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Salary Advance Policy

This policy provides guidelines for employees to receive advance or soft loans from the company for emergency purposes up to two months of wages. Eligible employees must have worked for the company for at least 12 months. Loans can be used for marriage, education, pregnancy, medical emergencies, or death in the family. Loans are interest free and repaid through monthly payroll deductions not exceeding 20% of wages. The application process involves approval from heads of department and HR before disbursement by accounts. Employees are responsible for repayment even if they leave the company early.

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Sandeep Mazumdar
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2K views3 pages

Salary Advance Policy

This policy provides guidelines for employees to receive advance or soft loans from the company for emergency purposes up to two months of wages. Eligible employees must have worked for the company for at least 12 months. Loans can be used for marriage, education, pregnancy, medical emergencies, or death in the family. Loans are interest free and repaid through monthly payroll deductions not exceeding 20% of wages. The application process involves approval from heads of department and HR before disbursement by accounts. Employees are responsible for repayment even if they leave the company early.

Uploaded by

Sandeep Mazumdar
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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POLICY ON ADVANCE / SOFT LOANS

Objective
The purpose of the policy is to provide guidelines for considering sanction for Advance /
soft loan for eligible workers. This scheme is purely for various emergency purposes.
Under this scheme, if the worker is in certain emergency situation, he / she can avail the
advances / soft loans. Emergency situations for workers may be defined as unforeseen,
unplanned and anavoidable events or for which no external loan disbursement channel /
sources exits which demands immediate financial attention and require an employee to
secure fund on short notice.
Applicability and Scope:
This policy shall be applicable to all Business units / department.
Eligibility for advances / soft loans:
It shall extend and cover all employees in the organization who has served at least for last
12 months with satisfactory attendance records
ORG provides this advances / soft loans for general purposes such as
 Marriage of self or children
 Education of children
 In case of Wife’s Pregnenacy or own pregnancy (for female employees)
 Emergency situation like accidents, hospitalization, death in family (spouse, children,
parents)
Quantum:
The advance / soft loan to be disbursed to any employee in need as stated above shall be
maximum two months wages (Basic plus Dearness Allowance).
Frequency:
Advance shall be given once in a year, after any previous advance / soft loan is repaid
Repayment:
The advance / soft loan shall be repayable on equitable installments on monthly basis
from the next month of advance payment. The amount shall be deducted from monthly
salary / wages.
The amount paid to the employee as advance / soft loan is totally interest free and there
are no hidden charges applicable.
The quantum of advance / soft loan and equal monthly installment tenure shall be decided
based on suitable calculation so that amount of deduction shall not exceed 20%. The
legally mandatory deduction or agreed deductions (like meal, union subscription, welfare)
are excluded from the 20%.
Procedure:
1. The applicant shall fill up a loan application form along with signature of two numbers
of workers (Confirmed / Permanent Workers/ staff) for surity. The worker has to
recommend the name of two surities and there is no boundness from the organization
side, It is purely based on employees discretion.
2. The form is approved by concerned HOD and the approved form is forwarded to
personnel department / Time office.
3. Time Office / Personnel department verifies the eligibility amount and forwards the
application to Head HR and IR for final approval. In case the required amount is more
than the eligibility amount, the approval is given by Head HR and IR, and his / her
decision in this regard is final
4. The approved form is forwarded to accounts department for disbursement. After the
loan is transferred to worker’s account, a note is given to the HR department
5. In any case, the worker leaves the organization, before completion of the payment of
full amount; the employee is liable to pay the amount before leaving. If the amount is
not recovered, the remaining shall be adjusted from his full and final settlement or shall
be recovered from the worker who has signed as surety.
Terms and Condition:
 Advances / soft loans is not a matter of right of the employee, it is the management
decision to consider / review / modify the amount policy any time
 The advance / soft loan is non transferable to any other worker
 The organization will not undertake payment of any outstanding loan / advances of
previous employer, bank or any financial institution.
 Employee will abide by the terms of payments as given in this policy. The extension of
the tenure for payment shall be purely management decision

Prepared by Authorised by Approved by


Factory Manager Business Head

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