MORTGAGE  LOAN AGAINST IP

Eligibility

For Personal Needs

Employees of Central Govt. /State Govt./Schools/Colleges/PSUs /Reputed Corporate & Other Income Tax assesses. Age should be less than 70 years–

Minimum net monthly Income Rs.25000/-p.m.for salaried class and Rs.300000/-p.a.for other IT assesses.

 For Business Needs

Retail Traders, Wholesale traders, SB Enterprises and Manufacturing concerns, Professional & Self Employed Existing Customers earning Cash Profits for the last 3 years and net Profits during immediate previous year.

New prospective borrowers and takeover cases in the aforesaid categories may be considered who are in existence for minimum of last three years or more with satisfactory track record and fulfilling the criteria as above for existing customers viz. cash profits during last three years and net profit in the immediately preceding financial year.

For Trusts, Societies and Educational institutions–3 years criteria of cash profits is not applicable. Loan can be considered if cash flows are sufficient to repay loan installment and interest.

Income Criteria

For salaried and other  income tax assesses:

Minimum net monthly salary of Rs.25,000/-for last three years salaried class) or minimum net annual income of Rs.3,00,000/- (for other income tax assesses).

For Business Enterprises:

Minimum Net annual income /Net Profit of Rs.3,00,000/-and above. Further, Interest and depreciation charges will be added back for the purpose of arriving at Net Income / profit.

Income of spouse /earning children /parent’s /partners /directors can be taken into consideration for the purpose of EMI OR Servicing of interest (for determining loan amount). In such cases, they should be made co-borrowers. However , in case the facility is being considered in favour of Business enterprises (firm), individuals whose income is taken into consideration for monthly instalment or for servicing of interest (for determining loan amount ) be made Guarantors.

Income/salary of Directors will not be added for computation of assessment of limit where loan is being allowed to Pvt.Ltd. Co.

Extent of Loan

For business needs: Minimum:Rs.5.00 lac; Max: Rs.500.00 lac.

For Personal Needs : Min:Rs.1.00 lac;  Maximum:Rs.5.00 lac.

 Term loan / OD with monthly reducing DP

Rate of Interest (subject to change from time to time)

·         Further concession in ROI be allowed as under :

• 0.25%  if RV is > 200% and upto 250%
• 0.50%  if RVis  > 250%  and upto 300%
• 0.75%  if RVis  > 300%  of the loan amount.

Assessment of limit

• Maximum 75% of the  realizable value of the property.
• Maximum three times of Annual Gross Income/Gross Profit, Whichever is lower (In case of Term Loan)
• Maximum Four times of Annual Gross Income /Gross Profit, whichever is lower (In case of overdraft). 

Repaying Capacity: Repayment should be fixed on a realistic basis, which should not exceed the prescribed limit of Net Monthly Salary/Income (NMS/I)^I in case of salaried/other income tax assesses and of Annual net profit after tax (ANPAT^II) for business enterprises. For this purpose, all Deductions^(III) including the proposed Mortgage Loan installment (except statutory deductions) should not exceed the prescribed ceiling as under:

Renewal/Review

Annual.

Restoration

In case of OD limit for business needs, SA may allow restoration of the original limit/enhancement of the limit after the lapse of 12 months, where the conduct of the account is satisfactory

Repayment

& Reducing DP

(a)     Max. 120 months, EMI up to 70 years of age in case of salaried class.

(b)     Max. 180 EMIs for Enterprises in Service Sector, Professional & Self Employed, Manufacturing Concerns, Education Institution.

(c)     Maximum 144 EMIs for Traders (Retail & Wholesale)

(Repayment period to be linked with Purpose/ Activity of the borrower)

OD–Monthly Reducing DP so that the whole limit is liquidated within the installments. Since interest is expected to be serviced during the month of normal transaction as in case of any OD facility, as such only the Principal amount is to be reduced every month on pro rata basis.

At non ECS locations, Advance cheques / Standing Instructions be taken to ensure recovery.

At ECS locations, Repayment of EMIs be considered only through ECS / RECS (Debit) mandate of the customers for debiting their accounts. However, 2-3 PDCs (in CTS-2010 Standard Format) be procured /maintained as SECURITY by the branches to keep remedy alive under Section-138 of Negotiable Instruments Act.

Security

EM of House /flat /commercial property /self occupied or vacant house in the name of borrowers / spouse /Sole Prop /Partner /firm /parents. The loan can be granted to prop. on mortgage of property in the name of firm. Finance can be made against lease hold property if the lease deed permits and loan is repaid before expiry of lease period.

Upfront fee(TL)

0.90%  of loan amount + service tax Minimum– Rs.5,000/- + GST, Maximum- Rs.1,25,000/- +GST

Processing fee (OD limit)

Rs.300/- per lac or part thereof

Documentation charges

For loan upto Rs.25 Lakhs- Maximum Rs 2500/- + GST For loan above Rs.25 Lakhs- Maximum Rs.5,000/- + GST.

Insurance

Comprehensive insurance of IP mortgaged for the Re-Construction    Cost only, cost to be borne by borrower.

IP

Inspection

Property to be inspected:

i.  Once every year for regular accounts;

ii.  Once every half year for irregular accounts ; and

Atleast  once in three months for NPA accounts