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Staff Clean Overdraft Facility

This document outlines the terms of the staff clean overdraft facility for bank employees. It specifies the eligibility, purpose, loan entitlements based on employee type and tenure, sanctioning authority, review process, interest rate, and documents required. Eligible employees include confirmed staff who have completed their probation period. The purpose is for any bonafide need. Loan entitlement ranges from Rs. 1.35 lakh to Rs. 10 lakh depending on employee type and tenure. Total deductions from salary cannot exceed 65% of gross monthly pay. The interest rate is 7% annually.

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Bikash Sah
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1K views11 pages

Staff Clean Overdraft Facility

This document outlines the terms of the staff clean overdraft facility for bank employees. It specifies the eligibility, purpose, loan entitlements based on employee type and tenure, sanctioning authority, review process, interest rate, and documents required. Eligible employees include confirmed staff who have completed their probation period. The purpose is for any bonafide need. Loan entitlement ranges from Rs. 1.35 lakh to Rs. 10 lakh depending on employee type and tenure. Total deductions from salary cannot exceed 65% of gross monthly pay. The interest rate is 7% annually.

Uploaded by

Bikash Sah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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STAFF Clean Overdraft facility

(HOBC 095/129 DATED 13/12/2001)


(HOBC 101/038 DATED 15/06/2007)
(HOBC 110/106 DATED 16/09/2016)
(HOBC 108/198 DATED 16.09.2016)
(HOBC 112/084 DATED 17.09.2018)
(HOBC 112/153 DATED 31.01.2019)
(HOBC 114/026 DATED 27/04/2020)

Presented by
Abinash kr. Mandilwar
STAFF Clean Overdraft facility
• Eligibility: All confirmed employees of the Bank.
• In the case of employees, whose services are not
confirmed due to technical reasons but have
completed their probation period as prescribed,
they become eligible after completion of their
probation period.
• Purpose : Any bonafide purpose relating to the staff
member.
LOAN ENTITLEMENT
Type of Loan: As per extant guidelines, 60% of the sanctioned limit will
be continued to be treated as Overdraft facility and remaining 40% of
the sanctioned limit to be converted as Term Loan.
Repayment: Overdraft portion can be repaid by the employee as per his
convenience. Term Loan to be repaid in 84 equated monthly
instalments or by the date of superannuation of the concern employee,
whichever is earlier.
Eligible employees 5 Years & above but 10 Years & above
less than 5 Years less than 10 Years
Officers Rs.2.00 lakh Rs.3.50 lakhs Rs. 10.00 lakh

Clerical staff Rs.1.65 lakh Rs.3.00 lakh Rs.7.00 lakh

Sub-staff Rs.1.35 lakh Rs.2.00 lakh Rs.4.00 lakh


SANCTION
1)Employees working in the branches / zonal office, the
sanction would rest with SZLCC of the Zone;
2)Employees posted at Zonal Audit Office Training Centres.
LCBs and other Administrative Offices, will be considered
on the SLCC of the concerned Zone in whose jurisdiction
the said offices is located.
3)In case of those employees, who have already availed OD
facility (with & without Term loan component), their request
for additional limits shall be considered by the SZLCC of the
zone where the original limits have been Sanctioned, even
through they are currently posted outside the said zone.
REVIEW
All staff loan accounts including clean OD irrespective of the
outstanding stand reviewed through credit inspection
subject to:
• All the Original terms of sanction/s are complied with and
security creation is completed.
• The account is in standard category and no overdue in the
account.
• No audit irregularities are pending for compliance.
• The staff is not under suspension and no major
disciplinary action is initiated/pending/contemplated.
STAFF Clean Overdraft facility
• Total deductions : The total deductions from the
salary of the applicant should not exceed 65% of
gross monthly emoluments.
• N.B.- As per HOBC 112/153, the board in its meeting
held on 28.01.2019 has accorded its approval to
exclude the notional interest on the OD limit from the
total deduction of gross monthly salary of the
employees for availing themselves of various Staff
Loan and/or OD facilities.
• Rate of interest : 7% per annum (OD/TL).
OTHER CONDITIONS
a) In case where disciplinary action is pending / initiated /
contemplated against the employee, the decision of
sanctioning of the facility will rest with the Zonal Manager
of the Zone where the employee is presently posted
b) In respect of ​employees who are placed under
suspension, this facility should not extend. If already
extended, the Suspended employee should not be allowed
to withdraw from the overdraft account during the period of
suspension, till the suspension is revoked. However,
employee can be allowed to withdraw subsistence
allowance as applicable.
OTHER CONDITIONS
c) In case of transfer of an employee, the Overdraft /
Term Loan account will remain on the original branch.
d) It will be mandatory for the employees to designate
the OD account for credit of their monthly salary as well
as charge account for India Card /Credit Card usage.
However, the limit should not be allowed to overdrawn,
which may attract disciplinary action against the
concerned employee.
e) As the Overdraft account will be an operative and
multi-purpose account, the employees will not be
entitled for any tax relief in connection with Housing
loan or for any other purpose.
Documents to be obtained
As per HOBC 109/222 Dt. 01.03.2016
By Borrower:
a) Demand Promissory Note with bearer letter (No change).
b) Newly devised 'Loan document- Staff OD‘ (This document is devised by
consolidating – 1) installments letter, 2) continuing security, 3) undertaking
regarding non availment of other loans, 4) Authority letter for deducting interest
from salary, 5) the document for recovery as a public demand under the local
legislations. Therefore these documents can be dispensed with).
c) As per the extant guidelines, unstamped L-496, in duplicate, to be obtained
from the staff Borrower authorizing the Trustees of PF/Gratuity to make the
payment to the Bank. This should continue as it is a separate document
addressed to the Trustees and cannot be clubbed to the Loan Document.
Documents to be obtained
By Guarantor:
a) New Guarantee Deed for staff OD (the document for recovery as a
public demand under the local legislations is included herein and hence
there is no need to obtain it separately).
b) As per the extant guidelines, unstamped L-497, in duplicate, to be
obtained from the nominee (Guarantor) of the staff Borrower authorizing
the Trustees of PF/Gratuity to make the payment to the Bank. This should
continue, as it is a separate document addressed to the Trustees and
cannot be clubbed to the Guarantee.
3. The specimen of aforesaid documents enclosed with HOBC 109/22.
Now stamping is required only on the Loan Document and Guarantee
Bond. Revenue stamp has to be affixed on the Demand Promissory Note
as per the extant guidelines.

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