Policy on Takeover of Loans

POLICY ON TAKEOVER OF LOANS

Two types of loans can be taken over

  1. Other loan
  2. Jewel loan

The existing loan sanctioning powers vested with the respective persons shall be the limit.

The takeover account should be closely monitored for a period of six months.

In the audit/inspection special attention should be given and a special report should be submitted on the irregularity of taken over accounts.

A note on status of the taken over other loan account should be submitted to board for information till 6 months from the date of takeover.

Details of loans taken over shall be periodically reported to the board.

With regard to take over of other loan accounts:

  • Only regular other loan account should be taken over. This should be confirmed by obtaining the credit opinion from the existing finance institution and statement of the account from the date of opening.
  • There should not be any ambiguity in the account statement.
  • The accounts with collateral security should be taken over
  • Only the balance outstanding should be taken over. No enhancement should be entertained in that loan. 
  • Fresh loans shall be entertained based on needs.
  • The existing sanction terms shall not be changed. The period of loan should not be more than that of the residual repayment period.
  • There should not be any negative remarks in CIBIL report of the borrower.
  • Repayment capacity of the borrower should be ensured.
  • Reason for shifting the account should be genuine and acceptable.
  • Ensure that there is no other charges over the property to be mortgaged with us.
  • Letter from the institution from which the loan is taken over, stating that they will release their lien/charges over the mortgaged property and also agree to hand over the title deed directly to us on a specific date (The date should not be more than 30 working days from the date of closure of the loan.)

With regard to take over of Jewel loan account:

  • Reference about the borrower from an existing customer/well known person is must.
  • Ownership of the jewels to be ensured.
  • Reason for shifting should be ensured and it should be genuine and acceptable.
  • Branch manager should ensure the availability of required Loan To Value (LTV).
  • Branch Manager should ensure that there is no other lien over the jewel loan account.
  • If the proposed loan value as per our calculation is more than that of the balance outstanding then the difference amount should be remitted.
  • If the borrower is ready to offer additional jewels for the difference value then the same should be obtained beforehand.
  • For safety purpose branch should obtain a letter from the borrower in favors of the financial institution authorizing us to receive the jewels. He should hand over the jewel loan card to us.  In the mean time he should come along with us to identify and take delivery of the pledged jewels
  • For any takeover account the payment should be made directly to the account of the borrower with the financial institution from where the loan is to taken over by way of Demand Draft / RTGS/ NEFT.
  • Interest should be calculated from the date of making payment by us to the financial institution.

For deviating the Board approved policy on takeover prior approval from Board is necessary.