(EXCLUSIVE OF SERVICE-TAX & EDUCATION CESS)
|1.||Issuance of Solvency Certificate||0.10% of certificate amount with a minimum
of Rs.500/- and maximum Rs.25000/-.
|2.||Co-Acceptance of Bills||Rs. 150 + 1.00% per quarter or part thereof for
the liability period, per bill.
Processing/upfront fee is to be charged as under:-
i) For all loans upto one year, processing fee is to be charged.
ii) For loans over one year, (a) upfront fee is to be charged in case loans are sanctioned to meet capital expenditure and (b) processing fee is to be charged proportionately for the period of sanction in case loans are sanctioned for working capital requirements.
(A) Working Capital
|Upto Rs. 25000/-||Nil.|
|Above Rs.25000/- & upto Rs. 2 lakh.||Rs. Rs. 500/-*|
|Above Rs.2 lakh||Rs.225/- per lakh or part thereof *|
|For Non-Fund Based Limits.||50% of the charges as applicable to fund based limits.|
* In case of advances to Micro and Small Enterprises upto Rs. 5 lakh, no processing charges are to be recovered, whether sanctioned or not.
No processing charges are to be levied in case of advances against deposits, Govt. securities, UTI, Mutual Fund Units, NSCs, KVPs, IVPs and SGSY cases and in case of Self Help Group Accounts (SHGs), Joint Liability Groups (JLGs), below poverty line.
Further, no processing fee/service charges/ledger folio charges are to be levied in respect of borrowers who have been issued Kisan Credit Card against the security of FDR, NSCs, KVPs or other such liquid securities and also for KCC up to Rs.3.00 Lakh
Besides, no processing fee is to be charged for processing the cases of setting up of Agri Clinics and Agri Business Centres by Agricultural Graduates under ‘Central Sector Scheme’.
The above charges will also be applicable in respect of working capital limits to traders.
20% discount in processing /upfront fee will be given in case of applications received on-line in respect of MSME category of borrowers to encourage such borrowers to submit on-line applications.
Processing fee is to be recovered as under:-
1. For all existing limitsincluding specific BG limits, processing charges be recovered in the month of April (max. upto 31st May) for the entire year. In the first year of its implementation, charges be recovered proportionately only.
2. For fresh proposals, the charges be recovered proportionately for the remaining months upto 31st March.
3. In case of adhoc working capital limits, the processing charges be recovered proportionately for the adhoc limits sanctioned for the period of such limits, irrespective of the financial year.
4. In case of enhancement in credit limits during the year, the charges recovered earlier may have to be appropriated and proportionate charges are to be levied on the enhanced portion for the remaining period in the financial year.
5. Charges once recovered by the bank for a particular period for specified limit will remain valid for the entire financial year. As such, the revised charges in existing accounts where processing fee has already been recovered prior to revision shall be effective at the time of review/renewal/enhancement. In other words, the processing charges once recovered in April in existing accounts, prior to the date of revision, if any, shall remain valid upto 31st March i.e. complete financial year.
The processing charges in case of fresh proposals may be recovered in stages as follows:
10% of processing fee on receipt of proposal. However, RM’s and above may relax the condition on merits of the case.
Minimum 50% of processing fee on the amount of limit sanctioned (inclusive of fee charged at the time of receipt of proposal) at the time of handing over letter of sanction and balance 50% at the time of disbursement.
A suitable undertaking in this regard (As per Annexure-I) is to be obtained from the prospective borrower at the time of receiving the loan application.
However, in cases, where the processing/upfront fee could not be recovered due to non-availment/ disbursement of limits, General Manager(Credit) & above may consider waivement of processing/upfront fee, in full, in such cases, on merits.In case the loan proposal is declined or the limit sanctioned is not availed by the customer within a period of six months the processing fee recovered shall be forfeited after giving due notice to the borrower.
• In case of adhoc working capital limits, the processing charges may be recovered proportionately for the adhoc limits sanctioned for the period of such limits, irrespective of the financial year.
• In case of enhancement in credit limits during the year, the charges recovered earlier may have to be appropriated and proportionate charges are to be levied on the enhanced portion for the remaining period in the financial year.
Out of Pocket expenses are to be recovered from the borrowers in addition to the processing fee in case such expenses relate to the post-sanction stage of the credit facilities granted to the borrowers.
(i) For Term Loans (Including DPG) – Other than Retail Segment
Upfront fee is to be charged in lieu of processing charges in case of term loans (including DPG), as under except term loans under Retail Segment for which separate rates have been prescribed:-
|UPFRONT FEE FOR TERM LOANS (INCLUDING DPG)|
|Upto Rs. 25,000||Nil|
|Above Rs. 25,000 and upto Rs. 2 lakh||Rs. 500/-*|
|Above Rs. 2 lakh & upto Rs. 10 crore||1.25% of the loan amount**|
|For Schemes where refinance is obtained||As specified by refinancing agency.|
* In case of following advances, no upfront fee is to be recovered:
(i) Micro & Small Enterprises upto Rs. 5 lakh, whether sanctioned or not
(ii) Self Help Groups (SHGs) below poverty line upto Rs 2 lakh,
** Upfront fee @ 0.60%+ST of the loan amount is to be charged for the following term loans:
(i)Above Rs 5 lakh and upto Rs 25 lakh to Micro & Small Enterprises
(ii) Above Rs 2 lakh and upto Rs 25 lakh to Agricultural activities.
Officials’ upto the levels of RMs shall not exercise powers to permit relaxation in upfront fee.
Upfront fee is to be recovered as a onetime fee. Where financing is in participation with financial institutions, upfront fee be levied/shared in line with those charged by financial institutions. However, this fee is not to be charged for the schemes where refinance is obtained (e.g. NABARD assisted/ refinanced projects).
The processing/evaluation fee in NABARD assisted/Refinanced Projects is to be levied as under:
“For advances where capital outlay of the project does not exceed Rs.2 lakh, no charges be levied.
Where capital outlay of the project exceeds Rs.2 lakh branches may charge evaluation fee once-and-for-all (in lieu of processing fee) @ 0.60% of the capital outlay of the project. The evaluation fee covers the cost relating to pre-sanction, inspection/visit fee, legal fee for examination of title deeds, encumbrance certificate fee etc. However, expenses relating to follow up of utilization in the form of post-sanction, supervision etc., branches may charge out of pocket expenses in addition to evaluation.
|For Term Loans (Under Retail Loan Segment)||Charges|
|Housing Loans including flexi housing loan||0.25%* of loan amount.|
|OD to Housing Loan Borrowers for Personal Needs||Nil|
|Car Loans||0.25% of loan amount Maximum Rs.6000/-
(Including Documentation charges)
|Two Wheeler Loan||Rs.275/-|
|Loan against Mortgage of IP||0.50% of the loan amount. Maximum Rs.45,000/-|
|Education Loan||For Studies in India- NIL For studies abroad- 0.50%, Max. Rs. 5000|
|Personal Loans||1.00%* of loan amount
*For Defence personnel- NIL
Further, no relaxation in processing fee or other charges is to be allowed at any level inHousing/ car loans to any category of borrowers. However, HOCAC-I & HOCAC-II shall have full powers to relax processing/other charges, in such cases.
|For Term Loans- Other Schemes||Charges|
|Traders, Future Lease Rentals||0.50% of loan amount.|
|Doctors Loan, Loan to Self Employed Professional||0.25% of loan amount|
Upfront fee is to be levied in the same way as processing charges are recovered in stages as under:
1. 10% of processing fee on receipt of proposal. However, GM Credit/HOCAC Level I Committee may relax the condition on merits of the case.
2. Minimum 50% of processing fee on the amount of limit sanctioned (inclusive of fee charged at the time of receipt of proposal) at the time of handing over letter of sanction and balance 50% at the time of disbursement.
In case the loan proposal is declined or the term loan sanctioned is not availed by the customer within a period of 6 months, upfront fee recovered shall be forfeited after giving due notice to the borrower.
While issuing instruments for remittance of funds directly in favour of supplier, for disbursement of term loan, no charges are to be recovered for issuance of Cash Order/Draft/RTGS/ NEFT/other mode.
It has been observed that after the sanction has been conveyed and terms & conditions are accepted by the borrowers, the requests are made by the borrowers for change in terms & conditions of the sanction which involves lot of work/time.
The charges prescribed for change in terms & conditions sought by the borrower, except in CDR/restructuring cases, shall be 0.02% of loan amount (Minimum Rs.1, 000/- and Maximum Rs. 5 lakh). These shall also be levied while seeking amendment in rate of interest.
However, these charges should be settled before processing of papers so that repetitive requests to HO are avoided.
Wherever full waiver of processing fee or upfront fee is permitted, ‘Handling Charges’ @ Rs. 15/- per lakh or part thereof, subject to a maximum of Rs. one lakh are to be recovered from borrowers availing limits of Rs. 1 crore & above, separately in lieu of processing fee & upfront fee.
(a). Term Loans (Other than Retail Loans Segment)
|For Loan Amount||Charges|
|Upto Rs 2 lakh||Nil|
|Above Rs 2 lakh||Rs 400/- per lakh of part thereof,
subject to a maximum of Rs 25,000/-
• The above mentioned documentation charges are to be levied only once in case of term loans.
• In case of cash credit accounts, documentation charges are to be levied first at the time of fresh sanction and then at the time of enhancement (for the enhanced portion of limit only). No documentation charges are to be levied at the time of renewal of limits.
• In cash credit accounts which involve execution of document whether regular or adhoc sanction, documentation charges to be levied for such amount.
• The aforesaid charges will not be applicable in case of advances against deposits, Govt. securities, UTI mutual fund units, RBI Relief Bonds, NSCs, KVPs, IVPs, IRDP cases, staff loans.
|For Term Loans (Under Retail Loan Segment)||Charges|
|Housing Loans including flexi housing loan||Rs. 500/-*
*For Defence Personnel- NIL
|OD to Housing Loan Borrowers for Personal needs||Rs 450/-|
|Car Loans||NIL(clubbed with upfront fee)|
|Two Wheeler Loan||Rs.275/-|
|Loan against Mortgage of IP||Rs.900/-|
|Education Loan||For loan upto Rs. 4 lacs- Rs.
270/-For loan over Rs. 4 lacs- Rs. 450/-
|Personal Loans||For loan upto Rs. 2 lacs- Rs.270/-*
For loan over Rs. 2 lacs- Rs.450/-
* For Defence personnel- NIL
(c) Term Loans (Other Schemes)
|For Term Loans- Other Schemes||Charges|
|Traders/Future Lease Rentals/||Rs. 270/- upto Rs. 2 lac.
Rs. 450/-over Rs. 2 lac.
|Doctors loans/Loan to Qualified Professional||Nil|
@ However, while recovering charges, circulars issued by L & A Department on the subject time to time may also be referred.
Guarantee commission is to be charged as under:
|Performance Guarantee||0.50% per quarter or part thereof with a minimum Rs.200/-|
|Other than performance guarantee||Rs. 0.75 % per quarter or part thereof with a minimum of Rs.200/-|
|Guarantees secured by Cash Margin/FDR/Other than liquid securities of:|
|100%||25% of normal commission|
|75%||50% of normal commission|
|50%||75% of normal commission|
Minimum charges for one month and part of a month to be treated as one month.
GM (Credit) can relax the above commission by 25% and Chairman has full power to allow relaxation in service charges.
|For PS Advances||: Rs. 50/- per Certificate|
|For others||: Rs.150/- per Certificate|
Actual charges (rounded off to next higher rupee) to be recovered as under:
I. Postage:Registered Post/Speed Post/courier - Actual expenses /Ordinary Post - Free.
II. Telegram charges
III. Telex Charges
IV. Telephone/Fax Charges
V. Godown Charges:Godown Keeper's salary - Godown Delivery Charges
VII. Valuation charges of Appraisers
VIII. Legal Charges: (a). - Stamp duties (b). - Fees paid for documentation (c). - Solicitors' fees.
IX. Consultancy charges paid to consultants for Feasibility Reports or Consultancy Reports.
X. Travelling, Conveyance Expenses of Bank's Auditors or Field Officers.
XI. Supervision Charges.
1. Service tax will be charged over and above the charges, irrespective of the fact that these charges have been denoted in percentage or flat rates have been prescribed.
2. Service tax will be charged over and above the minimum and maximum rates, wherever stipulated and applicable.
3. No upfront/processing fee is to be charged in case of Self Help Group Accounts (SHGs), below poverty line.
100% waiver of upfront fee & documentation charges be allowed in respect of honourably retired employees of our bank/widows of honorably retired members of staff.The term retired employee includes the employees retired honorably or leaving bank’s service including voluntary retirement or otherwise but does not include an employee retired compulsorily or in consequences of disciplinary action.
In cases where existing/prospective borrowers do not agree for execution of documents containing the required clause for unconditional cancellation of limits, commitment charges are to be levied on quarterly basis as under:
a) For all fund based working capital limits, commitment charges as given below shall be charged on undrawn portion
b) Operative limit if fixed on the basis of QIS-I form, shall be reckoned for calculating the commitment charges.
|Utilization Level||Rate of Commitment Charges|
|1. Utilization Level less than 50%||1.00% p.a.|
|2. Utilization Level 50% to less than 60%||0.50% p.a.|
|3. Utilization Level 60% to less than 70%||: 0.25% p.a.|
|4. Utilization Level above 70%||: NIL|
The Commitment charges at aforesaid rates shall also be levied on quarterly basis in case of partly drawn Term loan irrespective of the fact whether the borrower has executed the necessary documents containing unconditional cancellable limit clause or not. The commitment charges on undrawn portion of Term Loan shall be levied as under:
1. Where the draw down is made in stages as approved by the bank, the commitment charges shall be computed on the undrawn portion reckoned with respect to the relative draw down limit fixed for the period and not with reference to the total limit.
2. In case of partly drawn term loans where no specific draw down schedule has been prescribed/borrower has not adhered to the specific draw down schedule, the commitment charges at aforesaid ratesshall be levied on entire undrawn portion.
Commitment charges be levied in case of non-availment in eligible accounts and the condition be made part of sanction.
The operative limit shall be determined by the monthly cash budget (as in the case of working capital limits sanctioned to Sugar, Tea, etc.). In cases where the operative limit is not fixed or not applicable, the charge be reckoned with reference to sanctioned limit.
The unutilized portion of the operative/sanctioned limit shall be ascertained by the branches by calculating the average utilization during the quarter/month, as the case may be, after excluding there from utilization in excess of the operative/sanctioned limit. The difference between the average utilization determined as above and the sanctioned/operative limit, as the case may be, shall represent the unutilized portion.
Unutilized portion in the case of industries financed under the monthly cash budget should be arrived at with reference to the average utilization during the month and the monthly operative limit.
In respect of advances on consortium basis, RBI’s extant guidelines, interalia, require the lead bank and the bank having the next largest share to fix operative limits/shares of individual banks for the next quarter. The quantum of charge should accordingly be determined by each member bank with reference to the operative/sanctioned limit allocated to it. In multiple banking arrangements, the charge should be determined by each bank based on the limits sanctioned by it.
This charge shall not be levied in respect of drawings in excess of the operative/sanctioned limit. Sanction of adhoc limits over the regular sanctioned limits, should, however, continue to be subject to an additional interest over and above the normal rate as conveyed through L&A Circulars on the subject from time to time.
Where credit limits have been allocated among branches, commitment charge in such cases shall be charged by branch having main account after taking into account the unutilized portion of the allocated limits at the branches where sub-limits have been allocated.
The commitment charge shall be exclusive of the overall ceiling of penal/additional interest as advised from time to time.
Branches while conveying sanction to the borrowers should also mention about levy of commitment charges in the sanction letter itself. Branches to ensure that the loan documents/agreements should contain consent of the borrower to the above effect and in case the same is not available in the documents to be executed, supplementary agreement as per Annexure-II be obtained.
In all such cases branches to ensure that while passing voucher, adequate care should be taken that these are credited to the appropriate head of interest/misc. income but not to any head of service charges.
1. PURCHASE/DISCOUNT OF BILLS/CHEQUES
|(a) DD Purchase (Cheques/Drafts)|
|Local Cheques/Drafts||Interest rate as applicable to clean advances
for the number of days funds are advanced
depending upon the time taken at different
clearing centres. No collection
charges are to be levied.
|Outstation Cheques/Drafts||55 paise per cent plus collection charges
forcheques as applicable for respective slabs..
|(b) Purchase/Discount of Bills|
|Demand Bills (Clean/Documentary)||55 paise per cent plus collection charges for
cheques as applicable for respective slabs.
i) DD purchase charges should not be levied for outstation cheques upto Rs.15000/- where immediate credit is afforded.
ii) In case the cheque/bill (purchased/discounted) is returned unpaid, interest at 2% over and above our maximum interest rate applicable for working capital advances be charged for the period from the date of purchase/discount till the date of actual reimbursement, in addition to handling charges as prescribed for return of cheque/bill. In such cases, the hundian/interest recovered at the time of purchase/discount of cheque/bill will be appropriated towards the amount recoverable on account of return of the cheque/bill. However, the amount of commission charged initially will not be refunded.
iii) In case the demand bill remains unpaid on the date of presentation, interest at 2% over and above our maximum interest rate applicable for working capital advances be charged from the date of presentation till the date of realization.
iv) In case of usance bills overdue interest at 2% over and above the interest rate applicable to the respective borrower for working capital limit be charged from the due date till the date of realization.
v) If the cheque/bill purchased is sent for collection to another bank, the interest component will be retained by the negotiating Bank whereas the collection charges will be shared between the negotiating bank and collecting bank on 50:50 basis, interse public sector banks.
vi) In case of usance bills, if a bill is retired earlier than the due date, interest charged for the period between the actual date of realization and due date may be refunded.
vii) The commission to be charged as advised vide items (a) & (b) above, at the rate of 55 paise % represents cost of outlay of funds for a period of 14 days only. In case of delay in realization beyond 14 days of DD purchased, branches will not be able to fully recover the cost of funds. Therefore, in case of delay in realization of demand bills, interest @ 2% over BR + 5.00% (maximum lending rate for working capital facilities) may be charged for the period beyond 14 days. Further, the date of reimbursement may be taken as the date when the amount has been credited in ourbranch account. In view of the fact that delay in collection of demand bills will penalize the borrowers, branches should ensure that the instruments/remittances are not withheld under any circumstances at the purchasing or realizing branches and are dispatched immediately on the same day. Incumbents to ensure timely dispatch of such instruments and any lapse in this regard would be viewed seriously.
viii) In case the full value of the cheque/bill is not advanced against, interest element by way of purchase/discount may be levied only on the actual amount of drawings allowed to customers.
ix) No concessional facility should be extended to LIC for immediate encashment of cheques `at par` issued by them to their annuitants.
Postages, telegram charges and other out of pocket expenses have to be recovered in full. However, ordinary post will be free.
With a view to improve customer service, borrowers may be informed about service charges and interest component/hundian separately on purchase/discount of cheques and bills.
No charges to be levied.
For applicability of service tax/education cess on various services, circulars issued by Loan &Advances Deptt, HO on the subject from time to time may be referred and while passing voucher, adequate care should be taken that the above charges are credited to the appropriate head of interest/misc. income but not to any head of service charges.
1. In order to remain competitive in the industry and for development of business powers have been vested with the officials at various levels to permit relaxation in service charges (other than retail/ Non Fund Based ), as under:-
|1.||Regional Officer *(Scale IV & above)||Upto 25% of the card rate.|
|2.||General Manager (Credit)||Upto 50% of the card rate|
(*) Regional Officer, who have attained at least a YoY growth in fee based income of 15% and above.
@ Officials upto the levels of Regional Officer (Scale IV & above) shall not exercise powers to permit relaxation in respect of upfront fee. However, the discretionary powers vested with GM/Chairman shall continue as hitherto.
i) In order to retain good clients, Incumbents may waive charges to the full extent on merits in respect of issue of balance/interest certificate and issue of no due certificate.
ii) Agency Arrangements with other banks/institutions is a potential area to enhance business and revenue for the bank. Relaxation in service charges under such arrangements shall be considered at GM (Cedit), HO level who has full powers to finalize service charges under such arrangements.
iii) In order to have proper record, a register be maintained by all the sanctioning authority (ies) detailing reasons for allowing relaxation. Extant guidelines laid down in this regard should also be followed while permitting relaxation in service charges, details of which are given below:
a) The relaxations in service charges are to be permitted in high value and prestigious accounts for business considerations. While considering such proposals cost benefit aspect may be examined to ensure that it does not prove a losing proposition to the bank. Endeavor should be to garner some ancillary business like merchant banking etc. of the borrowal account while allowing concessions in credit related service charges.
b) Arrangement envisaging relaxation in service charges should be subject to annual renewal and half yearly review
c) In case of borrowal accounts, the references for relaxation in service charges should form a part of the loan proposal and thus approved by the concerned sanctioning authority in terms of their vested powers. However, on business considerations, the relaxations may be permitted by various authorities as per their vested powers which should be duly incorporated in the next renewal/review proposal.
d) A proper record of all the approvals relating to relaxation in service charges should be maintained in a Control Register at the sanctioning level as per the prescribed format (Appendix). A quarterly statement as on last date of March, June, September and December should be submitted to the next higher authority by the authority permitting relaxation in service charges alongwith the limits sanctioned statement for that month in the format prescribed for Control Register.
e) The purpose of these guidelines is to ensure that the Desk/Loan Officer while putting up the proposal should examine, in totality, the nature & amount of concessions permitted in the account and accordingly, if required, such relaxations may be reviewed.
In order to give relaxation in service charges to defence forces, all types of service charges on loans irrespective of the amount, granted to Ex-servicemen/Widows of Ex-serviceman under NEF, SEMFEX-II & SEMFEX-III schemes sponsored by SIDBI/NABARD and KVIC be waived. However, out of pocket expenses must be recovered in full in all cases.
Refund admissible on account of correction of mistakes, if any, committed earlier may be made as under:
|Amount of Refund Admissible onaccount
of correction of mistake
|Upto Rs. 1 lac||Regional Officer (Scale IV & Above)|
|Above Rs. 1 lac and upto Rs. 5 lacs||General Manager|
|Above Rs. 5 lacs||Chairman|
a. Refunds/reliefs beyond the powers of Incumbent In-charge should be allowed only after obtaining prior approval of the competent authority.
b. Amounts of refunds/reliefs, etc. approved by the competent authority should be allowed only from out of revenues of the branch concerned.