MSME Mortgage Loan Product Note

| IFFCO KISAN FINANCE LTD |

IFFCO House, 34, Nehru Place
New Delhi - 110019

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Sl. No. Particulars Page No.

1 Preamble 3
2 Estimated credit gap 3
3 Definition of Micro, Small and Medium Enterprises 4
4 Objective and target segment 4
5 Glossary of the terminology 5
6 Basic policy norms 6,7
7 Key guiding principles 8
8 Customer profiles and eligibility norms 9,10
9 Loan amount and LTV matrix based on collateral 11
10 Collateral related norms 12
11 Other Permissible Collateral 12, 13
12 Cautious profiles and cautious industries 13
13 Non-funding profiles 13
14 Annexure-1; Deviation and delegation matrix
A General Deviations 14, 15
B Credit Bureau and repayment track- related deviations 16,17
C Delegation Matrix for MSME Mortgage Loan 17
15 Annexure- 2; Document checklist
16 Monitoring and review 18, 19

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Preamble

MSMEs are the growth engine of the country’s economy and lead to entrepreneurial development and
diversification of the industrial sector. They also provide depth to the industrial base of the economy. MSMEs
play a crucial role in providing large employment opportunities at comparatively lower capital cost than large
industries. The MSMED Act was notified in 2006 to address different issues affecting MSMEs and seeks to
facilitate the development of these enterprises by enhancing their competitiveness. Banks and NBFCs have given
highest importance to financing MSMEs in their strategic growth plans and with the Government committed to
giving stimulus to this sector through infrastructure development, skill set development/entrepreneurship
development, technology upgradation etc., the scope for MSME finance has increased even further.

Estimated credit gap:

According to the report prepared by the UK Sinha led Reserve Bank of India (RBI) expert committee on
MSMEs, the sector has an estimated credit gap of INR 20–25 trillion. A majority of MSMEs do not have access
to sufficient credit and liquidity required for daily working capital needs.
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Definition of Micro, Small and Medium Enterprises:

The Government of India, vide Gazette Notification dated June 26, 2020, has revised the criteria for classification
of enterprises as Micro, Small and Medium enterprises. An enterprise shall be classified as a Micro, Small or
Medium enterprise based on the composite criteria of investment in plant & machinery/ equipment and turnover,
as provided below.

Classification of Investment in Plant & Machinery / Turnover

enterprise Equipment

Micro Does not exceed ₹ 1 Cr, and Does not exceed ₹ 5 Cr

Small Does not exceed ₹ 10 Cr, and Does not exceed ₹ 50 Cr
Medium Does not exceed ₹ 50 Cr, and Does not exceed ₹ 250 Cr

Objective and target segment:

The objective of this Policy is to provide a framework, which will enable IFFCO Kisan Finance to lay down
guidelines and procedures to extend loans and advances for Micro Enterprises.

The micro, small and medium enterprise (MSME) sector forms the backbone of India’s economic structure,
accounting for 29% of the country’s gross domestic product (GDP) and 49% of its exports. The Government of
India aims to increase the contribution of MSMEs to India’s GDP to over 50% and exports to 75% in the
forthcoming years.

Initially, we intend to target specifically micro enterprise segment of the MSME sector. This segment has
relatively low delinquencies and ample opportunities due to large credit gap.

We would be focusing on the businesses with existing investment in business up to Rs 1.0 Cr and/or business units
with turnover up to Rs 5.0 Cr and offering collateral securities against the loans to be disbursed by IFFCO Kisan
Finance. This would largely cover small manufacturing units, traders, retailers and other service providers.

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Glossary of the terminology:

Sl. No. Abbreviation Terminology

1 MSME Micro, Small and Medium Enterprises
2 NTC New to credit
3 SEP Self-employed professionals
4 SENP Self-employed non-professionals
5 NIP No documented income program
6 SORP Self-Occupied Residential Property
7 SOCP Self-Occupied Commercial Property
8 RRP Rented Residential Property
9 RCP Rented Commercial Property
10 VRP Vacant Residential Property
11 VCP Vacant Commercial Property
12 SOIP Self-Occupied Industrial property
13 LTV Loan to value
14 FOIR Fixed obligations to income ratio
15 ROC Registrar of Companies
16 PD Personal Discussion
17 TVR Tele Verification Report
18 GST Goods and Services Tax
19 EMI Equated Monthly Instalment
20 BT Balance Transfer
21 RM Registered Mortgage
22 HUF Hindu Undivided Family
23 SUB Substandard
24 DBT Doubtful
25 LSS Loss
26 DPD Days Past Dues
27 RTR Repayment Track Record
28 SMA Special Mention Account
29 RBI Reserve Bank of India
30 OVD Officially Valid Documents
31 ITR Income Tax Return
32 P&L Profit and Loss
33 NACH National Automated Clearing House
34 DPN Demand Promissory Note
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Basic Policy Norms:
Parameter Basic Norms
Constitution Individuals, Proprietorships, Partnerships and Companies.
Co-applicant is mandatory
Co-Applicant
All property co-owners must be party to agreement as applicant or co-applicant
Min 21 Years at the time of loan agreement and Max 60 Years at the time of
contractual loan maturity
Age Norms
Party to agreement whose income is not considered-
Min 18 Years and Max 75 Years
KYC As per RBI OVD norms prevailing at the time of processing of loan application
Instalment Frequency Equated Monthly Instalments
Min- 12 months
Tenure
Max- 84 months*
Loan Amount Min Rs 1.0 Lac, Max Rs 30.0 Lacs*
LTV As per the approved LTV matrix
FOIR As per the approved FOIR matrix
• One of the bureau checks (CIBIL or equivalent) is mandatory for all
individual applicants.
Credit bureau & ROC checks
• Corporate credit bureau (CIBIL or equivalent) and ROC checks to be done
for all non-individual applicants.
Minimum CIBIL score is 650*
CIBIL Score
NTC Score is also acceptable
Credit Visit or PD/ TVR Mandatory for all the cases
• Technical valuation of the collateral is mandatory for all the cases.
• One technical report for Lap cases less than or equal Rs. 30 lacs is
mandatory.
• Two technical reports for Lap cases greater than of Rs. 30 lacs are
mandatory.
Technical Valuation
• Lower of the two valuations to be considered for LTV determination.
• If difference between two valuations is more than 20%, then 3rd valuation
has to be initiated and Lowest value must be considered.
• Property Visit by credit manager is mandatory before disbursement, Visit
Report with Photograph has to be documented.
• Legal Report is required from empanelled lawyer for all cases
• Vetting of legal report from the Internal Legal manager must be done
Legal Evaluation
• Vetting of original property documents as per legal report is required from
the Internal Legal manager.
Geographic Limits Permissible Geographic limit 30 Km from the branch. *
Average balance will be calculated by dividing total of balance as on 3 dates i.e.
Banking calculations 5th, 15th and 25th for last 6 months and for 12 months in banking surrogate
cases.

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 Internal De-dupe check of all applicants must be done to identify whether the
Internal De Dupe check
applicant(s) has an existing relationship with IFFCO Kisan finance or if the
applicant(s) loan was ever rejected by IFFCO Kisan Finance in the past.
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Along with the internal de dupes below mentioned checks are to be included in
de dupe for individuals and non-individuals as applicable.
1. Financial intelligence unit (FIU) – shell company
check.
https://fiuindia.gov.in/
2. Ministry of company affairs (MCA) - List of Companies Struck-Off By
External De dupe RoCs.
https://www.mca.gov.in/content/mca/global/en/data-and-reports/rd-
rocinfo/companies-struck-roc.html
3. RBI caution and wilful defaulter list- https://www.rbi.org.in/
4. UNSCR- Sanction list - https://www.un.org/securitycouncil/content/un-
scconsolidated-list
5. RBI Centralized fraud registry- CFR check
• Sanction letter would be valid for 90 days from the date of sanction.
• Processing fee for sanctioned case will also be valid for 90 days from the
date of sanction, Post that in case of expiry of sanction. PF waiver request
can be approved by SBH for maximum 15 days from original sanction
Sanction validity validity.
• Any change in sanction terms will require re-approval from the approving
authority.
• Dedupe & Credit bureau checks would be done at the time of disbursement
if the gap is more than 30 days from the sanction date.
Legal report, Technical report, Customer visit and property visit reports are valid
Validity of reports for 90 days from date of sanction, additional 15 days validity can be approved by
ACM/RCM
Insurance Funding Insurance funding is allowed up to 5% over and above deal LTV
The Property documents of the customer along with the signed check list will be
kept in the safe custody (Fire proof vault) with the empanelled vendor of the
Storage of Mortgage documents
company. Retrieval and release of these documents upon closure of the loan
shall be in compliance with RBI norms.
Deviations Any deviation to be addressed as per approved deviation matrix.
*marked parameters are further covered in the deviation matrix.
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Key Guiding Principles:

Sourcing and onboarding of the customers will be based on below mentioned key guiding principles, Portfolio building
will be done considering the parameters defined by these key guiding principles.

1. Customer segmentation and distribution in the portfolio based on credit bureau scores:
CIBIL Score ranges <650 650 - 700 700 -750 > 750 NTC
Customer Distribution
across CIBIL Score
Ranges 5%-10% 15%-20% 20%-25% 15%-20% 25%-30%

2. Customer distribution based on collateral security (Property type):

Rented residential /
Property type SORP SOCP Commercial Property Vacant Plot Agri land
Distribution 25%-30% 15%-20% 15%-20% 5%-10% 15%-20%

3. Risk-rated pricing based on the type of collateral and credit bureau scores:
Collateral/CIBIL Score <650 650 - 700 700 -750 > 750 NTC
SORP 18% 16% 15% 14% 17%
SOCP 18% 16% 15% 14% 17%
Rented residential/ Commercial Property 19% 17% 16% 15% 18%
Vacant Plot 21% 19% 18% 17% 20%
Agri land 22% 19% 18% 17% 21%

4. FOIR Matrix for customer segments based on income ranges:

FOIR Matrix

Monthly Income Range Salaried SEP/SENP

Up to 30000 55%
30001-50000 60%
50001-100000 65% 65%
>100000 65% 70%

Customer Profiles and Eligibility Norms:

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Customer Eligibility Validation of Validation End use of
Profile Norms Eligibility Income Norms of income funds
Up to 4 salaried persons in the
immediate family can be considered.
Minimum Combined net salary of all
applicants should be Rs.25000/- pm
Permanent
At least one of the applicants must
Employees
have minimum net salary of Rs.
with minimum
12000 pm For purchase,
work Appointment Salary Slips,
construction
Salaried experience of letter, Forms-16
Eligibility calculations: and
Individuals 2 years- Employer ID and
A) Assessed Net Salary x FOIR (Up renovation of
Government proof etc banking
to own house.
and Private
65% to be considered)
sector
B) Less fixed obligation
companies
C) Amount available to service
Kisan finance EMI(A-B)
D) Divided by EMI per Lac
E) Loan eligibility in Rs. In lacs
Last two years financials, last 2 ITRs
of same business and last 6-month
banking of business account.
Minimum income must be Rs2.0L.
Professional A multiplier of up to two times of the
Degree above income may be considered For Business
Proof of Financials-
holders- based on cash flow assessment (To expansion,
professional Balance
SEP Practicing be approved by National Credit working
degree, Manager) sheets,
Doctors, capital
Business P&L
(Selfemployed Practicing CA, requirement
registration, statements,
professionals) Practicing CS Eligibility calculations: and ad hoc
Udyam Banking
and A) Final Income x FOIR (Up to 65% business
registration and ITR
Practicing to be considered) requirements
Architect B) Less fixed obligation
C) Amount available to service
Kisan finance EMI(A-B)
D) Divided by EMI per Lac
E) Loan eligibility in Rs. In Lacs
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Last two years financials, last 2 ITRs
of same business and last 6-month
Business banking of business account.
Manufacturing Minimum income must be Rs2.0L. For Business
registration, Financials-
units, A multiplier of up to two times of the expansion,
Udyam Balance
SENP wholesale above income may be considered working
registration, sheets,
businesses, based on cash flow assessment (To be capital
Shop and P&L
(Selfemployed Retail approved by National Credit requirement
establishment statements,
nonprofessionals) businesses Manager) and adhoc
certificate, Banking
and Service business
GST and ITR
providers Eligibility calculations: requirements
registration
A) Final Income x FOIR (Up to 65%
to be considered)
 B) Less fixed obligation
C) Amount available to service
Kisan finance EMI(A-B)
D) Divided by EMI per Lac
E) Loan eligibility in Rs. In Lacs
Last 6 months banking,
Monthly purchase invoices
Sales register, stock & inventory
Additionally Credit Manager to
conduct visits and PD for income
Individual/
assessment based on-
Business Business 1. Verified daily sales or receipts for Collection
not establishment minimum of last three months, of available
reporting proof- Kachcha/Pakka bills for income For Business
complete Business verification of the same to be documents expansion,
income or not registration, obtained and documented. working
NIP (No like
filing any Udyam 2. Monthly purchases can to be banking, capital
documented
income tax registration, validated by checking sales requirements
income program)
returns and Shop and stock/inventory maintained, receipts and and adhoc
Income establishment purchase bills, cross reference assessment business
consideration certificate, checks with suppliers etc. requirements
based on
is based GST 3. Sample copies of kachcha / Pakka verification
assessment registration record to be kept in record
only. 4. Monthly Income and Expenditure
statement to be prepared by Credit
Manager based on business
evaluation to calculate the
monthly income of the applicant.

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Loan amount and LTV matrix based on collateral:
Property type Possession type Profile LTV Loan amount
Salaried 70% Max Rs25 Lacs
Self-occupied SEP/ SENP 70% Max Rs30 Lacs
NIP 60% Max Rs20 Lacs
Residential

Salaried 60% Max Rs25 Lacs

Rented
SEP/ SENP 60% Max Rs30 Lacs

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 NIP 50% Max Rs20 Lacs

Salaried 55% Max Rs25 Lacs

Vacant SEP/ SENP 55% Max Rs20 Lacs
NIP 45% Max Rs15 Lacs
Property type Possession type Profile LTV Loan amount
Salaried 60% NA
Self-occupied SEP/ SENP 60% Max Rs30 Lacs
NIP 50% Max Rs20 Lacs

Salaried 55% NA
Rented SEP/ SENP 55% Max Rs30 Lacs
NIP 50% Max Rs20 Lacs
Commercial
Salaried 50% NA
Vacant SEP/ SENP 50% Max Rs20 Lacs
NIP 50% Max Rs15 Lacs

Salaried 45% NA
Open Plot SEP/ SENP 45% Max Rs10 Lacs
NIP 45% Max Rs10 Lacs
Property type Possession type Profile LTV Loan amount
Salaried 45%
Agriculture Land Self-occupied SEP/ SENP 45% Max Rs10 Lacs
NIP 45%

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Collateral related norms:
• Equitable mortgage
Collateral Security against • Registered mortgage on a case-to-case basis. In the case of registered mortgage,
loan the draft deed has to be approved by legal team and to be vetted by the internal
legal counsel before registration. (Mandatory in case of society cases where no
 registered document is available and in balance transfer cases gift deed can be
considered instead of registered mortgage
• Agri title property – Registered Mortgage is mandatory
• Society title – if Registered documents are not available –registered mortgage is
mandatory
• Properties held by minors, properties under HUF and properties inherited under the
Hindu Succession Act, Hospitals, Nursing Homes / Hospitals, Cinema Halls and
Gyms.
Properties not accepted for • Properties in negative areas
funding • Property situated in low-lying areas near tanks/lakes, banks of rivers, which are
susceptible/vulnerable to floods.
• Property to be funded should have an approach road which is at least 5 feet wide.
• For multiple tenants (More than 5 tenants) occupying the proposed property.
Self-Occupied Residential Property (SORP)
Self-Occupied Commercial Property (SOCP)
Rented Residential Property (RRP)
Acceptable collateral usage Rented Commercial Property (RCP)
Vacant Residential Property (VRP)
Vacant Commercial Property (VCP)
Self-Occupied Industrial property (SOIP)

Other Permissible Collateral:

Cases where back chain is missing, but we have latest registered documents in
favour of borrower (Gift deed, latest sale deed), same can be considered with
loan amount restriction up to Rs 10 Lakhs with maximum tenure 7 year and IRR
Single Deed / Last reg. sale 18% to 20% with following subjectivities:
deed / Gift Deed collateral • Electricity bill is mandatory
• Indemnity bond of Rs.200 for no litigation
• In case of Gift Deed, Registered mortgage with property photographs •
Registered mortgage
Agriculture land collateral can be considered subject to below-
• Last title document should register (Reg. Sale Deed / Gift Deed / Release Deed)
• Registered Mortgage with property photograph
• Jamabandi (Lien free) to be obtain with above documents
Agriculture collateral
• Executor of gift deed to be taken in deal.
• Back chain documents (As per legal requirement)
• Loan amount maximum Rs.10 Lakhs for 7 years with IRR 18% to 20%
• Single deed case allowed.
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This type of collateral can be considered subject to below mentioned conditions
are fulfilled-
• Only working society to be considered • This collateral only applicable
for Jaipur city.
Society collateral
• Society verification is must.
• RM / Reg.Gift deed required in case of Society Allotment, Receipt &
site plan only available.
• Indemnity bond (Rs.200/-) for lease deed as and when issued.

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 Cautious profiles and cautious industries:
Cautious Profiles Cautious Industries

• Consultants without professional degree / license

• Direct Sales Associates of finance companies • Fireworks
• Bar cum Restaurant owners excluding family • Gems & Jewellery
restaurants • Stockbroking
• Liquor vendors • Bullion Trader
• Policemen at Sub-Inspector and lower levels • • Diamond Industry
Media personnel

Non-funding profile:

1. Employees of chit-fund companies

2. Pubs and Dance Bars / Discotheques
3. Daily wage labourers / contractual labourers
4. Anti-social elements
5. Property dealers/brokers / real estate agents/stock Brokers
6. Politically exposed person
7. Lawyers, Journalists, Gambling business/ lottery business
8. NRI / Business done by NRI
9. Plantation dealing business
10. Multilevel Marketing/ Network business
11. Unregularized money exchanger
12. Chit fund, Lottery, speculative business, Private money lenders
13. Film Personality
14. Unani doctors

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Annexure-1: Deviation and Delegation Matrix A) General Deviations:

Sl. No Deviation Type Deviation Mitigates Approval Approver

Category Authority Level
Younger
Age at maturity
coapplicant actively
overrides up to 5
involved in the
1 General Age years whose income NCM L3
applicant's
is considered
business is
(SEP/SENP)
obtained.
Co-applicant
relationship norms
2 General Relationship not met (Other NA CEO L4
Combinations
such as Brother)
3 General Tenure a) Deviation up to Based on the a) NCM a) L3
 12 months
b) Deviation up to overall customer
b) CEO b) L4
24 months profile and other
c) Deviation up to mitigates
36 months c) MD c) L5
a) Exposure above According to the
a) CEO a) L4
Loan 30 L up to 50L scheme eligibility
4 General
amount b) Exposure above and customer
profile b) MD b) L5
50 L up to 100L
Current/CC/Saving
A/c - Inward
cheques return >5%
Cheque
5 General of total debit RCM L2
return
transactions in last
6 months. (Other
than EMI Cheques)
Month on Book
(MOB) less than 6
Seasoning months for BT +
6 General for Top-up Top CEO L4
Loan up Cases / Top up
to existing
Customers
There are some
employers where it
is optional to have
statutory
No deductions. This is
7 General Statutory to be exercised on a NCM L3
Deduction case-to-case basis
based on employer,
no. of employees in
the company,
qualification etc.
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a) Up to additional
5 kms Subject to
a) RCM a) L2
b) Up to additional collection comfort
8 General Geo Limit b) CEO b) L4
10 kms with sales
c) MD c) L5
c) Up to additional recommendation
15 kms
Govt / PSU
Work
employee with total
experience Positive
9 General work experience RCM L2
for salaried verifications
norms less than 2
employee
years
10 General Employee FI/Docs verification Security cheques of RCM L2
verification in case of salaried account
Govt. / PSU with positive bank
companies / MNCs statement
where entry verification

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 /FORM
26AS made
available reflecting
restricted hence
employer and
report is referred to
salary details /
credit and
Employment
verification on mails
Confirmation on
is also not possible
phone from
reporting manager
by credit officer
Subject to regular
repayment of BT
loan. Kisan
BT from co-op.
repayment should
BT from Bank where
be from ECS and
11 General Cooperative repayment is not CEO L4
condition for
bank reflecting in
original documents
CIBIL
with co-op bank to
be verified before
cheque handover
Minimum Min Income norms
13 General CEO L4
Income not met
Business stability
norms not met/ITRs
Business
14 General less than 2 years or CEO L4
stability
filled within 6
months Gap
To be approved by
CEO based on the
Other Any kind of Other merits of the case
15 General permissible permissible and CEO L4
Collateral Collateral recommendation of
RH+ Legal+
Technical

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B) Credit Bureau and repayment track related deviations:

Deviation Approval Approver

Sl. No Type Deviation Mitigate
Category Authority Level
A/c status with
Regular Payment of
Credit SUB/DBT/LSS
1 A/c status others credit cards RCM L2
card and/ or DPDs more
and/or loan EMI
than 30 days
2 A/c status Credit Written Off/ Regular Payment of BCM L1
card Written Off with others credit cards
settlement and / or and/or loan EMI
DPDs up to 30 days
 (Before 6 months)
Regular Payment of
Credit
3 Family Default If dependent others credit cards RCM L2
card
and/or loan EMI
Credit Based on
4 Family Default If not dependent BCM L1
card justification
Consolidated
Credit overdue in all cards.
5 Overdue <=50000 RCM L2
card Loan RTR to be
regular
Consolidated
Credit overdue in all cards.
6 Overdue >50000 CEO L4
card Loan RTR to be
regular
Written Off/
Written Off
With other regular
Loan with
7 A/c status RTR History with RCM L2
account settlement/A/c
Min 12 months RTR
status with SUB /
DBT / LSS
RTR to be collected
Loan Up to 30 days DPDs and ensure
8 DPD BCM L1
account (Before 6 months) repayment done in
the same month
Reason for default
Loan DPDs with static to be ascertained
9 DPD RCM L2
account string and RTR to be
collected
as Repayment of
Defaults Loan Defaults as
10 Individual Liability BCM L1
Guarantor account Guarantor
should be regular
Delinquencies prior
If credit history in
Loan to 3 years from date
11 Delinquencies latest 3 years is not RCM L2
account of application (In
available
Credit cards/Loans
Basis justification
CIBIL Score less
12 CIBIL Score General and live loan RTR NCM L3
than 650
history
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Loan Other loan RTR to
13 Family Default If dependent RCM L2
account be regular
No 60+ DPDs in
total loan vintage
Loan
14 Overdue Up to 2 EMI and last six months RCM L2
account
a/c must be
regularized
More than 2 Loan Details to be
CIBIL Recent Loan
15 Enquiries in current obtained and market RCM L2
Enquiries account reference check to
month

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 be done.
If the bad match is
on account of
operational reasons
or the dues cleared
within 15 days
Delayed
(RTR to be
Special Mention Payment/Special
Loan documented). Not
16 Account in mention Account RCM L2
account more than 3 bounces
credit bureau (SMA) in Credit
during the year (if
Bureau report
monthly repayment)
and for half yearly,
not more than 3
bounces during the
tenure

C) Delegation Matrix for MSME Mortgage loan

Level Designation MSME Mortgage loan Max exposure per customer

L1 Branch Credit Manager Up to 10.00 lacs 15.00 lacs

L2 Regional Credit >10- 25.00 Lacs 35 Lacs
Manager
L3 National Credit Manager >25.00- 50.0 Lacs 60 Lacs
L4 Chief Executive Officer >50.00- 75.0 Lacs 80.00 Lacs
L5 Managing Director >75.00- 100 Lacs 100.00 Lacs
Delegation matrix would be revised as per business needs and market requirements with the
recommendation of CEO and approval of MD

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Annexure- 2; Document checklist

Pre-sanction/ Login document checklist

1. Duly filled application form signed by the applicant, co-applicant (if applicable) and recent passport size
photograph pasted and cross-signed on application form.
2. KYCs (Identity and address proof) of applicant and co-applicant (if applicable) and guarantor (if applicable).
Acceptable KYCs as per RBI OVD list.
3. Applicable incorporation documents as per customer profiles- Memorandum & Articles of Association,
Certificate of Incorporation, udyam registration, proprietorship proof and partnership deed, etc.
4. Income documents applicable as per customer profile and scheme- e.g. Salary slips, forms-16, bank statement,
ITR, Balance sheet, P&L statements, bank statement, etc.
5. Copy of updated bank statement/passbook
6. FI/PD report done by the Credit manager
7. Copy of Property Papers
8. Other mitigant-related documents, if required for respective LTV and segment
9. Processing fee cheque/ receipt/ fee deposition proof

Property/ Collateral related documents

1. Proof of ownership – Original Property title deed of the property Offered as security.
2. Other property documents such as- Latest maintenance, Water Tax, Municipal Tax and any other such taxes
paid receipt.
3. Legal title search report of the property by empanelled lawyer.
4. Technical valuation report by empanelled valuator.
5. Permission to create Equitable Mortgage from society / Development Authorities. (wherever applicable)
6. Registered mortgage wherever applicable

Pre-disbursement document checklist

1. Duly executed Loan agreement

2. DPN duly executed on revenue stamp and signed by all parties
3. Duly filled and signed NACH form with BSV and updated Banking or eNACH
4. Copy of accepted sanction letter

Monitoring and Reviews

Product Review Timelines:

Portfolio performance reports shall be submitted to credit committee for review on achievement of 500 disbursement
numbers or Rs100 cr. book size whichever is earlier.
Portfolio-based triggers:

Based on the portfolio review for early delinquencies in the accounts, we shall identify the incipient stress and take
corrective actions. Branch-wise monitoring and review for early delinquency to be done and appropriate business
triggers to be applied whenever required.

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Sl. No Parameter Trigger First Level Action Second Level Action
Instalment cheque Instalment cheque
dishonour/ NACH dishonour/ NACH Regional level review for Subsequent review at HO
1
bouncing bouncing must not be taking corrective actions level by CEO or MD
more than 30%

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 2 Early Delinquency

Subsequent review at HO
Regional level review for level by CEO or MD for
taking corrective actions by corrective actions in the
A 30 DPD- 3 MOB Threshold limit 1.0%
RCM or RH if delinquency next 2 months shall be
breaches 1.0% done if delinquency levels
are still above 1.0%
Subsequent review at HO
Regional level review for level by CEO or MD for
taking corrective actions by corrective actions in the
B 60 DPD- 6 MOB Threshold limit 0.5%
RCM or RH if delinquency next 2 months shall be
breaches 0.5% done if delinquency levels
are still above 0.5%
Subsequent review at HO
Regional level review for level by CEO or MD for
taking corrective actions by corrective actions in the
C 90 DPD- 12 MOB Threshold limit 0.25%
RCM or RH if delinquency next 2 months shall be
breaches 0.25% done if delinquency levels
are still above 0.25%
Regional level review shall Review at HO level to be
Variance from
Key Guiding be done for taking done if there is no
3 defined levels is
Principles corrective actions, if there is improvement in next 3
acceptable up to 20%
variance of more than 20% months

Event-based triggers:

Below mentioned event-based triggers shall warrant a review of the policy and appropriate corrective actions wherever
it is required.

• Unusual events or fraudulent transactions reported

• Evidence of legal action against any borrower by other creditors
• Negative information or news on any particular business segment

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