PUNJAB NATIONAL BANK

SASTRA DIVISION, HEAD OFFICE

PLOT NO 4, EAST WING DWARKA-110075

SALIENT FEATURES OF POLICY FOR ENGAGEMENT OF RECOVERY

AGENCIES/RESOLUTION AGENTS

Eligibility criteria for allocation of accounts to Recovery Agencies/Resolution

Agents

All NPA accounts under Doubtful and Loss category (whether non-suit filed, suit filed
or decreed) and also all written off accounts shall be covered by the scheme except
accounts where compromises have been approved (including those reached at in Lok
Adalats) and have not been treated as failed.

Allocation of eligible NPA accounts shall be done as under:-

Recovery Agencies – Ledger Outstanding Upto Rs. 10 lacs

Resolution Agents – criteria for allocation of accounts to three different categories of

Resolution Agents will be as under:

(i) Securitization Reconstruction Companies (SCs/RCs) - Ledger outstanding of

Rs.1 Crore and above upto Rs. 50 Crores subject to sum of o/s balance of all NPA
accounts allocated should not exceed Rs. 50 Crores, at any point of time.

Further, SCs/RCs may be empanelled as Resolution cum recovery Agents and all
Retail Loans under Doubtful/Loss category may be allocated to them Circle-wise
on portfolio basis in addition to NPAs (Doubtful/Loss) of Rs. 1 Crore & above.

(ii) Other Firms (Firms/Companies other than SCs/RCs) - Ledger outstanding of

above Rs.10 lacs upto Rs. 50 Crores subject to sum of o/s balance of all NPA
accounts allocated should not exceed Rs. 50 Crores, at any point of time.

(iii) Ex-Employees of PSBs - Ledger outstanding above Rs. 10 lacs upto Rs. 5
crores subject to sum of o/s balance of all NPA accounts allocated should
not exceed Rs. 50 Crores at any point of time and also subject to the condition
that retired employees be not given such accounts for resolution which they
handled while in service i.e the accounts which were either sanctioned by them or
their operations were handled by them during their stay in that particular
branch/office.

Empanelment of Recovery Agencies/Resolution Agents- Eligibility & Procedure

 Recovery Agencies/Resolution Agents shall be empanelled for the entire District

or Cluster of Districts.

 Only agencies (companies, corporations, firms, NBFCs etc.) with sufficient

means/ resources/ field experience will be considered for empanelment. Further,

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 the following factors are also to be looked into for the empanelment of Recovery
Agency/Resolution Agent:

(i) Past experience and competence to implement and support the proposed
activity over the contracted period.

(ii) Financial soundness and ability to service commitments even under adverse
conditions.

(iii) Business reputation and culture, compliance, complaints and outstanding or

potential litigation.

(iv) Standards of performance including in the area of customer service; Security

and internal control, audit coverage, reporting and monitoring environment,
Business continuity management.

(v) External factors like political, economic, social and legal environment of the
jurisdiction in which the service provider operates and other events that may
impact service performance.

(vi) Wherever possible, the bank shall obtain independent reviews and market
feedback on the service provider to supplement its own findings.

(vii) It should be ensured that the agents engaged in the recovery process
carry out verification of the antecedents of their employees, which may
include pre-employment police verification, as a matter of abundant caution.
Further, re-verification of antecedents should be resorted to at an interval of 2
years. Police verification report must be available in the Circle Office records.

Eligibility Criteria for SCs/RCs, Ex-Employees of PSBs and Firms (For allocation
of NPA Accounts above Rs 10.00 lacs)

SCs/RCs Other Firms Ex-Employees of PSBs

The Securitization A Firm/Company Honourably retired bank employees of
/ Reconstruction promoted by and/or PSBs (including Voluntarily Retired
Companies employing Employees) will be eligible for
(SCs/RCs) which professional person/ empanelment. However, preference be
have obtained the persons like given to ex-employees of
certificate of Chartered amalgamated entities.
registration from Accountant / Keeping in view the high standards under
RBI under Company Secretary / the norms of Corporate Governance,
Section 3 of the Cost Accountant and following terms and conditions will be
SARFAESI Act / or honorably retired applicable, while engaging Amalgamated
and having Object Senior Executives of employees as Resolution Agents on
Clause of the Banks (not less behalf of the bank:
Memorandum of than DGM/GM) with
Association minimum 3 years Condition-1
permitting them to experience in the Retired employees of Amalgamated Bank
act as Resolution resolution of NPAs. who have worked in the last 5 years of
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 SCs/RCs Other Firms Ex-Employees of PSBs
Agent for the Firms/Companies not their service in the Head Office SASTRA
bank. having 3 years’ Division/ Recovery Sections at Zonal
experience but Office/Circle and/or in ARMBs, there will
having professionals be a cooling period of 1 years between
with minimum 3 the retirement date and date of their
years’ experience will engagement as Resolution Agent.
also be eligible.
Retired employees of other PSBs will
have to submit an undertaking as per
Annexure-5 obtained from local
controlling office of the Bank (Zonal
Office, Circle Office, and Divisional
HQ) where they are residing OR were
posted before retirement. Ex-
Employees of PSBs will apply to local
Zonal Office of their place of
permanent residence.

Condition-2
There will be no bar on Maximum age of
the retired employees, working as
Resolution Agent of the Bank; however,
after attaining the age of 65 years,
performance of the retired employee will
be reviewed by the Zonal Office
Committee for Empanelment of
Outsourcing Agencies (ZOCEOA) and on
finding the same as satisfactory, the
tenure of engagement may be extended
for further 2 years. This will be applicable
to the existing retired employees also,
who are working as Resolution Agents.

It shall also be ensured that the service provider’s employees maintain same
high standard of care in performing the services as would have been maintained
by the Bank as if the activities were conducted within the Bank and not
outsourced because outsourcing arrangement shall not diminish bank’s ability to
fulfill its obligations to customers and RBI.

 Applications would be invited from interested parties through advertisements to

be placed in two local newspapers, one of which should be vernacular.

 Recovery Agencies (For NPA accounts upto Rs. 10 lacs) - Concerned Circle
Head shall invite applications from Recovery Agencies for empanelment, once in
a year.

Resolution Agents - Concerned Zonal Manager shall invite applications from

Resolution Agents for empanelment once in a year. However, for empanelment
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 of SC (Securitization Companies)/RCs (Reconstruction Companies) as
Resolution Agents, Head Office, SASTRA Division shall invite applications. For
Ex-Staff, HRD and/or Zonal Manager shall invite applications from the
honorably retired bank employees of PSBs and there should not be any
dispute/court case with ex-employee (including Voluntarily Retired
Employees).

 Circle Office/Zonal Office shall co-ordinate all the activities relating to

empanelment and review.

 Recovery Agencies (For NPA accounts upto Rs. 10 lacs) – Circle Office
Committee for Empanelment of Outsourcing Agencies (COCEOA) shall
interview the applicants and shall be the Competent Authority to approve
empanelment of the Recovery Agencies and any decision in this regard will be
final.

Resolution Agents - Zonal Office Committee for Empanelment of

Outsourcing Agencies (ZOCEOA) shall interview the applicants and shall be
the Competent Authority to approve empanelment of the Resolution Agents and
any decision in this regard would be final except for the following categories
where power of empanelment will be as under:

 Competent Authority of Empanelment of Ex- Employees of PSBs as

Resolution Agents

Up to scale- Zonal Office Committee for Empanelment of

V Outsourcing Agencies (ZOCEOA)
Scale VI, VII Retired Employees of PNB (Amalgamated Entity)
& VIII
Executive Director (Domain) and Executive Director
(HRD) based on the recommendation of HO Level
Committee

Retired Employees of other PSBs

HO Level Committee

For empanelment under this category,

recommendations will be made by Zonal Office
Committee for Empanelment of Outsourcing
Agencies (ZOCEOA).

 Competent Authority of Empanelment of SCs/RCs as Resolution Agents

Executive Director shall be the competent Authority for empanelment of

SCs/RCs as Resolution cum Recovery Agents and allocation of NPAs under
Retail Loans on portfolio basis.

This panel shall be circulated to all the offices for the utilization of their services
for resolution of non-performing accounts under the scheme.
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 On empanelment of Resolution Agents, the Zonal Office will communicate
contact details of the Resolution Agents to all the Zonal SASTRA
Centres/Circle SASTRA Centre under their jurisdiction for utilization of their
services in case of need. A copy of agreement executed by Resolution Agents
shall also be sent to the respective Zonal SASTRA Centre/Circle SASTRA
Centre.

On empanelment of Recovery Agencies, the Circle Office will communicate

contact details of the Recovery Agencies to the concerned Branches and
Circle SASTRA Centre under their jurisdiction for utilization of their
services in case of need. A copy of agreement executed by Recovery Agency
shall also be sent to the respective Branches/ Circle SASTRA Centre.

Circle Office shall allocate the Branches in a geographical contiguous area,

to the Recovery Agencies.

 In case of Resolution Agents (other than Ex-employees and SC/RCs), an official

from the ZO or Circle Office, to be decided by the ZM shall visit the site/office of
the Applicant, to conduct due diligence to verify their address and infra-structure.
Due diligence at the time of empanelment should also cover that Applicant is
KYC Compliant, documents verified with originals, having required training/IIBF
Certificate, Past experience (if any), feedback from other Banks (if any), ensuring
name of the applicant is not appearing in IBA’s Third Party Caution List, Cross
Checking on Social Media (If available) etc. However, merely non-receipt of
feedback from other Banks should not be used as a tool for rejection of the
application.

In case of Recovery Agency, an official from the Circle Office, to be decided by

the Circle Head shall visit the site/office of the Agency, to conduct due diligence
to verify their address and infra-structure. Due diligence at the time of
empanelment should also cover that Applicant is KYC Compliant, documents
verified with originals, having required training/IIBF Certificate, Past experience
(if any), feedback from other Banks (if any), ensuring name of the applicant is not
appearing in IBA’s Third Party Caution List, Cross Checking on Social Media (If
available) etc. However, merely non-receipt of feedback from other Banks should
not be used as a tool for rejection of the application.

 Panel of Recovery Agencies/Resolution Agents shall be valid for 3 years

[subject to annual review by Zonal Office Committee for Empanelment of
Outsourcing Agencies (ZOCEOA)].

Legal aspects/Documentation
 If a Company is engaged as a Recovery Agency/Resolution Agent, it shall be
ensured that its Memorandum of Association (MOA) permits it to act as a
Recovery Agent/Resolution Agent of Banks and, if not, the MOA shall be got
suitably amended. To ensure this aspect, “Object Clause” in the MOA must be
checked.

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  Each Agency, so approved, shall be required to sign an ‘Agreement’. Proper
penal clause/clause of termination of contract with the agency/other provisions
shall be incorporated in the agreement to be executed by the Recovery
Agency/Resolution Agents.

 The Agency shall furnish to the Bank’s Circle Office (In case of Recovery
Agents) & Zonal Office (In case of Resolution Agents), a Bank guarantee for
an amount of Rs. 1,00,000/-. Alternatively, the Agency shall make a security
deposit (by way of term deposit) for equivalent amount which shall be returned to
the Agency on termination of the arrangement. However, if the agency is
terminated due to non-observance of terms & conditions, then the security is
liable to be retained by the bank. This condition will not be applicable to
individual employees.

Allocation of job/withdrawal of accounts to/from Recovery Agencies/ Resolution

Agent

Allocation of Accounts

The allocation of accounts shall be as under:

Recovery Agency –

Accounts upto Rs 1.00 lacs Branch Head

Accounts above Rs. 1.00 lacs upto Rs 10.00 lacs Circle SASTRA Head

Resolution Agent –

a. For SCs/RCs (A/c with ledger outstanding of Rs 1.00 crores and above upto
Rs. 50 Crores)

Balance outstanding of NPA account Competent Authority for

allocation of account
Above Rs. 1 crore to Rs. 5 crore Zonal SASTRA Head
Above 5 crore and upto Rs 10 crore Zonal Manager
Above 10 crore and upto Rs 50.00 crore CGM (SASTRA)

 Retail loan portfolio on Circle SASTRA Centre-wise basis

b. For Other Firms:

More than Rs.10 lacs upto Rs. 2 crore Circle SASTRA Head
Above Rs. 2 crore to Rs. 5 crore Zonal SASTRA Head
**Above 5 crore and upto Rs 10 crore Zonal Manager
**Above 10 crore and upto Rs 50.00 crore CGM (SASTRA)

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c. For Ex-Employees of PSBs:

Above Rs. 10 lacs Upto Rs. Clerical Staff Circle SASTRA Head
25 lacs
Above Rs. 10 lacs Upto Scale-I,II & III
Rs. 100 lacs
Above Rs. 10 lac Upto Rs. Scale IV & Zonal SASTRA Head
250 lacs Scale-V
Above Rs. 10 lac Upto Rs. Scale-VI and Zonal Manager
500 lacs above

**For allocation of NPA accounts having outstanding balance above Rs. 5 crores
to SCs/RCs and other firms, Zonal SASTRA Committee (ZSCO) will be the
recommending authority.

Accounts will be allotted to Recovery Agencies/Resolution Agents based

on their performance.

 Limit for number of Accounts to be allocated to the Resolution Agents

SCs/RCs Other Firms PSB Retired Employees

A Resolution Agent shall be Firms are to be allotted A Resolution Officer shall
allocated 25 to 50 accounts for accounts based on the be allocated maximum 50
resolution based on their credentials of the accounts subject to the
performance subject to the agency. However, not sum of outstanding
sum of outstanding balance more than 200 accounts balance of all NPA
of all NPA accounts above the balance of Rs accounts allocated to
allocated to resolution 10.00 lacs be allotted to resolution agents
agents should not exceed one Resolution Agent should not exceed Rs.
Rs. 50 Cr, at a time. subject to the sum of 50 Cr, at any point of
outstanding balance of time and accounts to be
However, in case of eligible all NPA accounts allotted based on their
Retail Loan NPAs under allocated to resolution performance subject to
portfolio basis, the limit will be agents should not the condition that retired
restricted to 50 accounts per exceed Rs. 50 Cr, at employees be not given
Circle with total ceiling of 8 any point of time. such accounts for
Circles. Therefore, at a time, a resolution which they
maximum of 400 NPA handled while in service
accounts will be allocated i.e the accounts which
under Retail Loan Scheme on were either sanctioned by
portfolio basis to a single them or their operations
SC/RC subject to the sum of were handled by them
outstanding balance of all during their stay in that
NPA accounts allocated to particular branch.
resolution agents should not
exceed Rs. 50 Cr, at any
point of time, in addition to
eligible accounts with balance
outstanding of Rs. 1 crore &
above upto Rs. 50 Crores.

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  Withdrawal of accounts
The allocating authority may consider withdrawing allocated accounts from said
agencies after 6 (six) months of allocation extendable to 12 months, in case no
effective result is yielded by them. Further, accounts be re-shuffled periodically.
For Accounts allotted by Head office, Zonal SASTRA Centre to send status
update after 6 months in case allocation is to be extended. For withdrawal, a
Withdrawal Notice must be invariably sent by the Branch/Circle SASTRA
Centre/Zonal SASTRA Centre to the Recovery Agency/Resolution Agents and
kept in the records of the respective offices to avoid any disputes/
complications/payments in the future.

Commission payable to Recovery Agencies/Resolution Agents

The Agency will be paid commission on the amounts recovered as under:

Recovery Agency

For NPA accounts upto Rs 10.00 lacs (suit filed/non-suit filed/decreed & Written
Off Accounts)
Age of NPA Commission payable on amount of recovery
For Suit Filed/Non-Suit Filed A/Cs For
For A/Cs with O/s For A/Cs with O/s Decreed
upto Rs 1 lac above Rs 1 lac A/Cs
Upto 3 years 7.5 % 5.0 % 5.0%
Above 3 years upto 5 10.0 % 7.5 % 7.5%
years
Beyond 5 years 15.0 % 10.0 % 10.0%

Resolution Agent

For NPA’s above Rs 10.00 lacs upto Rs. 50.00 Crores

Commission to be paid to SCs/RCs and Firms/Companies (other than SCs/RCs)
will comprise of two components viz. Fixed & variable but total amount will be
subject to the ceiling as given below:

(a) Fixed Component

SCs/RCs and Firms/Companies other than SCs/RCs may be paid commission
at the rate of 5% of the recoveries, as fixed component. However, there are
no changes in the other expenses payable, as mentioned in the Circular e.g
Insurance charges, Security/Valuation charges after taking the possession by
Bank/Official Liquidator/DRT Receiver, legal expenses including fees to the
advocates, charges relating to auction, which shall be borne by the Bank.
(b) Variable Component
In addition to the above mentioned fixed component of 5% of the recoveries,
the SCs/RCs and Firms/Companies other than SCs/RCs may also be paid the
variable component as per the Table given below:

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 S. Distress Value of Security Recovery Recovery Recovery
No. upto 90% of above 90% above
the and upto of principal
principal principal
1. Cases with distress value of No Incentive 5% of the
tangible security more than recovery in
principal amount. excess of
principal
2. Cases with distress value of No 6% of recovery in excess of
tangible security between Incentive 90% of the principal
50% to 90% of principal
amount.
3. Cases with distress value of 7% of any recovery
tangible security less than
50% of principal amount.
4. Cases without tangible 10% of any recovery
security
Note: A consolidated commission of 10% of recovery shall be payable to
the SCs/RCs for resolution of Retail Loans under NPAs entrusted to them
on portfolio basis.
Ceiling on payment of commission to ARCs and Other Firms (For NPA
accounts above Rs 10.00 lacs upto Rs. 50.00 Crores)
S. In case of recoveries through ARCs/ Other Maximum Amount of
No. Firms working as Resolution Agents Commission
Payable/Ceiling
1. Up to Rs. 5 crore Rs. 25 lacs
2. Above Rs. 5 crore up to Rs. 10 crore Rs. 35 lacs
Sub categories
(i) > Rs. 5 cr up to Rs. 6 cr Rs. 27 lacs
(ii) > Rs. 6 cr up to Rs. 7 cr Rs. 29 lacs
(iii) > Rs. 7 cr up to Rs. 8 cr Rs. 31 lacs
(iv) > Rs. 8 cr up to Rs. 9 cr Rs. 33 lacs
(v) > Rs. 9 cr up to Rs. 10 cr Rs. 35 lacs
3. Above Rs. 10 crore upto Rs. 50 Crores Rs. 50 lacs

Ex-Employees of PSBs

Outstanding If the age of NPA is If the age of NPA is

upto 3 years more than 3 years
Above Rs.10 lacs Upto Rs.50 lacs 7% 9%
Above Rs.50 lacs upto Rs. 1 crore 6% 8%
Above Rs. 1 crore upto Rs.5 crores 5% 6%
(Max. Rs. 15 lacs) (Max. Rs. 15 lacs)

Note:
(a) The above rates will be subject to the changes introduced by the Bank and
will be applicable from the date of issue of the relevant Circular/
Communication. However, the concerned Branch Incumbent/Circle
SASTRA Head must ensure to inform the rates to the Recovery

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 Agencies and Circle SASTRA Head/Zonal SASTRA Head must ensure to
inform the rates to the Resolution Agents.

(b) For actual written off accounts, the balance as on the date of allotment of
the account, be considered for fixation of commission slab.

(c) The above mentioned rates payable to all categories of Recovery

Agencies/Resolution Agents are all inclusive of taxes including Goods
& Services Tax (GST).

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 SALIENT FEATURES OF POLICY FOR ENGAGEMENT OF SUPPORTING AGENCIES

Nature of services required from Supporting Agencies

The following services/activities/sub-activities need to be performed by such

professional Supporting Agencies (other than Valuers and Managers), for which
generally Bank’s Staff may not possess requisite skills:

 Pre-take over examination of identified units/assets including survey which shall

include:
(i) Location of the unit/asset,

(ii) Its status i.e whether the unit is running or closed, whether the IP is
vacant or occupied, if occupied by owner or by tenants etc.

(iii) Requirement of manpower (security personnel) at the time of taking

over the actual possession,

(iv) Assessment as to whether the owner is likely to hand over the

possession voluntarily and/or peacefully or offer resistance.

 Facilitating the Bank in seizure of securities/taking possession of movable and

immovable assets.

 To provide security for preservation and protection of assets taken in

possession.

 To act as Custodian of secured assets.

 Obtaining assistance of District Magistrate/Metropolitan Magistrate for taking

over possession of securities. For this services of an advocate from Bank’s panel
may be utilized.

 Assisting the Bank for sale of assets taken in possession through auction or
otherwise.

Criteria for Empanelment of Supporting Agencies

For empanelment of Supporting Agencies, it is essential that following

aspects/parameters are taken due cognizance of:

 Promoters/Officials of the Supporting Agencies shall possess necessary skills

 Antecedents of promoters and infra-structure available with them shall be looked

into before assignment of any work and/or before empanelling them.

 Supporting Agencies which offer multiple and efficient services under one roof
may be given preferential treatment.

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 It should be ensured that the Certificate of Registration from Service Tax Cell of
Central Excise Department of Ministry of Finance, Government of India under
Section69 of Finance Act 1994 is held, wherever necessary, by a professional
before any job is entrusted to him.

 As far as possible, 4-5 Supporting Agencies for each type of service in a Circle
SASTRA Centre/Zonal SASTRA Centre may be engaged for utilization of their
services.

 Supporting Agencies offering services should have adequate manpower

comprising of:

(i) Persons capable of using fire arms and having requisite licence there for
or persons having retired from security forces or para-military forces,
(ii) Technical experts
(iii) Eminent people with adequate experience, from the fields of Law,
Accounts and Management and
(iv) Persons having liaison with Police and Administration.

 Preference should be given to those Supporting Agencies who have experience

of rendering such services to State Financial Corporation (SFC) and State
Industrial Development Corporations (SIDCs).

 Supporting Agencies should be capable of obtaining assistance of District

Magistrate/Metropolitan Magistrate for taking over the possession of securities.
The Supporting Agent(s) who is/are advocate(s) in the Bank’s approved Panel
and/or such advocates who are on this panel should be preferred.

 Supporting Agencies engaged should be capable of gathering proper and

genuine purchasers for assisting the Bank for sale of acquired assets, in order to
be able to fetch the maximum bid and as such must have an experience of 5
years of conducting auction on behalf of Government Departments of PSUs.

(a) Similarly, the ‘Supporting Agency’ offering to assist the Bank in sale of
acquired assets through other means, such as by inviting tenders or by
obtaining quotations or by private treaty should comprise of experts having
good liaison with persons dealing with/in the assets to be put on sale.

(b) Such ‘Supporting Agency’ should also be capable to assist in getting

change of ownership of property effected in appropriate Government
records.

 For NPAs having ledger balance exceeding Rs. 5 crore, bids may also be
invited from reputed Agencies like DTTIL, PWC, Ernst & Young, SICOM,
MITCON, ITCOT, SFCs, SIDCs, NITCON etc. if required.

 Empanelment of all those Supporting Agencies shall be made, whose fee

structure is within the limit, as specified by Head Office.
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  Verification of the antecedents of their employees shall be ensured by the
Supporting Agencies, before assignment of any task/job by the Bank. This
shall include pre-employment police verification, as a matter of abundant
precaution. Further, re-verification of antecedents should be resorted to at
an interval of 2 years.

 An official from the Circle Office, to be decided by the Circle Head shall visit the
site/office of the Applicant, to conduct due diligence to verify their address and
infra-structure. Due diligence at the time of empanelment should also covers that
Applicant is KYC Compliant, documents verified with originals, Past experience
(if any), feedback from other Banks (if any), ensuring name of the applicant is not
appearing in IBA’s Third Party Caution List, Cross Checking on Social Media (If
available) etc. However, merely non-receipt of feedback from other Banks should
not be used as a tool for rejection of the application.

Authority for engagement/empanelment of Supporting Agencies

(i) Concerned Circle Head shall invite applications from Supporting Agencies, once
in a year and Circle Office Committee for Empanelment of Outsourcing
Agencies (COCEOA) will be the competent authority for empanelment of a
Supporting Agency.

(ii) Zonal SASTRA Head/Circle SASTRA Head have full powers for engagement
of Supporting Agencies for assignment of task to them. However, the
supporting agencies shall be engaged judiciously on the basis of the
merits of the case and/or as per the requirement.

(iii) Assignment of task/Allocation of account

The Authorized Officer shall assign the task/issue work order to the
Supporting Agencies on panel, by issuing a letter. In the letter, nature of task
assigned shall be categorically mentioned including amount of fee payable
after accomplishment of task successfully, to obviate the possibility of complaints
for non/less payment of fees. Authorized Officer shall be responsible for
payment of fees to the Supporting Agencies, as per the Bank’s guidelines.

The task/work order will be assigned to Supporting Agency based on their

performance.

Withdrawal of account from a Supporting Agency

Allocating authority may consider withdrawing allocated accounts from said agencies
after 6(six) months of allocation extendable to 12 months. Since allocation/assignment
of task to the Supporting Agency is done by the Authorized Officer, in case a Supporting
Agency fails to perform the assigned task allotted to them, a Withdrawal Notice must be
invariably sent by the Authorized Officer to that Supporting Agency, under intimation to
the Zonal SASTRA Centre (For accounts under purview of Circle SASTRA Centre)
and must be kept in records by Circle SASTRA Centre and Zonal SASTRA Centre
to avoid any disputes/complications in the future.

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Security Deposit from Supporting Agency
The Supporting Agency shall furnish to the Circle Office, a Bank guarantee for an
amount of Rs 1.00 lac Alternatively, the Supporting Agency shall make a security
deposit (by way of term deposit) for equivalent amount which shall be returned to the
Supporting Agency on termination of the arrangement. However, if the agency is
terminated due to non-observance of terms & conditions, then the security is liable to be
retained by the bank.

If reputed Supporting Agencies having good track record in taking possession and sale
of properties under SARFAESI Act of the Banks are desirous of being empanelled with
other Circle Office, they shall provide Bank Guarantee/ Security deposit of Rs.1.00 lac
for each Circle Office separately, subject to maximum of Rs.3.00 lac.

In case, if any Supporting Agency is depaneled by any of the Circle Office Committee
for Empanelment of Outsourcing Agencies (COCEOA) due to misappropriation of the
fund, fraudulent activity, misuse of bank materials, forgery and/or any action detrimental
to the interest of the Bank, such Supporting Agency automatically gets ineligible for
other Circle Office. Concerned Circle Office which has depanelled a Supporting Agency,
shall inform to Zonal Office and other Circle Offices, where it is empanelled. Concerned
Zonal Office shall inform SASTRA Division, HO and HO: SASTRA Division shall
circulate the name of depaneled Supporting Agency and also forward the name to IBA
for further circulation to other Bank.

If any Agency is empaneled as on the role of more than one for a Circle
Office/Zonal Office for e.g. XYZ Ltd. is empaneled as Recovery Agency as well as
Resolution Agent & Supporting Agency, then Bank Guarantee/Security Deposit of
Rs. 1 lac to be furnished separately for each role.

Covenants on the part of ‘Supporting Agencies’

The Supporting agency shall adhere to ground rules. Besides, this, following RBI/IBA
guidelines shall be also adhered to, wherever required by the Supporting Agencies:

 RBI’s guidelines on Fair Practices Code for Lenders

 RBI’s guidelines for Managing Risk & Code of Conduct in Out Sourcing of
Financial Services by Banks and

 IBA’s Model Code for Collection of Dues and Repossession of Security (CDRS
Code) shall also be adhered to, wherever required, by the Supporting Agency

 The Supporting Agency (other than Advocates) shall be required to furnish at

the Circle Office level, a declaration/undertaking.

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 SARFAESI ACT- Rates approved by Head Office, for Supporting Agencies

Book Outstanding Pre-takeover examination Pre-takeover examination Pre-takeover examination of Obtaining

OR of identified units/ assets of identified units/ assets identified units/ assets assistance of
Estimated Value Of including survey including survey including survey District Magistrates/
Secured Assets (Per Secured Asset) AND AND Metropolitan
Facilitating bank in seizure Facilitating bank in seizure of Magistrates as and
WHICHEVER IS of securities/ taking securities/ taking actual when required for
LOWER symbolic possession of possession of movable and taking over
movable and immovable immovable assets possession of the
assets (Per Secured Asset) securities
(Per Secured Asset)
1 2 3 4 5
Upto Rs.10 lac Rs. 4500 Rs. 9,000 Rs. 13,500 Rs. 4,000
(Maximum Upto Rs.6,750) (Maximum Upto Rs.13,500) (Maximum Upto Rs.20250)
More than Rs. 10 lac to Rs. 6,000 Rs. 12,000 Rs. 18,000 Rs. 5,000
less than Rs.50 Lac (Maximum Upto Rs. 9,000) (Maximum Upto Rs.18,000) (Maximum Upto Rs.27,000)
Rs. 50 lac to less than Rs. 11,250 Rs. 22,500 Rs. 33,750 Rs. 7,500
Rs.1 crore (Maximum Upto Rs. 22,500) (Maximum Upto Rs.45,000) (Maximum Upto Rs. 67,500)
Rs. 1 crore to less than Rs. 15,000 Rs. 30,000 Rs. 45,000 Rs.10,000
Rs.5 crore (Maximum Upto Rs.30,000) (Maximum Upto Rs.60,000) (Maximum Upto Rs.90,000)
Rs. 5 crore and above Rs. 22,500 Rs. 45,000 Rs. 67,500 Rs. 15,000
(Maximum Upto Rs.45,000) (Maximum Upto Rs.90,000) (Maximum Upto Rs.1,35,000)
Note-1
(i) For obtaining assistance of District Magistrate / Chief Metropolitan Magistrate for taking over possession of securities, the fee shall be
paid fees in two stages i.e (i) 50% at the beginning on moving the application and (ii) Balance 50% after obtaining possession of
the secured assets.
(ii) Where application is to be moved in different courts, separate fees shall be payable
Note-2
The above rates mentioned under Columns No. 2, 3 & 4 above are per secured asset, subject to the maximum ceilings given if there are more
than one assets.
Rates mentioned above are all inclusive of taxes/incidental charges/actual expenses whatsoever may be payable

Page 15 of 23
 SARFAESI ACT- Rates approved by Head Office, for Supporting Agencies

Security watch and ward for preservation and protection of secured assets including insurance
Minimum wages per Security Personnel fixed by the respective State Act (Number of security personnel to be deployed shall be decided by the
competent authority.
To act as custodian of secured assets
Transportation Charges (on actual basis) plus Godown Charges.
Zonal SASTRA Head are permitted to sanction the fee not exceeding Rs. 7,000/- per month or custodian services over and above watch and
ward expenses, looking to the nature of assets acquired and need for its maintenance.
Travelling Expenses:
(i) Travelling expenses equivalent to A/C II Tier Railway Fare for actual number of persons not exceeding 3 in case of outstation visits
from the Agency Head Quarter or Circle Head Quarter, whichever is less.
(ii) No travel expenses in case of local securities situated at the Head Quarters of the Agencies and/or situated at Circle Head Quarters,
irrespective of distance.
Godown Charges
Go-downs are required only when the securities are to be taken in Bank’s physical possession and either there is no space available at the existing
site or it is not practically feasible and desirable to keep the securities at the same place, in the Bank’s interest. Generally such Go-downs are
located at places outside the City and the rates may vary from place to place and according to nature of securities etc. In such cases fixation of
rate/charges are market driven and Zonal SASTRA Head may negotiate and finalize the charges in line with the prevailing market rates.

The above mentioned rates payable to all categories of Supporting Agencies are all inclusive of taxes whatsoever may be applicable and
net amount will be payable after deduction of GST, to be deposited by the Bank.

Important Note
“In case the recoveries are effected in the accounts due to orders passed by say DRT/Court/Any Govt. Agency etc. and/or through any sale
process (e.g e-auction, manual auction, tenders etc.) and/or OTS/Compromise and/or any other process, which it is confirmed that the
Supporting Agency did not play any role for recovery/made any efforts, no commission shall be payable to the Supporting Agency.

++++++

Page 16 of 23
FEES PAYABLE TO SUPPORTING AGENCIES FOR SALE OF ACQUIRED ASSETS
THROUGH AUCTION OR OTHERWISE
Amount credited in the NPA account Fees payable on amount credited in the
through sale of assets NPA account through sale of assets
Up to Rs. 10 lac 3% of the amount

More than Rs. 10 lac but up to Rs. 50 Rs 30,000/- + 2.5% of the excess of amount
lac over Rs. 10 lac.
More than Rs. 50 lac but up to Rs. 1 Rs 1,30,000/- + 2.0% of the excess of amount
crore over Rs. 50 lac.
More than Rs. 1 crore but up to Rs. 5 Rs 2,30,000/- + 1.5% of the excess of amount
crore over Rs. 1 crore.
More than Rs. 5 crore Rs 8,30,000/- + 1.0% of the excess of amount
over Rs. 5 crore.
Note
(i) Rates mentioned above are all inclusive of taxes/incidental charges/actual
expenses whatsoever may be payable and in case different assets are sold,
amount of commission will be payable on the consolidated amount credited in
the NPA account.

(ii) The above fees be paid only when the Supporting Agencies have played active
role for sale of assets.

(iii) Important Note

“In case the recoveries are effected in the accounts due to orders passed by say
DRT/Court/Any Govt. Agency etc. and/or through any sale process (e.g e-
auction, manual auction, tenders etc.) and/or OTS/Compromise and/or any
other process, which it is confirmed that the Supporting Agency did not play
any role for recovery/made any efforts, no commission shall be payable to the
Resolution Agent.

+++++++

17
SALIENT FEATURES OF POLICY ON ENGAGEMENT OF DETECTIVE AGENCIES

Objective
The policy aims to significantly supplement efforts of the field officials in recovering
bank’s dues in NPA accounts by utilizing services of the Detective Agencies:

 Locate the borrower(s)/ co-borrower(s)/ guarantor(s)/ mortgagor(s),

(in/outside India) including their legal heirs who are either untraceable or
not available at the addresses given in Bank’s records;

 Ascertain latest information about their present address(es)/ occupation(s),

business(es), income streams, details of their all assets, whether charged
or uncharged, their location(whether in India or abroad), value and
ownership, etc.;

 Give details of bank accounts maintained by the defaulting

borrower(s)/guarantor(s), including their legal heirs;

 Give details of credit facilities availed/to be availed by defaulting

borrower(s)/ guarantor(s) from other Banks;

 Confirm present state of ownership of the secured assets by personal

visit(s)/market report, duly confirmed by the documents.

 Gather any other information which the Bank cannot access by utilizing
normal channels like CIBIL/internet/local enquiries and which may be
considered necessary by the Bank for recovery of the Bank’s dues;

Eligibility criteria for allocation of accounts to Detective Agencies

All NPA accounts under any category i.e Sub-Standard, Doubtful and Loss
category (whether non-suit filed, suit filed or decreed) shall be covered by the
guidelines in which engagement of detective agency is deemed appropriate, as
per the requirement.

Competent Authority for Engagement of Detective Agency

Zonal Office Committee for Empanelment of Outsourcing Agencies
(ZOCEOA) will be the competent authority to empanel any Detective Agency. On
empanelment of Detective Agencies, the Zonal Office will communicate
contact details of the Agencies to all the Zonal SASTRA Centre/Circle
SASTRA Centres under their jurisdiction for utilization of their service in
case of need.

Competent Authority for Assignment of task

Once a Detective Agency has been empanelled, Circle SASTRA Head/Zonal
SASTRA Head will be the competent authority to assign any task to the Detective
Agency. For a particular account, Circle SASTRA Head/Zonal SASTRA Head

18
may assign the task to more than one Detective Agencies, depending upon the
requirement and exigencies.

Circle SASTRA Head/Zonal SASTRA Head must ensure that while assigning
any task, a letter must be given to the Detective Agency clearly stating the nature
of task and the fees which will be payable for that task, to avoid any
dispute/complaint at a later stage.

While giving an assignment to the Detective Agencies, the endeavor should be

that only reasonable number of assignments are given to a particular Detective
Agency depending upon their infra-structure and competence, so as to get better
results.

Eligibility Criteria for Detective Agencies

Only agencies (Partnership Firms, Companies, Corporations etc.) with sufficient
means/ resources/ field experience will be considered for empanelment. Since
there are no regulatory and statutory guidelines for Detective Agencies,
preferably the Agency has to be member of “Association of Private
Detectives & Investigators” of India, also known by the name APDI.

The Detective Agency must have minimum 1 year of experience in this

activity and key-person of the Agency should have minimum 3 years of the
experience in this activity either worked in Govt. Offices looked after this
type of activity/ other Detective Agency firm.

Further, the following factors are also to be looked into for empanelment:

 Past experience and competence to perform the task which can be

assigned over the contracted period.
 Financial soundness and ability to service commitments even under
adverse conditions.
 Business reputation and culture, compliance, complaints and outstanding or
potential litigation.
 External factors like political, economic, social and legal environment of the
jurisdiction in which the service provider operates and other events that
may impact service performance.
 Wherever possible, the bank shall obtain independent reviews and market
feedback on the service provider to supplement its own assessment.
 It should be ensured that the Agencies carry out verification of the
antecedents of their employees, which may include pre-employment police
verification, as a matter of abundant caution.
 Our endeavor should be to ensure that the service provider’s employees
maintain same high standard of care in performing the services as would
have been maintained by the Bank as if the activities were conducted within
the Bank.
 Agencies will put its best efforts to provide the services assigned to them
and will function in such a manner that it will not cause any business loss to
19
 the Bank or entail any legal or other responsibility/liability to the Bank or its
officials.
 Observe the highest professional and ethical standards.
 Adhere to the instructions and guidelines provided by the Bank from time to
time and not adopt or resort to any method, conduct or procedure in
contravention of any Law/Act/Rules/ Fair Practices Code/Code of Conduct
which may be issued from time to time by the Government/ RBI/Indian
Bank’s Association or any other authority empowered by the law of land.
 The Agency shall not resort to use of coercive methods or commit any
wrongful act or offence against person/property of the borrower(s),
guarantor(s) or any other liable party(ies), while collecting the information.
The guidelines issued by the Govt/ RBI/Court, in this regard shall be
meticulously followed by the Agency. The Agency unconditionally agrees
that the Bank’s decision in this respect shall be final and binding in regard
to the Agency’s compliance.

Procedure for Engagement/Empanelment

Applications would be invited from interested parties through advertisements,
once in a year, to be placed in two local newspapers by the Zonal Offices, one
of which should be vernacular and placed on the Bank’s website www.pnbindia.in
also, for which they may refer the matter to Head Office: ITD, HO.

Applications be obtained as per the Application. The application to be

accompanied with the photocopies of academic qualifications, proofs of
experience & PAN Number of all key members of the agency along with Address
Proof and proof of membership of APDI (wherever available) for the Detective
Agency. Agency to also submit its PAN Number along with the application
(wherever available).

 Applications for empanelment would be submitted at ZO along-with

the necessary documents mentioned above.

 Dy. Zonal Manager shall co-ordinate all the activities relating to

empanelment and review.

 Committee for Empanelment of Detective Agencies

Zonal Office Committee for Empanelment of Outsourcing Agencies
(ZOCEOA) shall interview the applicants and will be the final authority for
empanelment of the eligible Detective Agency any decision in this regard
would be final and letter of empanelment will be issued by ZM only.

Before recommending empanelment, an official from the ZO or Circle

Office, to be decided by the ZM shall visit the site/office of the
Applicant, to conduct due diligence to verify their address and infra-
structure. Due diligence at the time of empanelment should also
covers that Applicant is KYC Compliant, documents verified with
originals Past experience (if any), feedback from other Banks (if any),
20
 ensuring name of the applicant is not appearing in IBA’s Third Party
Caution List, Cross Checking on Social Media (If available) etc.
However, merely non-receipt of feedback from other Banks should not
be used as a tool for rejection of the application.

 While issuing the letter of empanelment it must be categorically mentioned

that the Agency will function in such a manner that it will not cause any
business loss to the Bank or entail any legal or other responsibility/liability
to the Bank or its officials.

 Tenure of Empanelment
Panel of Detective Agencies shall be valid for 3 years [subject to annual
review by Zonal Office Committee for Empanelment of Outsourcing
Agencies (ZOCEOA)].

Bank has right to terminate the empanelment of Detective Agencies at any

time without assigning any reason subject to approval of Authority, who has
empanelled the agencies.

Submission of Reports by the Detective Agencies

The empanelled agencies will submit their report along-with the supporting
papers, photographs, audio/video recording etc., if any, collected by them.

Time Frame for submission of reports

A time frame of maximum 30 days will be allowed to the Agency for submission of
report.

However, in emergent circumstances, further extension of 15 days (total time

frame will be 45 days) may be permitted by the Zonal SASTRA Head, keeping in
view complexity of the case.

Submission of report with inordinate delay defeats the purpose of taking

help of Detective Agency. As such, the following penalty clause has been
incorporated:-

1) Penalty Clause for the cases where agency does not seek extension of
further 15 days
15 days’ notice to be issued to Detective Agency if report not submitted within
stipulated time i.e. 30 days from allocation of task. If report is not submitted
even after expiry of notice period of 15 days then penalty shall be charged as
under:-
Delay Time Penalty (% of total fees)
Upto 15 days 5%
Beyond 15 days upto 30 days 10%
Beyond 30 days upto 45 days 15%
Beyond 45 days upto 60 days 20%
Beyond 60 days 25%
21
2) Penalty Clause for the cases where 15 days extension was permitted to
the Agency (Keeping in view of Complexity of the case)
15 days’ notice to be issued to Detective Agency if report not submitted within
stipulated time 30 days + 15 days extension granted i.e. 45 days from
allocation of task and if report is not submitted after expiry of notice period of
15 days then penalty shall be charged as under:-

Delay Time Penalty (% of total fees)

Upto 15 days 10%
Beyond 15 days upto 30 days 15%
Beyond 30 days upto 45 days 20%
Beyond 45 days 25%

An undertaking should be taken from Detective Agency at the time of

empanelment/review prescribing the time limit & penalty clause.

Code of Commitment of Detective Agencies

 Agency will function in such a manner that it will not cause any business
loss to the Bank or entail any legal or other responsibility/liability to the
Bank or its officials.

 Supreme Court has cautioned the Banks against use of coercive methods
for recovery of loans and in other similar cases. Thus, Detective Agency
appointed by the Bank shall ensure that no coercive method is used while
collecting the information.

Fees payable to the Detective Agencies

The Agency will be paid fees on the following rates:

S. Nature of Task Assigned Fee Payable

No.
1. On receipt of information about Rs. 7,500/- per person
whereabouts of the missing/absconding subject to maximum
borrower / guarantor / co-borrower / fee of Rs. 45,000/-
director etc. subject to production of under this category,
documentary proof/evidence. per account.

2. For locating properties other than details of Rs. 20,000/- for each
which are available in Bank’s records, property located,
which may lead to attachment of the same subject to maximum
along-with the documentary proof. fee of Rs. 1.50 lacs
(All the properties in one title deed to under this category
be considered as one property). per account.

3. For providing any other information, which Rs. 2,500/- per piece of
may be helpful for recovery of Bank’s dues information, with
e.g information about other businesses, maximum amount of
22
S. Nature of Task Assigned Fee Payable
No.
credit facilities from other banks, accounts Rs. 30,000/- per
with other banks including verification of account.
present position of properties as per
Bank’s records, subject to production of
documentary proof/evidence.

4. Payment of reasonable out of pocket expenses may also be

sanctioned subject to maximum of Rs. 10,000/- per account. Zonal
SASTRA Head will be the competent Authority to take a decision for
payment of such out of pocket expenses. The Detective Agency to
give details of visits/proof of expenditure.

5. In case the Detective Agency fails to Maximum fee of Rs.

trace the borrower/guarantor etc. 3,000/- per account can
be paid.

6. In case the Detective Agency fails to Maximum fee of Rs.

trace the property. 7,000/- per account.

The above rates are inclusive of all taxes, whatsoever may be

applicable.

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23