Si)ilarly for consi#erin/ #e*reciation it shoul# 3e
a##e# only to the e8tent of the a**licantEs share.
In case there is any e8tra or#inary inco)e or e8*enses, #e#uctIa## the a)ount fro)Ito
Net *rofit 3efore arri9in/ at the a9era/e *rofit.
Inco)e Multi*lier Nor)s4
!.= A< ti)es #e*en#in/ on the 2ualification, an# no4 of yrs in *ractice.
L."+ E%(2(9(%(&' C"%#$%"&(.+:
Multi*ly N7I with res*ecti9e IIR V%a'
Total &i8e# O3li/ation %if any' V%3'
7)ount a9aila3le for ser9icin/ .H&0 loan 1 %aA3' V c
EMI *er lac as *er chart V #
0oan a)ount cI# V Rs.5555 lacs.

FF.- S*%/ E04%.'*) B$,(+*,,
N*& M.+&3%' I+#.0*4 This can 3e co)*ute# as follows4
-alculate a9era/e of last <yrs Net *rofit as *er PM0 7I- after #e#uctin/ ta8 *ai# for the
res*ecti9e yearA %7'
79era/e Net Profit %7'ZMulti*lyin/ &actor V6
7##4
" 79era/e of last < years #e*reciation%!00H' as *er the P M 0 7I-
9 7ny other inco)e
51
Net )onthly inco)e VX 6 U %su) of aU3'YI!;
NOTE:
In case a**licant is a *artner in a *artnershi* fir), the )ulti*lyin/ factor will 3e allowe#
to the e8tent of a**licantEs share in the net *rofit of the fir) that too if it is a closely hel#
*artnershi* fir) %fa)ily )e)3ers'. Si)ilarly for consi#erin/ #e*reciation it shoul# 3e
a##e# only to the e8tent of the a**licantEs share.
In case there is any an e8tra or#inary e8*ense or inco)e, #e#uctIa## the a)ount fro)Ito
Net *rofit 3efore arri9in/ at the a9era/e *rofit.
1 I+#.0* M$%&(4%(*- N.-0,:
Ma8. ; ti)es of net *rofit after ta8 with *ro*er +ustification.
2 L."+ E%(2(9(%(&' C"%#$%"&(.+:
Multi*ly N7I with res*ecti9e IIR V %a'
Total &i8e# O3li/ation %if any' V %3'
7)ount a9aila3le for ser9icin/ .H&0 loan 1 %aA3' V c
EMI *er lac as *er chart V #
0oan a)ount cI# V Rs.5555 lacs.

4 S"7,3"0 IS"0"-&3INIP (/.- N.+ I+#.0* P-../ C"&*2.-')
N*& M.+&3%' I+#.0* 4 This can 3e co)*ute# as follows4
.erify the 3usiness 3y *ersonally 9isitin/ the 3usiness *re)ises or wor( *lace.
Esti)ate the inco)e an# e8*enses 3y tal(in/ to the a**licant as well as his clients an#
custo)ers.
M(+(0$0 (+#.0* ./ &3* "44%(#"+& "+) &3* #.-"44%(#"+& &.2*&3*- ,3.$%) 9*
a. If resi#in/ in Metro*olitan 4
M(+(0$0 I+#.0*: Rs. B=00
52
PCRI4 Rs. !=00
3. If resi#in/ in State -a*ital4
M(+(0$0 I+#.0*4 Rs. >000
PCRI4 Rs.!000
c. If resi#in/ in istrict or rural area4
M(+(0$0 I+#.0*4 Rs. =000
PCRI4 Rs.B=0.
P*- C"4(&" R*,()$"% I+#.0* (PCRI): It is calculate# 3y #e#uctin/ all the lia3ilities li(e
car loan install)ents, ho)e loan install)ents other e8*enses fro) the Net )onthly
inco)e calculate#, the 3alance inco)e left is #i9i#e# 3y no. of )e)3ers. It can 3e
calculate# 3y clu33in/ the inco)e of all the wor(in/ )e)3ers of the fa)ily. The
e8*enses esti)ate )ust co))ensurate with his lifestyle, the city where he resi#es an# his
s*en#in/ ha3its.
I+#.0* I+,&"%%0*+& R"&(. (IIR): It is calculate# 3y #i9i#in/ the )onthly loan
install)ent to net ta(e ho)e inco)e. 0ower the IIR, 3etter the chances of an in#i9i#ual to
ser9ice the loan efficiently.
Hi/her IIR can 3e consi#ere# for
&or hi/h net worth in#i9i#uals.
Hi/hly 2ualifie# *rofessionals
0ar/e sa9in/s in 3an( account
If the )ar/in )oney is hi/her i.e. )ore than "0H of the *ro*erty cost.
7##itional li2ui# securities 3ein/ *ro9i#e# as collateral
EMI 3ein/ *ai# 3y the e)*loyer #irectly.
C3*#7 &3* *%(2(9(%(&'
The a**raisal officer then chec(s the eli/i3le loan a)ount after assessin/ the financial
health of the a**licant as e8*laine# a3o9e.
If the loan a)ount 9aries fro) the a)ount re2ueste# then 3ranch )ana/er 9iews shoul#
3e ta(en if the client acce*ts then the technical an# le/al a**raisal shoul# 3e tri//ere#. If
not then the *rocess shoul# 3e sto**e# at this ste* itself.
64
If the a**licant is eli/i3le for the re2ueste# a)ount or in case of any 9ariations, if
a**licant acce*ts the 9ariation then the #ocu)ents )ust 3e han#e# o9er to the *anel
9aluer M lawyer for the technical an# le/al a**raisal.
LEGAL J TECHNICAL APPRAISAL
OB!ECTI5E:
To ensure that the *ro*erty *ro*ose# to 3e finance# M )ort/a/e# is )ar(eta3le,
enforcea3le an# with clear title.
To re#uce ris(.
To assess the 2uality of security for the loan, the )ar/in *ro9i#e# i.e. 9alue of *ro*erty
)inus loan a)ount.
To calculate 0oan To .alue Ratio M 0oan To -ost Ratio to arri9e at the #ecision of
reco))en#in/ the *ro*osal for sanctionin/.
PROCEDURE:
The *anel lawyer M 9aluer su3)it their 9erifications an# o3ser9ations in the 0e/al
scrutiny re*ort an# 9aluation re*ort res*ecti9ely as in the ERP syste).
The Technical ins*ection )ust 3e #one 3y the internal technical officer who shoul# chec(
the followin/ as*ects.
1 FOR PROPERTY
OwnerI*ossessor of the *ro*erty
Pro*er accessi3ility
6oun#aries *ro*erly #e)arcate#
7**ro8i)ate area of *lot an# its sha*e.
0ocality4 @hether it is resi#ential, co))ercial, in#ustrial, se)iA in#ustrial, #e9elo*e# or
#e9elo*in/.
6asic 7)enities4 -hec( whether followin/ a)enities are a9aila3le or not such as4 water
su**ly, sewera/e, electricity, hos*ital, *ucca roa#, school, /ar#en etc.
The resi#entsE ty*e4 Is it Hi/h Inco)e $rou*, Mi##le Inco)e $rou* or 0ow Inco)e
$rou*.
The )ar(eta3ility of the *ro*erty4 Is it $oo#, &air or Poor.
.ulnera3le4 Is it *rone to fire, floo#in/, earth2ua(e etc.
63
7ny other factors that )ay affect its )ar(eta3ility then *ro9i#e #etails.
FOR SITEIBUILDING PLAN
.erify the sanction *lan no4, #ate of sanction an# the sanction authority of the sanctione#
*lan.
.erify the area of the *lot )entione# in the sanctione# *lan.
.erify the no4 of storey Ifloors an# the area of each storeyIfloor as *er the sanctione#
*lan.
.erify the na)e of the owner of the *lotI3uil#in/ as )entione# in the sanctione# *lan.
OTHER DETAILS
Note the sta/e of construction as on #ate of ins*ection.%escri3e in #etails'
.erify whether the construction is carrie# I 3ein/ carrie# out as *er the sanctione# *lan.
S*ecify the ty*e of #e9iation clearly in #etail.
-hec( the ty*e of construction4 3ric(I)asonryIhollow ce)ent Soli# ce)ent 6ric(s.
-hec( the 2uality of the construction4 as /oo#I a9era/eI*oor.
Note the a**ro8i)ate 3uilt u* area %if construction is co)*lete#'
If alrea#y e8istin/ 3uil#in/ then note the a**ro8i)ate a/e of the e8istin/ 3uil#in/.
.erify the *ur*ose of the e8istin/ construction is use# or is *ro*ose# to 3e use#.
.erify whether the structure a**ears to 3e )aintaine# in /oo# con#ition or not.
.erify whether the a##ress of the *ro*erty )atches with the route )a* *ro9i#e# or not.
LEGAL
The *ro*ose# *ro*erty to 3e finance# shoul# 3e enforcea3le with clear )ar(eta3le title
alon/ with chain title if a**lica3le.
The *ro*erty )ort/a/e# shoul# 3e unencu)3ere# an# not su3+ect to any char/e lease,
lien an# )ort/a/e.
7 #etaile# 0e/al Scrutiny Re*ort shoul# 3e inclu#e# 3y *anel lawyer shoul# inclu#e )a*
of the *ro*erty, also clearly trace the title of the owner as clear, un#is*ute# an#
)ar(eta3le.
62
The collateral security, if a9aila3le shoul# 3e enforcea3le, clear an# )ar(eta3le.
HOUSING LOANS J LEGAL ASPECTS
There as certain le/al enact)ents which ha9e 3earin/ on the o*erations of a housin/
finance co)*any. It is therefore i)*ortant to (now the 3asics of these enact)ents li(e4
Transfer of *ro*erty 7ct.
Sta)* 7ct an# Re/istration 7ct
0aws relatin/ to inheritance an# succession inclu#in/ *ersonal law
Ur3an lan# %ceilin/ M re/ulation '7ct.
Rent -ontrol 7ct.
&ro) the *oint of 9iew of in9esti/ation of title it 3eco)es essential to (now whether the
*ro*erty 3ein/ offere# as security is transfera3le or not.
TRANSFER OF PROPERTY ACT
The transfer of *ro*erty act #eals with fi9e (in#s of transfer of *ro*erties 9i:., Sale,
)ort/a/e , lease, /ift an# e8chan/e. It is an act 3y which a li9in/ *erson con9eys
*ro*erty , in *resent or in future , to one or )ore other li9in/ *ersons, or to hi)self.
SALE: It is a transfer of ownershi* in e8chan/e for a *rice *ai# or *ro)ise# or *artA*ai#
an# *artA*ro)ise#. It can 3e )a#e 3y a re/istere# instru)ent.
MORTGAGE: 7 )ort/a/e is the transfer of an interest in s*ecific i))o9a3le *ro*erty
for the *ur*ose of securin/ *ay)ent of )oney a#9ance# or to 3e a#9ance# 3y the way of
loan ,an e8istin/ or future #e3t, or the *erfor)ance of an en/a/e)ent which )ay /i9e
rise to a *ecuniary lia3ility.
The transferor is calle# a )ort/a/or, the transferee a )ort/a/ee, the *rinci*al )oney an#
interest of which *ay)ent is secure# for the ti)e 3ein/ are calle# the )ort/a/e )oney
an# the instru)ent %if any'3y which the transfer is effecte# is calle# a )ort/a/e #ee#.
S(04%* 0.-&2"2*AThis )ort/a/e is affecte# 3y a re/istere# instru)ent irres*ecti9e of the
a)ount. The )ort/a/or 3in#s hi)self to re*ay the loan. In case of #efault, courtEs #ecree
is re2uire# to 3e o3taine# for sale of the *ro*erty. There is no transfer of *ossession or
ownershi* of the *ro*erty. The )ort/a/ee #oes not /et the ri/ht of foreclosure.
E+2%(,3 0.-&2"2*4 It is affecte# 3y a re/istere# instru)ent. There is a3solute transfer of
*ro*erty with the *ro9ision of retransfer in case of re*ay)ent of the a)ount #ue. There is
a 3uilt in *ro9ision for the *ower of attorney an# in case of #efault the re)e#y a9aila3le
is 3y the sale of the *ro*erty. 7s the sta)* #uty an# re/istration char/es are su3stantial,
this )ort/a/e is not )uch in use. Howe9er, transaction where ut)ost security is re2uire#,
this ty*e of )ort/a/e is still *referre#.
63
M.-&2"2* 9' #.+)(&(.+"% ,"%*4 The )ort/a/or ostensi3ly sells the )ort/a/e#
*ro*ertyAAAA
on con#ition that on #efault of *ay)ent of the )ort/a/eA)oney on a certain #ate the sale
shall 3eco)e a3solute,or
on con#ition that on such *ay)ent 3ein/ )a#e the sale shall 3eco)e 9oi#,or
on con#ition that such *ay)ent 3ein/ )a#e the 3uyer shall transfer *ro*erty to the seller,
The transaction is calle# )ort/a/e 3y con#itional sale .The )ort/a/e is create# 3y a
sin/le #ocu)ent which is re2uire# to 3e re/istere#. This syste) is not *o*ular.
U+,$/-$#&$"-' 0.-&2"2*: The )ort/a/or #eli9ers *ossession of the )ort/a/e# *ro*erty
to the )ort/a/ee an# authori:es hi) to retain such *ossession until *ay)ent of the
)ort/a/eA)oney an# to recei9e the rents an# *rofits accruin/ fro) the *ro*erty in lieu of
interest or in *ay)ent of )ort/a/eA)oney, he has no ri/ht of sale an# foreclosure, the
transaction is calle# an unsufructuary )ort/a/e.
A+.0"%.$, 0.-&2"2*: 7 )ort/a/e which is not a si)*le )ort/a/e, a )ort/a/e 3y
con#itional sale, an unsufructuary )ort/a/e, an En/lish )ort/a/e or a )ort/a/e 3y
#e*osit of title #ee#s within the )eanin/ of the section is calle# an ano)alous )ort/a/e.
In this the *ossession is not #eli9ere# an# the re)e#y a9aila3le to the )ort/a/ee is sale or
foreclosure as *er the ter)s of the )ort/a/e.
EB$(&"9%* 0.-&2"2* IM.-&2"2* 9' )*4.,(& ./ &(&%* )**),: Here a *erson in any of the
followin/ towns na)ely -alcutta,Ma#ras an# Mu)3ai an# in any other town which the
State $o9ern)net concerne# )ay 3y notification in the official $a:ette, s*ecify in this
3ehalf, #eli9ers to his cre#itor or his a/ent #ocu)ents of title to i))o9a3le *ro*erty, with
intent to create security thereon, the transaction is calle# a )ort/a/e 3y #e*osit of title
#ee#s.
It )ay 3e note# that the restriction re/ar#in/ the na)es of towns refers to the *lace where
the title #ee#s are #eli9ere# an# not to the situation of the *ro*erty )ort/a/e#. Thus in
case where the *ro*erty )ort/a/e# is outsi#e the na)es )entione# 3y the act of #e*osit
of title #ee#s is *erfor)e# within the areas s*ecifie#, the transaction will 3e le/ally 9ali#.
7 #e*osit of title #ee#s outsi#e the s*ecifie#Inotifie# towns will not create e2uita3le
)ort/a/e. The letterI)e)oran#u) of #e*osit of title #ee#s is not re2uire# to 3e
re/istere#. Howe9er sta)* #uty as *er the sta)* 7ct of the concerne# state )ay 3e
*aya3le.
It will 3e seen fro) the a3o9e that whate9er )ay 3e the for) of the )ort/a/e, there is
only a transfer of so)e interest in the *ro*erty. This is what #ifferentiates a )ort/a/e
fro) a sale. Nor)ally H&-s acce*t e2uita3le )ort/a/e in usual transactions.
64
STAMP ACT
The In#ian Sta)* 7ct is a central *iece of le/islation. Many states ha9e their own Sta)*
7ct. There are certain su3+ects which are e8clusi9ely /o9erne# 3y the In#ian Sta)* 7ct
9i:. 6ills of e8chan/e, -he2ues, Pro)issory Notes, 6ills of la#in/, 0etter of -re#it,
Policies of Insurance, Pro8ies, Recei*ts etc. Si)ilarly there are certain su3+ects /o9erne#
states. If an instru)ent is not *ro*erly sta)*e#, it is lia3le to 3e i)*u/ne# 3y any *erson
ha9in/ authority to recei9e e9i#ence or any *erson in char/e of *u3lic office 3efore
who) it is *ro#uce#. No instru)ent char/ea3le with sta)* #uty shall 3e a#)itte# in
e9i#ence unless it is #uly sta)*e# e8ce*t in those cases where there is *ro9ision of
*ay)ent of *enal sta)* #uty e2ui9alent to ten ti)es of such #uty.
A, ,$#3 , 63(%* *8"0(+(+2 &3* ).#$0*+&, .- "##*4&(+2 "+' ).#$0*+& (& ,3.$%) 9*
#3*#7*) 63*&3*- &3* ).#$0*+&, 3":* 9**+ 4-.4*-%' ,&"04*)
REGISTRATION ACT:
The In#ian Re/istration 7ct #oes not re2uire that a transaction affectin/ the i))o9a3le
*ro*erty shoul# 3e carrie# out a re/istere# instru)ent. It only enacts that when a
#ocu)ent is lia3le to effectuate any other transactions s*ecifie# in section !B of the 7ct,
such #ocu)ent )ust 3e re/istere#. The transaction of sale, )ort/a/e, lease, /ift or
e8chan/e are re2uire# to 3e in writin/ an# co)*ulsorily re/istere# as *ro9i#e# 3y the
Transfer of Pro*erty 7ct. Other transactions affectin/ i))o9a3le *ro*erty such as
*artition, release relin2uish)ent, surren#er, co)*ro)ise, fa)ily arran/e)ents, or char/e
on *ro*erty #o not re2uire 3ein/ in writin/ an# )ay 3e )a#e orally. Howe9er, if these
transactions are re#uce# to writin/, they will 3e re2uire# to 3e co)*ulsorily re/istere#.
This is 3ecause un#er the In#ian Re/istration 7ct, a nonAtesta)entary instru)ent that
*ur*orts or o*erates to create, #eclare, assi/n li)ite# or e8tin/uish any ri/ht, title or
interest to or in i))o9a3le *ro*erty re2uires to 3e co)*ulsorily re/istere#.
There are so)e instru)ents, which thou/h in writin/ #o not re2uire to 3e co)*ulsorily
re/istere# li(e #ecree or or#er of the court relatin/ to an i))o9a3le *ro*erty which is the
su3+ect )atter of a suit or *rocee#in/, a /rant of an i))o9a3le *ro*erty 3y the /o9t. an
instru)ent of *artition of an i))o9a3le *ro*erty )a#e 3y Re9enue Officer an# a
certificate of sale /rante# to the *urchaser
of any i))o9a3le *ro*erty sol# 3y *u3lic auction 3y a ci9il on Re9enue Officer. Section
"9 of the In#ian Re/istration 7ct, *ro9i#es that no #ocu)ent re2uire# 3y Section !B
thereof or 3y any *ro9isions of the Transfer of Pro*erty 7ct, to 3e re/istere# shall affect
any i))o9a3le *ro*erty co)*rise# therein, or 3e recei9e# as e9i#ence of any transaction
65
affectin/ such *ro*erty, unless it has 3een re/istere#. @hile e8a)inin/ a #ocu)ent which
is not re/istere# it shoul# 3e chec(e# whether it is re2uire# to 3e co)*ulsorily re/istere#.
The re/istrar of a istrict in which a Presi#ency town is inclu#e# li(e Mu)3ai, -alcutta
an# Ma#ras an# the Re/istrar of elhi istrict )ay recei9e an# re/ister a #ocu)ent
without re/ar# to the situation of the *ro*erty.
7 #ocu)ent )ust 3e *resente# for re/istration at the *ro*er re/istration office 3y4
7 *erson e8ecutin/ the sa)e.
7 *erson clai)in/ the sa)e.
The re*resentati9e or assi/nee of such *ersons, OR the a/ent of such *ersons,
re*resentati9e or assi/n #uly authori:e#.
If a #ocu)ent has not 3een *resente# 3y a co)*etent *erson, the re/istration thereof will
3e 9ali#. In case a #ocu)ent re2uirin/ re/istration has 3een acce*te# for re/istration 3y
the re/isterin/ authority fro) a *erson not #uly e)*owere# to *resent the sa)e an# has
3een re/istere#, any *erson clai)in/ un#er such #ocu)ent )ay within four )onths fro)
his first 3eco)in/ aware that the re/istration of such #ocu)ent is in9ali#, *resent such
#ocu)ent for
Re/istration as *ro9i#e# in section ;< 7 of the 7ct. If the #ocu)ent is #uly reAre/istere#,
it shall 3e #ee)e# to ha9e 3een #uly re/istere# for all *ur*oses fro) the #ate of its
ori/inal re/istration. @hile e8a)inin/ a #ocu)ent that is re/istere#, it shoul# 3e chec(e#
whether it has 3een *ro*erly *resente# an# #uly re/istere#.
SUCCESSION ACT:
@hile #ealin/ with a *ro*erty 3elon/in/ to a #ecease# *erson, it )ust 3e in2uire# 3y
what law his estate is /o9erne#. 7s re/ar#s inheritance an# succession, Hin#us inclu#in/
6u##hists, Cains an# Si(hs are /o9erne# 3y Hin#u Succession 7ct !9=>. Musli)s are
/o9erne# 3y their *ersonal laws, Cews, In#ian -hristians, Parsis an# &orei/ners are
/o9erne# 3y the In#ian Succession 7ct !9;=.
TENURE OF LAND4
@hile e8a)inin/ the title, it shoul# 3e in2uire# as to what is the tenure of lan#. Tenure is
the ri/ht an# the )anner in which lan# is hel# an# *ossesse#. The tenure of lan# )ay 3e
freehol#, leasehol# or hel# un#er $o9ern)ent $rant or Sana#. The ri/ht to hol# *ro*erty
in *er*etuity )a(es it herita3le. The occu*ant is entitle# to use lan# an# re)ain in
66
*ossession a/ainst $o9ern)ent as lon/ as he o3ser9es the con#itions of /rant lai# #own
is sana#. The contra9ention or nonAo3ser9ance of the con#itions ren#ers the
*ossession of lan# unauthori:e# an# the collector has *ower to su))arily e9ict hi).
$enerally a/ricultural lan#s can 3e transferre# only with the *rior *er)ission of the
co)*etent authority whereas nonAa/ricultural lan#s are nor)ally transfera3le an#
herita3le. @hile #ealin/ with the ur3an lan#s an# *ro*erties, the *ro9isions of Ur3an
0an# %-eilin/ an# Re/ulation ' 7ctA!9B> shoul# 3e (e*t in 9iew.
URBAN LAND CEILING LEGISLATION:
The Ur3an 0an# %-eilin/ an# Re/ulation ' 7ct, !9B>, was enacte# )ainly with the o3+ect
of *ro)otin/ e2uita3le #istri3ution of sur*lus lan# in the ur3an a//lo)erations. Un#er
this 7ct, no o3+ection certificate %NO-' is re2uire# fro) the co)*etent authority 3efore
alienation of lan# in the ur3an area. 7s such while e8a)inin/ the title, it shoul# 3e
ensure# that the re2uisite NO- un#er the UR67N 07N %-eilin/ an# Re/ulation' 7ct,
!9B> is o3taine# 3y the 9en#or. @ithout this NO- a con9eyance cannot 3e re/istere#.
RENT CONTROL ACT:
Each state has its own Rent -ontrol 7ct . The rele9ance of the Rent -ontrol 7ct is to see
whether the *erson in occu*ation of *re)ises has ac2uire# 3y ri/hts li(e *rotecte#
tenancy etc., un#er the 7ct. To that e8tent the security 9alue of the *ro*erty, rele9ant
*ro9isions of the Rent -ontrol 7ct )ust 3e e8a)ine#.
Thus, while chec(in/ the title, the followin/ thin/s shoul# 3e ensure#4A
The *ro*erty is herita3le an# transfera3le.
The transferor has the ri/ht to transfer.
The transferor has the ca*acity, *ower or authority to transfer
The transferee is co)*etent to ta(e the transfer.
If the consent of any *erson, 3o#y or authority to transfer was necessary, the sa)e is
o3taine#.
7ll necessary *arties ha9e 3een +oine# in the #ocu)ent
The whole interest of the transferor has 3een transferre#.
The i#entity of the *ro*erty is *reser9e#
The consi#eration or o3+ect of transfer is lawful
The #ocu)ent has 3een #uly sta)*e#, e8ecute# an# atteste#.
The #ocu)ent was *resente# for re/istration 3y a co)*etent *erson an# all e8ecutin/
*arties ha# a#)itte# e8ecution an# it was #uly re/istere#.
6esi#es the a3o9e, the other thin/s which shoul# also 3e o3ser9e# are4A
The 9en#or has *ro#uce# all )aterial #ocu)ents of title relatin/ to *ro*erty.
67
7ll ori/inal #ocu)ents ha9e 3een *ro#uce#.
The facts an# e9ents )aterial to title ha9e 3een satisfactorily *ro9e#.
7ll #ocu)ents, *er)ission, NO-s for transfer of the *ro*erty 3y the 9en#or to the
*urchaser ha9e 3een o3taine#.
I#entity of the *ro*erty has 3een esta3lishe#.
0in(s in the chain of title ha9e 3een *ro*erly esta3lishe#.
7ll outstan#in/ encu)3rances ha9e 3een cleare#.
There are no cases 3efore the court wherein title to the *ro*erty is 2uestione#.
There is no #ou3t a3out the title.
The *ro*erty stan#s in the na)e of the 9en#or in the $o9ern)ent an# Munici*al Recor#s
an# all Munici*al an# Pro*erty ta8es etc. ha9e 3een *ai# u*AtoA#ate.
MISCELLANEOUS
@here Ori/inal Title ee#s constitutin/ the chain of Title are )issin/4
In such cases while e8a)inin/ the title, the followin/ safe/uar#s shoul# 3e ta(en.
-o*y of $eneral iary Re*ort%$E' )a#e in local Police station.
7ffi#a9it fro) the a**licant or his *re#ecessor in the title who has lost the concerne#
ori/inal #ocu)ents e8*lainin/ the circu)stances in which the ori/inal #ocu)ents were
lost an# confir)in/ that no char/e ha# 3een create# a/ainst the *ro*erty 3y #e*ositin/
the #ocu)ents in 2uestion.
Pu3lication of notice 3y the le/al a#9isor , at the a**licantEs cost, notifyin/ the loss of
concerne# #ocu)ents an# the *ro*ose# )ort/a/e arran/e)ent in two wi#ely circulate#
news*a*ers 1 one in En/lish an# the other in .ernacular. The notice shall /i9e != #ays
ti)e to the clai)ants of the *ro*erty to file clai) failin/ which the *ro*erty will 3e
*resu)e# to 3e free fro) encu)3rances.
7**licant will furnish surety of soun# )eans to in#e)nify .H&0 in the e9ent of any loss
or #a)a/e on account of nonA*ro#uction of the concerne# #ocu)ents.
7**licant )ay +ointly e8ecute the in#e)nity 3on# or sta)* *a*er of re2uisite 9alue.
If the a**licant has lost the #ocu)ent 3y which he has 3eco)e the owner of the *ro*ose#
*ro*erty to 3e )ort/a/e#, a &IR )ust 3e lo#/e#.
The a**licant will ha9e to *ro#uce certifie# co*y of the lost #ocu)ent fro) the Su3A
Re/istrar.
Nor)ally in #ou3tful cases Re/istere#IEn/lish )ort/a/e shoul# 3e *referre#
NON-A5AILABILITY OF ORIGINAL TITLE DEEDS FOR DEPOSIT:
In the followin/ cases the ori/inal title #ee#s are not li(ely to 3e a9aila3le with the a**licant.
I. @here the *ro*erty *ro*ose# to 3e )ort/a/e# for)s a *art of lar/er *ro*erty.
II. @here such #ocu)ent is the last #ocu)ent in the chain of title an# is lo#/e# for
re/istration.
61
III. @here the *ro*erty in 2uestion is a *artitione# *ro*erty.
In the case %I' it woul# 3e in or#er if the a**licant su3)its ori/inal #ocu)ents in res*ect of
the *ortion of the *ro*erty *ro*ose# to 3e )ort/a/e#.
In case %II' the a**licant shoul# furnish the followin/4
7 true co*y of the last #ocu)ent
0o#/)ent recei*t issue# 3y the Su3ARe/istrar.
-ertificate fro) the Su3ARe/istrar that the #ocu)ent has 3een re/istere#Ior#ere# to 3e
re/istere#.
7 letter fro) the a**licant to the Su3 1 Re/istrar sayin/ that the #ocu)ent after
re/istration to 3e returne# to .H&0 on an ac(nowle#/e# co*y of the letter alon/ with an
un#erta(in/ on re2uisite sta)* *a*er that in case he recei9es the ori/inal #ocu)ent #uly
re/istere# fro) the Su3ARe/istrar, the sa)e woul# 3e #e*osite#.
In case of %III' co*ies of the Ori/inal Title ee#s certifie# 3y Su3ARe/istrar alon/ with
un#erta(in/ fro) coA*artner who retains the ori/inal , to *ro#uce the ori/inal *artition
#ee#s when re2uire#.
C3*#7 %(,& /.- EB$(&"9%* M.-&2"2* ./ P-.4*-&'
I#entification of the )ort/a/or.
Ori/inal title #ee#
0e/al o*inion %3y *anel a#9ocateIother a#9ocate' with search re*ort for !< years, chain
of #ocu)ents.
Non encu)3rance certificate to esta3lish clear an# )ar(eta3le title.
.aluation re*ort 3y the a**ro9e# *anel 9aluer.
Ins*ection re*ort 3y .H&0 officer relatin/ to title of the *ro*erty an# actual *hysical
*ossession.
eclaration of the )ort/a/or on non +u#icial sta)* *a*er, #uly notari:e# that *ro*erty is
free fro) all sort of encu)3rances.
62
NO- fro) a**ro*riate authority to )ort/a/e.
-ertificate relatin/ to D0al ora, *ro*erty %if a**lica3le'
0ien in the recor# of a**ro*riate authority.
I+,$-"+#* 4.%(#'- P-.4*-&' (/ (+,$-*) &3*+ R(,7 #.:*-I#.4' ./ 4-*0($0 -*#*(4&
P.%(#' &. 9* ",,(2+*) (+ /":.$- ./ 5HFL
POINTERS TO IN5ESTIGATION OF BORROWERKS TITLE TO THE
PROPERTY:
One of the con#itions of the sanction of loans un#er the 9arious sche)es is that the
co)*any has to fin# out conclusi9ely an# 3eyon# #ou3ts that the title to the *ro*erty
*ro*ose# to 3e offere# as security is clear an# )ar(eta3le an# free fro) all encu)3rances
in fa9our of the a**licant.
The le/al a#9isor for this *ur*ose shoul# ensure the followin/ an# 9erifie# 3y the
a**raisal officer.
A9,&-"#& ./ &(&%*: The in house official shoul# *re*are a3stract of title. It is a or#erly
su))ary of the #ee#s an# other instru)ents in the chain of title of i))o9a3le *ro*erty
arran/e# in a chronolo/ical or#er an# containin/ a state)ent of encu)3rances an#
char/es to which the i))o9a3le *ro*erty )ay 3e su3+ect. He )ust ta(e ste*s to e8a)ine
any transactions )a#e within a *erio# of !< years affectin/ the *ro*erty concerne# 3y the
)ort/a/or or his *re#ecessors in interest.
I+,4*#&(.+ ./ &(&%* )**),: It is necessary for the inAhouse officialIle/al a#9isor to scan all
the title #ee#s in chain of title to the *ro*erty co9erin/ a )ini)u) *erio# of !< yrs.
If there was no transaction e8actly !< years *rior to the title in9est)ent, the title #ee#
i))e#iately 3efore !< yrs is to 3e o3taine# so that the root of the title is esta3lishe#.
The ori/inal title #ee#s which relate to the *ro*erty 3ut *ertains to the lar/er *ro*erty, of
which the *ro*erty offere# as security for)s a *art, the certifie# co*y of such title #ee#s
are to 3e e8a)ine# M o3taine#.
If the title #ee#s are not forthco)in/ an# no satisfactory e8*lanation is /i9en a3out their
nonA*ro#uction, one woul# naturally sus*ect that the #ocu)ents )ust ha9e 3een *le#/e#
elsewhere an# no recor# thereof )ay 3e a9aila3le in the Re/istrarEs office. If this is the
case the loan shoul# 3e re+ecte#.
74
!. P.,,*,,(.+ E+B$(-': The le/al a#9isor shoul# also en2uire a3out the title of the *erson
who is in actual *ossession of the *ro*erty. It is always necessary to )a(e *articular
en2uiry if the *ro*erty is in *ossession of a *erson other than the transferor or the
a**licant.
2 E8"0(+(+2 &(&%* )**):
The na)e of the *arties to the transaction i.e 3uyer an# seller, #onor an# #onee, lessor
an# lessee )ust 3e 9erifie#.
7n e8*ress co9enant fro) 3oth *arties re*resentin/ their ca*acity to enter into the
transaction an# e8ecute the #ee#.
escri*tion of the *ro*erty inclu#in/ the area co)*rise# therein, clearly )entionin/ the
3oun#aries of the *ro*erty.
M"+)"&.-' A&&*,&"&(.+: 7ll the #ocu)ents re2uire co)*ulsory attestation. It )eans to
3ear witness to the e8ecution of the #ocu)ent. There shoul# 3e at least two witness. It is
an affir)ation to the e8ecutantsE si/nin/ an# affir)in/ his si/nature to the instru)ent.
.erify 4
I+ S"%* )**)
The e8act consi#eration a)ount e8chan/e# 3etween the *arties
The transfer of ownershi* is a3solute an# there are no ne/ati9e co9enants restrictin/ the
title in fa9our of the 3uyer.
The sale #ee# shoul# 3e acco)*anie# with a recei*t fro) the seller an# a *ossession
letter in fa9our of the 3uyer.
I+ L*",* )**)
The e8act ter)s of the lease shoul# 3e enu)erate# i.e. the ter) of the lease, the lease
rental *aya3le or lease rental *ai# etc.
The restricti9e co9enants of the lease shoul# 3e clearly )entione#.
I+ G(/& )**)
7n e8*ress co9enant fro) the onor re*resentin/ hisIher ca*acity to e8ecute the $ift
#ee# an# statin/ that the /ift is 3ein/ )a#e out of the onorEs free will 9oluntarily an#
without coercion of any sort.
The transfer of title %as in the na)e of the #onor' shoul# 3e a3solute an# there shoul# 3e
no ne/ati9e co9enants restrictin/ the title in fa9our of the #one.

73
T3-.$23 W(%%
The *ro*erty 3ein/ transferre# 3y way of a will shoul# ha9e 3een ac2uire# 3y the testator
hi)self an# not inherite# #urin/ hisIher lifeti)e.
The @ill shoul# 3e the last @ill of the Testator.
The #eath certificate of Testator.
Pro3ate of the @ill.
I+ #",* ./ :*,&(+2 -(23&, ./ .6+*-,3(4 (+ "+ (00.:"9%* 4-.4*-&':
6roa#ly, the *ro*erties can 3e classifie# into leasehol# an# freehol#.
&or all leasehol# *ro*erties, *er)ission letter fro) the 0essor shall 3e a )an#atory
re2uire)ent. If it is transferre# #irectly to the 3orrower, search re*ort or a nonA
encu)3rance certificate is not necessary.
In case of resale transaction of leasehol# *ro*erties, the #ocu)entation will 9ary fro)
one state to another as so)e states )ay allow a transfer of leasehol# throu/h *ower of
7ttorney, whereas so)e states )ay 3e rea#y to transfer on *ay)ent of transfer char/es in
which case there shall 3e a transfer letter an# a
)utation certificate fro) the lessor. 0e/al o*inion 3y a re*ute# a#9isor )ust 3e o3taine#
an# (e*t on recor# in the ERP syste).
I+ #",* ./ %*",* 3.%) 4-.4*-&(*,- P.6*- ./ A&&.-+*' T-"+,"#&(.+,:
There are so)e states, where as a )ar(et *ractice lease hol# *ro*erties can 3e sol#
throu/h *ower of 7ttorney %PO7'. Such PO7 transactions are reco/ni:e# as a 9ali# for)
of transfer 3y e9elo*)ent 7uthorities also on *ay)ent of s*ecifie# char/es.
Transactions throu/h PO7 route are fun#e# 3y H&-Es in a state that allow such transfers.
It is necessary in such cases to 9erify the chain of PO7.
.H&0 shall acce*t only the first PO7 cases.
The laws a**lica3le to the transactions throu/h PO7 are the sa)e that /o9ern transfer of
*ro*erty. The a/ree)ent to Sell In fa9our of the 3orrower shoul# ha9e 3een re/istere#.
ocu)ents in res*ect of PO7 transactions will inclu#e4
72
7/ree)ent to sell %#uty re/istere# an# sta)*e# as *er re2uire)ent'
$eneral Power of 7ttorney.
S*ecial Power of 7ttorney in fa9our of the co)*any.
@ill.
Possession 0etter.
Recei*t
7ll ori/inal #ocu)ents of title in fa9our of the Ori/inal 7llottee.
7t *resent these (in# of transactions ha9e 3een *er)itte# only at elhi.
I+ #",* ./ ,*#$-(&'
1 S(04%* M.-&2"2*
Un#er this ty*e of )ort/a/e without #eli9erin/ *ossession of the )ort/a/e# *ro*erty the
)ort/a/or 3in#s hi)self *ersonally to *ay the )ort/a/e )oney an# a/rees e8*ressly or
i)*lie#ly that in an e9ent of failure to *ay accor#in/ly to his contract, the )ort/a/e shall
ha9e the ri/ht to cause the )ort/a/e *ro*erty to 3e sol# an# the *rocee#s of the sale to 3e
a**lie# in *ay)ent of )ort/a/e# )oney.
The Mort/a/or un#erta(es *ersonal lia3ility
No *ossession is #eli9ere#
No foreclosure. No *ower of sale out of court.
It )ust 3e affecte# 3y a re/istere# instru)ent.

2 B' )*4.,(& ./ &(&%* )**), (EB$(&"9%* M.-&2"2*)
7 )ere #e*osit of title #ocu)ents woul# not create e2uita3le )ort/a/e unless there is an
intention to create e2uita3le )ort/a/e.
Physical #eli9ery of #ocu)ents is not the only )o#e of #e*osit
-onstructi9e #eli9ery is also sufficient.
If #ocu)ents #e*osite# show no title no )ort/a/e is create#. 7 co*y is not a #ocu)ent of
title an# its #e*osit cannot create an e2uita3le )ort/a/e.
Howe9er, where the ori/inal is lost an# a certifie# co*y is o3taine# %with safe/uar#s such
as *olice &IR, *u3lic notice in news*a*ers *u3lishin/ such loss' an# #e*osite# , it )ay 3e
acce*te# as a #ocu)ent of title.
73
It )ust 3e )a#e out that the #ocu)ent is lost.
The #ocu)ents #e*osite# shoul# show co)*letely /oo# title.
It is sufficient if the #ee#s #e*osite# 3onafi#e relate to the *ro*erty or are )aterial
e9i#ence of title an# are shown to ha9e 3een #e*osite# with the intention of creatin/
security there on.
CHEC<LIST OF TITLE DOCUMENTS
A) F.- 4-.4*-&(*, "%-*")' "#B$(-*)I.6+*) 9' &3* 9.--.6*-
1 F-** 3.%) 4-.4*-&(*,
Re/istere# #ee# 3y which the *ro*erty is transferre# in fa9our of the 3orrower in ori/inal.
7ll *re9ious re/istere# title #ee#s in ori/inal.
2 L*",* 3.%) 4-.4*-&(*,
--- L*",* 3.%) 4-.4*-&(*, ./ ,&"&$&.-' 9.)(*,I)*:*%.40*+& "$&3.-(&(*, "%%.&&*)
)(-*#&%' &. &3* 9.--.6*-
0ease #ee# an# allot)ent letter in fa9our of 3orrower in ori/inal.
Per)ission to )ort/a/e the *ro*erty in fa9our of len#er fro) #e9elo*)ent authority.
AAA L*",* 3.%) 4-.4*-&(*, ./ .&3*- &3"+ ,&"&$&.-' 9.)(*,I)*:*%.40*+& "$&3.-(&(*,
Re/istere# lease #ee# in fa9our of a**licant in ori/inal.
Per)ission fro) the lessor to )ort/a/e the *ro*erty in fa9our of len#er.
-ertifie# co*ies of title #ee# of the lessor.
F P$-#3",* ./ 4-.4*-&'
AAAP$-#3",*- ./ 4%.& /-.0 C..4*-"&(:* G-.$4 H.$,(+2 S.#(*&'.
7llot)ent letter issue# 3y the Society in ori/inal.
Share -ertificate issue# 3y the Society in ori/inal.
Re/istere# leaseIsale #ee# in fa9our of the 3orrower in ori/inal as soon as it is e8ecute#
3y the society.
NO- fro) society.
Possession letter confir)in/ han#in/ o9er *ossession of i#entifie# *lot.
74
-ertifie# co*y of the 6yeAlaws an# Title #ee#s of the society.
7**ro9e# layout sanctione# *lan.
AAAA P$-#3",*- ./ 4%.&I/%"&,I3.$,* "%%.&&*) 9' ,&"&$&.-' "$&3.-(&'I)*:*%.40*+&
"$&3.-(&'
7llot)ent letterIallocation letter issue# 3y the Statutory
NOTE:
D*:("&(.+, 4*-0(&&*): (/.- ,"%"-(*))
In case the a**licant is on *ro3ation on the first +o3 3ut heIshe is *rofessionally 2ualifie#.
7**licant is on *ro3ation in the secon# +o3 with /oo# *ast e8*erience.
Salary without P& #e#uction. The case can 3e consi#ere# in case the total staff stren/th is
less than ;0 e)*loyees an# the turno9er is )ore than Rs.< crores su**orte# 3y the 3ranch
9erification of the fir).
-ash salary fro) Pu3lic sector fir)s.
-ash Salary fro) *ri9ate sector fir)s with turno9er of )ore than Rs.< cr.
D*:("&(.+,: (/.- ,"7,3"0 I S"0"-&3INIP #"&*2.-')
No #e9iations *er)itte#.
R*#.00*+)"&(.+
The a**raisal officer on the 3asis of the 0e/al Scrutiny Re*ort M .aluation Re*ort
forwar#s his reco))en#ations an# co))ents a3out the followin/ to the 6R7N-H
M7N7$ER.
0oan 7)ount
Per -a*ita Resi#ual Inco)e %P-RI'
75
0oan To .alue %0T.' shoul# not 3e )ore than B=H
0oan -ost Ratio %0-R' shoul# not 3e )ore than B=H
Positi9e 9iews alon/ with #e9iations.
POINTERS TO APPRAISAL DECISION
1) F.- "%% &3* /.$- #"&*2.-(*, (,"%"-(*), ,*%/ *04%.'*) 4-./*,,(.+"%,, ,*%/ *04%.'*)
9$,(+*,,, NIP)
" I+#.0*: I/ (& (, $4 &. R, 10,000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. !000
IIRA%Inco)e Install)ent Ratio' A not )ore than "=H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. If P-RI is hi/h'
9 I+#.0*: R, 10,000 &. R, F0,000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. !=00
IIRA%Inco)e Install)ent Ratio' A not )ore than =0H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all %i.e. If P-RI is hi/h' an#
if a##itional inco)e e8ists.
# I+#.0*: R, F0,000 &. R,G0, 000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. <000
IIRA%Inco)e Install)ent Ratio' A not )ore than >0H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. If P-RI is hi/h' an# if
a##itional inco)e e8ists.
) I+#.0*: R, G0,000 "+) "9.:*
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. "000
IIRA%Inco)e Install)ent Ratio' A not )ore than >=H
76
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. If P-RI is hi/h' an# if
POINTERS TO 0O7N REU-TION, ENH7N-EMENT M TOP UP
In case loan #is3urse)ent is )a#e in *arts, 7t ti)e of #is3urse)ent or 3efore the final
#is3urse)ent , loan a)ount )ay re#uce or enhance, #ue to technical reason or )ay 3e
)ana/e)ent #ecision %li(e #efault in PreAEMII-he2ue #ishonore#'. The a**raisal is re
e8a)ine#.
If the loan a)ount enhances, then the latest inco)e *roof an# 3an( state)ent shoul# 3e
collecte#, , recalculation of loan a)ount , IIR, P-RI, 0T., 0-R shoul# 3e #one an#
Re9ise# Sanction 0etter, Su**le)entary 0oan 7/ree)ent, Pro)issory Note for Enhance#
a)ount shoul# 3e issue#.
If loan a)ount re#uces, than confir)ation fro) a**licants an# su**le)entary loan
a/ree)ent shoul# 3e si/ne# an# re9ise# *ay)ent sche#ule shoul# 3e /enerate#.
In case of T.4 U4 L."+, the loan re2uest shoul# 3e consi#ere# on co)*letion of one
year trac( recor# of re*ay)ent with .H&0. New &ile no4 )ust 3e /enerate#, an# shoul#
3e resrutini:e# as *er the *rocess of new a**lication, the New &ile no4 shoul# 3e lin(e#
with Ol# file for *ur*ose of creatin/ lien on security. @hile calculatin/ IIR, P-RI, earlier
loan install)ent )ust 3e ta(en as fi8e# o3li/ation an# shoul# 3e #e#ucte# fro) /ross
inco)e.
SANCTION
OB!ECTI5E:
To chec( the a**raisal of the a**licant an# the *ro*erty 3e finance# is e8ecute#
#ili/ently.
To )iti/ate ris( 3y reconsi#erin/ the loan *olicies.
PROCEDURE
The file is then forwar#e# to 3ranch )ana/er for sanctionin/ if the loan a)ount is within
his li)it or#er, then he chec(s for the 0oan *olicies, re 9erifies the a**raisal con#itions of
IIR, P-RI, 0T., 0-R an# instructs for the issue of the sanction letter.
If the loan a)ount is not within his li)its then the file is forwar#e# to the O*erations
e*t at Hea# office. They re9iews the a**raisal *rocess an# if they fin# it satisfactory
the file is forwar#e# to sanction authority at Hea# Office.
77
If while re9iewin/ the case is foun# unsatisfactory it is forwar#e# 3ac( to 6ranch
Mana/er for further 9iews.
The Sanction authority at Hea# Office assesses the a**raisal *rocess #one at 6ranch, if
the assess)ent is clear then the sanction con#itions are *ut in the file throu/h ERP
syste) M forwar#e# to 6ranch for issuin/ sanction letter.
If not then the file is forwar#e# 3ac( to 6ranch with the clearance re2uire)ents.
AGREE)ENT
OB!ECTI5E:
To /et the acce*tance of the a**licant%s' on the ter)s un#er which the loan has 3een
sanctione#.
PROCEDURE
On the sanction of the loan the sanction letter is issue# with the sanction con#itions
)entione# in it /enerate# 3y the ERP syste).
The letter has to 3e /i9en in *erson to the client an# the re)ainin/ fee has to 3e collecte#.
7fter the client acce*ts the sanction con#itions M *ays the re)ainin/ fee the loan
#ocu)ent is *rinte# an# the followin/ #ocu)ents are collecte# an# )entione# as
collecte# in the ERP syste) also.

0oan 7/ree)ent 1Housin/ %if a**lica3le'
0oan 7/ree)ent 1 Personal %if a**lica3le'
e)an# Pro)issory Note
7ffi#a9it %$eneral'
eclaration of Plot
ee# of /uarantee
is3urse)ent re2uest letter
$eneral Power of 7ttorney
eli9ery Note
Me)oran#u) of e*osit of Title #ee#s
Thir# Party Un#erta(in/.%if a**lica3le'
7ffi#a9it cu) un#erta(in/ relatin/ to construction as *er NH6 /ui#elines to a3i#e 3y the
rules, re/ulation, ter)s, con#itions an# #irections as a**lica3le fro) ti)e to ti)e for
*ro*er utili:ation of loan sanctione#.
EM of *ro*erty offere# as security.
Other collaterals re2uire#.
E8ecution of /uarantee #ee# 3y the /uarantor
Un#erta(in/ relatin/ to P-s I -he2ues.
71
e*osit of Security che2ues for the full a)ount of loan 3y the 3orrower as well as the
/uarantor.
Su3)ission of Pre EMI P-s M EMI P-s. %MI-R'
DISBURSE)ENT
OB!ECTI5E:
To #is3urse 0oan to the client on ti)e ensurin/ fulfill)ent of all the sanction
co)*liances.
PROCEDURE:
The Mana/er O*erations M 6ranch Mana/er shoul# ensure that there is no *en#ency left
3efore #is3ursin/ the loan a)ount to the a**licant.
The #is3urse)ent letter shoul# )ention the a)ount of loan sanctione#, fa9orin/ *ersonEs
na)e, che2ue no4, che2ue #ate
The #is3urse)ent #etails to 3e furnishe# in the is3urse)ent letter I)e)o are4
Eli/i3le #is3urse)ent 7)ount.
7)ount is3urse# so far
is3urse)ent re2ueste# now
is3urse)ent a**ro9e# now.
6alance to 3e #is3urse#.
The )e)o has to 3e forwar#e# to accounts officer for the *re*aration of the che2ue.
The -he2ue has to 3e forwar#e# to Hea# Office Mana/er O*erations for a**ro9al.
Mana/er O*erations )ust chec( the sanction co)*liances an# /et the che2ue si/ne# 3y
the sanction authority at Hea# Office an# )ust forwar# it to the res*ecti9e 6ranch
Mana/er.
6ranch Mana/er then shoul# /et the loan account create# 3y the 3ranch account officer,
ensure the collection of the *rocessin/ an# the a#)inistration fee, 3oo( #is3urse)ent an#
/enerate the *re EMI an# EMI sche#ule.
The 6ranch Mana/er then a**ro9es #is3urse)ent an# han#s o9er the che2ue to Mana/er
O*erations.
Mana/er O*erations shoul# ensure collection of loan #ocu)ent, security *a*ers, a**ro9al
of 6ranch Mana/er, collection of P-s an# )ention as recei9e# in the ERP syste)
3efore releasin/ the che2ue.
72
7fter the a3o9e con#ition is )et the che2ue )ust 3e issue# alon/ with the #is3urse)ent
letter an# EMI *ay)ent sche#ule at the ti)e of final #is3urse)ent.
COLLECTION
The co%%ection process is 'ndert"-en or co%%ection o !onth%#
inst"%%!ent> interest CPre0EMI interest D EMIE "s non co%%ection o EMI>
Pre0EMI "cts "s " &'rden on reg'%"r inco!e o the co!p"n#* The
process de"%s +ith co%%ection o PF?s>c"sh> E?S D s'&se9'ent%#
depositing the! in &"n- "nd getting the d'es c%e"red* It "%so g'ides
"&o't the steps to &e o%%o+ed in diBerent c"ses s'ch "s de%in9'enc#,
che9'e dishono'r etc*
CLIENT GRADING
P$-4.,*
-lient /ra#in/ is #one so as to #ifferentiate re/ular #efaulters, occasional #efaulters an#
re/ular *ayers.
It also hel*s to i#entify if actions a/ainst so)e clients nee# to 3e ta(en at a faster rate an#
also hel*s to +u#/e the efficiency of the collection *rocess
7 $ra#e 1 The clients who ha9e no EMIIPreAEMI #ue for last <0 #ays
6 $ra#e 1 The clients who ha9e EMIIPreA EMI #ue for last <0 #ays
- $ra#e 1 The clients who ha9e EMIIPreA EMI #ue for >!A90 #ays
$ra#e 1 The clients who ha9e EMIIPreAEMI #ue for a *erio# of o9er 90 #ays. These
are essentially NP7s
EMI DUE
The EMI /ets #ue on the !
st
of e9ery su3se2uent )onth, or on the #ate s*ecifie# 3y the
client on his P-s, for the *re9ious )onth. &or e8a)*le, The EMI for the )onth of
March woul# 3e #ue on !
st
of 7*ril or on the #ate for the )onth of 7*ril s*ecifie# 3y the
14
client on the P- an# is *aya3le 3y )a8i)u) !=
th
of 7*ril %i.e. != #ays is the /race
*erio#'
N.+ P*-/.-0(+2 A,,*& (NPA)
7ny asset that has faile# to *ay towar#s its *rinci*al an# interest for a ti)e *erio#
e8cee#in/ 90 #ays is classifie# as NP7.
COLLECTION PROCESS
!. B #ays *rior #ue #ate
The ERP syste) shows the followin/ client #etails
a. -lient na)e
3. -lient $ra#e
c. -lient contact no.
-ourse of actionA
-alls to 3e )a#e to clientsA
a. 7 /ra#e 1 No calls to 3e )a#e
3. 6 /ra#e 1 ! call to 3e )a#e 3efore the #ue #ate arri9es
c. - /ra#e 1 ; calls to 3e )a#e 3efore the #ue #ate arri9es
#. Un/ra#e# 1 -all to 3e )a#e a3out *ay)ent of PreA EMI a)ount
The calls shoul# 3e )a#e to clients re2uestin/ the) to ensure sufficient fun#s in their
account an# infor)in/ the) that they ha9e 3een calle# 3ecause of their *ast #efaults
On ue ate
The ERP syste) shows Infor)ationZ for the #ayEs
-ollection I #e*osit
-ourse of action
7 *ay in sli* is /enerate# 3y the syste)
The syste)s as(s for a *ay)ent )o#e 9i:. P-, -ash or E-S
In -ase Of a P-A
.erify the P- *hysically to ensure that it is in /oo# con#ition
7n# its #etails )atch with those shown 3y the ERP syste)
If the P- is 9erifie#, *resent the P- in 3an(. Re#uce P- no.3y !
-re#it the 0oan 7ccount in /oo# faith if the account is stan#ar#
13
&or nonA stan#ar# account, cre#it it only if fun#s are cleare#
If the P- is in an unacce*ta3le con#ition
-hec( for whose error is it 1 the co)*any or the client
If it is a co)*any error, rectify it an# *resent the P- in the 3an(
If it is a client error, return the P- to the client alon/ with letter !ZZ.
If the client arran/es the re2uisites of letter !, i.e. a fresh che2ue I cash within B #ays,
*resent the sa)e in the 3an(. If the -lient #oes not #o the re2uisite
-all the client to as( hi) to #o the re2uisite
Sen# hi) re)in#er !ZZ
If the client #oes the re2uisite within B #ays, *resent the che2ue I cash in the 3an(. If the
client #oes not #o the re2uisite a/ainA
-all hi) to as( hi) to #o the re2uisite an# infor) hi) that if he #oes not co)*ly, his
woul# 3e re/ar#e# as a serious offence
&ollow #ues reco9ery *rocessZZZ
I+ #",* ./ #",3
e*osit cash in 3an(
-re#it loan account if stan#ar# an# if its nonAstan#ar#, cre#it it after fun#s are cleare#
I+ #",* ./ ECS
Inti)ate 3an( with E-S #etails
-re#it loan account if stan#ar# an# if its nonAstan#ar#, cre#it it after fun#s are cleare#.
In case thereEs no instru)ent to *ay M or client refuses to *ay
Sen# Notice <ZZ
If the client arran/es for a *ay)ent instru)ent, follow the collection *rocess. If the client
still *ersists with non *ro9ision )o#e, follow u* 3y !A; 9isits a/ent an# *hone calls.
12
If the client #oesnEt arran/es for a *ay)ent instru)ent within <0 #ays *ast #ue #ate, the
EMI 3eco)es o9er #ue for ne8t )onth an# is treate# as a *en#ency
If the client #oesnEt arran/es for a *ay)ent instru)ent for 90 #ays, his loan is recalle#
an# le/al action is initiate# a/ainst hi)
;. 7fter #e*ositin/ the P- in 3an(
-onfir) for 3an( reconciliation an# cre#it in .H&0 account
If the che2ue is cleare# an# .H&0 account has 3een cre#ite#, the transaction is settle#.
If the che2ue 3ounces, as( the 3an( for the reason.
If thereEs a co)*any error, rectify it an# *resent the che2ue a/ain in the 3an(
If thereEs an error fro) the clientEs si#e, infor) hi) 3y a *hone call an# Notice !ZZ.
e3it loan 7Ic 3y Rs. ;=0 U Ser9ice Ta8
If the client ta(es the re2uisite action an# /i9es a confir)ation to *resent the che2ue
a/ain in the 3an( within B #ays of recei9in/ the notice !ZZ, *resent the che2ue in the
3an(. If the che2ue 3ounces a/ain, follow the *re9ious ste*.
If the client #oesnEt res*on#s *ositi9ely to the notice sent, initiate the )$*, -*#.:*-'
4-.#*,,
D$*, R*#.:*-' P-.#*,,
P$-4.,*
-ollection of #ues an# #iscoura/e clients fro) #efaultin/
Sen# the client the #e)an# notice within ;! #ays *ast #ue #ate
If the client arran/es for the fun#s, #e*osit the) in 3an(.
13
G
"* ?%ient N"!e
&* PF? n'!&er
c* The A"n-,
&r"nch D 7>c no*
O &"n- in +hich
the PF? is to &e
presented
If the client #oesnEt res*on# to the #e)an# notice, sen# hi) a re)in#erZZ alon/ with a
*hone call an# follow u* with an a/ent 9isit if the client #oesnEt res*on# to the re)in#er
also.
If the client fails to *ay the EMI a)ount within <0 #ays *ast #ue #ate, it is re/ar#e# as a
*en#ency for the ne8t )onth
If the client #efaults for two consecuti9e )onths an# there are in#ications that he )i/ht
#efault a/ain, sen# hi) notice ;ZZ an# follow u* 3y an a/ent 9isit.
If the client fails to *ay the EMI a)ount or #efaults for a *erio# of 90 #ays, the 0oan
7ccount turns NP7. Then, the client is sent the notice for a le/al recourse an# his loan is
un#er recall.
R*0(+)*- /.- +*8& %.& ./ PDC,
The ERP syste) /enerates a re)in#er when the P- no. In a clientEs account 3eco)e
[V<.
The client is sent a letter as(in/ hi) to *ro9i#e with the ne8t lot of P-s
The client )ay o*t for *ay)ent of EMIs throu/h cash or E-S un#er s*ecial
circu)stances. Howe9er, the consent of the co)*any is necessary in such cases.
In case the client refuses to *ay or fails to *ro9i#e the *ay)ent instru)ent within the
/i9en ti)e fra)e, a re)in#er letterZZ is sent to hi) an# follow u* is #one 3y *hone callsI
SMS an# a/ent 9isit. &or a *erio# of <0 #ays, usually !A; 9isits are )a#e.
&or two consecuti9e )onths, nonA a9aila3ility of *ay)ent instru)ent or clientEs
i/norance towar#s *ay)ent is treate# as *en#ency. Howe9er, if the ti)e *erio# of 90 #ays
ela*ses, the loan is un#er recall an# client 3eco)es lia3le for le/al action.
CLOSURE
-hec( if all the EMIs are *ai# alon/ with other #ues an# arrears.
If the EMIs MIor other #ues are *en#in/, initiate the reco9ery *rocess.
In case the #ues are to 3e written off, refer to the Reco9ery PolicyZZ
Once all the #ues are cleare#, the accounts #e*t. issues the No ues -ertificate
The o*erations #e*tt. then issues the NO- to the client an# returns all the #ocu)ents
su3)itte# 3y hi) 3ac( to hi).
14
In case the #ues are to 3e written off, refer to the Reco9ery PolicyZZ
The client is /rante# the NO- an# all the #ocu)ents su3)itte# 3y hi) are returne# once
all the #ues are cleare#I written off
The loan account is then close#.
I+ #",* ./ 4-*4"'0*+& ./ .$&,&"+)(+2 %."+ "0.$+& %*")(+2 &. 4-*-#%.,$-*
Infor) the client a3out the outstan#in/ loan a)ount
On clientEs consent, collect the che2ueI cash an# #e*osit it in the 3an(
If the che2ue 3ounces, infor) the client an# sen# Notice !ZZ
If the che2ue clears, all the #ues are cleare# an# all transactions are co)*lete, the client is
returne# all the #ocu)ents su3)itte# 3y hi) alon/ with the NO- an# lefto9er P-s %if
any'
The loan account is then close#.
41 BENEFITS OF THE PROPOSED PROCESS
I+&*2-"&(.+
Inte/ration can 3e the hi/hest 3enefit of all. The only real *ro+ect ai) for i)*le)entin/ ERP is
re#ucin/ #ata re#u#ancy an# re#u#ant #ata entry. If this is set as a /oal, to auto)ate the entire
*rocess, then it )i/ht 3e a successful *ro+ect. Those co)*anies where inte/ration is not so
i)*ortant or e9en #an/erous, ten# to ha9e a har# ti)e with ERP. ERP #oes not i)*ro9e the
in#i9i#ual efficiency of users, so if they e8*ect it, it will 3e a 3i/ #isa**oint)ent. ERP i)*ro9es
the coo*eration of users es*ecially with res*ect to )ulti*le 3ranches which the co)*any will 3e
15
e8*an#in/ to in the ne8t ;A< yrs.
E//(#(*+#'
This *rocess focuses on inte/ration of the *rocess. I thin( in#i9i#ual efficiency as well as the
tea) efficiency will increase as the *rocess will 3e free fro) re*etiti9e ste*s.The 3enefit of
inte/ration an# coo*eration will )a(e u* for the loss in )anual *rocess.
C.,& -*)$#&(.+
It re#uces cost as the *rocess 3eco)es faster, free fro) errors an# without #elays. Internal
re*ortin/ will 3eco)e )ore efficient an# can 3e )onitore# easily.
L*,, 4*-,.++*%
0ess re*ortin/ or accountin/ *ersonnel will 3e re2uire#.
A##$-"#'
Hu)an errors will 3e re)o9e#. It will force the *eo*le an# the co)*any to 3e accurate, or it
falls.
16
PART F
DPROPOSED LOAN POLICY
17
I+&*-*,& R"&* S*&&(+2 J B*+#30"-7 ROI
AVERAGE COST OF FUNDS
PNA 3
)1'05 O63 P,-'/-2&4 I'0+,+30
)&7
810 3,32,43,434 343363
A2, 810 3,34,21,234 343125
)&,810 3,36,33,434 347273
F+9810 3,37,21,634 21417
%&'810 3,32,13,134 334142
D+/80# 3,23,62,434 332327
3,37,46,434 633737
PNB
2
)1'0
5
O63
P,-'/-2&4
I'0+,+
30
)&7
810 34473644
32733
4
A2,
810 34251144
32744
1
)&,8
10 34444444
33373
2
F+98
10 34622244
32321
3
%&'81
0 34144444
33721
7
D+/8
0# 34222644
33667
2

34543533
*33
71444
4
11
SB)
)1'0
5
O63
P,-'/-2&4
I'0+,+
30
)&7
810 54444444 534437
A2,
810 54444444 543774
)&,8
10 54444444 524522
F+98
10 54444444 472335
%&'81
0 32644444 422617
D+/8
0# 4 26513

32233333
*33
246322
6
D+/ %&' F+9 )&, A2, )&7
273616
34
664271
34
764271
34
764574
34
756174
34
753366
34
663141
13
275517 677136 622313 763534 733447 732424
317245
7

3*43H 3*42H 4*23H 3*44H 4*27H 4*21H 5*16H
T10&4
O63
P,-'/-2&4$D+/8
0#-)&7810( 66314114*67
I'0+,+30$D+/80
#-)&7 810( 3172457

AVERAGE
COST OF
FUNDS 11.!2:
A"n-Is %ending
r"te 32*25H
12
W+-;50+< &=+,&;+
/130 1> >?'< &3 1'
316362010
A B A @ B
AA1?'0
C130
:
N+0 B1,05 $EC?-07 D
R+3+,=+3(
4551344
4 4*32 5462264
S+/?,+< <+90
7561743
4
4*322
5 2273652
U'3+/?,+< <+90 562445 4*34 72666*3
T10&4
3231324
52 34123216

W+-;50+< A=+,&;+
/130 1> >?'<3 32*36H
32,+&< 4*44H
B+'/5A&,E ROI 1.1:
?ost H
;or e9'it#, this is t"-en to &e 34H p%'s di(idend cost, "pproxi!"ted to 32H*
;or sec'red de&t, this is t"-en "s p"st 6 !onth "(er"ge o ter! %o"n cost OR
c'rrent ter! %o"n interest r"te, +hiche(er is higher C32*25HE
;or 'nsec'red de&t, this is t"-en "s SI67 r"te or SI67 p%'s r"te Cor Firectors
deposits or I?FE, +eighted "(er"ge, p%'s 35H C32HJ3*31HK "pprox* 34HE
L1&' P14-/7
TYPE OF LOANS
W3. #"+ &"7* 4
24
HOUSING LOAN
NON-HOUSING LOAN
1 0oan for *urchase of rea#y 3uilt
houseIflat.
2 0oan for construction of house.
F 0oan for e8tension of house.
4 0oan for reno9ation
Ii)*ro9e)entIre*air of house.
D 0oan for *urchase of resi#ential
*lot.
1 0oan a/ainst *ro*erty.
2. Personal loans.
In#i9i#ual
Hus3an# M wife +ointly.
&ather M son%s' +ointly
Two or )ore 3rothers +ointly
0oans to un)arrie# #au/hters +ointly with *arent%s' %e8ce*tional cases'.
P$-4.,*
Housin/ loans for *urchase of houseIflatI*lot I or for
constructionIe8tensionIre*airsIreno9ation of #wellin/ units.
NonAhousin/ 0oans for loan a/ainst *ro*erty M *ersonal loans.
E%(2(9(%(&'
In#ian Nationals either sin/le or +ointly who are otherwise not #is2ualifie# fro) enterin/
into contract.
NonAResi#ent In#i9i#uals %NRIs'
A, 4*- F.-*(2+ E8#3"+2* M"+"2*0*+& A#&, 199C
NonAResi#ent In#ians are In#ian citi:ens who stay a3roa# for e)*loy)ent or for carryin/
on 3usiness or 9ocation outsi#e In#ia or for any *ur*ose in circu)stances in#icatin/ an
in#efinite *erio# of stay a3roa#.
$o9ern)ent Ser9ants who are *oste# a3roa# on #uty with In#ian )ission an# si)ilar
other a/encies set u* a3roa# 3y the $o9ern)ent of In#ia where the officials #raw their
salaries out of $o9ern)ent resources.
$o9ern)ent Ser9ants #e*ute# a3roa# on assi/n)ents with forei/n
/o9ern)entsIinternational a/encies.
Officials of State $o9ern)ents an# *u3lic sector un#erta(in/s #e*ute# a3roa# on
te)*orary assi/n)ents or *oste# to their 3ranches an# offices a3roa#.
A0.$+& ./ %."+
T'4* 7)ount
1 0oan for *urchase of rea#y 3uilt house I flat Rs.!=,000,00
rela8a3le u* to
Rs.;0,000,00
2 0oan for construction of houseIflat Rs.!=,000,00
rela8a3le u* to
Rs.;0,000,00
F 0oan for ho)e e8tension Rs.!0,000,00
rela8a3le u* to
Rs.!=,000,00
23
4 0oan for re*airIreno9ation Ii)*ro9e)ent. Rs.!0,000,00
rela8a3le u* to
Rs.!=,000,00
D 0oan for *urchase of resi#ential *lot. Rs.!0,000,00
rela8a3le u* to
Rs.!=,000,00
G 0oan a/ainst *ro*erty Rs.!=,000,00
rela8a3le u* to
Rs.;0,000,00
H Personal loans Rs.!0,000,00
FEE STRUCTURE
0o/in &ees %0e/al M Technical &ee' Rs.;=00 U Ser9ice Ta8%nonA
refun#a3le'
Processin/ &ees !.00H of sanctione# loan a)ount U
ser9ice ta8.
7#)inistrati9e &ees !.00H of sanctione# loan a)ount U
ser9ice ta8.
ReAsche#ule)ent fee Rs. !000 U ser9ice ta8
Interest ty*e con9ersion !.00H of the *rinci*al loan outstan#in/
22
U ser9ice ta8
Pre*ay)ent in ta(eo9erI6T ;.00H of the *rinci*al loan outstan#in/
U ser9ice ta8 .
Pre*ay)ent fro) own source =H to ;.00H of the *rinci*al loan
outstan#in/ U ser9ice ta8 su3+ect to
sanction con#itions.
Sta)* char/es for loan #ocu)ents 7ctual
Reco9ery char/es 7ctual
-he2ue return char/es Rs. ;=0IA*er instru)ent.
Penal char/es for #elaye# *ay)ents <>H *.a. % <.00H *.).'
N.&*: The )ana/e)ent )ay allow suita3le re3ate in char/es at its #iscretion
L."+ &*+$-*
!.0oan for *urchase of rea#y
3uilt house I flat
U* to !; yrs , rela8a3le u* to !=
yrs.
;.0oan for construction of
houseIflat
yrs.
<. 0oan for ho)e e8tension U* to !; yrs , rela8a3le u* to !=
yrs.
". 0oan for re*airIreno9ation
Ii)*ro9e)ent.
yrs.
=.0oan for *urchase of
resi#ential *lot.
yrs.
23
>.0oan a/ainst
*ro*ertyI)ort/a/e loan
yrs.
B.Personal loans ! yr to = yrs.
N.&*4
The tenure of Ho)e 0oan I)ort/a/e loan ran/es fro) < yrs to !; years rela8a3le u* to
!= yrs. The ter) howe9er #oes not e8ten# 3eyon# the retire)ent a/e or >0 years
whiche9er is earlier %>= years for self e)*loye# in#i9i#uals an# *ri9ate co)*any
e)*loyees if certifie# 3y the co)*any'.
T3* ,(;* ./ EMI )*4*+), .+:
Quantu) of loan
Interest rate a**lica3le
0oan tenure
O$- *8(,&(+2 -*&"(% 4-(0* %*+)(+2 -"&* (, 1G2DL
LOAN TO 5ALUE RATIO (LT5):
3uilt house I flat
B=H of esti)ate# cost
houseIflat
B=H.
<. 0oan for ho)e e8tension =0H of )ar(et 9alue.
Ii)*ro9e)ent.
=0H of )ar(et 9alue.
resi#ential *lot.
>0 H
24
>.0oan a/ainst
*ro*ertyI)ort/a/e loan
=0 H.
N.&*: H.6*:*- M"+"2*0*+& 0"' 4*-0(& -*%"8"&(.+ ./ DL
LOAN TO COST RATIO(LCR):
INS
TA
LL
ME
NT
TO
INCOME RATIO: F.- "%% &3* /.$- #"&*2.-(*, (,"%"-(*), ,*%/ *04%.'*) 4-./*,,(.+"%,,
,*%/ *04%.'*) 9$,(+*,,, NIP)
I+#.0*: I/ (& (, $4 &. R, 10,000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. !000
IIRA%Inco)e Install)ent Ratio' A not )ore than "=H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. If P-RI is hi/h'
I+#.0*: R, 10,000 &. R, F0,000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. !=00
IIRA%Inco)e Install)ent Ratio' A not )ore than =0H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all %i.e If P-RI is
25
3uilt house I flat
B=H.
houseIflat
B=H.
<. 0oan for ho)e e8tension !00H of i)*ro9e)ent
esti)ate# cost .
Ii)*ro9e)ent.
!00H of i)*ro9e)ent
esti)ate# cost.
resi#ential *lot.
>= H
N.&*: H.6*:*- M"+"2*0*+& 0"' 4*-0(& -*%"8"&(.+ ./ DL
hi/h' an# if a##itional inco)e e8ists.
I+#.0*: R, F0,000 &. R,G0, 000 40
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. <000
IIRA%Inco)e Install)ent Ratio' A not )ore than >0H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. If P-RI is
hi/h' an# if a##itional inco)e e8ists.
I+#.0*: R, G0,000 "+) "9.:*
P-RIA%Per -a*ita Resi#ual Inco)e' A Rs. "000
IIRA%Inco)e Install)ent Ratio' A not )ore than >=H
e9iation of =H can 3e *er)itte# if the fa)ily si:e is s)all. %i.e. if P-RI is hi/h' an# if
O&3*- I+#.0* C.+,()*-*) /.- IIR N.-0,
R*+&"% I+#.0*: B=H of rental inco)e can 3e consi#ere# in case the a**licant su3)it either
of the followin/ #ocu)ents4
o 0ease a/ree)ent.
o -o*y of 3an( *ass3oo(I3an( state)ent reflectin/ the rent recei9e# alon/ with the
ownershi* *roof.
o -o*y of ITREs if rental inco)e is shown in the ITR.
A2-(#$%&$-"% I+#.0*: =0H of a/ricultural inco)e can 3e consi#ere# su3+ect to a )a8i)u)
of <0H of Net 7nnual Inco)e if the inco)e is shown in the ITR.
&or the consi#eration of a/ricultural inco)e if not shown in the ITR, a certificate of
a/riculture inco)e fro) the 9illa/e officer can 3e o3taine#. In 3oth cases ownershi* of
7/ricultural lan# alon/ with the 9isit re*ort 3y 6ranch Mana/er assessin/ the a/ricultural
inco)e is a )ust.
P*+,(.+ I+#.0*: !00 H of *ension inco)e as reflecte# in the 3an( state)ent can 3e
consi#ere# as other inco)e. -o*y of *ension or#er to 3e collecte# fro) the custo)er.
26
Note4 In case of the future *ension the 6asic U 7 shoul# 3e )ore than Rs.!0000IA*.). at
the ti)e of a**lication. &or calculation of loan eli/i3ility for the e8ten#e# *erio# %u* to the
a/e of >=' =0H of the 6asic U 7 at the ti)e a**lication is consi#ere#.
T$(&(.+ I+#.0*: =0H of tuition inco)e is consi#ere# for Net 7nnual Inco)e. The 3ranch
has to su3)it a 9erification re*ort 3y 6ranch Mana/er. !00H of tuition inco)e if #eclare# in
ITR M 3an( state)ent.
P"-& T(0* !.9 I+#.0*: !00H of inco)e can 3e consi#ere# for Net 7nnual Inco)e if it is
reflecte# in ITRI3an( state)ent of the custo)er. Howe9er only =0H of inco)e is consi#ere#
if the custo)er is /ettin/ the co)*ensation in cash. Proof of cash inco)e has to 3e
su**orte# 3y the contract letter on the letterhea# of the co)*any #uly 9erifie# 3y the 3ranch.
SECURITY: " E2uita3le Mort/a/e of *ro*erties for which loan is a#9ance#.

3. $uarantee che2ues fro) 3orrower for Housin/ loan
c. $uarantee che2ues fro) 3orrower as well as /uarantor for *ersonal loans.
ADDITIONAL SECURITY: " -ollaterals e./. Insurance Policy, NS-, 6on#s etc. as
re2uire#.
9. $uarantor

INTEREST RATES4
1 H.$,(+2 L."+,
a. &i8e# Rate4 U* to = years !B.00H
\ =yrs u* to !0 yrs !B.=0H
\ !0 years !?.00H
3. &loatin/ Rate4 U* to = years !>.=0H
\ =yrs u* to !0 yrs !B.00H
27
\ !0 years !B.=0H
N.&*: Howe9er rate of interest shoul# 3e char/e# !H hi/her in case of salarie# e)*loyee
with *ro*rietorshi* or *9t.lt# co)*any, !H hi/her in case of self e)*loye# *rofessionals
if cash accrual inco)e is consi#ere# an# ;H hi/her in case of selfAe)*loye# 3usiness if
)ulti*lier factor is a**lie# at the ti)e of net inco)e calculation, also for NIP %NonA
Inco)e Proof' -ate/ory it )ust 3e char/e# ;.00 H hi/her for any of the sla3s #escri3e#
a3o9e.
Mana/e)ent can *ro9i#e interest rate concession u* to ;H in case of low 0T., low IIR
an# hi/h inco)e sta3ility.
;. L."+ "2"(+,& P-.4*-&'4 a. &i8e# rate4 U* to B yrs ;;H
\ B yrs ;"H
3. &loatin/ Rate4 U* to B yrs ;0H
\ B yrs ;;H
N.&*: !H hi/her rate in case of salarie# e)*loyee with *ro*rietorshi* or P9t.lt#
-o)*any , !H hi/her in case of self e)*loye# *rofessionals if cash accrual inco)e is
consi#ere# ,;H hi/her in case of selfAe)*loye# 3usiness if )ulti*lier factor is a**lie# at
the ti)e of net inco)e calculation. Incenti9es )ay 3e /i9en for re/ular *ay)ents on #ue
#ates as #eci#e# 3y the Mana/e)ent. Mana/e)ent can *ro9i#e interest rate concession
u* to ;H in case of low 0T., low IIR an# hi/h inco)e sta3ility.
<. P*-,.+"% L."+4
Interest rates
o &or salarie# e)*loyee with $o9t. or Known Pu3lic 0t# co)*any4 ;"HA<0H *.a.
o &or salarie# e)*loyee with P9t. lt# co)*any4 <0HA<>H *.a.
o &or self e)*loye# *rofessionals4 ;"HA<>H *.a.
o &or self e)*loye# 6usiness)en4 ;"HA<>H *.a.

N.&*: Mana/e)ent is authori:e# to 9ary the incenti9e in suita3le cases M /i9e interest
rate concession in case of hi/her inco)e /rou* in#i9i#uals that fall in low ris( cate/ory.
". C3"+2*, (+ I+&*-*,& -"&*,4 Mana/e)ent is authori:e# to effect suita3le chan/es in
Interest rates fro) ti)e to ti)e as #ee)e# necessary. 7ll such re9isions )ay 3e *lace#
3efore the 3oar# su3se2uently.
Interest will 3e calculate# on DNearly Rest 6asis, %NR6'
S4*#("% F"#(%(&(*, (A))*) 5"%$*,)
!. I+#*+&(:* /.- -*2$%"- "+) 4-.04& 4"'0*+&: If the 3orrower *ays all his EMIs
re/ularly on #ue #ates without fail. The co)*any )ay e8ten# a re3ate of 0.;=H which
will 3e cre#ite# to his account at the closure of the loan. This facility is a9aila3le on 3oth
21
fi8e# an# floatin/ rates 3ut is not e8ten#e# to *re EMIs an# to cases where concessional
interest rate is char/e#. Mana/e)ent is authori:e# to 9ary the incenti9e in suita3le cases.
;. R*-,#3*)$%*0*+&: ReAsche#ule)ent of housin/ loan is *er)itte# un#er the followin/
circu)stances4
ReA*ay)ent of loan account 3eco)in/ o9er#ue on /enuine reasons li(e loss of
+o3, une8*ecte# e9ents to the custo)er or fa)ily )e)3ers an# custo)er
re2uestin/ for increasin/ tenure.
-usto)er *re*ayin/ *art of loan an# re2uestin/ to re#uce the tenure or EMI.
Present inco)e not sufficient to ser9ice the EMI an# re2uestin/ for a lower EMI
an# a lon/er tenure%ha9in/ sufficient 3alance ser9ice *erio#'.
@ith the increase in salaryIinco)e, custo)er re2uestin/ to enhance EMI an#
re#uction in tenure.
Increase in EMI on account increase in ROI 3y .H&0 an# custo)er re2uestin/ for
increasin/ the tenure.
<. E+3"+#*0*+& ./ %."+: The necessity for enhance)ent of loan arises out of cost
escalation of construction, e8tension, i)*ro9e)ent etc. In so)e cases where the custo)er
fails to 3rin/ in the re2uire# )ar/in for reasons 3eyon# hisIher control, nee# for
enhance)ent of loan arises.
Enhance)ent o*tion is a9aila3le 3efore the #is3urse)ent of loan as well as 3efore the
final #is3urse)ent.
Enhance)ent will not 3e allowe# after the last #is3urse)ent of loan.
The enhance# *ortion as well as the e8istin/ *ortion shoul# 3e within the a**lica3le
0-RI0T. an# IIR an# other cre#it nor)s.
Inco)e earlier not consi#ere# for Net 7nnual Inco)e as well as increase in inco)e #urin/
the /a* can 3e consi#ere# for enhance)ent of loan.
4 F.-*#%.,$-*IP-*-4"'0*+& ./ %."+:
22
PreA*ay)ent of loan )ay 3e *er)itte#.
.=H to ;.00H *reA*ay)ent fee shall 3e char/e# if *ai# fro) own source li(e sa9in/,
retire)ent 3enefit, sale of asset etc.
;.00H *re*ay)ent char/e *lus ser9ice ta8 shall 3e collecte# for ta(eo9er 3y
&IsI6alance transfer etc.
No fee shall 3e char/e# for *art *ay)ent *ro9i#e# the a)ount of *art *ay)ent #o not
e8cee# B=H of the loan outstan#in/ for that *articular financial year.
=. D*%"'*) P"'0*+&: In case of #elaye# *ay)ent of *reAEMI or EMI the *resent *ractice
of char/in/ an a##itional interest of <H for the #elaye# *erio#, calculate# on #aily 3asis
will continue.
>. C.%%*#&(.+ C3"-2*,: &or collection of cashIche2ue fro) the 3orrowers an a**ro*riate
char/e will 3e le9ie#. Rs ;=0 *er 9isit 3y )essen/er. Rs. =00 *er 9isit 3y a/entIofficer.
Rs.B=0 *er 9isit 3y any hi/her )ana/e)ent re*resentati9e. Mana/e)ent is authori:e# to
re9ise these rates as an# when necessary.
P-*-S"+#&(.+ R*B$(-*0*+&,
" S$90(,,(.+ ./ "44%(#"&(.+
Prescri3e# a**lication for) #uly fille# with su**ortin/ #ocu)ents is to 3e lo//e# in an#
a suita3le i#entification nu)3er has to 3e /enerate# 3y the ser9ice centre. Referre# as
&ile nu)3er, this is the uni2ue i#entity of an a**lication for all future references.
9 A44%(#"&(.+ -*B$(-*0*+&,
NonArefun#a3le *rocessin/ fee.
C3*#7%(,& ./ ).#$0*+&, &. 9* #.%%*#&*)
MANDATORY DOCUMENTS I <YC DETAILS
* R*,()*+#* P-../
&or resi#ence *roof the followin/ #ocu)ents shoul# 3e collecte#. %S*%/ "&&*,&*) c.4' ./
"+' .+*' later to 3e 9erifie# with the ori/inals 3y the 9erification officerIin char/e 3efore
a**raisal as )entione# in the 9erification ste*.
Ration car#
Pass*ort
Tele*hone 3ill
344
Electricity 3ill
6an( state)ent
/ I)*+&(&' P-../
&or i#entity *roof collect (S*%/ "&&*,&*) #.4' ./ "+' .+*' later to 3e 9erifie# with the
ori/inals an# concerne# authorities as )entione# in the 9erification ste*.
P7N %*er)anent account nu)3er' -ar#
ri9in/ license
Election I#entity -ar#
Pass*ort.
F(+"+#("% D.#$0*+&,
4) F.- S"%"-(*) (S*%/ "&&*,&*) #.4' ./ "%% ./ &3* /.%%.6(+2)
Salary sli*s of last < )onths.
0atest &or) A!>. If salary a3o9e Rs.!=, 000 *.).
-o*y of 3an( State)ent of salarie# account or any other 3an( account for last > )onths.
-o)*any *rofile if it is a lesser (nown or/ani:ation.
0oan state)ent with current outstan#in/ 3alance an# o9er#ue if any an# re*ay)ent
sche#ule.
D) F.- S*%/-*04%.'*) 4-./*,,(.+"%, (S*%/ "&&*,&*) #.4' ./ "%% ./ &3* /.%%.6(+2)
0ast < years IT returns of the a**licant alon/ with co)*utation of inco)e self atteste#.
0ast three years 6alance sheet an# Profit M loss 7I- of the fir) self atteste#.
6rief 6usiness Profile on letterhea# of the fir) 3y the a**licant.
7ll 3an( state)ents for last ! yr for sa9in/ 7I- an# -urrent 7I-.
G) F.- S*%/-*04%.'*) 9$,(+*,, (C.4' ./ "%% ./ &3* /.%%.6(+2)S*%/ "&&*,&*)
0ast < yrs inco)e ta8 return with co)*utation of inco)e self atteste#.
343
0ast < yrs 6alance sheet an# Profit M 0oss 7I- of the co)*any self atteste#.
6rief 3usiness *rofile on the letter hea# of the co)*any.
7ll 3an( state)ents for last ! year for sa9in/ 7I- an# current 7I-.
If P9t. 0t# then MOU
etails of contracts un#erta(en #urin/ last ; yrs.%If a**lica3le'
GENERAL DOCUMENTS
# G*+*-"% ).#$0*+&, (/.- "%% F #"&*2.-(*, ./ "44%(#"+&, (* ,"%"-(*), ,*%/-*04%.'*),
9$,(+*,,)
Recent Pass*ort si:e *hoto/ra*hs of the a**licant as well as the coAa**licant.
etails of e8istin/ loan %loan outstan#in/, total no4 of install)ents an# 3alance no4 of
install)ents with sche#ule.'
Pro*erty #ocu)ents of the *ro*ose# *ro*erty alon/ with necessary a**ro9al M chain
title.
) G*+*-"% ).#$0*+& (/.- ,"%"-(*))
-o*y of e)*loyee I#entity -ar# %to 3e 9erifie# with ori/inal at the 9erification ste*.'
2 G*+*-"% ).#$0*+&, (/.- ,*%/ *04%.'*) 4-./*,,(.+"%,) (C.4' ./ "%%) to 3e 9erifie# with
ori/inal at the 9erification ste*.
Professional Qualification certificate.
Practice -ertificate.
Salary certificate%in case of ha9in/ salarie# inco)e'
3 G*+*-"% ).#$0*+& (/.- ,*%/ *04%.'*) 9$,(+*,,)
-o*y of list of clients.
( D.#$0*+&, &. 9* ,$90(&&*) /.- NRI %."+ 4-.4.,"%
-o*y of 9isa sta)*e# on the *ass*ort.
-o*y of the latest wor( *er)it.
342
-o*y of e)*loy)ent contract.
Salary certificate fro) the e)*loyer.
-o*y of sanctione# *lan of the house to 3e constructe# or a co*y of the 3uil#in/ *lan in
case of flat.
etaile# esti)ate of construction cost for self construction cases fro) a 2ualifie#
architect.
7/ree)ent for SaleITitle #ocu)ent an# other #ocu)entary e9i#ences as *er the local
laws an# acce*ta3le to the *anel a#9ocate for su3)ittin/ nonAencu)3rance an#
)ar(eta3ility re*ort of the *ro*erty.
In case the *ro*erty is to 3e *urchase# fro) Housin/ 6oar#Ie9elo*)ent 7uthority or a
housin/ -oAo*erati9e society, an allot)ent letter fro) the a/ency concerne#, alon/ with
NoAO3+ection letter, for creatin/ )ort/a/e in fa9our of .H&0.
* S*#$-(&' ).#$0*+&,
Ori/inal #ocu)ents
In case of security #ocu)ent lo#/e# for re/istration un#er the In#ian Re/istration 7ct, the
recei*t issue# 3y the Re/istrar.
-ertifie# co*iesIori/inal of recei*t for *ay)ent )a#e to the 3uil#er or coAo*erati9e
society.
CHEC<LIST OF TITLE DOCUMENTS
4 F.- 4-.4*-&(*, "%-*")' "#B$(-*)I.6+*) 9' &3* 9.--.6*-
F-** 3.%) 4-.4*-&(*,
Re/istere# #ee# 3y which the *ro*erty is transferre# in fa9our of the 3orrower in ori/inal.
7ll *re9ious re/istere# title #ee#s in ori/inal.
D L*",* 3.%) 4-.4*-&(*,
--- L*",* 3.%) 4-.4*-&(*, ./ ,&"&$&.-' 9.)(*,I)*:*%.40*+& "$&3.-(&(*, "%%.&&*)
)(-*#&%' &. &3* 9.--.6*-
0ease #ee# an# allot)ent letter in fa9our of 3orrower in ori/inal.
Per)ission to )ort/a/e the *ro*erty in fa9our of len#er fro) #e9elo*)ent authority.AAA
L*",* 3.%) 4-.4*-&(*, ./ .&3*- &3"+ ,&"&$&.-' 9.)(*,I)*:*%.40*+& "$&3.-(&(*,
Re/istere# lease #ee# in fa9our of a**licant in ori/inal.
Per)ission fro) the lessor to )ort/a/e the *ro*erty in fa9our of len#er.
-ertifie# co*ies of title #ee# of the lessor.
G P$-#3",* ./ 4-.4*-&'
AAAP$-#3",*- ./ 4%.& /-.0 C..4*-"&(:* G-.$4 H.$,(+2 S.#(*&'.
7llot)ent letter issue# 3y the Society in ori/inal.
Share -ertificate issue# 3y the Society in ori/inal.
343
Re/istere# leaseIsale #ee# in fa9our of the 3orrower in ori/inal as soon as it is e8ecute#
3y the society.
NO- fro) society.
Possession letter confir)in/ han#in/ o9er *ossession of i#entifie# *lot.
-ertifie# co*y of the 6yeAlaws an# Title #ee#s of the society.
7**ro9e# layout sanctione# *lan.
AAAA P$-#3",*- ./ 4%.&I/%"&,I3.$,* "%%.&&*) 9' ,&"&$&.-' "$&3.-(&'I)*:*%.40*+&
"$&3.-(&'
7llot)ent letterIallocation letter issue# 3y the Statutory
/ I+&*-:(*6
The a**licant an# coAa**licant are to 3e inter9iewe# to 9erify the #etails furnishe# 3y the
a**licant in the a**lication for), #ocu)ents su3)itte# an# #urin/ the *ersonal
#iscussion are consistent M to assess the attitu#e of the a**licantIs M elicit a##itional
infor)ation across the ta3le an# to +u#/e the /eneral cre#it worthiness.
@hile inter9iewin/ the ser9ice centre official shoul# recor# his i)*ressions in the
*rescri3e# inter9iew sheet.
2 A44-"(,"%
It shoul# 3e #one in < sta/es financial, technical an# le/al. &inancial a**raisal nee#s to 3e
#one to chec( the cre#itworthiness of the a**licant an# the loan eli/i3ility so that the
re*ay)ent of the EMI is re/ular an# on ti)e M to )iti/ate ris( 3y consi#erin/ the
inco)e, no4 of #e*en#ents, assets M lia3ilities of a**licantIs.
@hile wor(in/ out the re*ay)ent ca*acity, cre#it shoul# 3e /i9en for 9oluntary sa9in/s
li(e a##itional *ro9i#ent fun# contri3ution, contri3ution to sa9in/ *lans, *re)iu) for
insurance *olicies not assi/ne# as collateral security.
79era/e of inco)e 3ase# on ITR i/norin/ a3nor)al fluctuations.
e*reciation to the e8tent of B=H to 3e a##e# 3ac( to arri9e at #is*osa3le inco)e of
a**licant. In e8ce*tional cases !00H of #e*reciation )ay 3e consi#ere#.
@hile technical M le/al shoul# 3e #one to ensure that the *ro*erty *ro*ose# to 3e
finance# M )ort/a/e# is )ar(eta3le, enforcea3le an# with clear title, to re#uce ris( , to
assess the 2uality of security for the loan, the )ar/in *ro9i#e# i.e. 9alue of *ro*erty
)inus loan a)ount M to calculate 0oan To .alue Ratio M 0oan To -ost Ratio to arri9e at
the #ecision of reco))en#in/ the *ro*osal for sanctionin/.
-are to 3e ta(en to a9oi# financin/ *ro*erty ha9in/ location han#ica*s or other ty*es of
infir)ities.
344
SANCTION
7. Para)eter
0oanA-ost Ratio %0-R' u* to B=H %with =H #e9iation' as )entione# in
0-R nor)s
0oan to .alue Ratio %0T.' u* to B=H %with =H #e9iation' as )entione# in
0T. nor)s.
Install)entAInco)e Ratio %IIR' "=H A>=H %with =H #e9iation' as )entione# in
IIR nor)s.
Per -a*ita Resi#ual Inco)e %P-RI' shoul# 3e a#e2uate an# co)forta3le as
)entione# in P-RI nor)s.
$uarantors One /uarantor *refera3le shoul# 3e of si)ilar financial status as
that of the a**licant *refera3ly a $o9t. e)*loyee.
i. Net inco)e shoul# 3e arri9e# at after #ue consi#eration of ta8 relief.
ii. IIR )ay 3e rela8e# in the cases of hi/h inco)e /rou* as the sa9in/ ca*acity is /enerally
3etter.
iii. Noun/ *rofessionals with *ros*ects of increase in salaryIinco)e )ay 3e allowe# hi/her
IIR
i9. @here the *ro*erty is inten#e# to 3e let out, net rental inco)e shoul# 3e a##e# to the
inco)e to #eter)ine eli/i3le loan a)ount.
It /enerally ha**ens in the case of /o9t. e)*loyees entitle# to 2uarters e9en after 3uyin/
a house. -ertain or/ani:ations allow the syste) of selfAlease where the e)*loyee is
allowe# to *ut his own flat on lease for selfAuse. In such cases #ue cre#it )ay 3e /i9en
for lease rent a9aila3le to the e)*loyee.
9. Nor)ally acce*ta3le loan ter) is <A;0 yrs. Howe9er , != yrs ter) is the )ost
a#9anta/eous. 0oan ter) is allowe# u* to B= years of a/e.
9i. The sanctionin/ authority shoul# ensure4
The 9alue of *ro*erty is a#e2uate an# the 0-R is co)forta3le.
The financial *osition of the a**licant is satisfactory an# his re*ayin/ ca*acity is
*ro*erly assesse# 9isA]A9is his *ersonal an# social o3li/ations.
The IIR an# P-RI shoul# 3e )eetin/ the acce*ta3le nor)s.
The authenticity of the #ocu)ents of *roof of inco)e M resources shoul# 3e 9erifie#.
345
6. ISSUE O& O&&ER
On sanction of loan, loan offer shoul# 3e issue# in #u*licate in the *rescri3e# for)at. It
shoul# 3e ensure# that s*ecial con#itions if any *rescri3e# 3y the sanction authority are
incor*orate# in the loan offer letter.
The #u*licate co*y is to 3e )ar(e# D7cce*tance -o*y, an# the a**licant is /i9en <0
#ays ti)e fro) its #ate to return it #uly si/ne# si/nifyin/ the acce*tance alon/ with
a#)inistrati9e fee an# is 9ali# for 90 #ays fro) the sanction #ate. In e8ce*tional cases it
can 3e re9ali#ate# for further *erio# 3y the sanction authority.
-. 7--EPT7N-E O& O&&ER
On acce*tance of the loan offer, it is #ue for #is3urse)ent.
DISBURSEMENT4
# P-*--*B$(,(&*:
7 sanctione# loan is #ue for #is3urse)ent when followin/ re2uire)ents are co)*lete#.
The title is a**ro9e# as clear an# )ar(eta3le.
Su**orte# 3y 9aluation re*ort.
The a**licant has in9este# his share an# it is su3stantiate# 3y #ocu)ents, if any.
0oan #ocu)ents are #uly e8ecute#.
PostA#ate# che2ues towar#s *re EMIIEMI are collecte#.
7##itional con#itions as *er Sanction note are co)*ile# with.
) L(,& ./ ).#$0*+&, &. 9* *8*#$&*)
0oan 7/ree)ent 1Housin/ %if a**lica3le'
0oan 7/ree)ent 1 Personal %if a**lica3le'
e)an# Pro)issory Note
7ffi#a9it %$eneral'
eclaration of Plot
ee# of /uarantee
is3urse)ent re2uest letter
$eneral Power of 7ttorney
eli9ery Note
Me)oran#u) of e*osit of Title #ee#s
346
* DISBURSEMENT OF INSTALLMENTS J FINAL DISBURSEMENT
The a)ount of loan to 3e #is3urse# shoul# 3e in the sa)e *ro*ortion as the 9alue of the
wor( co)*lete# 3ears to the total cost, after #e#uctin/ *re9ious #is3urse)ents, if any
throu/h 7Ic *ayee che2ue #uly a**ro9e# 3y the Mana/in/ irectorISanction authority at
-or*orate OfficeIRe/istere# Office.
Un#er no circu)stances loan #is3urse)ents will 3e )a#e in cash.
The final install)ent of loan will 3e #is3urse# when the houseI flat is co)*lete# an#
technical ins*ector certifies that the construction is co)*lete an# rea#y for occu*ation.
NOTE: In case of loan for *urchase of co)*lete# houseIflat or on secon# *urchase, as
the entire *urchase consi#eration will ha9e to 3e #is3urse# in one lu)* su), the
3orrower has to 3rin/ in his share 3efore we #is3urse.
RECO5ERY MANAGEMENT
7fter the #is3urse)ent of loan has 3een )a#e to the 3orrower. 7s *er the 0oan
7/ree)ent, the 3orrower has to re*ay the loan In E2ual Monthly Install)ents %EMI' 3y
way of Post ate# -he2ues %P-'. 7ny #elay in *ay)ent or nonA*ay)ent of #ues
attracts a##itional interest. Hence the 3orrower shoul# 3e #uly consi#ere# a3out the
re*ay)ent ter)s at the ti)e of #is3urse)ent. The P- are /enerally acce*te# for a year
an# re*lenishe# annually. The effecti9e runnin/ of any -o)*any #e*en#s on its cash
flow, the re*ay)ents of loan has to 3e )ana/e# effecti9ely.
The reco9ery *roce#ure can 3e #i9i#e# into followin/4
" M"+"2*0*+& ./ PDC
The P-s shoul# 3e collecte# at the ti)e of first #is3urse)ent. The 3orrowers nee# to
#e*osit a )ini)u) of !; che2ues to <> che2ues.
&resh P- are to 3e calle# once the ol# 3unch is e8hauste#. Since the loan ter) ran/es
fro) <A;0 yrs, while P-s are collecte# in lots, a constant )onitorin/ is to 3e #one.
@hen the P-s are e8hauste# 3orrower nee#s to 3e infor)e# ; )onths in a#9ance 3y the
way of written co))unication an# thereafter tele*honically. In case the che2ues are not
recei9e# then 3orrower nee#s to 3e /i9en a secon# re)in#er 3efore ! )onth an# /et the)
re*lenishe#.
7ny #elay in #e*osit of che2ues attracts *enal interest which nee#s to 3e co))unicate#
to the 3orrower.
The P-s )ay ha9e to 3e e8chan/e# #ue to 9arious reasons as4
6orrower )ay ta(e a##itional loan. In such cases either fresh che2ues for new loan
shoul# 3e as(e# or P-s for total loan )ay 3e ta(en in which case *re9ious che2ues are
returne#.
347
ue to re9ision of ROI, the ter) or EMI of the loan )ay chan/e. In such cases #ue
inti)ation nee#s to 3e sent to the 3orrower, either for new che2ues of re9ise# EMI or
e8tension of the ter) of loan
6orrower chan/in/ I closin/ 6an( 7ccount.
9 M"+"2*0*+& ./ C3*B$* )(,3.+.$-,
ishonour of che2ues in any loan account has to 3e )onitore# #ili/ently. 7 che2ue can
3e #ishonoure# #ue to )any reasons. In case of che2ue #ishonor the 3orrower has to 3e
i))e#iately contacte# on *hone an# si)ultaneously a written inti)ation can 3e sent
citin/ the reasons for the sa)e. It shoul# 3e insiste# that the *ay)ent in lieu of che2ue
#ishonor shoul# 3e )a#e 3y cash. Howe9er #ishonoure# che2ues can 3e re*resente# on
re2uest of the 3orrower if the reason for #ishonor is other than for insufficient fun#s.
F.%%.6 $4 ./ (--*2$%"- I .:*-)$* I NPA "):"+#*,
$enerally loans an# a#9ances 3eco)e irre/ular 3ecause of non *ay)ent of install)ents
an#Ior I interest an# or #ue to non renewal of the o*erati9e cre#it facilities. Such accounts
turn NP7 if ti)ely care is not ta(en for their reco9eryIre/ularisation. 7s the interest on
such NP7Ss cannot 3e reco/nise#, the *rofita3ility of the co)*any is a#9ersely affecte#.
@ith a 9iew to a9oi#in/ the accounts turnin/ NP7 ste*s are re2uire# to 3e ta(en
i))e#iately on an account 3eco)in/ technically irre/ular. In 9iew of the followin/ ste*s
woul# 3e initiate#A
!. In case of ter) loans if two )onthly, one 2uarterly, one half yearly or one annual
install)ent re)ain un*ai#, the 3orrower 3e *ersonally contacte# an# a notice #e)an#in/
the #ue install)ents 3e issue# si)ultaneously.
;. In case two )onthly, one 2uarterly, one half yearly or one annual install)ent an# the
interest on the account re)ain to 3e un*ai# for )ore than two )onths, ste*s 3e ta(en for
ta(in/ *ossession of the securities for the loans.
<. In case of o*erati9e cre#it facilities which are to 3e renewe# annually a notice 3e issue#
to the concerne# 3orrower two )onths 3efore the #ue #ate a#9isin/ to su3)it the *a*ers
re2uire# for the renewal of the li)it. This woul# hel* to +u#/e whether the li)it is /oin/
to 3e renewe# or otherwise an# to ta(e a**ro*riate ste*s.
". E9en after ta(in/ a3o9e )entione# ste*s the account is not re/ularise#Irenewe# an# it is
turne# NP7, the #ocu)ents of such loan accounts 3e thorou/hly e8a)ine# an#
#iscre*ancies therein if any 3e /ot rectifie#. 7c(nowle#/e)ent of #e3t woul# 3e
o3taine# fro) the 3orrower an# the /uarantor. The securities for the loan facility woul#
3e ta(en into *ossession.
=. 7ll the fi8e# #e*osits o3taine# as securityIcollateral security for the loanIcre#it facility
woul# 3e a**ro*riate# towar#s the outstan#in/ i))e#iately after the account is i#entifie#
as NP7.
341
>. The 3orrower an# the /uarantor woul# 3e constantly followe# u* for
reco9eryIre/ularisation of the account an# in case no #esire# res*onse is recei9e#, a le/al
notice throu/h an a#9ocate on the -o)*anySs *anel woul# 3e issue# to the 3orrower an#
the /uarantor in si8 )onths fro) the #ate of i#entification of the account as NP7 with
*rior a**ro9al of the Hea# Office.
B. -onsi#erin/ the /enuine #ifficulties of the 3orrowers, their accounts )ay 3e resche#ule#I
restructure# if they turn NP7.
?. In case the 3orrowers #ifficulties are /enuine an# in case he is rea#y to *ay the
outstan#in/ in one lu)* su) if the *enal interest is wai9e#, his re2uest )ay 3e
consi#ere# sy)*athetically an# the *enal interest 3e wai9e#. Such *ro*osals, howe9er,
are to 3e /ot a**ro9e# fro) -or*orate Office.
9. It shoul# 3e ensure# that the state)ents showin/ *osition of NP7Ss for the 2uarter en#in/
March e9ery year are recei9e# at -or*orate Office i))e#iately after the financial year is
o9er. Such state)ents 3e thorou/hly scrutini:e# an# the #ata of all the 3ranches 3e
consoli#ate#. 6ase# on these fi/ures tar/ets for reco9ery 3e fi8e# in consultation with
the Ser9ice center in char/e . -or*orate Office shoul# follow u* with the 3ranches for
achie9e)ent of tar/ets 3y re9iewin/ the *osition on 2uarterly 3asis.
C.+&-.% .:*- I--*2$%"- A):"+#*, "+) N.+ P*-/.-0(+2 A,,*&,
!. In case of ter) loans where two )onthly install)ents, one 2uarterly, one half yearly or
one annual install)ent ha9e re)aine# un*ai#, such account 3e classifie# as irre/ular
account. Si)ilarly in case of -ash -re#itIO*erati9e -re#it facilities if the facility is not
renewe#I re9iewe# within two )onths fro) the #ue #ate such account 3e classifie# as
irre/ular.
;. The accounts which ha9e 3een classifie# as irre/ular 3e re*orte# 3y 3ranches on )onthly
3asis to -or*orate Office in a *rescri3e# for)at. Such state)ents woul# 3e scrutinise#
thorou/hly 3y the -or*orate Office an# the 3ranches 3e /ui#e# suita3ly for reco9ery.
<. 7ll the loans an# a#9ances woul# 3e classifie# in four cate/ories as *er the nor)s
*rescri3e# 3y Reser9e 6an( of In#ia na)ely !' Stan#ar#, ;' Su3Astan#ar#, <' ou3tful
an# "' 0oss 7ssets. The classification )a#e 3y the 3ranches woul# 3e 9erifie# 3y
Internal Ins*ectin/ Officers an# I or -oncurrent 7u#itors.
". State)ents showin/ *osition of NP7 accounts woul# 3e calle# fro) the 3ranches to Hea#
Office on 2uarterly 3asis. Such state)ents 3e scrutinise# thorou/hly 3y the Hea# Office
an# the 3ranches 3e /ui#e# for reco9ery.
=. The *osition of reco9ery in NP7 accounts woul# 3e calle# fro) 3ranches on )onthly
3asis an# the *osition of reco9ery woul# 3e *lace# 3efore the 6oar# of irectors on
)onthly 3asis.
>. Position of to* !0 NP7 accounts woul# 3e *lace# 3efore the 6oar# on 2uarterly 3asis.
Si)ilarly the co)*arati9e *osition of a)ount in9ol9e# in NP7Ss, Reco9ery an# *ro9ision
hel# for the NP7Ss 3e also *lace# 3efore the 6oar# on 2uarterly 3asis.
342
B. Reco9eries affecte# in #ou3tful an# loss assets woul# 3e first a**ro*riate# towar#s
*rinci*al.
C.%%*#&(.+ ./ )$*, "+) ,*#$-(&' -*4.,,*,,(.+ P.%(#':
The #e3t collection of the co)*any is 3uilt aroun# #i/nity an# res*ect to custo)ers. The
-o)*any will not follow *olicies that are un#uly coerci9e in collection of #ues. The
*olicy is 3uilt on courtesy, fair treat)ent an# *ersuasion. The -o)*any 3elie9es in
followin/ fair *ractices with re/ar# to collection of #ues an# re*ossession of security an#
there3y fosterin/ custo)er confi#ence an# lon/ A ter) relationshi*.
The re*ay)ent sche#ule for any loan sanctione# 3y the -o)*any will 3e fi8e# ta(in/
into account *ayin/ ca*acity an# cash flow *attern of the 3orrower. The -o)*any will
e8*lain to the custo)er u*front the )etho# of calculation of interest an# how the E2uate#
Monthly Install)ents %EMI' or *ay)ents throu/h any other )o#e of re*ay)ent will 3e
a**ro*riate# a/ainst interest an# *rinci*al #ue fro) the custo)ers. The -o)*any woul#
e8*ect the custo)ers to a#here to the re*ay)ent sche#ule a/ree# to an# a**roach the
-o)*any for assistance an# /ui#ance in case of /enuine #ifficulty in )eetin/ re*ay)ent
o3li/ations.
-o)*anySs Security Re*ossession Policy ai)s at reco9ery of #ues in the e9ent of #efaults
an# is not ai)e# at whi)sical #e*ri9ation of the *ro*erty. The *olicy reco/nise# fairness
an# trans*arency in re*ossession, 9aluation an# realisation of security. 7ll the *ractices
a#o*te# 3y the -o)*any for follow u* an# reco9ery of #ues an# re*ossession of security
will 3e inconsonance with law.
G*+*-"% G$()*%(+*,
7ll the )e)3ers of the staff or any *erson authorise# to re*resent our -o)*any in
collection orIan# security re*ossession woul# follow the /ui#elines set out 3elow4
!. The custo)er woul# 3e contacte# or#inarily at the *lace of his I her resi#ence an# if
una9aila3le at his I her resi#ence, at the *lace of 3usiness I occu*ation.
;. I#entity an# authority of *ersons authorise# to re*resent -o)*any for follow u* an#
reco9ery of #ues woul# 3e )a#e (nown to the 3orrowers at first instance. The -o)*any
staff or any *erson authorise# to re*resent the -o)*any in collection of #ues or I an#
security re*ossession will i#entify hi)self I herself an# #is*lay the authority letter issue#
3y the -o)*any u*on re2uest.
<. The -o)*any woul# res*ect *ri9acy of its 3orrowers.
". The -o)*any is co))itte# to ensure that all written an# 9er3al co))unication with it s
3orrowers will 3e in si)*le 3usiness lan/ua/e an# -o)*any will a#o*t ci9il )anners for
interaction with 3orrowers.
=. Nor)ally the -o)*anySs re*resentati9es will contact the 3orrower 3etween 0?00 hrs an#
;000 hrs, unless the s*ecial circu)stance of herIhis 3usiness or occu*ation re2uires the
-o)*any to contact at a #ifferent ti)e.
334
>. 6orrowerSs re2uests to a9oi# calls a *articular ti)e or at a *articular *lace woul# 3e
honoure# as far as *ossi3le.
B. The -o)*any will #ocu)ent the efforts )a#e for the reco9ery of #ues an# the co*ies of
co))unication set to custo)ers, if any, will 3e (e*t on recor#.
?. 7ll assistance will 3e /i9en to resol9e #is*utes or #ifferences re/ar#in/ #ues in a
)utually acce*ta3le an# in an or#erly )anner.
9. Ina**ro*riate occasions such as 3erea9e)ent in the fa)ily or such other cala)itous
occasions will 3e a9oi#e# for )a(in/ calls I9isits to collect #ues.

G(:(+2 N.&(#* &. 9.--.6*-,
@hile written co))unications, tele*honic re)in#ers or 9isits 3y the -o)*anySs
re*resentati9es to the 3orrowers *lace or resi#ence woul# 3e use# as loan follow u*
)easures, the -o)*any will not initiate any le/al or other reco9ery )easures inclu#in/
re*ossession of the security without /i9in/ #ue notice in writin/. -o)*any woul# follow
all such *roce#ures as re2uire# un#er law for reco9eryIre*ossession of security.
R*4.,,*,,(.+ ./ S*#$-(&'
Re*ossession of security is ai)e# at reco9ery of #ues an# not to #e*ri9e the 3orrower of
the *ro*erty. The reco9ery *rocess throu/h re*ossession of security will in9ol9e
re*ossession, 9aluation of security an# realisation of security throu/h a**ro*riate )eans.
7ll these woul# 3e carrie# out in a fair an# trans*arent )anner. Re*ossession will 3e
#one only after issuin/ the notice as #etaile# a3o9e. ue *rocess of law woul# 3e
followe# while ta(in/ re*ossession of the *ro*erty. The -o)*any will ta(e all reasona3le
care for ensurin/ the safety an# security of the *ro*erty after ta(in/ custo#y, in the course
of the 3usiness.
5"%$"&(.+ "+) S"%* ./ P-.4*-&'
.aluation an# sale of *ro*erty re*ossesse# 3y the -o)*any will 3e carrie# out as *er law
an# in a fair an# trans*arent )anner. The -o)*any will ha9e ri/ht to reco9er fro) the
3orrower the 3alance #ue if any, after sale of *ro*erty. E8cess a)ount if any, o3taine# on
sale of *ro*erty will 3e returne# to the 3orrower after )eetin/ all the relate# e8*enses
*ro9i#e# the -o)*any is not ha9in/ any other clai)s a/ainst the custo)er.
O44.-&$+(&' /.- &3* 9.--.6*- &. &"7* 9"#7 &3* ,*#$-(&'
The -o)*any woul# resort to re*ossession of security only for the *ur*ose of realisation
of its #ues as the last resort an# not with intention of #e*ri9in/ the 3orrower of the
*ro*erty. 7ccor#in/ly, the -o)*any woul# 3e willin/ to consi#er han#in/ o9er
*ossession of *ro*erty to the 3orrower any ti)e after re*ossession an# 3efore conclu#in/
333
sale transaction of the *ro*erty, *ro9i#e# the -o)*any #ues are cleare# in full. If
satisfie# with the /enuineness of 3orrowerSs ina3ility to *ay the loan install)ents as *er
the sche#ule which resulte# in the re*ossession of security, the -o)*any )ay consi#er
han#in/ o9er the *ro*erty after recei9in/ the install)ents in arrears. Howe9er, this woul#
3e su3+ect to the -o)*any 3ein/ con9ince# of the arran/e)ents )a#e 3y the 3orrower to
ensure ti)ely re*ay)ent of re)ainin/ install)ents in future.
N.-0, 6(&3 -*,4*#& &. /(%(+2 ./ ,$(&,
-onsi#erin/ the lon/ #rawn *rocess in the liti/ation an# #ifficulties in e8ecutin/ the
#ecrees action of filin/ of suit 3e ta(en as a last resort. &ollowin/ nor)s 3e o3ser9e#
3efore filin/ of a suit.
!. 7 suit 3e file# only after )a(in/ all the efforts such as *ersonal contacts, #e)an# notice
fro) the 3ranch or throu/h a#9ocate etc. an# if the 3ranch an# the reco9ery #e*art)ent at
-or*orate Office co)es to the conclusion that there is no alternati9e 3ut to file a suit for
reco9ery.
;. 6efore filin/ of the suit it shoul# 3e ensure# that the loan #ocu)ents are co)*lete in all
res*ects an# that the suit is well within the li)itation *erio#. The *osition of #ocu)ents
3e /ot e8a)ine# for) the -o)*anySs a**ro9e# a#9ocate.
<. 6efore filin/ of the suit final notice throu/h -o)*anySs a#9ocate 3e issue#.
". 7ll the #e*osits o3taine# as security an# I or collateral security 3e /ot a**ro*riate#
towar#s the outstan#in/s 3efore filin/ of the suit.
=. 7ll the assets such as )achinery, 9ehicles, shares etc. in the custo#y of the -o)*any
woul# 3e #is*ose# off an# the sale *rocee#s woul# 3e a**ro*riate# towar#s the
outstan#in/s in the account an# the suit woul# 3e file# for reco9ery of resi#ual a)ount.
>. Suit woul# 3e file# throu/h an 7#9ocate on the -o)*anySs *anel only.
B. 6efore filin/ of the suit infor)ation re/ar#in/ )o9a3leIi))o9a3le assets of the 3orrower
an# the /uarantor woul# 3e ascertaine# an# ste*s 3e ta(en for attach)ent of these
*ro*erties 3efore +u#/e)ent.
# R*#.:*-' (+ #",* ./ )*/"$%& 9' &3* 9.--.6*-
1 D*/"$%& (+ R*4"'0*+&
There can 3e 9arie# reasons for #efault in any account. Each an# e9ery account has to 3e
scrutini:e# for the reasons of #efault. E9ery )onth the followin/ state)ents shoul# 3e
/enerate# after runnin/ P-s.
a. Perio# wise #efault
3. 7ccount wise #efault
c. 0ocation wise #efault
#. -he2ue #ishonor list
332
e. 0ist of NP7s
7fter /eneratin/ the state)ents the sa)e are to 3e analyse# an# a**ro*riate action has to
3e initiate#.
The #efault reco9ery entails the followin/ line of action.
a. @ritten an# tele*honic co))unication in case of che2ue #ishonor.
3. &irst re)in#er letter to 3e sent in the first )onth of #efault followe# 3y tele*honic
re)in#er.
c. 7fter fifteen #ays the secon# re)in#er to 3e sent followe# 3y a tele*honic re)in#er.
#. In the secon# )onth a thir# re)in#er to 3e sent an# a tele*honic inti)ation
co))unicatin/ the further line of action which the co)*any is /oin/ to ta(e.
e. The thir# re)in#er )ust 3e sent with a warnin/ letter to recall the entire loan if full
*ay)ent is not )a#e within the sti*ulate# ti)e.
f. 7fter this if no *ay)ent is recei9e#, a**ro*riate le/al notice )ust 3e sent.
;. D*/"$%& ./ S*#$-(&'7 3orrower )ay 3e re/ular in )onthly install)ents 3ut he )ay
#efault in creation of security or )ort/a/e. In such cases a written co))unication has to
3e sent to the 3orrower to fulfill the re2uire)ents as *er the ter)s of the loan in #ue ti)e.
If he #oes not co)*ly within ti)e the entire loan )ay 3e recalle#.
The loan is recalle# in case of followin/ e9ents.
If the account has 3eco)e NP7
If any infor)ation /i9en 3y the 3orrower in loan a**lication for) or otherwise is foun#
)islea#in/ or incorrect.
If security for loan #e*reciates in 9alue an# a##itional security is not *ro9i#e# 3y the
3orrower in lieu of it.
Non creation of )ort/a/e
If the *ro*erty or any *art thereof is sol#, #is*ose# off, char/e#, encu)3ere# or otherwise
alienate# in any )anner
Security 3eco)es unenforcea3le
Ina3ility to *ay #e3ts
REGISTERSIRECORDS TO BE MAINTAINED
!. Sanction re/ister
;. is3urse)ent re/ister
<. P- re/ister
". E2uita3le )ort/a/e re/ister
=. -ollateral Security re/ister
333
>. Insurance re/ister
B. Outstan#in/ loan re/ister
?. efault follow u* re/isterIfile
SEMUENCE OF FILING OF LOAN PAPERSIDOCUMENTS
The *a*ersI#ocu)ents shoul# 3e file# in the followin/ se2uence in the CARD FILE an#
the LOAN DOC<ET CO5ER.
7ll the *a*ersI#ocu)ents *ertainin/ to a**raisal, sanction, #is3urse)ent, )onitorin/,
followAu*, reco9ery, closure, loan security #ocu)ents are #i9i#e# into two *arts for filin/
*ur*ose na)ely, PART-1 "+) PART-2
PART-1:
-onsists of *a*ers *ertainin/ to infor)ation nee#e# in a**raisal, sanction M
#is3urse)ent of loan. Thereafter, all corres*on#ence relatin/ to follow u*, till closure of
the loan such as loan re)in#ers, notices etcJ are also re2uire# to 3e file# in this file, only
7ll *a*ers *ertainin/ to PartA! shoul# 3e file# in the -7R &I0E, which can 3e store# in
the or#inary cu*3oar#Istora/e ca3ins etc, so that these car# files can 3e ta(en any nu)3er
of ti)es in a #ay for reference *ur*ose, if nee#e#. These files nee# not 3e store# in the
fire *roof ca3inet. 7ccess to these files ,can /enerally 3e 3y the cre#it #e*art)ent staff
an# there is no restriction in this re/ar#.
PART-2
This *art of *a*ers *ertains to security #ocu)ents which are re2uire# to 3e (e*t in the
loan O-KET -O.ER an# store# in the fire *roof stora/e ca3inets. 7ccesses to these
#ocu)ents are restricte# only to the authori:e# *ersons.%Security #ocu)ents consist of
*a*ers which are re2uire# to 3e file# in the court, in case of an account 3eco)in/ NP7 M
reco9ery is throu/h inter9ention of the court.
PART- 1 CARD FILE:
In this file, all the *a*ers nee#e# I*ertainin/ to a**raisal of loan, sanction,
#is3urse)ent, )onitorin/, followAu*, are re2uire# to 3e file# in the followin/ se2uence
%where9er a**lica3le'
7**lication for) with *hotos of the a**licants an# /uarantor where9er
a**lica3le.
334
Pa*ers *ertainin/ to i#entity of the a**licants%na)ely, *ass*ort co*y ,*an
car# co*y, 9oters i#entity co*y, #ri9in/ license co*y, ration car# co*y ,e)*loy)ent
i#entity co*y, )e)3ershi* i#entity car# co*y %in case of *rofessionals etc'.
Su**ortin/ infor)ation *a*ers. %7s a**lica3le'
Salary certificateIsalary sli* as a**lica3le
7**oint)ent letterI2ualification certificate co*y.
&or)A!>Ifor)A!> 7 as a**lica3le.
Inco)e ta8 returns for the last < years.
6an( state)ent for the last > )onths.
0atest electricityItele*hone 3ill co*ies.
-o*y of cre#it car# 3ills
6rief *rofile of 3usinessI*rofession
Rent recei*t where9er a**lica3le
Me)3ershi* certificate in case of *rofessionals.
Re/istration certificate co*y for *rofessionals, ser9ice ta8, .7T co*y etc.
Personal iscussion for)%salarie#Iself e)*loye#I3usiness *eo*le 1as
a**lica3le'
Su**le)ental inco)e su**ortin/ *a*ers such as a/ricultural inco)e,
Tuition inco)e, rental inco)e, other inco)e etc.
.erification re*orts, such as4
IT 9erification re*ort.
Resi#ence 9erification re*ort
.erification of 3an( state)ent
0e/al scrutiny re*ort
Technical scrutiny re*ort
7**licants e9aluation for)
0etter of offerI7cce*tance%one co*y of this for) is also re2uire# to 3e
(e*t alon/ with the loan #ocu)ents'
7ssi/n)ent of 0I- *olicies.
eclaration fro) the 3orrower for assi/n)ent of 0I- *olicies.
7ssi/n)ent of *olicies.
Notice of assi/n)ent of *olicies.
Post sanction ins*ection re*orts, co*ies of notices sent to the 3orrowers for
*ay)ent of EMIs, recall of loans in case of accounts where install)ents are not co)in/
as *er the ter)s of sanction, an# all other corres*on#ence relatin/ to reco9ery.
Me)oran#u) for resche#ule)ent of loan where9er a**lica3le.
Me)oran#u) *ro*osin/ le/al action, Reco9ery un#er S7R&7ESI act,
@ai9er of le/al action, Me)oran#u) for co)*ro)ise settle)ent, writes of
)e)oran#u), Notices un#er S7R&7ESI 7-T etcJ as a**lica3le.
Reassi/n)ent of *olicies u*on closure of loan a)ount.
335
7**lication for) shoul# 3e at the 3otto) of the car# file followe# 3y the a3o9e *a*ers in
ascen#in/ se2uence fro) ! to !<.%In other wor#s the se2uence of filin/ the *a*ers
*ertainin/ to P7RTA! shoul# 3e for) !< at the to* to ! at the 3otto) in #escen#in/ or#er'
The a3o9e or#er facilitates easy reference, at any *oint of ti)e.
PART -2 LOAN DOC<ET CO5ER:
The loan #oc(et co9er shoul# contain the followin/ *a*ers, in the se2uence in which they
are state#. The loan #oc(et co9er shoul# 3e store# in the fire *roof ca3inet only.
e)an# Pro)issory Note%PN'
0oan 7/ree)ent%07'
0etter of re2uest for #is3urse)ent of loan
ee#r of $uarantee %$'Awhere9er a**lica3le.
Pa*ers relatin/ to E2uita3le )ort/a/eIRe/istere# )ort/a/e
Power of 7ttorney
7ffi#a9it cu) un#erta(in/
Ori/inal Title #ee#s to the *ro*erty, as *er le/al o*inion, alon/ with ori/inal chain
#ocu)ents.
Ori/inal 0I- *olicies,%#uly assi/ne#' NS-s, & recei*ts etcJ #uly #ischar/e#.
Encu)3rance certificate as *er le/al scrutiny re*ort.
Ori/inal co*y of re/istration recei*t fro) the su3Are/istrar where9er a**lica3le.
Society allot)ent letter M share certificate %where9er a**lica3le'
NO- fro) /o9t.Ise)iA/o9t. or/ani:ations, societies,a/encies.
In construction cases4 a' ori/inal a**ro9al *lan 3' Ori/inal esti)ates.
0etter of offer cu) 7cce*tance.
T3* /.%%.6(+2 "))(&(.+"% ).#$0*+&, ", "44%(#"9%* (+ *"#3 "##.$+&
Su**le)entary loan a/ree)ent for Ho)e I)*ro9e)ent loanIho)e e8tension loan.
-onsent letter fro) the e8istin/ /uarantor for fresh /uarantee for a##itional loan or
9ariation in ter)s of sanction or a new /uarantor.
E8tension of e2uita3leIRe/istere# )ort/a/e for a##itional li)its.
Re2uest letter for resche#ule)ent of loan, chan/e fro) floatin/ rate to fi8e# rate or 9ice
9ersa.
Su**le)entary loan a/ree)ent for chan/e fro) floatin/ rate to fi8e# rate or 9ice 9ersa.
7c(nowle#/e)ent of securities.
Ori/inal *ay)ent recei*t to the 3uil#er.%where9er a**lica3le'
Possession of the flatIhouse%where9er a**lica3le'
7ll the ser9ice centre in char/e Ia**raisal officersIaccountants at the ser9ice centre are
a#9ise# to follow the a3o9e *roce#ure, for unifor)ity without fail.
336
GCONCLUSION
0oo(in/ into the followin/ *lans of the co)*any the a3o9e *ro*ose# *rocess will
#efinitely *ro9i#e a route )a* to the #esire# /oals
N1'-,+0&-4 4+< ;,1B05 -' 05+ A-< 0+,A
The ?o!p"n# intends to p'rs'e "ggressi(e gro+th t"rgets in %o"n
dis&'rse!ents, +hi%e !"int"ining %ending spre"ds o 2*503*4H in its t"rget
%ending to the !id>%o+er !idd%e c%"sses Ci*e* o "n "(er"ge %o"n "d("nce o
Rs 6 6 or soE on ho'sing %o"ns "nd spre"ds o 505*5H on non0ho'sing %o"ns*
The ?o!p"n# expects to contin'e to "c9'ire c'sto!ers thro'gh its
re%"tionship +ith re"% est"te de(e%opers, inc%'ding those it h"s existing
re%"tionships +ith*
This reerr"% process ro! de(e%opers red'ces c'sto!er "c9'isition costs "nd
is expected to contin'e ti%% "t %e"st the Rs74 cr %o"n porto%io %e(e%, +hich +i%%
ser(e the ?o!p"n#=s gro+th t"rget ti%% 2434033*
P"st the Rs74 cr %o"n porto%io si/e, the ?o!p"n# +i%% de(e%op " ret"i%
presence, st"rting +ith " &r"nch net+or- "t -e# %oc"tions its existing "nd
prospecti(e &orro+ers "re %oc"ted "t, pri!"ri%# N?R, H"r#"n" C7!&"%" "nd
Re+"riE, "nd in Oriss" CAh'&"nes+"rE* This is p%"nned in 2442034*
)&'&;-'; R-3E
3* Sec'rit#L The ?o!p"n# !"n"ges the ris- o de"'%t &# re%#ing on high %e(e%s
o sec'rit# o the 'nder%#ing "sset !ortg"ged to the ?o!p"n#* This h"s t+o
"spects* ;irst%#, 6T: %e(e%s "re t#pic"%%# %o+er th"n the ind'str# "(er"ge
+hich ser(es "re pri!"r# sec'rit#* 7%so, "ddition"% sec'rit# in ter!s o 6I?
po%icies, person"% g'"r"ntees, etc*, "dd 'rther sec'rit#* This %e"ds to
"de9'"te "nd (er# pr'dent %e(e%s o sec'rit#* Second, the !e"ns o
enorcing orec%os're o the %o"n in the e(ent o +i%%'% de"'%t is !"de
possi&%e &# "de9'"te doc'!ent"tion "nd process Cdeed o !ortg"ge, etc*E,
"s +e%% "s ens'ring th"t the sec'red "sset is e9'it"&%e !ortg"ge in "%%
respects* This ens'res th"t reco(er# is possi&%e thro'gh the co'rts in the
e(ent o de"'%t, "nd the ?o!p"n# +i%% "pp%# to NHA to t"-e 'p pro(isions o
S7R;ESI "ided reco(er#* Together, the high %e(e%s o sec'rit# "s +e%% "s
enorce"&%e reco(er# %e"d to "de9'"te de0ris-ing*
2* NP7sL The ?o!p"n# !"n"ges the ris- o poor ser(icing o %o"ns &# %o"nees
pri!"ri%# thro'gh rigoro's s"nctioning process, +here inco!e proo "nd
&"c-gro'nd chec-s "re re9'ired* This is especi"%%# i!port"nt since IIR is
t#pic"%%# "s high "s the ind'str# "(er"ge* It is +e%% 'nderstood th"t "de9'"te
337
chec-s d'ring s"nctioning de0ris- the possi&i%it# o de"'%t, "nd th"t reco(er#
s'&se9'ent%# Cin the e(ent o de"'%tE is on%# " too% o %i!ited 'se* Mith this
in !ind, the ?o!p"n# oc'ses on pr'dent s"nctioning process !"n"ged &#
ex0&"n-ers "nd PSU ho'sing .n"nce co!p"nies, t#pic"%%# !ore ris- "(erse
th"n the !"r-et nor!*
The "&o(e ris- !itig"tion techni9'es +i%% +or- +e%% or the ?o!p"n#*
D+2417A+'0 P4&'
L1&' S/5+A+3 1> 05+ C1A2&'7
The ?o!p"n# de(e%ops %o"n sche!es in ("rio's de(e%op!ents th"t re"% est"te
de(e%opers the ?o!p"n# is "ssoci"ted +ith !"# oBer or s"%e to the p'&%ic*
These %o"n sche!es t"-e 'p the &'%- o dis&'rs"%s o the ?o!p"n#*
The "d("nt"ge o these &'%- %o"n sche!es is the red'ced d'e di%igence "nd
tr"ns"ction cost the ?o!p"n# &e"rs, +hi%e sti%% &eing sec'red thro'gh e9'it"&%e
!ortg"ge "ssets*
Upco!ing dep%o#!ent propos"%s "re indic"ted &e%o+*
!. 7Bord"&%e Ho'sing Pro)ects in Oriss" 0 It is expected th"t Rs32034 cr +i%% &e
"&%e to &e dep%o#ed in "Bord"&%e ho!es Cs'& Rs7 %"csE &eing de(e%oped in
Ah'&"nes+"r "re", +here e9'it"&%e !ortg"ge is oBered*
;. 7Bord"&%e Ho'sing Pro)ects in N?R or +hich MoU &eing negoti"ted "t present
0 It is expected th"t Rs 34032 cr +i%% &e "&%e to &e dep%o#ed in "Bord"&%e
ho!es Cs'& Rs 7 %"csE &eing de(e%oped in Ahi+"di0N?R "re", +here e9'it"&%e
!ortg"ge is oBered*
This is o(er "nd "&o(e the Rs 2 cr J per !onth th"t the ?o!p"n# dis&'rses
thro'gh the N?R o$ces in Fe%hi "nd P"%+"%* This it is expected th"t Rs32037 cr
c"n &e pr'dent%# dep%o#ed +ithin 2442034, %e"ding to " porto%io o Rs24025 cr
&# M"rch 2434* This is "chie("&%e "s per de!onstr"ted peror!"nce, &'t this
t"rget is c'rrent%# h"!pered &# " short"%% in &orro+ings*
S/&4-'; U2 05+ C1A2&'7
S/&4+ 1> O2+,&0-1'3 &'< D+2417A+'0
The ?o!p"n# expects to gro+ e(en "ster in the s'&se9'ent #e"rs, h"(ing
"chie(ed initi"% s'ccess o(er the p"st 3 #e"rs*
F'ring this period, :H;6 h"s i!p%e!ented signi.c"nt !"n"ge!ent ch"nge,
tightened sh"reho%ding, introd'ced high go(ern"nce st"nd"rds, "nd "%igned
"cco'nting pr"ctices +ith the ind'str#* It h"s th's &een "&%e to con(ince %enders
to co!e or+"rd +ith de&t 'nds, +hi%e gro+ing sh"reho%der e9'it# eno'gh to
s"tis# reg'%"tor# g'ide%ines Cnot so !'ch th"t the %ogic o de&t %e(er"ging is
di!inishedE* 2447041 sho+s the res'%t o this t'rn"ro'nd +ith o'tst"nding %o"ns
gro+ing &# o(er 52H #e"r0on0#e"r, "%tho'gh 2441042 h"s &een co!pro!ised on
"cco'nt o "n in"&i%it# to r"ise 'nds in the di$c'%t credit scen"rio*
331
7t the s"!e ti!e, +ith incre"sed "cco'nt"&i%it# &# !"n"gers to the Ao"rd,
gre"ter proession"%is! in d"i%# exec'tion h"s %ed to rising e$ciencies in %o"n
oper"tions, dep%o#!ent, processing ti!es, "nd other s'ch !etrics* The
?o!p"n#=s "&i%it# to de"% +ith the iss'es o s!"%% sc"%e "nd reg'%"tor# o(ersight
h"s &een de!onstr"ted*
The ?o!p"n#, in the (ie+ o !"n"ge!ent, is poised or strong gro+th o(er the
next 3J #e"rs* This +i%% occ'r o(er t+o ph"ses* The .rst is &# %e(er"ging 'p
thro'gh s'&st"nti"% de&t +ith rising e9'it#>NO;, +hich is to s"#, to exp%oit the
%e(er"ging per!itted 'nder NHA g'ide%ines* The second is &# s'&st"nti"% e9'it#
in'sion on the &"sis o " str"tegic s"%e to "n instit'tion"% in(estor, +ho +i%% "%so
&ring in the !"tching %e(e%s o de&t to !"int"in re%e("nt %e(er"ging r"tios*
The t"&%e &e%o+ pro)ects s'ch " gro+th p%"n*
LOANS
DISBURSED 200#-10E2010-11E2011-12ECAGR
HOUSIN5 6O7NS 3434*23 3754*54 2346*44
NON0HOUSIN5
6O7NS 332*32 324*54 234*44
TOT76 1123.25 1#45.00 2340.00 TOT76
LOAN
PORTFOLIO 1!#2.00 3!3!.52 0"5.#0 21.3%
I'/,+&3+ -' NOF
7s o 33 M"rch 2442, The ?o!p"n# h"s Net O+ned ;'nds o Rs 337*75 %"cs,
rising to Rs 462*14 %"cs "s "t 33 8"n'"r# 2434* Under NHA Firections, " H;? is
332
per!itted &orro+ings o 'p to 36 ti!es NO; Cris- +eightedE, "%tho'gh " !ore
's'"% %e(er"ge r"tio is x1034* The ?o!p"n# h"s o'tst"nding &orro+ings o Rs
773*45 %"cs "s "t 33 8"n'"r# 2434, or " %e(er"ge r"tio o 3*67 ti!es NO;* A# "n#
!e"s're, it is c%e"r th"t the ?o!p"n# is 'nder%e(er"ged*
Upon "("i%ing o the proposed ter! %o"n, "nd re"ching " !ore re"son"&%e
%e(er"ging o 506 ti!es NO;, the ?o!p"n# +i%% 'rther incre"se in its p"id0'p
e9'it#, thro'gh in'sion &# existing sh"reho%ders "nd, in d'e co'rse, thro'gh
str"tegic di(est!ent to ne+ in(estors* 7s "n esti!"te, the ?o!p"n# expects to
incre"se p"id0'p e9'it# so "s to re"ch NO; o Rs34 cr in 2434033*
C,+<-0 R&0-';
The ?o!p"n# h"s co!!enced pre%i!in"r# disc'ssions +ith credit r"ting
"gencies to "chie(e credit r"ting o .n"nci"% instr'!ents, s'ch "s .xed deposits,
th"t the ?o!p"n# expects to !o&i%i/e in 2434033* It is re9'ired th"t the r"ting is
o in(est!ent gr"de, "nd the ?o!p"n# +i%% !eet this re9'ire!ent so th"t p'&%ic
deposits !"# &e t"-en* The ?o!p"n# is !"-ing the necess"r# "rr"nge!ents to
get the extern"% r"ting done "s on 3304302434*

O,;&'-3&0-1'&4 S0,?/0?,+ 1> 05+ C1A2&'7
The ?o!p"n# h"s strengthened the org"nis"tion thro'gh -e# hires in the recent
p"st*
7s 5ener"% M"n"ger, Oper"tions, R")ender 5"'r %e"ds the s'st"in"&%e gro+th in
%o"ns porto%io, +hi%e ens'ring th"t credit "ppr"is"% re!"ins &est in ind'str#* 7s
" (eter"n in the ho'sing .n"nce sector in N?R, he is +e%% p%"ced to "chie(e ret"i%
%ed gro+th, "%ong +ith his te"! o origin"tion "nd ser(ice st"B*
7 recent initi"ti(e is the ro%%o't o "n extensi(e sot+"re s#ste! o ERP, " critic"%
p"rt o +hich is " 6o"ns M"n"ge!ent S#ste!* 7%% %o"n "cco'nts, "nd their
.n"nci"% "nd d"i%# !"n"ge!ent s'ch "s "%erts, re!inders, d'es, etc "re
!"n"ged in " high%# e$cient !"nner* This is o(erseen &# the ?o!p%i"nce te"!*
B,&'/5 '+0B1,E 1> 05+ C1A2&'7
The -o)*any currently has no 3ranches currently, 3ut will start se9eral s)all 3ranches in
;009A!0. It is e8*ecte# that a )inor 3ranch networ( will /ra#ually e9ol9e o9er the ne8t !A;
years to enhance the -o)*anyEs custo)er ser9ice at (ey locations its e8istin/ 3orrowers are
locate# at, *ri)arily N-R an# Haryana, in a##ition to ser9in/ new custo)ers in Orissa.
Thus the *rocess *ro*ose# will sustain the #e9elo*)ent *lans of the co)*any efficiently as
the co)*any has a 9ery /oo# *ros*ects in future as there is *heno)enal /rowth in the
in#ustry.
324
HBIBLIOGRAPHY
1 B..7,:-
The 6an( -re#it 7nalysis Han#3oo(4 7 $ui#e for 7nalysts, 6an(ers an# In9estors,
Conathan $olin.
-re#it 7**raisal, Ris( 7nalysis 7n# ecision Ma(in/, Mu(her+ee.
-re#it ris( 4 Pricin/, Measure)ent 7n# Mana/e)ent, arrell, uffie MKenneth C.
Sin/leton.
2W*9,(&*,:-
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%%%*rupeetimes*com+***+ home - loans +rate-cuts-unable-to-augment- credit - flo%
-to-housing-sector-./.0*html

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