QUICK SUCCESS SERIES – ADVANCES GENERAL

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QUICK SUCCESS SERIES an initiative of SBLC Deoghar to facilitate the preparation of promo-tion seeking personnel of our Bank, appears to have succeeded in its objective to a large extent as the readers are still approaching us for its revision/updation despite availability of plenty of other study materials.

We would not have been able to sustain this unique effort of ours, without the active sup-port and continuous encouragement of our DGM cum Circle Development officer Sri Bi-jayananda Padhi. We are deeply indebted to him for his co-operation and guidance. Sri Rakesh Roshan, Chief Manager (Training) ,Sri Kumar Priyank, Chief Manager (Training) ,Sri Sanjay Kumar Sharma,Manager (Train-ing)and Sri Jitendra Kumar Arun,Manager (Training) at this SBLC have owned up this project and have taken pains to keep it relevant to the users by updating & improving it at half yearly interval. Though every care has been taken while updat-ing the contents, we request our readers to point out any lapses at the earliest. Needless to mention that this book is not a substitute of circular instructions issued by the Bank from time to time. For detailed guidelines please re-fer to Bank’s latest circulars. Soft copy of this edition is available on our ftp://10.151.51.33 in QSS folder and on SBI TIMES>PATNA CIR-CLE>SBLC Deoghar site. Team SBLC Deoghar is humbled by the re-sponse and recognition, it is receiving from readers within and beyond the circle. Our Team wishes the readers grand success in their en-deavours.

Abhishek Kumar Sharma Assistant General Manager, State Bank Learning Centre, Deoghar- 814112 Phone- 06432-232895 Fax - 06432-231810 E-mail: agmstc.deoghar@sbi.co.in

QUICK SUCCESS SERIES

ADVANCES GENERAL

Updated By: Rakesh Roshan Chief Manager (Training), SBLC Deoghar Mobile- 9162370185 Email- r.roshan@sbi.co.in

Updated upto 31st October 2016

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Loan Policy (Applicable to domestic Lending)- Important Points (RBI cir-RBI-2014-15/66 dtd 01.07.2014) All Scheduled Commercial Banks(excluding RRBs) Prudential Credit Exposure Norms It has been prescribed by RBI. Single Borrower :- Maximum exposure 15% of Capital funds; for infrastructure lending 20%. Group Borrower :- Maximum exposure 40% of Capital funds; for infrastructure lending 50%. (Capital funds includes Tier I and Tier II capital) Individual Borrower :- Maximum aggregate credit facilities ( FB and NFB ) of Rs. 25 Cr. (excluding loan against specified securities).Rs.50 Cr. (H/L only.) (E-cir:1182/2014-15 dt.05/01/2015) Individuals as borrowers: Maximum aggregate exposure of Rs. 50 crores. However, the maximum aggregate exposure in respect of Ship Breaking and Diamond Industry shall be Rs.200 crores. ii)Noncorporates ($):Maximum aggregate exposure of Rs. 100 crores. However, the maximum aggregate expo-sure in respect of Renewable Energy Projects shall be Rs.50 crore, and for Ship Breaking and Di-amond Industry - Rs.400 crores. The above ceilings will also be applicable to the aggregate of all facilities sanctioned to partner-ship firms which have identical partners. (REF:155/2016-17 DT:01/05/2016) Non Corporates :- Maximum aggregate credit facilities ( FB and NFB ) of Rs. 100 cr (excluding loan against specified securities). Corporates :- 15% of Bank’s capital funds for sin-gle borrower exposures and 40% of capital funds for group exposures. A credit facility extended by lenders (i.e. banks and select AIFIs) to a borrower for exposure in the Transport, Energy, Water & Sanitation, Communi-cation, Social and Commercial Infrastructure & their infrastructure sub-sectors will qualify as 'infrastructure lending'.

Exposures to NBFCs

The exposure (both lending and investment, in-cluding off balance sheet exposures) of a bank to a single NBFC / NBFC-AFC (Asset Financing Com-panies) should not exceed 10% / 15% respectively, of the bank's capital funds as per its last audited balance sheet. Banks may, however, assume ex-

posures on a single NBFC / NBFC-AFC up to 15%/20% respectively, of their capital funds pro-vided the exposure in excess of 10%/15% respec-tively, is on account of funds on-lent by the NBFC / NBFC-AFC to the infrastructure sector. Exposure of a bank to Infrastructure Finance Companies (IFCs) should not exceed 15% of its capital funds as per its last audited balance sheet, with a provi-sion to increase it to 20% if the same is on ac-count of funds on-lent by the IFCs to the infra-structure sector. Further, banks may also consider fixing internal limits for their aggregate exposure to all NBFCs put together. Infusion of capital funds after the published balance sheet date may also be taken into account for the purpose of reckon-ing capital funds. Banks should obtain an external auditor’s certificate on completion of the aug-mentation of capital and submit the same to the Reserve Bank of India (Department of Banking Supervision) before reckoning the additions to capital funds.

Lending under Consortium Arrangements

The exposure limits will also be applicable to lend-ing under consortium arrangements.

Food credit

Borrowers, to whom limits are allocated directly by the Reserve Bank for food credit, will be ex-empt from the ceiling.

Guarantee by the Government of India

The ceilings on single /group exposure limit would not be applicable where principal and interest are fully guaranteed by the Government of India.

Loans against Own Term Deposits

Loans and advances (both funded and non-funded facilities) granted against the security of a bank’s own term deposits may not be reckoned for com-puting the exposure to the extent that the bank has a specific lien on such deposits.

Exposure to Leasing, Hire Purchase and Factoring Services

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Banks have been permitted to undertake leasing, hire purchase and factoring activities departmen-tally. Where banks undertake these activities de-partmentally, they should maintain a balanced portfolio of equipment leasing, hire purchase and factoring services vis-à-vis the aggregate credit. Their exposure to each of these activities should not exceed 10 per cent of total advances.

Irrevocable Payment Commitments (IPCs)

Banks issue Irrevocable Payment Commitments (IPCs) in favour of stock exchanges on behalf of domestic mutual funds/FIIs to facilitate the trans-actions done by these clients.

The maturity of Term Loan should not exceed 8 years, including moratorium period (except cases under CDR mechanism approved by the bank, Housing Loan, Infrastructure Loans, Education Loans and ATL under approved schemes etc.) Quantitative Credit Standard Appraisal Minimum Current Ratio desired for manufacturing company - 1.33 Min. Current Ratio desired for others - 1.20 (for FBWC limits above Rs. 5cr). 1.00 (for FBWC limits up to Rs. 5 cr). Maximum TOL/TNW desired for manufacturing company - 3.00 Maximum TOL/TNW desired for Others - 5.00 Minimum Net DSCR desired for manufacturing company & others - 2:10 Minimum gross DSCR desired for manufacturing company & others - 1.75:1 Maximum Debt/Equity desired for manufacturing company - 2:1

Maximum Debt/Equity desired for others - 2:1

Credit Risk Assessment (CRA) Models designed in conformity with Internal

Ratings Based (IRB) requirements of Basel-II. The current CRA (Simplified) Non-Trade and Trade

& Services models were developed in-house in 2007.

Separate models for Non-Trading Sector (NTS) and Trading Sector (TS).

Two-dimensional structure for Risk Rating – Borrower Rating and Facility Rating.

Borrower Rating (BR) expanded to 16 grades (SB-1 to SB-16).

Hurdle rate is SB 10. Facility Rating (FR) would also range from FR-1 to

FR-16 The new CRA models will be applicable to all

accounts with Aggregate Exposure (FBL + NFBL) of Rs. 25 lacs and above, for both Non-Trading Sec-tor (C&I, SSI & AGL segments) and Trading Sector (Including Services).

There will be following 3 CRA (Simplified) Models- i) CRA (Simplified) Non-Trade ii) CRA (Simplified) Trade iii) CRA (Simplified) Services

Simplified Model covers accounts with exposure of Rs. 25 lacs and above, but upto Rs. 5 crores.

Regular Model covers accounts with exposure above Rs. 5 crores.

Facility Rating (FR) will be applicable only for exposures covered under the Regular Model

Borrower accounts rated SB 10 and below would be rated at half-yearly intervals considering the risk severity of the loan. Separate weightage scheme and hurdle scores for New Units as under:

Risk Catego-ry

Existing - Common for Both Existing & New Units

Revised for New Units*

Wei

gh-

tage

Hu

rdle

Sc

ore

Wei

gh-

tage

Hu

rdle

Sco

re

Finan-cial Risk

55 24 25 10

Busi-ness & Indus-try Risk

15 8 30 17

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Mana-gem-ent Risk

30 15 45 22

Total 100

47 100 49

*No changes for existing units. The Credit Risk Assessment Model for Non Bank-ing Finance Companies (CRANBFC), in its existing form was introduced for use in the Bank in May 2000. The review of CRA Model for Non banking finance companies (NBFC)/ Housing Finance Com-panies (HFC) are in line with requirements of IRB approach. The Model is applicable across the Bank for all exposures to NBFCs and HFCs of Rs. 25 lacs & above. The changes and highlights of the NBFC/HFC model are summarized in e.cir.sl.no:1228/2015-16 dt:12/01/2016 TAKE OVER OF ADVANCES Take over norms applicable to C&I and SME seg-ment: For exposures from Rs.25 Lacs and above to less than Rs.10 crores: The CRA of the borrower should be SB-7 or better. For exposures from Rs.10 crores and above upto Rs.50 crores: Where ECR is not available: The CRA of the borrower should be SB-7 or better,and and the proposed exposure must be backed by mini-mum 75% Collateral Security. Further, it is also to be noted that no dilution in existing security coverage would be permitted for the amount taken over. Where ECR is available: CRA should be SB-9 or better and ECR should be BBB or better. c) For exposures above Rs.50 crores: Where ECR is not available: The CRA of the borrower should be SB-5 or better. Where ECR is available: CRA should be SB-9 or better and ECR should be BBB+ or bet-ter. iii. Other guidelines: Stock and Receivables Audit is to be conducted prior to disbursement of any credit facilities above Rs.5.00 crores except for units having ECR of “A-” and better. Perfection of securities must be completed within 90 days of disbursement. (e.cir.sl.no:40/2016-17 dt:06/04/2016)& (e.cir.sl.no:786/2016-17 dt:16/09/2016)

Norms for Takeover of advances under Agricul-ture segment

The minimum amount eligible for takeover would be as under :

Nature of Facility

Amount

ACC

Rs.1.00 Lac

ATL– for Allied Ac-tivities

Rs.10.00 Lac

ATL for other than allied activities

Rs.2.00 Lac

The maximum amount eligible for takeover would be Rs.2 crores. However, administrative clearance should be obtained from ZCC for loans above Rs.2 crores to Rs.5 crores and from CCC-II for loans above Rs.5 crores No administrative clearance is needed for takeo-ver wherever prescribed norms for takeover are met or not and the Sanctioning Authority would take a call. Takeover from our Associate Banks is not permit-ted. No dilution in the security in takeover proposals is permitted (e.cir.sl.no:786/2016-17 dt:16/09/2016)

Stock Audit a) Stock and Receivables Audit shall be conducted at yearly intervals for all exposures above Rs. 1 crore and upto Rs. 25 crores. b) For units having credit limits of Rs. 25 crs and above, the frequency of Stock and Receivables Audit will be half yearly. For CAG/MCG accounts, all unlisted companies falling under speculative Grade, frequency of Stock and Receivables audit will also be half yearly. c) All other accounts of Rs. 5 crores and above with Credit Rating of SB-8 and below, or accounts where slippage in Credit Rating is by two notches or more, irrespective of the rating, will also be subjected to Stock and Receivables Audit at half yearly intervals. (e-cir- 324 dt 04/07/2012) d) In respect of accounts which are “B” and be-low, Stock & Receivable Audit to be conducted at quarterly intervals.

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e) In respect of all accounts eligible for Stock Au-dit, verification of Invoice by the Stock Auditor should be made part of the Stock Audit. Failure of verification of invoice should be suitably dealt with. (e-cir- 794 dt 15/10/2013)

Legal Audit Reserve Bank of India told banks to do legal audit and re-verification of title deeds of loans above Rs 5 crore to check fraud. Two years back, banks were told to put a system a place wherein the concurrent auditors were required to look into the genuineness of the title documents especially for large value loans. This move was prompted by an RBI study of large value frauds, especially in the housing loan segment. The Legal Audit shall be conducted preferably 3 months before the commencement of RFIA / Cre-dit Audit, so that auditee branches can comply with rectification of the deficiencies pointed out. A separate Legal Audit Report Format (LARF) to be submitted by Legal Auditor has been designed. The format contains Value Statements pertaining to documentation, mortgage, charge creation, etc., corresponding to Value Statements in the existing Credit Audit Report Format (CARF). Legal Audit was rolled out in all the Business verticals in June, 2014 to cover all loan and Mortgage related documents pertaining to accounts with aggregate exposure of Rs.5.00 crores and above. As on 31st March, 2015 Legal Audit has been commenced in 8,976 eligible accounts and already completed in 3,310 accounts.

Credit Audit Credit Audit Department (CAD) is a specialized wing of Inspection & Management Audit Depart-ment, Corporate Centre, Hyderabad, exclusively dealing with high value Credit Accounts (with an exposure of Rs.10 crore and above) domiciled at Branches all over the country.

Takeout finance Takeout finance is the product emerging in the context of the funding of long-term infrastructure projects. Under this arrangement, the institu-tion/the bank financing infrastructure projects will have an arrangement with any financial institution for transferring to the latter the outstanding in respect of such financing in their books on a pre-determined basis.

FACTORING:- Kalyansundaram Committee

recommended introduction of Factoring in India. Factoring is purchase of a trade debt by a factor.

Clayaton’s Rule It is incorporated in S 59-61 of Indian Contract Act. It is related to appropriation of Payment to-wards debt. The first item of debit is offset by the first payment. It is the sum first paid that is treated as first paid out. This rule is applicable to running a/cs like OD, CC etc., only.

Various Types of Borrowers Minor: - As per S 11 of Indian Contract Act, a con-tract with minor is void-ab-initio (from the begin-ning). Money lent to a minor can’t be recovered from him even after he attains majority. But if the money is spent for the necessaries or for the ben-efit of his estate, the minor’s estate would be lia-ble. Joint Hindu Family (JHF): All adult co-parcener are required to sign the security documents. If a Joint Hindu Family has a minor co-parcener, his guar-dian should sign the documents on his behalf to bind the minor’s interest in the JHF. Loan granted to a JHF binds the share of the minor in JHF prop-erty, but not his personal property, if any. Loan granted for a business which is not ancestral will not bind the co-parceners. Partnership: All partners are jointly and severally liable for all the debts of the firm. The liability of the partners is unlimited. The properties of the firm as well as the properties of individual part-ners are liable for the satisfaction of the liabilities of the firm. Guarantee of the partners in their personal capacity is also obtained. This is done with a view to ensure that the Bank will rank along with the private creditors of the partners to claim the dividend from the personal property of the partners, in case of their insolvency. RBI has decided to prohibit NBFCs (both deposit and non deposit taking ) from contributing capital to any partnership firm or to be partners in partnership firms. In cases of existing partnerships, NBFCs may seek early retirement from the partnership firms. Trust: No trustee can delegate his power to the other parties for operation of the account. An ad-

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vance can be granted to a Trust only if the trust deed gives power to borrow money. In the case of advances to Public Trusts, prior permission of the Commissioner of Charity is to be obtained. Liquidator: Official liquidator of a company is ap-pointed by the court and the court’s specific sanc-tion for the borrowing must be obtained. General-ly no advance is granted to the liquidator. Receiver: Receiver is appointed in respect of indi-viduals and firms who have declared insolvency. Generally no advance is granted to the Receiver. Highlights On New Indian Companies Act, 2013

1. Immediate Changes in letterhead, bills or other official communications, as if full name, address of its registered office, Corporate Identity Number (21 digit number allotted by Government), Tele-phone number, fax number, Email id, website ad-dress if any.

2. One Person Company (OPC): It's a Private Com-pany having only one Member and at least One Director. No compulsion to hold AGM. Conversion of existing private Companies with paid-up capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into OPC is permitted.

3. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100 Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at least one Woman Director.

4. Resi-dent Director: Every Company must have a director who stayed in India for a total pe-riod of 182 days or more in previous calendar year.

5. Accounting Year: Every company shall follow uniform accounting year i.e. 1 st April -31st March.

6. Loans to director – The Company CANNOT advance any kind of loan / guarantee / security to any director, Director of holding company, his partner, his relative, Firm in which he or his rela-tive is partner, private limited in which he is di-rector or member or any bodies corporate whose 25% or more of total voting power or board of Directors is controlled by him.

7. Articles of Association- In the next General Meeting, it is desirable to adopt Table F as stan-dard set of Articles of Association of the Com-

pany with relevant changes to suite the re-quirements of the company. Further, every copy of Memorandum and Articles issued to mem-bers should contain a copy of all resolutions / agreements that are required to be filed with the Registrar.

8. Disqualification of director- All existing direc-tors must have Directors Identification Number (DIN) allotted by central government. Directors who already have DIN need not take any action. Directors not having DIN should initiate the process of getting DIN allotted to him and in-form companies. The Company, in turn, has to inform registrar.

9. Financial year- Under the new Act, all com-panies have to follow a uniform Financial Year i.e. from 1st April to 31st March. Those compa-nies which follow a different financial year have to align their accounting year to 1st April to 31st March within 2 years. It is desirable to do the same as early as possible since most the compli-ances are on financial year basis under the new Companies Act.

10. Appointment of Statutory Auditors- Every Listed company can appoint an individual audi-tor for 5 years and a firm of auditors for 10 years. This period of 5 / 10 years commences from the date of their appointment. Therefore, those companies have reappointed their statu-tory auditors for more than 5 / 10 years, have to appoint another auditor in Annual General Meeting for year 2014.

As per RBI guidelines, Non-Lending Banks should not open CAs of borrowers enjoying credit facili-ties (FB or NFB) without obtaining "No Objection Certificate (NOC)" from Lending Banks. If the NOC sought is not received within a fortnight, a non lending bank may go ahead and open the Current Account. In view of the above, a request for NOC sought from our branches / by other banks, must be at-tended to promptly and our objection / Non ob-jection should be conveyed to the other Bank / our Branch at the earliest and in any case well within the laid down timeline of a fortnight

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The incidence of frauds involving fudged/fabricated financial statements contin-ues to be cause for serious concern. In this con-nection, verification and cross checking of major items of Profit & Loss account and Balance Sheet with the regulatory returns, for validation and ensuring their genuineness and acceptability, should be ensured from various sources, such as;

Sl.no Items in P/L account

& B/Sheet

Returns filed by the unit, with which the figures have to be cross checked

1 Capital Balance Sheet avail-able with Registrar of Companies (ROC)

2 Domestic Sales VAT Return

3 Payment to Con-tractors

Quarterly statement of TDS for other than Salary filed un-der Section 194-C (Form No.26Q) with Income Tax Department

4 Net Profit Income tax return and other related documents submit-ted to Income Tax authorities

5 Purchases Credit claimed in the VAT returns

OFF SITE TRASACTION MONITORING SYSTEM (OTMS): Exception data generated by Data Warehouse (DW) based on requirements submitted by Offsite Monitoring Centre (OMC) at I &MA Hyderabad. OTMS, a web based solution has been introduced to capture deviations and take corrective actions. Presently 11 types of deviations are being monitored and will be reviewed as per re-quirements.

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LENDING TO PRIORITY SECTOR (RBI CIR –RBI/2015-16/63 dtd 01.07.2015)

*Adjusted Net Bank Credit (ANBC) (Net Bank Cre-dit plus investments made by banks in non-SLR bonds held in HTM category) *OBE - Off-Balance Sheet Exposure. For foreign banks with 20 and above branches, priority sector targets and sub-targets have to be achieved within a maximum period of five years starting from April 1, 2013 and ending on March 31, 2018. 1. EDUCATION Educational loans granted to individuals for edu-cational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad.

2. HOUSING

(i) Loans to individuals up to 25 lakh in metropoli-tan centres with population above 10 lakh and 15 lakh in other centres for purchase/construction of a dwelling unit per family excluding loans sanc-tioned to bank’s own employees. (ii) Loans for repairs to the damaged dwelling units of families up to 2 lakh in rural and semi- urban areas and up to 5 lakh in urban and metro-politan areas. (iii) Bank loans to any governmental agency for construction of dwelling units or for slum clear-ance and rehabilitation of slum dwellers subject to a ceiling of 10 lakh per dwelling unit. (iv) The loans sanctioned by banks for housing projects exclusively for the purpose of construc-tion of houses only to economically weaker sec-tions and low income groups, the total cost of which do not exceed 10 lakh per dwelling unit. For the purpose of identifying the economically

Categories

Domestic commercial banks / Foreign banks with 20 and above branches

Foreign banks with less than 20 branches

Total Priority Sector ad-vances

40 per cent of ANBC* or credit equivalent amount of OBE*, whichever is higher.

40 percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whi-chever is higher.

Agricultural Foreign banks with less than 20 branches and above have to achieve the Agriculture Target within a Maximum pe-riod of five years starting from April 1,2013 and ending on March 31, 2018 as per the action plans submitted by them and approved by RBI. The sub-target for Small and Marginal farmers would be made applicable post 2018 after a review in 2017.

Not applicable.

Micro Enter-prise

7.5 percent of ANBC or Credit Equivalent amount of OBE whichever is higher to be achieved in a phased manner i.e.7 percent by March 2016 and 7.5 percent by March 2017. The Sub target for Micro Enterprises for foreign banks with 20 branches and above would be made applicable post 2018 after a review in 2017.

Not applicable.

Advances to weaker sec-tions

10 per cent of ANBC or credit equivalent amount of OBE, whichever is higher. Foreign banks with 20 branches and above have to achieve the Weaker Sections Target within a maximum period of five years starting from April 1, 2013 and ending on March 31, 2018 as per the action plans submitted by them and approved by RBI.

Not applicable.

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weaker sections and low income groups, the fami-ly income limit of 1,20,000 per annum, irrespec-tive of the location, is prescribed. 3. AGRICULTURE Separate strategic business unit viz. Agriculture Business Unit (ABU), was created during 2004. The credit policy and procedures for agricultural segment are by and large determined by RBI and NABARD and the State Level Bankers’ Committee (SLBC). The policies and procedures substantially differ from those of other segments. Lending to this sec-tor is characterised by the twin features of Service Area Approach (SAA) and scale of finance.

'Direct Finance' for Agricultural Purposes:

(i) Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual farmers] engaged in Agricul-ture and Allied Activities, viz., dairy, fishery, ani-mal husbandry, poultry, bee-keeping and sericul-ture.

(ii) Loans to corporates including farmers' pro-ducer companies of individual farmers, partner-ship firms and co-operatives of farmers directly engaged in Agriculture and Allied Activi-ties, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of `2 crore per borrower.

(iii) Loans to small and marginal farmers for pur-chase of land for agricultural purposes.

(iv) Loans to distressed farmers indebted to non-institutional lenders.

(v) Bank loans to Primary Agricultural Credit Socie-ties (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi Purpose Societies (LAMPS) ceded to or managed/ controlled by such banks for on lending to farmers for agricultural and allied activities.

EARLY SANCTION REVIEW (ESR): ESR mechanism introduced in audit system since September 2014 to review sanctions of more than Rs.1 crore upto

Rs.5 crores which are largely sanctioned / re-newed by RCCs and ZCCs.(e.cir:835/2014-15 dt:13/10/2014) The objectives of ESR are: To capture the critical risks in the proposals sanctioned, as an early stage and apprise the controllers of such risks for mitigation thereof at the earliest. Improve the quality of pre-sanction process/sanctions in respect of exposures falling in this category. Improve the quality of sourcing of loan propos-als. During FY 2015, 4,339 accounts have been re-viewed under ESR. Based on feedback received in course of Early Sanction Review I&M Audit Department, Hydera-bad have drawn up a checklist for convenient ref-erence by Regional Credit Committee (RCC) mem-bers. (detailed in e.cir.1221/2014-15 dt.17/01/2015) e-DFS, SME Car loan & SBI Shoppe Plus eligible for review-YES (e.cir.1121/2015-16 dt:09/12/2015) Analysis of Financial Statements Important Financial Statements – Balance Sheet & Profit & Loss Statement Balance Sheet – Statement of assets and liabili-ties of a concern as on a particular date Asset – What the business entity owns Liabilities – What the business entity owes Assets can be classified into – Current Assets, Non Current Assets, Miscellaneous As-sets, Intangible Assets and Fixed Assets Liabilities can be classified into - Current Liabili-ties, Term Liabilities and Net worth Current Asset – Likely to be converted into cash in 12 months. Examples – Cash and Bank Balance, Investments, Stock (Raw Material, Stock in Process and Finished Good), Sundry Debtors, Pre Paid Expenses ( Insur-ance Premium Paid, Advance Tax Paid, etc) Exceptions – 1. Sundry debtors outstanding up to 6 month only are classified as Current Asset, out-standing beyond 6 month are classified as Non Current Asset 2. Investment in Bank’s TDR are classified as Cur-rent Asset irrespective of Period of Deposit

Non Current Asset – Previously current, but now not likely to be converted into cash Examples – Obsolete stocks, Non – Moving Stocks, Sundry Debtors due beyond 6 months

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Miscellaneous Asset – Advance to employees, Investment in associate firms, Investment in equi-ty shares

Intangible Asset – Goodwill, Copy Right, Trade Mark, Patent, Royalties, Licences, Preliminary and Pre operative expenses incurred by the firm, Debit balance in Profit & Loss A/c.

Fixed Asset – Assets employed for aid in the production process but not used up in the produc-tion process Examples – Land & Building, Plant & Machinery, Furniture & Fittings, Office equipments, etc. Fixed assets go through wear and tear on their use. De-preciation by Straight Line Method (SLM) or Writ-ten Down Value Method (WDV) is applied on these assets every year. Depreciation is a non cash expense to the business entity.

Current Liabilities – dues of the firm payable within 12 months from the date of balance sheet Examples – Bank Borrowings (Cash Credit, Over-draft, etc), Sundry Creditors, Advance Payments Received from customers, Term Loan Installments due within 12 months

Term Liabilities – dues of the firm Payable after one year from the date of balance sheet. Source for acquiring Fixed Assets, Supporting accumu-lated losses and raising working capital margins. Examples – Term Loan from Bank & FIs, Deben-tures, Deferred Credit from supplier of Capital equipments, Deposits from Public (Repayable beyond one year) Term Liabilities are repaid out of Cash Accrual (Profit after Tax + Depreciation + Other Non Cash expense)

Definition of Net Worth

Net worth would comprise Paid-up capital plus Free Reserves including Share Premium but ex-cluding Revaluation Reserves, plus Investment Fluctuation Reserve and credit balance in Profit & Loss account, less debit balance in Profit and Loss account, Accumulated Losses and Intangible As-sets. No general or specific provisions should be included in computation of net worth. Infusion of capital through equity shares, either through do-mestic issues or overseas floats after the pub-lished balance sheet date, may also be taken into account for determining the ceiling on exposure to capital market. Banks should obtain an external auditor’s certificate on completion of the aug-mentation of capital and submit the same to the

Reserve Bank of India (Department of Banking Supervision) before reckoning the additions, as stated above. Tangible Net Worth – Net worth – Intangibles Ratio Analysis Financial Ratios can be classified broadly under four heads a) Liquidity Ratio – Indicates ability to meet cur-rent dues out of Short Term Assets b) Solvency Ratio – Indicates extent of depen-dence on outside liabilities and the feasibility of meeting them if need arises c) Activity Ratio – Indicates efficiency of the unit in utilizing present available resources d) Profitability Ratio – Indicates capacity of the unit to generate profit and its rate of return Liquidity Ratio i) Current Ratio = Current Asset/Current Liabilities ii) Quick or Acid test ratio = (Current Assets – In-ventory) / Current liabilities iii) Net Working Capital (NWC) or Margin or Liquid Surplus = (Long Term Sources – Long Term Uses) or (Current Asset – Current Liability) Solvency Ratio i) Debt Equity Ratio = Debt / Equity or Term Liabil-ities / Tangible Net Worth ii) Financial Leverage Ratio = Total Outside Liabili-ties/ Tangible Net worth iii) Debt Service Coverage Ratio = (Profit After Tax + Depreciation + Interest on TL)/(Principal Re-payment of TL + Interest on TL) Activity Ratio i) Assets Turnover Ratio = Net Sales/Net Tangible Assets ii) Stock Turnover Ratio = Cost of goods sold (COS)/ Average Inventory COS = Net Sales – Gross Profit Average Inventory = (Op Stock + Closing Stock)/2 iii) Debtor’s Period = Average Sundry Deb-tors/Average daily credit sales Average Sundry debtors = (Opening + Closing Deb-tors)/2 iv) Creditor’s Period = Average Sundry Creditors/ Average daily credit purchases Profitability Ratio i) Return on Investment (ROI) = (Profit after Tax/ Total Tangible Assets) x 100

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ii) Return on Equity (ROE) = (PAT / Tangible Net worth) x 100 Bank Guarantees Proper Classification- Financial or Performance Credit Conversion Factor (e-cir-365-16.07.2013) Financial guarantees, attract a CCF of 100 per cent. Performance guarantees, attract a CCF of 50 per cent. VALUATION OF LANDED ASSETS:

(Modifications in the obtention of Valuation Reports for Loans, applicable to all segments ir-respective of the amount) (e.cir.sl.no 229/2014-15 dt:04/06/2014) Standard formats -one for properties valued up to Rs 5 crores (Annexure-I) and the other for proper-tiesvalued above Rs 5 crores (Annexure-II of the e-cir.1227/2014-15 dt.17/01/2015.

In case of variation of 10 % or more in the valua-tion proposed by the valuer and the Guideline value provided in the State Government notifica-tion or Income Tax Gazette, justification on varia-tion has to be given by the Valuer. The same should be brought out in the Appraisal Memoran-dum for the Sanctioning Authority to take a view.

Details of last two transactions in the area also to be incorporated in the Valuation Report.

Valuers are to be provided with precise details of the property to be valued. A copy of the TIR ob-tained from the Empanelled Advocate for the property to be valued should be given to the Valuers.

The guidelines in respect of TIR has been re-viewed in respect of Home Loans and Home re-lated loans with a view to improve delivery:

TIR in respect of POA Sales/Gift Deed will invaria-bly be obtained from two empanelled advocates, irrespective of loan amount.

Scrutiny of Gift Deed and POA by Bank’s Law of-ficer will be waived in respect of loans up to Rs. 1.00 crore. In all cases, where two TIRs are re-quired to be obtained, certified copies of all rele-vant documents will be obtained by only one of the two empanelled advocates. The extant in-structions for verification of genuineness of title

documents by the empanelled advocates by in-spection of books maintained at the Sub-registrar office will continue to be followed by both the advocates. In cases where Title documents of current owner is more than 13 years old and the property is mu-tated in the name of current owner, the certified copy will be obtained for the current Title docu-ments only instead of current instruction of mini-mum two previous chain title documents. In all other cases, the extant instructions for ob-taining certified copy of minimum two previous chain titles falling within the TIR period (i.e. 13 or 30 years, as the case may be)/or all chain title documents executed within three year period from the date of the latest/current title deed pa-pers will continue to be followed.(e.cir.Sl. No. : 649/2015 – 16 dtd:24/08/2015) Whenever any property is taken as security (pri-mary/ collateral) based on Gift Deed as the prin-cipal title deed, clearance must be obtained from the Law Department without fail. This is in addi-tion to obtention of TIR from the Panel Advocate as required in the normal course. A suitable con-firmation to this effect must Invariably be pro-vided in the loan proposal submitted to the Sanc-tioning Authority, as a foot note under Security column. (e.cir. 823/2015 – 16 dt:01/10/2015) CENTRAL REGISTRY UNDER SARFAESI ACT 2002 The Central Registry of Securitisation Asset Re-construction and Security Interest of In-dia (CERSAI) is a company licensed under section 25 of the Companies Act, 1956 and registered by the Registrar of Companies, New Delhi. CERSAI was promoted by central government to prevent frauds involving multiple lending by different banks on the same immovable property. It be-came operational on March 31, 2011. The Company is a Government Company with a shareholding of 51% by the Central Government and select Public Sector Banks and the National Housing Bank are also shareholders of the Com-pany. The Company is providing the platform for filing registrations of transactions of securitisation, as-set reconstruction and security interest by the banks and financial institutions.

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Any person can also search and inspect the

records maintained by the Registry on pay-

ment of fees prescribed under the Securitisa-

tion and Reconstruction of Financial Assets

and Enforcement of Security Interest (Central

Registry) Rules, 2011.

The process of registration of transactions of creation of security interest, securitization and asset reconstruction will be carried out through the web-portal www.cersai.org.in of the Central Registry.

As the registration of transactions of creation of security interest, securitization and asset recon-struction has been made mandatory in respect of all mortgages created on or after 31st March 2011.

The filing has to be done on an ongoing basis within the 30 day.

A fee of Rs 500 is payable to CERSAI for each filing. The Registrar has the discretion to permit regis-tration of charges up to 60 days from the date of the charge subject to payment of late fee up to ten times of the prescribed amount of the fee on the Banks/FIs However, the Central Registry has so far allowed for filing of charge within the next 30 days following expiry of the initial period of 30 days, without levying any penalty or additional fee. With the insertion of Section 26 A in SARFAE-SI Act , if the particulars of the transaction are not filed with the Registry within a period of 60 days from the date of transaction, the secured creditor has to approach the Central Government to get the delay condoned under the Act.

Sl. no

Registration on CER-SAI after the date of transaction

Additional fee proposed to be charged if the loan amount is:

Upto Rs.5 Lakh

Above Rs. 5 Lakh

1 From 31st to 40th day Rs.500 Rs.1000

2 From 41st to 50th day Rs.1250 Rs.2500

3 From 51st to 60th day Rs.2500 Rs.5000

To recover CERSAI registration charges for all mortgages required to be registered in the Central Registry Site, a front end menu has been devel-oped in CBS for recovery of CERSAI Charges by GITC, Belapur.

The Menu navigation is Transaction Posting > On line fee deduction (i) The user has to key in the account number from which the CERSAI Registration charges are to be recovered (ii) From drop box select as LON/DEP for Ter-mloan/Deposit accounts as applicable (iii) CERSAI charges will be automatically picked by the system when the loan sanctioned amount is entered by the user in the tier value column The CERSAI registration charges recovered will be cre-dited to the Bank CGL account which is paramete-rized. Once the Fee is successfully debited, the system shows a pop-up message “ An amont of INR (amount) has been debited from the account.

CERSAI has advised vide their Circular No CER-SAI/IT/1178/2016 dated 01.02.2016 that the fees for various transactions in CERSAI has been re-duced

Nature of transaction to be Registered

Amount of fee payable

Particulars of creation or modification of Security Interest by way of mort-gage by deposit of title deeds

Rs.100/- for creation and for any subsequent modification of Security interest for a loan above Rs.5 lakh. For a loan below Rs.5 lakh, the fee would be Rs.50/- for both creation and modifica-tion of security interest.

Particulars of Satisfaction of charge for security interest filed under sub-rule (2) and (2A) to (2D) of rule 4

NIL

Particulars of securitiza-tion or reconstruction of financial assets

Rs.500/-

Particulars of satisfaction of securitization or recon-struction transactions

Rs.50/-

Any application for infor-mation recorded / main-tained in the Register by any person

Rs.10/-

Any application for condo-nation of delay up to 30 days

Not exceeding 10 times the basic fee, as applicable

Note: Service Tax shall be applicable over and above the fees mentioned above

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REGISTRATION OF CHARGES:

Manual on Loans & Advances, Part-2, Chapter-18, para 1.3 (iii) on the captioned subject says “The pledge of goods on the company’s assets is a spe-cific/ fixed charge. Therefore, the relative docu-ment does not require registration with the Regi-strar of Companies.”

Revised Instructions: it has been decided that till any future clarification is issued by the Ministry of Corporate Affairs, operating functionaries should register charges created by pledge under the op-tion “Other” under “Type of Charge” in Form CHG 1. (e.cir.sl.no 242/2014-15 dt:07/06/2014) The branches/operating units should use appro-priate notice formats for serving notices to de-faulting borrowers/guarantors under Section 13(2), and issuing/publishing Possession Notice under Section 13(4) of the SARFAESI ACT-2002. A complete set of model notices are available at SAMG site, the access path being: SBI Times -> Departments 2 -> SAMG -> Standard Format -> Model Notices for action under SARFAESI Act. Sale of Properties under SARFAESI Act, 2002 Standard Operating Procedure (SOP) is detailed in e.cir.Sl. No. : 1459/2015 – 16 dtd:01/03/2016.

FUND TRANSFER PRICING (FTP) (e.cir.sl.no 267/2014-15 dt:11/06/2014)

For rated accounts, differential Transfer Pricing Rates for limits from Rs. 5 Crores to 25 Crores and Rs.25 Crores and above, are intro-duced To sensitize the branches for follow-up of NPA’s, the Transfer Price Rates has been In-creased. {For advances of Rs.5 Cr. but less than Rs.25 Cr, for units rated BBB and above, to encourage branches to book quality business TP rates are revised downwards by 10 bps. TP rates for ad-vances rated BBB minus and below TP rates are revised downwards by 5 bps. For advances of Rs.25 Cr and above TP rates are revised down-wards by 10 bps in respect of accounts rated “A” and above.For advances of Rs.25 Cr and above TP rates revised downwards by 5 bps in respect of accounts rated “BBB”. For accounts with internal rating of SB-6 and above TP rates are revised downward by 10 bps. For accounts with internal rating of SB-7 and below TP rates are revised

downward by 5 bps. (e.cir.sl.no:636/2015-16 dt:20/08/2015)}

Transfer price is applied for Savings Bank and Current Account deposits on the portfolio out-standing balance of the branch.

For Limits Rs.5 Crs. and above but below Rs. 25 Crores Transfer Price is applied on External Rating basis.(i.e. External Agencies)

CC/OD/DL/WCDL (Limits Rs.5 Crore and above) for accounts where External Rating is not available, Transfer Price is to be charged/applied on Internal rating basis.

Term Loans (Limits Rs.5 Crore and above) for accounts where External Rating is not available Transfer Price is to be charged/applied on Internal rating basis.

Accounts where there is neither External nor Internal ratings, such accounts irrespective of the limit transfer price is charged as under Food Credit Accounts and others limits below Rs. 5 Crores Base Rate + 15 bps Restructured Accounts (As per details obtained from CBS/BU) Base Rate + + 50 bps

The Tier-I capital adequacy ratio (CAR) of our Bank stood at 9.60%, as against the RBI minimum re-quirement of 7% as on March 2015. The Minimum Common Equity Tier 1 CAR stood at 9.31%, well over the RBI mandated 5.5%. The overall CAR of the Bank by the end of FY2015 was 12.0%,

As per the published accounts as on 31.03.2015, the Bank’s Capital Funds (Basel III) stood at Rs.1,46,518.95 crores as under: Tier- I Capital— Rs 1,17,157.20 crores, Tier- II Capital—Rs 29,361.75 crores. Further, Bank’s Net Worth as on 31.03.2015 stood at Rs.1,20,082.35 crores. (e.cir: 304/2015 – 16 dtd:11/06/2015)

As per extant instructions, Staff Accountability is to be conducted when an account becomes NPA or a fraud has been detected.

Conveying reason(s) leading to rejection of loan proposal and providing a copy of loan document to the borrower is detailed under Fair Practices Code for Lenders in line with RBI guidelines.

It has now been decided to enable Cash Credit accounts and Current Accounts with sanctioned

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overdraft limits under non-retail segments for transactions through Mobile Banking Service. All other conditions remain the same.

(e.cir.sl.no:337/2014-15 dt.02.07.2014)

Ministry of Corporate Affairs had introduced e-filing system in 2006.

As a part of information to be submitted quarterly on large borrowers (CRILC), starting from June 2014, Reserve Bank of India required the Banks to furnish the information on non-cooperative bor-rowers with exposure of Rs.5 cr and above. RBI also prescribed higher/accelerated provisions on new loans/exposures sanctioned to such bor-rower entities as well as new loans/exposures to any other entities promoted by such promot-ers/directors or to a company, on whose board any of the promoter/directors of identified non-cooperative borrower entity is a director.

Definition: Reserve Bank of India defined a non-cooperative borrower as

‘One who does not provide necessary informa-tion required by a lender to assess its financial health even after 2 reminders; or

Denies access to securities etc. as per terms of sanction or

Does not comply with other terms of loan agreements within stipulated period; or

Is hostile/indifferent/in denial mode to negoti-ate with the bank on repayment issues; or plays for time by giving false impression that some solution is on horizon; or

Resorts to vexatious tactics such as litigation to thwart timely resolution of the interest of the lender/s. (e.cir.sl.no:355/2014-15 dt:07/07/2014)

Provisions applicable: The higher/accelerated provisions applicable in cases where a borrower is identified as non-cooperative borrower are as under:

Standard-5% Sub-standard (secured)

Upto 6- months--15% 6 months to 1 year—25%

Sub-standard (Unsecured-ab-initio)

Upto 6- months--25% 6 months to 1 year—40%

Doubtful-I- 2nd year- 40% (secured por-tion) & 100% (unsecured portion)

Doubtfull II- 3rd & 4th Year-100% for both secured and unsecured portions

Doubtfull III- 5th year Onwards- 100%

ADOPTION OF IBA APPROVED COMMON APPLI-

CATION FORM: it has been decided that in addi-tion to the PAN No., Mobile No. & email IDs of promoters / guarantors, all other details viz. Aad-har No., Passport No., Social Media IDs etc. are also to be captured in the loan application form. These details may be inserted in item no. 14 & 20 (a) of the captioned application.

Appropriate authority has approved reclassifica-

tion of major infrastructure related construction activities viz. Roads, Ports, Airports, Railways, Transport Terminals, Bridges, Tunnels and Dams, from the existing Services Sector, to Industry Sec-tor. Following this reclassification, the Collateral Security norms applicable to Working Capital and Term Loans to units under the Services Sector, will not be applicable to units engaged in the eight aforementioned major infrastructure related con-struction activities. (e.cir. sl.no.911/2014-15 dt:29/10/2014)

TUFS-Technology Upgradation Fund Scheme-

submission of ‘Asset Verification Certificate’ has been made mandatory for release of subsidy un-der TUFS from quarter ended June 2014 onwards.

It has been decided to give separate value

statements in CRA (framework is to be used for all internal credit rating models) more relevant for assessment of New Units under ‘Management & Corporate Governance’ parameter.

Standard Covenants form an integral part of the credit delivery process and serve to bring in the required discipline, as also take care of the regula-tory requirements. There were 3 types of cove-nants viz. Basic (12), Optional(14) and Nega-tive(4). The Standard Covenants, aggregating to 30, have now been bifurcated into two (2) catego-ries aggregating to 31 viz. ‘Mandatory Cove-nants’(15) and ‘Mandatory Negative Cove-

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nants’(16). Covenants under “Mandatory Nega-tive” category (other than MN1) are those in re-spect of which the borrower is required to obtain prior approval of the Bank in writing. The breach of any Standard Covenant would be treated as an event of default and Bank will charge card rates (in case concession has been extended) and in addition a penalty may also be levied. The revised Standard covenants (Mandatory and Mandatory Negative) will be applicable for fresh/new sanc-tions as well as renewal of WC limits of existing customers. (e.cir.1242/2015-16 dt:07/01/2016)

Whenever a breach of covenant takes place, a suitable communication be sent to the CEO of the Company expressing concern of the Bank. (e.cir.sl.no:1028/2014-15 dt:12/12/2014)

VALUATION OF LANDED ASSETS AND PHYSICAL VERIFICATION OF PROPERTY (e.cir.sl.no:1130/2014-15 dt:24/12/2014) In case of variation of 20 % or more in the valuation pro-posed by the valuer and the guideline value pro-vided in the State Government notification or In-come Tax Gazette, justification on variation has to be given by the Valuer.

Details of last two transactions are additionally to

be provided in the Valuation Report, if available. Selfie of the Inspecting Official at the site, with or without the borrower should be taken as an integral part of inspection and the same should be kept along with the security documents. This ex-emption (with or without the borrower) will ap-ply only in respect of Housing Loans.

In respect of prospective new connections where our estimated exposure is Rs. 5 crore or above (aggregate of fund based and non-fun based ex-posures), the Bank has entered into an agreement with a service provider M/S Cubictree Technology Solutions Pvt. Ltd., (CTSPL)for pre-screening ser-vices.

Obtention of CIR is mandatory prior to sanction of credit facilities when the borrower is having Mul-tiple Banking Arrangement or considered under take over norms. The genuineness of the CIR should be ascertained diligently and carefully i.e. to be verified by way of branch visit, telechecking, examining statements of accounts etc.

It has been decided that Branch Managers, Case Lead Officers or Case Officers in SAMBs and Offi-

cers from SARBs/ Branches in the Circle / MCG / CAG can file RTI application with Income Tax De-partment, Sub-Registrar of Assurances and Mu-nicipal Corporation for ascertaining details of in-come and properties owned by the borrowers / guarantors. Further the Income Tax Authorities cannot claim exemption as furnishing the details would involve overriding public interest for recov-ery of money due to the Bank which is public money. In case the CPIOs or the respective Appel-late Authorities reject the application or deny the information, the Bank can consider taking up the matter with CIC and subsequently with High Court and Supreme Court, if necessary. (e.cir.sl.no:179/2014-15 dt:20/05/2014)

DCCO =Date of commencement of commercial

operations. RAR=Risk Assessment Report AFI=Annual Financial Inspection MMPs=Mission Mode Projects MENA=Middle East & North Africa SOP=Standard Operating Procedure NEGP=National E-Governance Plan HPTF COMMITTEE=High Power Task Force Com-

mittee CRGFTLIH=Credit Risk Guarantee Fund Trust for Low Income Housing CRILC=Central Repository of Information on Large Credits.

It has been decided by the Executive Committee of Central Board (ECCB) that while putting up any credit proposal (Format S or AS) to ECCB, a tem-plate containing highlights of the proposal should additionally be attached. (e.cir.1212/2014-15 dt:14/01/2015)

In Section F (of Format S), item (i) (i.e. Risks / adverse features and mitigating factors), a provi-sion has been made for recording remarks featur-ing in Credit Audit Report. In this section the criti-cal risks / deficiencies/observations of the Credit Audit report should be reported.

Negative Lien:- It does not create any charge in favour of the bank but merely prohibits the com-pany from creating further charge in favour if the third parties. (COS 245)

Paripassu Charge: In consortium advances, the borrower creates paripassu charge over his assets in favour of all member banks. This is a charge over the securities given to more than one credi-tor with the condition that all the creditors will be

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entitled to the charge on equal footing in propor-tion to the amount of their advances.

To strengthen measures to ensure proper end use

of Term Loan proceeds-Plant and machineries to be purchased out of Bank’s loan are procured di-rectly from the manufacturer/authorized dealer instead of intermediaries. Borrowers have to sub-mit quotations from the manufacturer/ authorized dealer, at the time of request for sanction of Term Loan, which should contain the details of RTGS Code and Account Number to which the TL proceeds have to be remitted.

To have a Policy to protect and facilitate the oper-ating functionaries handling recovery of Bank’s NPAs/AUCAs. it has been decided to put in place a policy for providing legal and financial protection to Bank’s officers who adopt a tough posture against defaulters and initiate criminal proceedings based on facts of individual cases so that the de-faulters do not go scot free under any circums-tances and they are punished as per provisions of Indian Penal Code (IPC), 1860 etc for various crimi-nal offences committed by them against the Bank. (e.cir.425/2015-16 dt:10/07/2015)

NPAs should be migrated to SAMG immediately, but in any case within a maximum period of 180 days from the date of NPA with the approval of the Controllers of the Branches. However, accounts where restructuring in JLF/CDR/Non-CDR mechan-ism is under process, such accounts need not be migrated within the maximum stipulated time limit of 180 days.

The present cut off limit of Rs.25 lacs for migration of accounts from NBG to SARBs has been lowered to Rs.10 lacs.

All existing AUCAs in CAG, MCG & AUCAs of Rs.10 lacs & above in NBG have to be migrated to SAMG. Branches in NBG should obtain approval from their Controlling Authority not below the rank of DGM for not migrating NPAs to SAMG within 180 days from the date of NPAs in their branch. In case of MCG/CAG, this approval would be required from the CGM. Advances related fraud cases can be mi-grated to SAMG after registration of FIR with State Police/CBI

A standard Operating Procedure based on Bank’s policy has been laid down with the approval of competent authority for the benefit of the operat-

ing units regarding Publication of Photographs of Defaulter Borrower(s)/Guarantor(s) The required formats of the proposals and the notices have also been designed & enclosed. (e.cir.sl.no.1245/2013-14 dtd:13.02.2014 & e.cir.sl.no. 509/2015 – 16 dtd: 25/07/2015.)

ECR has a bearing on Capital Adequacy Ratio of the Bank. Obtaining External Credit Rat-ing (ECR) has been made mandatory for all expo-sures above Rs.5 Cr.

Obtention of ECR from any of the six accre-dited agencies is mandatory for all exposures of Rs.10 crores and above. Product specific schemes (e.g. Lease Rental Discounting Scheme, Asset Backed Loan, e-VFS etc.) are exempted from obtaining ECR. (Reference Loan Policy as on 01/01/2016, Chapter-6, pa-ra.6.7) The extant instructions that: • The validity of External Credit Rating is to be treated as 15 months from the date of rating and • Independent verification of ECR must be en-sured in all cases, by accessing the website of the Rating Agency concerned (Ref.: e-Circular No. CCO/CPPD-ADV/82/2015 – 16 dated 25/08/2015)

Branches can update ECR information in CBS

through “Common Processing>CIS/BASEL/ Re-structure> Capital Adequacy Details”.

Special Mention Account’ (SMA) was introduced

in terms of RBI Circular No. DBS.CO.OSMOS/B.C./4/33.04.006/2002-2003 dated September 12, 2002, whereby banks are required to identify incipient stress in the account by creating a sub-asset category viz., SMA.

With a view to discouraging borrowers/defaulters

from being unreasonable and non-cooperative with lenders in their bonafide resolution/recovery efforts, banks may classify such borrowers as “Non-cooperative borrowers”, after giving them due notice if satisfactory clarifications are not fur-nished. Banks will be required to report classifica-tion of such borrowers to CRILC.

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A Non-cooperative borrower is one who does not engage constructively with his lender by default-ing in timely repayment of dues while having abili-ty to pay, thwarting lenders’ efforts for recovery of their dues by not providing necessary informa-tion sought, denying access to assets financed / collateral securities, obstructing sale of securities, etc. In effect, a non-cooperative borrower is a de-faulter who deliberately stone walls legitimate efforts of the lenders to recover their dues.

The Gold loan portfolio of the bank stands at Rs.40, 995 cr as on 31.03.2015. Average ticket size of gold loan is Rs.1.05 lakhs.

Teaser rates: Comparatively lower rates of interest in the first few years, after which rates are reset at higher rates.

Provisioning Coverage Ratio (PCR): The ratio of

provisioning to gross non-performing assets and indicates the extent of funds a bank has kept aside to cover loan losses.

Sick Industrial Company means an industrial company (being a company registered for not less than five years) which has at the end of any finan-cial year accumulated losses equal to or exceeding its entire net worth.

BIFR=Board for Industrial and Financial Recon-struction

SICA=The Sick Industrial Companies (Special Provisions) Act, 1985

OPINION REPORT - DEFINITION OF NET MEANS

AND RATING: The Managing Committee of IBA, has accepted the revised parameters for calculat-ing the Net Means of borrowers, for reporting in Credit Information Reports. Accordingly, all mem-ber banks have been advised for implementation of the structure as under (e.cir.sl.no:679/2015-16 dt:28/08/2015)

Net Means Means.

Up to Rs. 1.00 lac. Very small

Above Rs.1.00 lacs to Rs.4.00 lacs

Small Means.

Above Rs.4.00 lacs to Rs.10.00 lacs

Moderate means.

Above Rs. 10.00 lacs to Rs. 25.00 lacs.

Fair means.

Above Rs. 25.00 lacs to Rs.1.00 crore

Good means

Above Rs.1.00 crore to Rs.10.00 crores.

Very good means

Above Rs.10.00 crores to Rs.25.00 crores

Large means.

Above Rs.25.00 crores Very Large means.

Opinion Reports should invariably be compiled

and updated annually for borrowers in CAG,MCG, SME and before migration of accounts to SAMG. In case of loans under PBBU and RE, H&HD, Opi-nion Reports would be compiled once at the time of sanction.

The operating functionaries are not required to

forward copies of Opinion Reports to Controllers.

Compiling fresh Opinion Reports during change in incumbency of Field Officer/Cash Officer/Branch Manager has since been dispensed with

Compilation of detailed opinion report has been

exempted in following cases:

Opinion Reports need not be compiled for Loans against Bank’s own fixed deposits

Borrowers availing loans against pledge of Gold

upto Rs.3.00 Lacs (Both “P” and “AGL” segments)

Borrowers availing loans upto Rs.3.00 Lacs in case of AGL and SME segments.

(e.cir.Sl. No. : 753/2014 – 15 dt: 25/09/14)

RAROC=RISK ADJUSTED RETURN ON CAPITAL: RAROC presents risk-oriented view for the reve-nues in terms of risks taken to generate those revenues. It serves as a uniform measure of per-formance to compare profitability across different businesses with different levels of risk and capital requirements.

(e.cir:438/2015-16 dtd:13/07/2015) RAROC is defined as

Risk Adjusted Return RAROC = ------------------------------- Economic Capital

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[(Interest + Non Interest Income) - Ex-penses -Expected Losses +Notional return on regulatory Capital]

RAROC= -------------------------------x(1-Tax Rate) Economic Capital

RAROC will be calculated at customer level to evaluate customer’s profitability. Indicative Hur-dle rate has been approved at 25%. Benchmark will be reviewed after 9 months, i.e. in Mar'16.

RAROC thus calculated, will be available to the Relationship Manager and Credit committees as a reference in decision making, by comparing with minimum expected return (Hurdle Rate as de-cided by the Bank), for negotiating

Pricing Additional Non-interest income Collateral

Out of Order:An account should be treated as 'out

of order' if the outstanding balance remains con-tinuously in excess of the sanctioned lim-it/drawing power for 90 days. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited dur-ing the same period, these accounts should be treated as 'out of order'.

Overdue:Any amount due to the bank under any credit facility is ‘overdue’ if it is not paid on the due date fixed by the bank.

In the case of bank finance given for industrial

projects or for agricultural plantations etc. where moratorium is available for payment of interest, payment of interest becomes 'due' only after the moratorium or gestation period is over. There-fore, such amounts of interest do not become overdue and hence do not become NPA, with reference to the date of debit of interest. They become overdue after due date for payment of interest, if uncollected.

In the case of housing loan or similar advances

granted to staff members where interest is pay-able after recovery of principal, interest need not be considered as overdue from the first quarter onwards. Such loans/advances should be classi-

fied as NPA only when there is a default in re-payment of instalment of principal or payment of interest on the respective due dates.

CDR system in the country will have a

three tier structure :

CDR Standing Forum and its Core Group CDR Empowered Group CDR Cell

A loan granted for short duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for two crop seasons. A loan granted for long duration crops will be treated as NPA, if the instalment of princip-al or interest thereon remains overdue for one crop season. For the purpose of these guidelines, “long duration” crops would be crops with crop season longer than one year and crops, which are not “long duration” crops, would be treated as “short duration” crops. The crop season for each crop, which means the period up to harvesting of the crops raised, would be as determined by the State Level Bankers’ Committee in each State. De-pending upon the duration of crops raised by an agriculturist, the above NPA norms would also be made applicable to agricultural term loans availed of by him. Corporate Debt Restructuring (CDR) Me-chanism: The objective of the Corporate Debt Re-structuring (CDR) framework is to ensure timely and transparent mechanism for restructuring the corporate debts of viable entities facing prob-lems,outside the purview of BIFR, DRT and other legal proceedings, for the benefit of all concerned. The CDR Mechanism has been designed to facili-tate restructuring of advances of borrowers enjoy-ing credit facilities from more than one bank / Fi-nancial Institution (FI) in a coordinated manner. The CDR Mechanism is an organizational frame-work institutionalized for speedy disposal of re-structuring proposals of large borrowers availing finance from more than one banks / FIs. This me-chanism will be available to all borrowers engaged in any type of activity subject to the following con-ditions :

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a) The borrowers enjoy credit facilities from

more than one bank / FI under multiple banking /

syndication / consortium system of lending.

b) The total outstanding (fund-based and non-

fund based) exposure is Rs.10 crore or above.

The instructions on interpretations of CIBIL report

and certain relaxations /modifications in mini-mum CIBIL score, some relaxation for certain cat-egories of borrowers under salaried private un-listed companies, professional & self-employed and established Businessmen have been made in view of the high incidence of NPAs and frauds in Auto loans. (e.cir.833/2015-16 dt:05/10/2015)

CGTMSE has revised the interest rate structure for covered accounts w.e.f 01.12.2015. The revi-sion involves charging of interest for loans up to Rs.50 lacs at BR+3% and for loans >Rs.50 lacs & up to Rs.100 lacs at BR+4%, irrespective of CRA rating The existing as well as revised interest structure for CGTMSE guaranteed loans w.e.f. 01.12.2015).(e.cir.1098/2015-16 dt:05/12/2015)

Recoveries made, post settlement of claims by CGTMSE in respect of proposals covered under Credit Guarantee Scheme (CGS), should be passed on to CGTMSE as per provisions of CGS. As per Chapter IV, Clause 11(iii) of CGS, every amount recovered and due to be paid to the Trust shall be paid without delay, and in case it remains unpaid beyond a period of 30 days from the date on which it was first recovered, interest shall be pay-able to the Trust by the MLI at the rate which is 4% above Bank Rate for the period for which payment remains outstanding after the expiry of the said period of 30 days.

Aggregate Limits include all Fund and Non-fund based Limits (including Term Loans).

With a view to discourage the branches from submission of false / delayed compliance to OTMS alerts, it has been decided to impose a penalty and award negative marks in RFIA score and become effective from RFIA October, 2015.

I&MA department has since revised the audit report formats (ARFS). Implementation of mod-ular structure Audit report processing system has been initiated. Risk assessment modules (RAMS) have been developed for each auditee unit to as-sess its activities and related risk profile compre-hensively. Scores are auto generated and are au-tomatically populated in the ARF as per pre de-fined deviation range and score band. A graded system of penalty in RFIA for false compliance has been introduced.

(e.cir. sl.no.199/2016 – 17 dt: 11/05/ 2016.)

Penalty to be imposed on account of False

Compliance: (a)High Risk & Medium Risk Areas :

1 False Compliance : 10 marks 2 False Compliances : 20 marks => 3 False Compliances : 30 marks.

(b) Low & Very Low Risk Areas : 1 to 3 False Compliances : 10 marks 4 to 5 False Compliances : 15 marks > 5 False Compliances : 20 marks

Subject to (a) + (b) not exceeding 30 marks.

Term Loans having tenure beyond 7 years will not be eligible for CGTMSE Guarantee Coverage as interest rate will cross 13.30%(BR+4%), the cap prescribed by CGTMSE. (e.cir.964/2015-16 dt:02/11/2015)

Payment of Annual Guarantee Fee(AGF) on Term

Loans: As per extant instructions, the Bank is not absorbing the Annual Guarantee Fee (AGF) for CGTMSE guaranteed loans with limit >Rs.50 lacs to Rs.100 lacs w.e.f 17.06.2014(Ref. SMEBU e-circular SL.No.307/2014-15 dated 24th June, 2014). It has been decided that henceforth, AGF on Term Loans financed under CGTMSE guaran-tee cover w.e.f. 01.12.2015 will not be absorbed by the Bank irrespective of the amount. Hence, AGF on Term Loans sanctioned on or after 01.12.2015(irrespective of amount) shall be de-bited to borrower’s loan account and paid to

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CGTMSE. In case the borrower is inclined to avail Term Loans under Credit Guarantee Scheme of CGTMSE and in respect of such Term Loans sanc-tioned on or after 01.12.2015, the concerned branch has to pay the AGF for the first year by debiting borrower’s account. For subsequent years, AGF on such Term loans shall be paid by us at Corporate Centre on or before May, 31 of every year till the end of the tenure of guarantee cover by debiting concerned circles with instruc-tions to recover the AGF from respective bor-rower’s account. (e.cir.964/2015-16 dt:02/11/2015)

Websites for verification along with navigation Path for various Documents for verification by Processing/ Sanctioning Officer is detailed in the Master circular on Auto loan e.cir.sl.no.1111/2015-16 dt:08/12/2015.

Assessment of credit limits based on unauthentic,

unverified financials submitted by borrowers /prospective borrowers leads to frequent and large enhancements in limits. With a view to en-suring realistic assessment of scale of operations so that optimum credit limits are considered for sanction, our satisfaction as to authenticity / rea-sonableness of data provided by customers is of utmost importance during assessment. Projected sales figures should be in sync with Industry / Sector / Sub-sector growth and in case of va-riance by more than 20%, deeper analysis needs to be carried out. Similarly, projected Cash flows submitted by the customers, need to be in sync with past sales and are to be cross checked with the credit summations in the account. (e.cir.sl.no:1112/2015-16 dt:08/12/2015)

For operational convenience it has now been decided to revise the authority structure as under

(e.CIR.SL.NO:1350/2015-16 DT:03/02/2016)

Amount of Loan Deviation to be approved by

Up to Rs 50 lacs Sanctioning Authority

Above Rs 50 lacs & up to RCC powers

Zonal Credit Commit-tee

Within the powers of ZCC / CCC-II

CCC-1

Within the powers of CCC–I/ MCCC

WBCC-II

Within the powers WBCC-II / WBCC-I / CCCC

Sanctioning Authority

Within the powers ECCB

CCCC

KYC DOCUMENTS applicable for Non Individu-als/Entities accounts of Proprietary concerns, Accounts of partnership firms, Accounts of com-panies, Accounts of trusts & foundations, Ac-counts of Unincorporated association or body of individuals, Hindu Undivided Family (HUF) de-tailed in e.cir.sl.no:1115/2015-16dt:08/12/2015

In terms of the extant instructions, operating

units have to obtain Credit Information Report from one CIC for Home Loan limits upto Rs 10 lacs and two CICs in respect of Home Loan limits above Rs 10 lacs, to scrutinize credit history of the borrower. (e.cir.sl.no:1209/2015-16 dt: 31/12/2015)

Project TATkal, is about total revamping of entire

Home Loan Delivery Channel, starting from sourcing till Maintenance, is under implantation in the Bank.

As per judgement of Hon’ble Supreme Court of

India, application for recovery of dues before DRTs in BIFR cases are not to be filed.(e.cir.sl.no:1244/2015-16 dt:07/01/2016)

To obviate complaints of delay, rejection, timely

decision on sanction, etc. a Standard Operating Procedure (SOP) for sanction of loans (including takeover of loans), has been prepared. SOP will cover loans sanctioned by RMSEs & RMMEs i.e. in BPR Centres above Rs.50 lacs and in Non BPR Centres above Rs. 1 crore. (e.cir.sl.no:1267/2015-16 dt:13/01/2016

In order to enhance credit skills of the operating

staff and obviate complaints of delay in processing of Auto Loans, a Standard Operating Procedure (given as Annexure), for convenience to operating functionaries, has been prepared. (e.cir.sl.no:1321/2015-16 dt:29/01/2016

Our Bank is launching the Wealth Management Initiative SBI Exclusif. The objective of Wealth Management initiative is to retain as also acquire the premium customer segment by offering a complete range of financial products and servic-

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es along with investment advisory services, which are technology driven, contemporary & comprehensive. The Wealth Management Busi-ness would be driven through Wealth hubs, ded-icated branches and e-Wealth Centres (where banking and investment services would be pro-vided over audio, video and web chat channels) using state of the art technologies. Presently, the Wealth Management Initiative is being launched in Bengaluru and will be rolled out to select cities shortly. SBI Exclusif is a new set of services designed to give our registered (signed up) customers the following benefits - Unique Relationship Manager Model (RM) backed by a team of experts. Extensive range of rewarding products and services including an all new enhanced savings account, a wide range of investment products, lifestyle privileges including an exclusive health card, loan approvals on priori-ty, Visa Signature cards with additional privileges, as well as expert legacy & taxation advisory ser-vices. Expert financial advisory across all asset classes crafted to suit the Customer’s immediate & long-term financial needs – this includes mutual funds, real estate advisory, gold etc. (To be rolled out) Enhanced digital platform on internet and mobile, which gives the Customer access to all his/her information in one place and lets him/her carry out all banking and investment transactions on the go. (e.cir.sl.no:1270/2015-16 dt: 14/01/2016) Concession on different services have been ex-tended to the SBI Exclusif customers. Detailed in e.cir.sl.no.151/2016-17 dt:30/04/2016

Earlier service fee /incentive for sourcing Auto

Loans to dealers /DSEs were being paid by debit to branch Interest Account. Now any charges pay-able to third party entities (TPEs) shall be paid by debit to Charges Account through Vendor Pay-ment System (VPS)) to enable the Bank to dis-charge service tax liability under reverse charge.

In terms of extant instructions, operating units

have to obtain IN PER SEG.Credit Information Re-ports from two of the four Credit Information Companies viz. Credit Information Bureau Limited (CIBIL), Equifax Credit Information Services Pvt Ltd (ECISPL), Experian Credit Information Company of India Ltd (ECICIPL) and CRIF Highmark Credit In-

formation Services Pvt. Ltd (HMCISPL). (e.cir.sl.no:1298/2015-16 dt: 21/01/2016)

In terms of the extant instructions, operating units

have to obtain Credit Information Report in AGRI SEG.as under: a) For secured Loans up to a limit of Rs.3.00 lac : Report from one Credit Bureau b) For secured Loans for limit greater than Rs.3.00 lac : Report from two Credit Bureaus c) For unsecured Loans up to a limit of Rs.1.00 lac : Report from one Credit Bureau d) For unsecured Loans for limit greater than Rs.1.00 lac: Report from two Credit Bureaus It has been decided to follow the undernoted or-der for pulling CIRs from CICs: i. CRIF HIGH mark Credit Information Services Pvt Ltd. ii. Credit Information Bureau Limited (CIBIL) iii. Equifax Credit Information Company of India iv. Experian Credit Information Company of India Where one report is required, it will be pulled from CRIF HIGH mark Credit Information Services Pvt Ltd and if two reports are required then one report from CRIF HIGH mark Credit Information Services Pvt Ltd and second from Credit Informa-tion Bureau Limited (CIBIL) will be obtained. (e.cir.sl.no:1305/2015-16 dt: 22/01/2016)

The National Payments Corporation of India (NPCI) offers to banks, financial institutions, Cor-porates and Government/s a service termed as “National Automated Clearing House (NACH)” which includes both Debit and Credit. It shall be referred to as NACH hereafter. Proposed NACH (Debit) & NACH (Credit) aims at facilitating interbank high volume, low value de-bit/credit transactions, which are repetitive in nature, electronically using the NPCI service. De-tailed procedural guidelines is there in e.cir.sl.no.1366/2015-16 dt:06/02/2016

ECS is now being migrated to NACH and NPCI / RBI has advised member banks to migrate full volume to NACH as processing of ECS by RBI will be com-pletely stopped with effect from 01.04.2016. Therefore, all branches/ RACPCs should stop ac-cepting ECS mandates and obtain fresh NACH Mandates. However, customers who have already given ECS debit mandate need not execute NACH

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mandate afresh and only for the new debit in-structions NACH mandate should be obtained. (e.cir.sl.no. 1371/2015 – 16 dt:09/02/2016)

ECS/NACH files will be processed daily, except on RTGS holidays. SBI has opted for decentralized processing of ECS files received from NPCI and it will be the responsibility of the respective Cen-tres/CCPCs/Branches to process the records/files and upload the return files to NPCI same day within stipulated time lines prescribed by NPCI, even if the day is a holiday in the Circle/ branch but working day for RTGS. (e.cir.sl.no. 1493/2015 – 16 dt:05/03/2016)

It has now been decided by the appropriate authority to modify the guidelines pertaining to the WCDL product as under:

Parameter Revised Guide-lines

Maximum Tenor 365 days

Minimum Tranche Rs.5 Crore

The guidelines on minimum tenor i.e 7 days,

provided the tranche is at least Rs 25 crores, and 30 days otherwise, remain unchanged.

Supreme Court Order dated 11.08.2015 – Prohibition of display of Aadhaar number of resi-dents in public domain: all the operating functio-naries are advised not to display or make available Aadhaar numbers in public domain such as inter-net, web, public notices etc . In case there is a re-quirement to publish a list of individu-als/customers by any department/branch/office through a public notice, such list shall not contain Aadhaar numbers. (e.cir.sl.no:1411/2015-16 DT:16/02/2016)

As of now, for agricultural advances with limit of

Rs.25 lacs to Rs.2 crores, Simplified Liberal Model of CRA is being adopted.The Bank has approved the waiver of CRA rating in Produce Marketing Loans of Rs.25 lac to Rs.50 lac under Collateral Management arrangement with empanelled Col-lateral Managers based upon certain conditions. (e.cir.sl.no.1415/2015-16 dt:16/02/2016)

All Mudra loans (Manufacturing & Services) upto

Rs. 10 lacs also should be covered under the Cre-dit Guarantee Scheme of CGTMSE. Loans to retail

trade are not eligible for coverage under Credit Guarantee Scheme of CGTMSE.

The interest rate structure for CGTMSE loans

above Rs.10 lacs to Rs. 100 lacs (effective from 01.12.2015) advised earlier remains unchanged. The Annual Guarantee Fee (AGF) for all eligible MSE loan accounts with Cash Credit limit upto Rs.50 lacs is being absorbed by the Bank. AGF for Cash Credit limit above Rs.50 lacs (sanctioned on or after 17.06.2014) and AGF on Term Loans fi-nanced under CGTMSE guarantee cover (w.e.f. 01.12.2015) irrespective of the loan amount will not be absorbed by the Bank. Hence, AGF on Term Loans sanctioned on or after 01.12.2015 (irrespective of the amount) and Cash Credit limit above Rs.50 lac shall be debited to borrower’s account and paid to CGTMSE. (e.cir.sl.no:1419/2015-16 dt:16/02/2016)

Under SARFAESI Act, 2002, the Bank can sell the secured assets to recover its dues by following the prescribed procedures. Under Rule 6(1) and 8(5) of the Security Interest (Enforcement) Rules, sale of the secured assets can be made by any one of the following methods to secure maximum sale price: a) By obtaining quotations from the persons deal-ing with similar secured assets or otherwise inter-ested in buying such assets b) By inviting tenders from the public c) By holding public auction d) By private treaty (e.cir.sl.no: 1423/2015 – 16 dt:17/02/2016)

Liquidity Coverage Ratio (LCR) TDRs of our bank with the exception of SBI Tax

saving Scheme, 2006 have the option of prema-ture payment and therefore the entire TDR/STDR portfolio would be considered as callable within the next 30 days. The product SBI- NON-CALLABLE TERM DEPOSIT SCHEME is available for TDRs/STDRs of Rs.1 Crore and above where the banks would have the dis-cretion to offer differential interest rates based on whether term deposits are with or without pre-mature withdrawal facility. Product code 3411-1529 for NCD-STD-GEN PUB-IND-2Y has been opened. Premiums on interest rates for Non-Callable Deposits of Rs.100 Crores and above to all customers for both Card Rates and DIR Rates.

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Currently Lock-in Period would be allowed to be set at product level in years i.e. 1 year, 2 years and 3 years.

In respect of guarantees issued by the branches favouring Government Departments, branches should not address any correspondence to the President of India, although such guarantees are favouring the President of India. The correspon-dence relating to such guarantees should instead be addressed to the concerned Government Min-istry/Departments.

All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes. Actual lending rates will be determined by adding the compo-nents of spread to the MCLR. Accordingly, there will be no lending below the MCLR of a particular maturity for all loans linked to that benchmark. The actual rates, pertaining to different maturities under this dispensation will be advised separately.

Banks are required to carry out their own internal

credit assessment and internal ratings even in re-spect of rated issues and not rely entirely on the ratings of External Agencies for investment deci-sions. Accordingly, CRMD have developed in-house credit rating models for investment deci-sion making namely, Risk Assessment Model for Investments in Non-Banking Finance companies (RAMIN) and Risk Assessment Model for Invest-ments by the Treasury (RAMIT). RAMIN model is applicable for assessment of in-vestment decision in respect of those NBFCs/HFCs which are not our borrowers. In case of existing borrowers, CRA NBFC model is applicable even for decision making related to investment and RAMIT model is applicable for assessment of investment decision in respect of those corporates which are not our borrowers. In case of existing borrowers, CRA Regular Non-Trade model is applicable even for decision making related to investment. (e.cir.sl.no:1597/2015-16 dt:31/03/2016)

SBI GENERAL Loan Insurance product is a unique product with multiple coverages / benefits. The product provides cover for 13 critical illnesses, accidental death or permanent disablement and

loss of job. For details e.cir.Sl. No. : 900/2014 – 15 dt:28/10/2014 and e.cir.Sl. No. : 1461/2015 – 16 dt:01/03/2016 may be referred.

LOAN AGAINST MORTGAGE OF IMMOVABLE PROPERTY (LAP) is detailed in e.cir.sl.no.43/2016-17 dt:07/04/2016

Bank has engaged for Repossession and Sale of

Vehicles with TVS Credit Services Ltd as Resolu-tion Agent. (e.cir.sl.no.67/2016-17 dt:16/04/2016)

Bank has arrangement for the above purpose with

Shriram Automall India Ltd (SAMIL)also, for sto-rage and auction of the repossessed vehicles.( e-Circular No: NBG/PBU/AL-NPAM/51/2015-16 dated 22.01.2016)

A Standard Operating Procedure (SOP) for

operation of the Currency Chests has been pre-pared and annexed to this Circular. A copy of the same is also placed in State Bank Times> Depart-ment 1> Banking Operations Department.

(e.cir.sl.no.68/2016-17 dt:16/04/2016)

Electrical Safety Audit is carried out at least once in a year. Fire Safety And Electrical Audit of Branches / Offices Standard Operating Procedure (SOP) For Protection Against Short circuting is de-tailed in e.cir.sl.no:69/2016-17 dt:16/04/2016. On a review it has been considered desirable to undertakerevision/restructuring of SME Centre (SMEC) with a view to ensure: i) Better utilisation/productivity of SMECs. ii) To reduce the large number of rejections by SMECs. iii) To provide marketing /sourcing of SME Busi-ness. iv) To address RMSE’s handling multiple branches. v) To provide end-to-end solution for SME cus-tomers Upon undertaking restructuring the following are proposed to be covered: i) Creation of dedicated Asset Management Teams. ii) Budgetary targets to be given for SMECs and in turn to the AMTs. iii) Marketing of proposals below Rs. 50.00 Lacs to be done by AMTs. iv) Posting officers in SMECs who possess requi-site credit experience e.cir.Sl. No. 232/2016 – 17 dt:17/05,2016)

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The name of ‘CREDIT INFORMATION BUREAU (IN-DIA) LIMITED’, a Credit Information Company, has since been changed to ‘TRANS UNION CIBIL LI-MITED’. Implementation of holding on operations in re-spect of SMA – Category I & II or Substandard Accounts which are identified as ‘potentially via-ble’ would not require any administrative clear-ance / approval / sanction and would need to be only reported to the appropriate authority as laid down. However, in those cases where holding on operations are proposed as a part of restructuring package, along with other terms, prior approval of authority approving the restructuring package will have to be taken before implementing holding on operations. Subsequent extensions, if considered necessary, will also require to be cleared by the appropriate sanctioning authority in advance. (e.cir.sl.no. : 827/2016 – 17 DT:27/09/2016)

Lead Banks Scheme is administered by the Re-serve Bank of India. Assignment of lead bank re-sponsibility in every district and State Level Bank-ers’ Committee responsibility to various Banks is done by RBI. Our Bank has been assigned SLBC/UTLBC responsibility in 12 States/UT out of 36 States/UTs and Lead District responsibility in 190 districts out of 673 Districts.

State Level Banker’s Committee (SLBC): State Level Bankers’ Committee is an apex inter-institutional forum to create adequate coordina-tion machinery in all States, on a uniform basis for development of the State. Representatives of var-ious organizations from different sector of the economy are special invitees in SLBC meetings for discussing their specific problems. The SLBC meet-ings are held on quarterly basis. PERIODICITY FOR SUBMISSION OF IRREGULARITY REPORT has been reviewed. Irregularities due to application of interest in Working Capital accounts: Irregularities in ac-counts arising solely from application of interest need not be reported, if the account is regularised within 30 days from the date of application of in-terest, irrespective of whether the outstanding are within the sanctioned limit or not. Irregularity in Term Loan accounts : Irregularity in Term Loan on account of application of inter-

est/non-payment of installment, but adjusted within 30 days has been reviewed detailed in e.cir:629/2016-17 dt:11/08/2016

The Stand Up India scheme was launched by the Prime Minister on 05.04.2016.The objective of the scheme is to create an eco-system for SC, ST and women entrepreneurs by providing bank loans over Rs.10 lakh and up to Rs.100 lakh to atleast one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower & at least one women borrower per Bank branch for setting up a Greenfield enterprise in FY 2016-17.(e.cir:731/2016-17 dt:01/09/2016) To include SME schemes / products with different Product codes, a new scheme code (09121) has now been made available by GITC.

It has now been decided to merge Rent Plus Scheme (P-segment) with Loan against Property Scheme (LAP). The Rent Plus Scheme (P-segment) will stand withdrawn with immediate ef-fect.(908/2016-17 dt:13/10/2016) The following communities have been notified as minority communities by the Government of In-dia, Ministry of Minority Affairs: a) Sikhs b) Muslims c) Christians d) Zoroastrians e) Buddhists f) Jains Lending to minority communities forms a part of weaker sections advances. It should be ensured that minority communities secure adequate bene-fits flowing from various Government Sponsored Schemes in a fair manner.

In FY2016, Ecosystem Financing (Project Shikhar) has been started by your Bank to take advantage of growing e-Commerce footprint in the economy.